Document:

Reference: Section 17(a)iv

 LEASE OF INDUSTRIAL PROPERTY
 FROM U.P.

 (GRAND ISLAND, NEBRASKA)

<PAGE>

 LEASE OF INDUSTRIAL PROPERTY

         THIS LEASE ("Lease") is entered into on the 13 day of February 1998
 between UNION PACIFIC RAILROAD COMPANY ("Lessor") and CXT INCORPORATED, whose
 address is North 2420 Sullivan Road, P. 0. Box 14918, Spokane, Washington
 99214-0918 ("Lessee").

 IT IS AGREED BETWEEN THE PARTIES AS FOLLOWS:

 Article I. PREMISES USE.

         Lessor leases to Lessee and Lessee leases from Lessor the premises
 ("Premises") at Grand Island, Nebraska, as shown on the print dated February 6,
 1998, marked Exhibit A, hereto attached and made a part hereof, subject to the
 provisions of this Lease and of Exhibit B attached hereto and made a part
 hereof. The Premises may be used for manufacture of concrete ties for the
 Lessor's use, and such other uses as may be permitted in the Restated Supply
 Agreement referred to in Article II of this Lease, and for no other purpose.

 Article II. TERM.

         The term of this Lease shall commence on the Thirteenth day of
 February, 1998, and shall extend for a term of run coterminous with that
 certain Restated Supply Agreement dated October 1, 1997, by and between the
 Lessor and lessee. This Lease shall terminate or expire on the same date that
 said Restated Supply Agreement terminates or expires.

 Article III. RENT.

          A. Lessee shall pay to Lessor, in advance, rent of One Dollar ($1.00)
 per annum.

          B. Not more than once every sixty eight (68) months, Lessor may
 redetermine the rent. In the event Lessor does redetermine the rent, Lessor
 shall notify Lessee of such change.

 Article IV. SPECIAL PROVISIONS.

          A. The words, "which shall not be unreasonably withheld." shall be
  added to the end of the first
 sentence of Section 10.A. of Exhibit B.

B.       Section 13.B of Exhibit B shall be deleted.

<PAGE>

          IN WITNESS WHEREOF, the parties have executed this Lease as of the day
and year first herein written.

 UNION PACEFIC RAILROAD COMPANY                       CXT INCORPORATED

 By: /c/Michael P. Horn                               By: /c/J. White
 Title: Sr. Mgr. - Real Estate                        Title: President & CEO

 NOTE: New.

<PAGE>

 IND LS 110695
 APPROVED, LAW

 EXHIBIT B

 Section 1.       IMPROVEMENTS.

 No improvements placed upon the Premises by Lessee shall become a part of the
realty.

         Section 2.        RESERVATIONS AND PRIOR RIGHTS.

     A. Lessor  reserves  to itself,  its agents and  contractors,  the right to
enter  the  Premises  at such  times as will  not  unreasonably  interfere  with
Lessee's use of the Premises.

          3. Lessor reserves (i) the exclusive right to permit third party
 placement of advertising signs an the Premises, and (ii) the right to
 construct, maintain and operate now and existing facilities (including, without
 limitation, trackage, fences, communication facilities, roadways and utilities)
 upon, over, across or under the Premises, and to grant to others such rights,
 provided that Lessee's use of the Premises is not interfered with unreasonably.

     C. This Lease is made subject to all outstanding rights,  whether or not of
record. Lesser reserves the right to renew such outstanding rights.

 Section 3.       PAYMENT OF RENT.

          Rent (which includes the annual rent and all other amounts to be paid
 by Lessee under this Lease) shall be paid in lawful money of the United States
 of America, at such place as shall be designated by the Lessor, and without
 offset or deduction.

 Section 4.       TAXES AND ASSESSMENTS.

          A. Losses shall pay, prior to delinquency, all taxes levied during the
 life of this Leese an all personal property and improvements on the Premises
 not belonging to Lessor. If such taxes are paid by Lessor, either separately or
 an a part of the levy on Lessor's real property, Lessee shall reimburse Lessor
 in full within thirty (30) days after rendition of Lessor's bill.

B. If the Premises are specially  assessed for public  improvements,  the annual
rent will be automatically increased by 12% of the full assessment amount.

 Section 5.       WATER RIGHTS.

          This Lease does not include any right to the use of water under any
 water right of Lessor, or to establish any water rights except in the name of
 Lesser.

 Section 6.       CARE AND USE OF PREMISES.

          A. Lessee shall use reasonable care and caution against damage or
 destruction to the Premises. Lessee shall not use or permit the use of the
 Premises for any unlawful purpose, maintain any nuisance, permit any waste, or
 use the Premises in any way that creates a hazard to persons or property.
 Lessee shall keep the Premises in a safe, neat, clean and presentable
 condition, and in good condition and repair. Lessee shall keep the sidewalks
 and public ways on the Premises, and the walkways appurtenant to any railroad
 spur track(s) on or serving the Premises, free and clear from any substance
 which might create a hazard and all water flow shall be directed away from the
 tracks of the Lessor.

     3. Lesses shall not permit any sign on the Premises,  except signs relating
to Lessee's business.

          C. If any improvement on the Premises not belonging to Lessor is
 damaged or destroyed by fire or other casualty, Lessee shall, within thirty
 (30) days after such casualty, remove all debris resulting therefrom. If Lessee
 fails to do so, Lessor may remove such debris and Lesee agrees to reimburse
 Lessor for all expenses incurred within thirty (30) days after rendition of
 Lesser's bill.

