Document:

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                                                                   EXHIBIT 10.54

                                                            AMENDED AND RESTATED
                                                                           FINAL

                            L. B. FOSTER COMPANY 2003
                     MANAGEMENT INCENTIVE COMPENSATION PLAN

I.       PURPOSE

         To provide incentives and rewards to salaried non-sales managers 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 2003 Management Incentive Compensation Plan. The definitions
shall be subject to such adjustments as, from time to time, may be made, by the
Committee.

         2.1      "ADJUSTED OPERATING UNIT TARGET AWARD" shall be a
Participant's Operating Unit Target Award multiplied by the applicable Operating
Unit Performance Percentage determined under Section 3.5B(b).

         2.2      "BASE COMPENSATION" shall mean the total base salary, rounded
to the nearest whole dollar, actually paid to a Participant during 2003,
excluding payment of overtime, incentive compensation, commissions,
reimbursement of expenses, severance, car allowances 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 2003 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 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 Foster Technologies.

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         2.6      "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.

         2.7      "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 twice the amount of a
Participant's Target Award. In addition, the portion of an Individual Incentive
Award derived from the Product Pool shall not exceed the portion of the Target
Award allocated to the Product Pool multiplied by a percentage equal to twice
the percentage of Target Award paid to Participants in the General Pool. The
limitations herein shall not affect amounts distributed under Section 3.3.

         2.8      "OPERATING UNIT" shall mean the following units or divisions
which are reported in the Company's internal financial statements: CXT Rail, CXT
Buildings, Foster Coated Pipe, Threaded Products, Rail Products (excluding CXT
Rail), Piling, Fabricated Products and Geotech, subject to such adjustments as
may be made by the Chief Executive Officer.

         2.9      "OPERATING UNIT TARGET AWARD" shall mean the portion of a
Participant's Target Award allocated to a specific Operating Unit pursuant to
Section 3.5B(a).

         2.10     "OPERATING UNIT PERFORMANCE PERCENTAGE" shall mean the sum of
the percentages earned by the applicable Operating Unit pursuant to Section
3.5B(b).

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

         2.12     "PERFORMANCE PERCENTAGE" shall be each of the Percentages
earned by an Operating Unit under Section 3.5(B)(b) and which together equal the
Operating Unit Performance Percentage.

         2.13     "PLAN" shall mean the L. B. Foster Company 2003 Management
Incentive Compensation Plan, which Plan shall be in effect only with respect to
the fiscal year ending December 31, 2003.

         2.14     "PLANNED INCOME" shall mean Pre-Incentive Income of $6,885,000

         2.15     "PLANNED CONTRIBUTION" shall mean $895,000.

         2.16     "POOL" shall mean the Product Pool and the General Pool, as
calculated pursuant to Section 3.4 hereof, subject to such adjustments as may be
made by the Chief Executive Officer.

         2.17     "PRE-INCENTIVE INCOME" shall mean the audited pre-tax income,
after, inter alia, deductions for benefits payable under the 2003 Sales
Incentive Plans, of the Corporation for the fiscal year ending December 31, 2003
determined in accor-

                                       2
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dance 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.

         2.18     "PRE-TAX INCOME" shall mean an Operating Unit's Pre-Tax Income
as shown in the Corporation's financial statements and subject to such
adjustments as may be made by the Chief Executive Officer, without taking into
account incentive compensation under the 2003 Sales Incentive Plan.

         2.19     "TARGET AWARD" shall mean the product of a Participant's Base
Compensation multiplied by said Participant's Target Percentage.

         2.20     "TARGET PERCENTAGE" shall mean those percentages assigned to
Participants pursuant to Section 3.2 hereof.

III.     PLAN DESCRIPTION

         3.1      BASE FUND. The amount of the Base Fund shall be calculated
                  based upon the percentage of Pre-Incentive Income to Planned
                  Income, calculated as follows:

<TABLE>
<CAPTION>
                 I                                          II
-------------------------------------        ----------------------------------                  III
Pre-Incentive Income as Percentage of        Percentage of Planned Contribution                ---------
     Planned Income ($6,885,000)                   ($895,000) to be Made                       Base Fund
-------------------------------------        ----------------------------------                ---------
<S>                                          <C>                                           <C>
                 70%                                         50%                                 447,500
                 75%                                         60%                                 537,000
                 80%                                         70%                                 626,500
                 85%                                         78%                                 698,100
                 90%                                         86%                                 769,700
                 95%                                         93%                                 832,350
                100%                                        100%                                 895,000
                105%                                        110%                                 984,500
                110%                                        120%                               1,074,000
                115%                                        130%                               1,163,500
                120%                                        140%                               1,253,000
                125%                                        150%                               1,342,500
                130%                                        160%                               1,432,000
                135%                                        170%                               1,521,500
                140%                                        180%                               1,611,000
                145%                                        190%                               1,700,500
           150% and above                                200% plus                         $1,790,000 and up
                                                 26% of Pre-tax Income over
                                                       $10,327,500
</TABLE>

                                       3

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The Percentage of Planned Contribution Percentage in Column II will not increase
until the next specified level of Pre-Incentive Income as Percentage of Planned
Income in Column I has been achieved.