     D. Lessee  shall  comply with all  governmental  laws,  ordinances,  rules,
regulations and orders relating to Leseee's use of the Premises.

 Section 7.       HAZARDOUS MATERIALS, SUBSTANCES AND WASTES.

          A. Without tho prior written consent of Lessor, Lessee shall not use
 or permit the use of the Premises for the generation, use, treatment,
 manufacture, production, storage or recycling of any Hazardous Substances,
 except that Lessee may use (i) small quantities of common chemicals such as
 adhesives, lubricants and cleaning fluids in order to conduct business at the
 Premises and (ii) other Hazardous Substances, other than hazardous wastes as
 defined in the Resource Conservation and Recovery Act, 42 U.S.C. 55 6901, et
 seq., as amended ("RCRA"), that are necessary for the conduct of Lessee's
 business at the Premises as specified in Article I. The consent of Lessor may
 be withheld by Lessor for any reason whatsoever, and may be subject to
 conditions in addition to those set forth below. It shall the sole
 responsibility of Lessee to determine whether or not a contemplated use of the
 premises is a Hazardous Substance use.

B.                  In no event shall Lessee (i) release, discharge or dispose
                    of any Hazardous Substances, (ii) bring any hazardous wastes
                    as defined in RCRA onto the Premises, (iii) install or use
                    on the Premises any underground storage tanks, or (iv) store
                    any Hazardous Substances within one hundred feet (100') of
                    the center line of any main track.

          C. If Lessee uses or permits the use of the Premises for a Hazardous
 Substance use, with or without Lessor's consent, Lessee shall furnish to Lessor
 copies of all permits, identification numbers and notices issued by
 governmental agencies in connection with such Hazardous Substance use, together
 with such other information an the Hazardous Substance use as may be requested
 by Lessor. If requested by Lessor. Lessee shall cause to be performed an
 environmental assessment of the Premises upon termination of the Lease and
 shall furnish Lessor a copy of such report, at Lessee's sole cost and expense.

          D. Without limitation of the provisions of Section 12 of this Exhibit
 B, Lessee, shall be responsible for all damages, losses, costs, expenses,
 claims, fines and penalties related in any manner to any Hazardous Substance
 use of the Premises (or any property in proximity to the Premises) during the
 term of this Lease or, if longer, during Lessee's occupancy of the Premises,
 regardless of Lossor's consent to such use, or any negligence, misconduct or
 strict liability of any Indemnified Party (as defined in Section 12), and
 including, without limitation, (i) any diminution in the value of the Premises
 and/or any adjacent property of any of the Indemnified Parties, and (ii) the
 cost and expense of clean-up, restoration, containment, remediation,
 decontamination, removal, investigation. monitoring, closure or post-closure.
 Notwithstanding the foregoing, Lessee shall not be responsible for Hazardous
 Substances (i) existing on, in or under the Premises prior to the earlier to
 occur of the commencement of the term of the Lease or Lessee's taking occupancy
 of the Premises, or (ii) migrating from adjacent property not controlled by
 Lessee, or (iii) placed on, in or under the Premises by any of the Indemnified
 Parties; except where the Hazardous Substance is discovered by, or the
 contamination is exacerbated by, any excavation or investigation undertaken by
 or at the behest of Lessee. Lessee shall have the burden of proving by a
 preponderance of the evidence that any exceptions of the foregoing to Lessee's
 responsibility for Hazardous Substances applies.

          E. In addition to the other rights and remedies of Lessor under this
 Lease or as may be provided by law, it Lessor reasonably determines that the
 Premises may have been used during the term of this Lease or any prior lease
 with Lessee for all or any portion of the Premises, or are being used for any
 Hazardous Substance use, with or without Lessor's consent thereto, and that a
 release or other contamination may have occurred, Lessor may, at its election
 and at any time during the life of this Lease or thereafter (i) cause the
 Premises and/or any adjacent premises of Lessor to be tested, investigated, or
 monitored for the presence of any Hazardous Substance, (ii) cause any Hazardous
 Substance to be removed from the Premises and any adjacent lands of Lessor,
 (iii) cause to be performed any restoration of the Premises and any adjacent
 lands of Lessor, and (iv) cause to be performed any remediation of, or response
 to, the environmental condition of the Premises and the adjacent lands of
 Lessor, aa Landlord reasonably may deem necessary or desirable, and the cost
 and expense thereof shall be reimbursed by Lessee to Lessor within thirty (30)
 days after rendition of Lessor's bill. In addition, Lessor may, at its
 election, require Lessee, at Lessee's sole cost and expense, to perform such
 work, in which event, Lessee shall promptly commence to perform and thereafter
 diligently prosecute to completion such work, using one or more contractors and
 a supervising consulting engineer approved in advance by Lessor.

     F. For purposes of this  Section 7, the term  "Hazardous  Substance"  shall
mean  (i)  those  substances  included  within  the  definitions  of  "hazardous
substance",   "pollutant",   "contaminant",   or  "hazardous   waste",   in  the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C.  SS 9601,  et. seq., as amended or in RCRA, the  regulations  promulgated
pursuant  to either  such  Act,  or state  laws and  regulations  similar  to or
promulgated  pursuant to either such Act, (ii) any material,  waste or substance
which  is  (A)  petroleum,  (B)  asbestos,  (C)  flamable  or  explosive,  or D)
radioactive; and (iii) such other substances,  materials and wastes which are or
become  regulated or  classified an hazardous or toxic under  federal,  state or
local law.

 Section 8.           UTILITIES

     A. Lessee will arrange and pay for all utilities  and services  supplied to
the Premises or to Lessee.

     B. All utilities and services will be separately  metered to Lessee. If not
separately  metered,  Lessee  shall pay its  proportionate  share as  reasonably
determined by Lessor.

 Section 9.       LIENS.
     Lesee shall not allow any liens to attach to the Premises for any services,
labor or Materials furnished to the Premises or otherwise arising from Lessee's
use of the Premises.  Lessor shall have the right to discharge any such liens at
Lessee's expense.

 Section 10.      ALTERATIONS AND IMPROVEMENTS; CLEARANCES.

          A. No alterations, improvements or installations may be made an the
 Premises without the prior consent of Lassor. Such consent, if given, shall be
 subject to the needs and requirements of the Lessor in the operation of its
 Railroad and to such other conditions as Lessor determines to impose. In all
 events such consent shall be conditioned upon strict conformance with all
 applicable govornmental requirements and Lessor's then-current clearance
 standards.

     B. All alterations, improvements or installations shall be at Lessee's sole
cost and expense.

          C. Lessee shall comply with Lessor's then-current clearance standards,
 except (i) where to do so would cause Lessee to violate an applicable
 governmental requirement, or (ii) for any improvement or device in place prior
 to Lessee taking possession of the Premises if such improvement or device
 complied with Lessor's clearance standards at the time of its installation.

          D. Any actual or implied knowledge of Lessor of a violation of the
 clearance requirements of this Lease or of any governmental requirements shall
 not relieve Lessee of the obligation to comply with such requirements, nor
 shall any consent of Lessor be deemed to be a representation of such
 compliance.

 Section 11.      AS-IS.

          Lessee accepts the Premises in its present condition with all faults,
 whether patent or latent, and without warranties or covenants, express or
 implied. Lessee acknowledges that Lessor shall have no duty to maintain, repair
 or improve the Premises.

 Section 12.      RELEASE AND INDEMNITY

          A. As a material part of the consideration for this Lease, Lessee, to
 the extent it may lawfully do so, waives and releases any and all claims
 against Lessor for, and agrees to indemnify, defend and hold harmless Lessor,
 its affiliates, and its and their officers, agents and employees ("Indemnified
 Parties") from and against, any loss, damage (including, without limitation,
 punitive or consequential damages), injury, liability, claim, demand, cost or
 expense (including, without limitation, attorneys' fees and court costs), fine
 or penaIty (collectively, "Loss") incurred by any person (including, without
 limitation, Lessor, Lessee, or any employee of Lessor or Lessee) and arising
 from or related to (i) any use of the Premises by Lessee or any invitee or
 licensee of Lessee, (ii) any act or emission of Lessee, its officers, agents,
 employees, licensees or invitees, or (iii) any breach of this Lease by Lessee.

          B. The foregoing release and indemnity shall apply regardless of any
 negligence, misconduct or strict liability of any Indemnified Party, except
 that the indemnity, only, shall not apply to any Loss caused by the sole,
 active and direct negligence of any Indemnified Party if the Loss (i) was not
 occasioned by fire or other casualty, or (ii) was not occasioned by water,
 including, without limitation, water damage due to the position, location,
 construction or condition of any structures or other improvements or facilities
 of any Indemnified Party.

          C. Where applicable to the Loss, the liability provisions of any
 contract between Lessor and Lessee covering the carriage of shipments or
 trackage serving the Premises shall govern the Loss and shall supersede the
 provisions of this Section 12.

     D. No provision  of this Lease with  respect to  insurance  shall limit the
extent of the release and indemnity provisions of this Section 12.

 Section 13.      TERMINATION.

          A. Lessor may terminate this Lease by giving Lessee notice of
 termination, if Lessee (i) fails to pay rent within fifteen (15) days after the
 due date, or (ii) defaults under any other obligation of Lessee under this
 Lease and, after written notice is given by Lessor to Lessee specifying the
 default, Lessee fails either to immediately commence to cure the default, or to
 complete the cure expaditiously but in all events within thirty (30) days after
 the default notice is given.

          B. Notwithstanding the term of this Lease set forth in Article II.A.,
 Lessor or Lessee may terminate this Lease without cause upon thirty (30) days'
 notice to the other party; provided. however, that at Lessor's election, no
 such termination by Lessee shall be effective unless and until Lessee has
 vacated and restored the Premises as required in Section 15A, at which time
 Lessor shall refund to Lessee, on a pro rata basis, any unearned rental paid in
 advance.

 Section 14.      LESSOR'S REMEDIES.

          Lessor's remedies for Lessee's default are to (a) enter and take
 possession of the Premises, without terminating this Lease, and relet the
 Premises an behalf of Lessee, collect and receive the rent from reletting, and
 charge Lessee for the cost of reletting, and/or (b) terminate this Lease as

<PAGE>

 provided in Section 13 A) above and sue Lessee for damages, and/or (c) exercise
 such other remedies as Lessor may have at law or in equity. Lesser may enter
 and take possession of the Premises by self - help, by changing locks, if
 necessary, and may lock out Leesee, all without being liable for damages.

 Section 15.      VACATION OF PREMISES:  REMOVAL OF LESSEE'S PROPERTY

 A. Upon termination howsoever of this Lease, Lessee (i) shall have peaceably
 and quietly vacated and surrendered possession of the Premises to Lessor.
 without Lessor giving any notice to quit or demand for possession, and (ii)
 shall have removed from the Premises all structures, property and other
 materials not belonging to Lessor, and restored the surface of the ground to as
 good a condition as the same was in before such structures were erected,
 including, without limitation. the removal of foundations, the filling in of
 excavations and pits, and the removal of debris and rubbish.

          a. If Lessee has not completed such removal and restoration within
 thirty (30) days after termination of this Lease, Lessor may, at its election,
 and at any time or times, (i) perform the work and Lessee shall reimburse
 Lessor for the cost thereof within thirty (30) days after bill is rendered,
 (ii) take title to all or any portion of such structures or property by giving
 notice of such election to Lessee, and/or (iii) treat Lessee as a holdover
 tenant at will until such removal and restoration is completed.

 Section 16.      FIBER OPTICS.

          Lessee shall telephone Lessor at 1-800-336-9193 (a 24-hour number) to
 determine if fiber optic cable is buried an the Premises. If cable is buried on
 the Premises, Lessee will telephone the telecommunications campany(ies),
 arrange for a cable locator, and make arrangements for relocation or other
 protection of the cable. Notwithstanding compliance by Lessee with this Section
 16, the release and indemnity provisions of Section 12 above shall apply fully
 to any damage or destruction of any telecommunications system.

 Section 17.      NOTICES.

          Any notice, consent or approval to be given under this Lease, shall be
 in writing, and personally served, sent by reputable courier service, or sent
 by certified mail, postage prepaid, return receipt requested, to Lessor at:
 Contracts a Real Estate Department, Room 1100, 1416 Dodge Street, Omaha,
 Nebraska 68179; and to Lessee at the above address, or such other address as a
 party may designate in notice given to the other party. Mailed notices shall be
 deemed served five (5) days after deposit in the U.S. Mail. Notices which are
 personally served or sent by courier service shall be deemed served upon
 receipt.

 Section 18.      ASSIGNMENT.

         A. Lessee shall not sublease the Premises, in whole or in part, or
 assign, encumber or transfer (by operation of law or otherwise) this Lease,
 without the prior consent of Lessor, which consent may be denied at Lessor's
 sole and absolute discretion. Any purported transfer or assignment without
 Lessor's consent shall be void and shall be a default by Lessee.

          B. Subject to this Section 18, this Lease shall be binding upon and
 inure to the benefit of the parties hereto and their respective heirs,
 executors, administrators, successors and assigns.

 Section 19.      CONDEMNATION.

          If, as reasonably determined by Lessor, the Premises cannot be used by
 Lessee because of a condemnation or sale in lieu of condemnation, then this
 Lease shall automatically terminate. Lessor shall be entitled to the entire
 award or proceeds for any total or partial condemnation or sale in lieu
 thereof, including, without limitation, any award or proceeds for the value of
 the leasehold estate created by this Lease. Notwithstanding the foregoing,
 Lessee shall have the right to pursue recovery from the condemning authority of
 such compensation as may be separately awarded to Lessee for Lessee's
 relocation expenses, the taking of Lessee's personal property and fixtures, and
 the interruption of or damage to Lessee's business.

 Section 20.      ATTORNEY'S FEES.

  If either party retains an attorney to enforce this Lease (including, without
limitation, the indemnity provisions of this Lease), the prevailing party in
entitled to recover reasonable attorney's fees.

 Section 21.      ENTIRE AGREEMENT.

      This Lease is the entire agreement between the parties, and supersedes all
other oral or written agreements between the parties pertaining to this
transaction. Except for the unilateral redetermination of annual rent as
provided in Article III., this Lease may be amended only by a written instrument
signed by Lessor and Lessee.Approved 3/1/00

                              L. B. FOSTER COMPANY
                        2000 INCENTIVE COMPENSATION PLAN

I.       PURPOSE

         To provide incentives and rewards to salaried employees based upon
overall corporate profitability and the performance of individual operating
units.

II.      CERTAIN DEFINITIONS

     The terms below  shall be defined as follows for the  purposes of the L. B.
Foster Company 2000 Incentive  Compensation  Plan. The definitions of accounting
terms shall be subject to such adjustments as are approved by the  Corporation's
Chief Executive Officer.

         2.1 "Average Unit Income" shall mean for each Operating Unit the sum of
such Operating Unit's "Operating Unit Income" for the years 1997, 1998 and 1999
divided by three, subject to such adjustments as may be made by the Chief
Executive Officer.

         2.2 "Base Compensation" shall mean the total base salary, rounded to
the nearest whole dollar, actually paid to a Participant during 2000, excluding
payment of overtime, incentive compensation, commissions, reimbursement of
expenses incurred for the Participant's benefit, or any other payments not
deemed part of a Participant's base salary; provided, however, that the
Participant's contributions to the Corporation's Voluntary Investment Plan shall
be included in Base Compensation. Base Compensation for employees who die,
retire or are terminated shall include only such compensation paid to such
employee during 2000 with respect to the period prior to death, retirement or
termination.

         2.3 "Base Fund" shall mean the aggregate amount of all cash payments to
be made pursuant to this Plan prior to adjustments pursuant to Article IV, which
amount shall be determined pursuant to Section 3.1 hereof.

     2.4 "Committee" shall mean the Personnel and Compensation  Committee of the
Board of Directors and any successors thereto.

     2.5  "Corporation"  shall mean L. B. Foster Company and those  subsidiaries
thereof in which L.B. Foster Company owns 100% of the outstanding  common stock,
excluding  (except  for  the  purpose  of  calculating  "Pre-Incentive  Income")
Natmaya, Inc. Fosmart, Inc. and CXT Incorporated.

         2.6 "Cost of Capital" shall mean a charge imposed on an Operating Unit
based upon the assets employed by such Operating Unit, as determined by the
Chief Executive Officer.

         2.7 "Fund" shall mean the aggregate amount of all payments made to Plan
Participants under this Plan, after deducting all discretionary payments made
pursuant to Section 3.3 hereof and subject to Article IV.

         2.8 "Individual Incentive Award" shall mean the amount paid to a
Participant pursuant to this Plan, which amount shall be determined pursuant to
Section 3.5 hereof and which award shall not exceed the lower of: (a) twice the
amount of a Participant's Target Award; or (b) the sum of (i) the portion of the
Participant's Individual Incentive Award allocable to the General Pool; plus
(ii) the Participant's Target Award allocable to the Product Pool multiplied by
a percentage equal to twice the percentage of Target Award paid to Participants
in the General Pool; subject, however, to the provisions of Article VII of this
Plan. The limitations herein shall not affect amounts distributed under Sections
3.3 or 6.2.

         2.9 "Operating Unit" shall mean the following units or divisions which
are reported in the Company's internal financial statements: Foster Coated Pipe,
Threaded Products, Allegheny Rail Products, Foster Technologies, Inc., New Rail,
Relay Rail, Transit Products, Mining Products, Piling, Fabricated Products and
Geotech, subject to such adjustments as may be made by the Chief Executive
Officer.

         2.10 "Operating Unit Income" shall mean an Operating Unit's 2000 gross
profit at actual plus (minus) other income (expense) less allocated and direct
sales expense and direct administrative expense and Cost of Capital, subject to
such adjustments as may be made by the Chief Executive Officer.

         2.11 "Participant" shall mean a salaried employee of the Corporation
who satisfies all of the eligibility requirements set forth in Article V hereof.

     2.12 "Plan" shall mean the L. B. Foster Company 2000 Incentive Compensation
Plan,  which Plan shall be in effect only with respect to the fiscal year ending
December 31, 2000.

         2.13 "Pool" shall mean the Product Pool and/or General Pool, as
calculated pursuant to Section 3.4 hereof, subject to such adjustments as are
approved by the Chief Executive Officer.

         2.14 "Pre-Incentive Income" shall mean the audited pre-tax income of
the Corporation for the fiscal year ending December 31, 2000 determined in
accordance with generally-accepted accounting principles, excluding (i) benefits
payable under this Plan; and (ii) any portion of gains or losses arising from
transactions not in the ordinary course of business which the Committee, in its
sole discretion, determines to exclude.

         2.15 "Target Award" shall mean the product of a Participant's Base
Compensation multiplied by said Participant's Target Percentage.

         2.16 "Target Percentage" shall mean those percentages assigned to
Participants pursuant to Section 3.2 hereof.

III.     PLAN DESCRIPTION

     3.1 Base Fund.  Subject to Article IV, the amount of the Base Fund shall be
calculated  by  adding  the flat  rate  contribution  determined  in 3.1A to the
marginal rate contributions determined in 3.1B.

     3.1A Flat Rate Contribution. The flat rate contribution shall be determined
by  multiplying  the  Corporation's   Pre-Incentive   Income  by  the  following
percentages:

Pre-Incentive Income              Percentage         Flat Rate Contribution

$0 - $5,999.999                           0                                0
$6,000,000 and Over                      15                $900,000 and Over

         3.1B Marginal Rate Contribution. If the Corporation achieves any of the
following levels of Pre-Incentive Income, the marginal rate contribution shall
be determined by adding together the marginal rate contributions through the
level of Pre-Incentive Income actually achieved.

                             Marginal     Maximum
 Pre-Incentive Income        Percentage   Marginal
                             Rate         Rate
                                          Contribution
--------------------------- --------------------------------
--------------------------- --------------------------------
$0 - $6,999,999                   0            0
--------------------------- -------------------------------
--------------------------- -------------------------------
$7,000,000 - $7,999,999           1            $10,000
--------------------------- ---------------------------------
--------------------------- --------------------------------
$8,000,000 - $8,999,999           2            $20,000
--------------------------- --------------------------------
--------------------------- --------------------------------
$9,000,000 - $9,999,999           3            $30,000
--------------------------- --------------------------------
--------------------------- --------------------------------
$10,000,000 - $10,999,999           4            $40,000
--------------------------- --------------------------------
--------------------------- --------------------------------
$11,000,000 and Over                5            N/A
--------------------------- --------------------------------

     Example: If the Corporation earned $11,500,000 in Pre-Incentive  Income the
Base Fund would be $1,850,000, calculated as follows:

                     =

a.       Calculate Flat Rate Contribution

         $11,500,000 X 15% = $1,725,000

b.       Calculate Marginal Rate Contribution

         $10,000 + $20,000 + $30,000 + $40,000 + ($500 ,000 X 5%) =   $125,000

c.       Calculate Base Fund

         $1,725,000 + $125,000 = $1,850,000

         3.2 Target Percentages. Subject to adjustment as set forth below, each
Participant shall have a Target Percentage based upon the grade level of such
Participant, unless determined otherwise by the Chief Executive Officer, on July
1, 2000, as follows:

Result:  % Of Base
Grade Levels                                            Compensation

Grade 10, Plant Managers                                       12.5
Grade 10, Product Managers                                     12.5
Grade 11, Plant Managers                                       15.0
Grade 11, Product Managers                                     15.0
Grade 6, Sales Positions                                       15.0
Grade 8, Sales Positions                                       20.0
Grade 9, Sales Positions                                       21.0
Grade 10, Sales Positions                                      22.0
Grade 11, Sales Positions                                      23.0
Grade 12, Sales or Management Positions                        25.0
Grade 13, Sales or Management Positions                        27.0
Grade 14, Sales or Management Positions                        30.0
Grade 15, Sales or Management Positions                        32.0
Grade 16, Sales or Management Positions                        36.0
Grade 17, Sales or Management Positions                        38.0
Grade 18, Sales or Management Positions                        39.0
Grade 19, Sales or Management Positions                        40.0
Grade 20, Sales or Management Positions                        50.0
Grade 21, Sales or Management Positions                        52.0
Grade 22, Sales or Management Positions                        54.0
Grade 23 and Above                                             60.0

Other Employees selected, in writing, by L. B. Foster Company's Chairman of the
Board and Chief Executive Officer may also be made Participants in the Plan on
such terms as may be approved by the Chairman of the Board and Chief Executive
Officer.

         The Chief Executive Officer may determine performance goals for
Participants selected by the Chief Executive and the Target Percentage for each
such Participant will be adjusted upward or downward based upon such
Participant's achievement of such goals. The precise method for determining such
adjustments for each such Participant shall be separately scheduled and deemed
incorporated herein by reference.

         Those Participants who have retired or died prior to July 1, 2000 shall
have a Target Percentage based upon their grade level at death or retirement.

         3.3 Discretionary Payments. Ten percent (10%) of the Base Fund, plus
amounts reallocated pursuant to Section 6.1, shall be reserved for discretionary
payments to employees of the Corporation including, for purposes of this Section
3.3, employees of CXT Incorporated. The recipients of all such awards and the
amounts of any such awards initially shall be selected by the Chief Executive
Officer, subject to final approval by the Committee. If any amounts are not paid
from the amount herein reserved, such remaining amount shall be allocated to the
Fund for distribution among the Pools.

         3.4 Calculation of Pools. Each Participant and all or any portion of
each Participant's Target Award shall be assigned to a Pool or Pools by the
Chief Executive Officer of the Company. In the absence of a contrary
determination by the Chief Executive Officer, 25% of the Target Awards of
Participants in the Product Pool shall be allocated to the General Pool. The
dollar amount of each Pool will be determined by dividing the portion of the
Target Awards assigned to the Pool by the total Target Awards of all
Participants and then multiplying such amount by the Fund.

EXAMPLE 1:

THE CORPORATION'S PRE-INCENTIVE INCOME IS $7,100,000. THE TOTAL OF ALL TARGET
AWARDS FOR ALL PLAN PARTICIPANTS IS $2,100,000, WITH $1,000,000 ALLOCATED TO THE
GENERAL POOL AND $1,100,000 ALLOCATED TO THE PRODUCT POOL. THE DOLLAR AMOUNT OF
EACH POOL WOULD BE CALCULATED AS FOLLOWS:

(a)      Determine Base Fund

         ($7,100,000)  x  15% + ($100,000 x 1%) =  $1,066,000

(b)      Calculate Fund By Deducting 10% For "Discretionary Awards"

         $1,066,000  x  90%  =  $959,400

(c)      Determine Amount of Each Pool

         1.       General Pool

                  $1,000,000
                  ---------------           x        $959,400   =   $456,857
                  $2,100,000

         2.       Product Pool

                  $1,100,000
                  ---------------           x        $959,400   =    $502,543
                  $2,100,000

     3.5  Calculation  of Individual  Incentive  Awards.  The  calculation of an
Individual  Incentive Award shall be determined  based on the Pool(s) to which a
Participant is assigned.

         3.5A General Pool Individual Incentive Awards. A General Pool
Participant's Individual Incentive Award shall be calculated, subject to the
limitations in Section 2.8, as follows:

     (a) Divide  Participant's Target Award allocated to General Pool by the sum
of all Target Awards allocated to General Pool;

     (b)      Multiply (a) by amount of General Pool.

                  EXAMPLE 2:

     THE GENERAL  POOL IS $306,000.  THE SUM OF ALL GENERAL  POOL  PARTICIPANTS'
TARGET AWARDS IS $1,000,000. MANAGER JONES HAS A TARGET AWARD OF $19,200:

         $  19,200
         -------------  x   $306,000   =   $5,875 (Individual Incentive Award)
         $1,000,000

         3.5B Product Pool Individual Incentive Awards. The Product Pool shall
be divided based upon the relative improvement in the Operating Units'
"Operating Unit Income" and the Operating Units' respective shares of all Units'
"Operating Unit Income". All Participants in the Product Pool shall be assigned
to one or more Operating Unit(s) and their respective Target Awards shall be
allocated among one or more Operating Unit(s), all as determined by the Chief
Executive Officer. Individual awards shall be calculated, subject to the
limitations in Section 2.8, as follows:

                  (a) Add together: (i) all Operating Units' "Operating Unit
                  Income" (disregarding any annual loss which an Operating Unit
                  may have sustained); and (ii) the total improvement in all
                  Units' "Operating Unit Income" over all Units' "Average Unit
                  Income" (disregarding any Unit that did not improve and, for
                  purposes of calculating improvement, counting only a reduced
                  percentage of such improvement, as determined by the Chief
                  Executive Officer but in no event greater than 50%, which
                  represents a reduction from negative "Average Unit Income" to
                  zero).

(b)                        Divide (a) into the sum of all Operating Units'
                           Operating Unit Income (calculated in the same manner
                           as in (a) above) and multiply the resulting quotient
                           by the amount in the Product Pool (the "Product
                           Operating Income Subpool")

                  (c)      Divide (a) into the sum of all improvement in all
                           Units' Operating Unit Income over such Units'
                           respective Average Unit Incomes (calculated in the
                           same manner as in (a) above) and multiply the
                           resulting quotient by the amount in the Product Pool
                           (the "Product Improvement Subpool").

                  (d)      To determine an Operating Unit's share of the Product
                           Operating Income Subpool, multiply the amount in the
                           Product Operating Income Subpool by a fraction, the
                           numerator of which is the Operating Unit's Operating
                           Income and the denominator is the sum of all Units'
                           Operating Income (calculated in the same manner as in
                           (a) above).

                  (e)      To determine an Operating Unit's share of the Product
                           Improvement Subpool, multiply the amount of the
                           Product Improvement Subpool by a fraction, the
                           numerator of which is the Operating Unit's
                           improvement (calculated in the same manner as in (a)
                           above) and the denominator of which is the sum of all
                           Operating Units' improvement (calculated in the same
                           manner as in (a) above).

                  (f)      To determine a Participant's share of the Product
                           Operating Income Subpool, multiply the amount
                           calculated in (d) above by a fraction, the numerator
                           of which is the Participants' Target Bonus allocated
                           to the Operating Unit and the denominator of which is
                           the sum of all Target Bonuses allocated to the
                           Operating Unit.

                  (g)      To determine a Participant's share of the Product
                           Improvement Subpool, multiply the amount calculated
                           in (e) above by a fraction, the numerator of which is
                           the Participants' Target Bonus allocated to the
                           Operating Unit and the denominator of which is the
                           sum of all Target Bonuses allocated to the Operating
                           Unit.

EXAMPLE 3:

THE PRODUCT POOL IS $336,600. RELAY RAIL'S OPERATING UNIT INCOME IS $900,000
WHILE ITS AVERAGE UNIT INCOME IS A LOSS OF $100,000. THE SUM OF ALL OPERATING
UNITS' "OPERATING UNIT INCOME" IS $6,800,000 AND THE SUM OF ALL OPERATING UNITS'
IMPROVEMENT OVER THE SUM OF THEIR "AVERAGE UNIT INCOMES" IS $1,900,000. PRODUCT
MANAGER SMITH HAS A TARGET AWARD OF $20,000 AND THE SUM OF ALL TARGET AWARDS
ALLOCATED TO RELAY RAIL IS $120,000. TWENTY-FIVE PERCENT (25%) OF SMITH'S TARGET
AWARD IS ALLOCATED TO THE GENERAL POOL, TEN PERCENT (10%) IS ALLOCATED TO
MIDWEST AND SIXTY-FIVE PERCENT (65%) IS ALLOCATED TO RELAY RAIL. IT HAS BEEN
DETERMINED THAT FIFTY PERCENT (50%) OF IMPROVEMENT FOR REDUCTION OF LOSSES SHALL
BE COUNTED. THE PORTION OF SMITH'S INDIVIDUAL INCENTIVE AWARD ATTRIBUTABLE TO
RELAY RAIL IS CALCULATED AS FOLLOWS:

(a)      Determine Allocation Between Product Operating Income Subpool and
 Product Improvement Subpool:

         1.       $6,800,000  +   $ 1,900,000    =    $8,700,000

         2.       $6,800,000  /   $  8,700,000   =    78.16%

         3.       $1,900,000  /   $  8,700,000   =    21.84%

         4.       $  336,600    x    78.16%      =    $263,087
                                           ("Product Operating Income Subpool")

         5.       $  336,600    x     21.84%     =    $  73,513
                                                ("Product Improvement Subpool")

(b)      Determine Relay Rail's share of Product Operating Income Subpool and
           Product Improvement Subpool:

         1.       $   900,000
                  ---------------   x     $263,087    =     $34,820
                  $6,800,000                    (Relay Rail's Share of Product
                                                 Operating Income Subpool)

         2.       $   900,000 + ($100,000 X 50%)
                  ---------------   x     $ 73,513     =    $36,757
                  $1,900,000                     (Relay Rail's Share of Product
                                                   Improvement Subpool)

(c)      Determine Smith's Individual Award from Relay Rail:

         1.       $  20,000         x         65%         =     $13,000
                                                          (Smith's Target Award
                                                       Allocable to Relay Rail)
         2.       $  13,000
                  ------------      x       $34,820   =    $ 3,772
                  $120,000                           (Smith's Share of Product
                                                    Operating Income Subpool)
         3.       $  13,000
                  -------------     x       $36,757   =        $ 3,982
                  $120,000                           (Smith's Share of Product
                                                   Improvement Income Subpool)

Smith would also be able to receive an additional award based upon Midwest's
performance and a portion of the General Pool.

IV.      STOCK IN LIEU OF CASH FOR EXECUTIVE OFFICERS

         Notwithstanding any other provision of this Plan, the Corporation's
executive officers, as determined by the Committee, shall receive shares of the
Corporation's Common Stock ("Stock"), subject to such restrictions on
transferability as the Corporation's legal counsel may deem necessary or
appropriate (such restrictions shall provide for no less than a two-year
restriction on the voluntary transfer of such stock), in lieu of cash equal to
25% of the Individual Incentive Awards (without taking into account any
discretionary payments under Section 3.3) that would otherwise be payable to
such officers under the Plan. In the event such restriction on transferability
should be violated, all proceeds derived from such transaction shall be
forfeited to the Company. Such stock shall be forfeited and revert to the
Company in the event the Participant's employment with the Company should cease
within two (2) years after the date of grant, unless such forfeiture is waived
by the Committee or said termination is attributable to the Participant's death,
permanent disability, retirement with the consent of the Company's Chief
Executive Officer or in the event of a "Change of Control". The amount of stock
to be granted to an executive officer shall be calculated by: (a) dividing the
closing price of the stock on the day preceding the date cash distributions are
made under the Plan into a sum equal to 25% of the Individual Incentive Award
that, but for this Article IV, would have been payable to such executive
officer; and (b) multiplying the resulting quotient by 115% with fractional
share interest being rounded to the nearest number of whole shares. Stock shall
be deemed distributed to the executive officers on the first day of the calendar
month following the date cash distributions are made or as soon thereafter as is
practicable but the corporation shall retain custody of such shares until the
Participant's risk of forfeiture has ended. Cash which would have been payable
to executive officers, but for this Article IV, shall not be distributed and
shall remain the property of the Corporation.

         "Change of Control" shall mean: (i) any person or group of persons (as
used in Sections 13 and 14 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations thereunder) shall have
become the beneficial owner (as defined in Rules 13d-3 and 13d-5 promulgated by
the Securities and Exchange Commission (the "SEC") under the Exchange Act) of
20% or more of the combined voting power of all the outstanding voting
securities of the Corporation or, (ii) at any time following any merger,
consolidation, acquisition, sale of assets or other corporate restructuring of
Corporation, during any period of six consecutive calendar months, individuals
who were directors of the Corporation on the first day of such period, together
with individuals elected as directors by not less than two-thirds of the
individuals who were directors of the Corporation on the first day of such
period, shall cease to constitute a majority of the members of the board of
directors of the Corporation.

V.       ELIGIBILITY

         Unless changed or amended by the Committee, an employee shall be deemed
a Participant in the Plan only if all of the following requirements are
satisfied:

     A. A Participant must be a salaried employee of the Corporation, at a grade
level  set  forth  in  Section  3.2 or as  otherwise  approved  by L. B.  Foster
Company's Chairman of the Board and Chief Executive Officer for at least six (6)
months of the entire fiscal year, unless deceased or retired.

     B. A  Participant  must not  have:  (i) been  terminated  for  cause;  (ii)
voluntarily  have  resigned  (other than due to  retirement  with the  Company's
consent)  prior to the date  Individual  Incentive  Awards  are paid;  or (iii),
unless  the  Corporation  agrees in writing  that the  employee  shall  remain a
Participant in this Plan,  been  terminated  for any reason  whatsoever and have
received money from the Corporation in connection with said termination.

     C.  A  Participant's  services  must  not  primarily  be  provided  to  the
Corporation's  Monitor  Group  Division,  Natmaya,  Inc.,  Fosmart,  Inc. or CXT
Incorporated, unless otherwise approved by the Chief Executive Officer.

     Notwithstanding  the  foregoing,  Brian N.  Southon,  George H.  Nelson and
Franklin B. Davis shall not be Participants in the Plan.

         As used herein, "cause" to terminate employment shall exist upon (i)
the failure of an employee to substantially perform his duties with the
Corporation; (ii) the engaging by an employee in any criminal act or in other
conduct injurious to the Corporation; or (iii) the failure of an employee to
follow the reasonable directives of the employee's superior(s).

VI.      REALLOCATIONS

         6.1 In the event an employee has satisfied the eligibility criteria set
forth in Article V(A), but has not satisfied the eligibility criteria set forth
in Article V(B), the portion of the Individual Incentive Awards allocable to the
Product Pool shall be calculated as though such employee was a Participant and
any amounts which would have been payable to such employee from the Product Pool
shall be used for discretionary payments under Section 3.3.

         6.2 Any portion of the Fund not otherwise distributed ("Excess Funds")
shall be awarded to each Participant in an amount calculated by multiplying the
amount of the Excess Funds by a fraction, the numerator of which shall be the
Participant's Target Bonus and the denominator of which shall be the sum of all
Participants' Target Bonuses.

VII.     PAYMENT OF AWARDS

         Payment of Individual Incentive Awards will be made on or before March
15, 2000, except that the timing of the distribution of stock pursuant to
Article IV shall be governed by Article IV.

VIII.    LIMITATIONS ON AWARDS

         Notwithstanding any other provision of this Plan, Individual Incentive
Awards shall normally be limited to the amount of a Participant's Target Award.

IX.      ADMINISTRATION AND INTERPRETATION OF THE PLAN

         A determination by the Committee in carrying out, administering or
interpreting this Plan shall be final and binding for all purposes and upon all
interested persons and their heirs, successors and personal representatives.

         The Committee may, from time to time, amend the Plan; provided,
however, that the Committee may not amend, terminate or suspend the Plan so as
to reduce the Base Fund payable under the Plan.

         The Chief Executive Officer may delegate any of his duties herein.

         The Corporation's independent public accountants will review and verify
the Corporation's determination of Pre-Incentive Income.

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