Notwithstanding the foregoing, if Pre-Incentive Income exceeds $4,000,000 but is
less than $4,819,500, the Base Fund shall be the Pre-Incentive Income divided by
$4,819,500, multiplied by $447,500.

EXAMPLE: If the Corporation earned $11,500,000 in Pre-Incentive Income the Base
Fund would be $2,094,850:

         a.       Determine Percentage of Pre-Incentive Income to Planned Income
                  plus Pre-Incentive Income in excess of 150% of Planned Income.

         $11,500,000
         ------------ = 150% of Planned Income + $1,172,500 (i.e.  $11,500,000-
         $  6,885,000                                            $10,327,500)

         b.       Locate Base Fund in Column III

         $1,790,000 + (26% X $1,172,500) = $2,094,850

         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, 2003, as follows:

<TABLE>
<CAPTION>
          GRADE LEVELS                                                      % OF BASE COMPENSATION
          ------------                                                      ----------------------
<S>                                                                         <C>
Grade 6 I, Sales                                                                       15
Grade 7 I, Sales                                                                       15
Grade 8 I, Sales                                                                       20
Grade 10 I, Sales/Management                                                           22
Grade 10 P, Professional/Management                                                  12.5
Grade 11 I, Sales/Management                                                           23
Grade 11 P, Professional/Management                                                    15
Grade 12, Management Positions                                                         25
Grade 13, Management Positions                                                         27
Grade 14, Management Positions                                                         30
Grade 15, Management Positions                                                         32
Grade 16, Management Positions                                                         36
Grade 17, Management Positions                                                         38
Grade 18, Management Positions                                                         39
Grade 19, Management Positions                                                         40
Grade 20, Management Positions                                                         50
Grade 21, Management Positions                                                         52
Grade 22, Management Positions                                                         54
Grade 23 and Above                                                                     60
</TABLE>

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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 Committee may determine performance goals for the Chief Executive
Officer and such other officers as the Committee may, in its discretion, select
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, 2003 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 Article V, shall be reserved for
discretionary payments to employees of the Corporation. 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, at the discretion of the Chief Executive Officer, either revert to the
Corporation or be allocated to Participants in proportion to their respective
Individual Incentive Awards prior to the allocation herein.

         3.4      CALCULATION OF POOLS. Each Participant and all or any portion
of each Participant's Target Award shall be assigned to a Pool by the Chief
Executive Officer of the Company with (i) 100% of the Target Award of a
Participant not assigned to an Operating Unit being assigned to the General Pool
and (ii) 75% of the Target Award of a Participant assigned to an Operating
Unit(s) being assigned to the Product Pool and 25% of such Participant's Target
Award being assigned 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 :

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 PRE-INCENTIVE INCOME AS PERCENTAGE OF PLANNED INCOME

Pre-Incentive Income is:

                                       5
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         $7,100,000
         -----------             =       103%
         $6,885,000

(b)      DETERMINE BASE FUND UNDER COLUMN III

         103% of Planned Income will yield 100% of the Planned Contribution, or
         $895,000

(c)      CALCULATE FUND BY DEDUCTING 10% FOR "DISCRETIONARY AWARDS"

         $895,000 X 90% = $805,500

(d)      DETERMINE AMOUNT OF EACH POOL

         1.       GENERAL POOL

                  $1,000,000
                  ---------------   x  $805,500  =   $383,571
                  $2,100,000

         2.       PRODUCT POOL

                  $1,100,000
                  ---------------   x  $805,500  =   $421,929
                  $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 2.9, 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:

THE GENERAL POOL IS $383,571. 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  $383,571  =  $7,365
         $  1,000,000                               (Individual Incentive Award)

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         3.5B     PRODUCT POOL INDIVIDUAL INCENTIVE AWARDS

                  (a)      The Chief Executive Officer shall assign all or any
         portion of a Participant's Target Award to an Operating Unit for
         purposes of calculating percentages earned under 3.5(B)(b)(i), and
         (b)(ii), may adjust such allocation(s) at any time (the "Operating Unit
         Target Award"). The Participant's Individual Incentive Award shall be
         calculated by: (i) multiplying each such Operating Unit Target Award by
         the sum of the percentages (the "Operating Unit Performance
         Percentage") earned by the Operating Unit under 3.5B(b), with the
         resulting product being the "Adjusted Operating Unit Target Award" and
         (ii) multiplying the amount in the Product Pool by a fraction, the
         numerator of which is the Participant's Adjusted Operating Unit Target
         Award and the denominator of which is the sum of all Adjusted Operating
         Unit Target Awards of all Participants in the Product Pool.

                  (b)      The Operating Unit Performance Percentage with
         respect to the applicable Operating Unit shall be the sum of the
         following percentages:

                           (i)      The single "Pre-Tax Income Performance
                           Percentage" set forth below opposite the "Pre-Tax
                           Income as % of the Operating Unit's 2003 Operating
                           Plan" earned by the applicable Operating Unit
                           (subject to the $5,000 thresholds set forth below and
                           subject to adjustment by the Chief Executive
                           Officer):

<TABLE>
<CAPTION>
PRE-TAX INCOME AS % OF OPERATING                             PRE-TAX INCOME
  UNIT'S 2003 OPERATING PLAN*                            PERFORMANCE PERCENTAGE
--------------------------------                         ----------------------
<S>                                                      <C>
           75%                                                       5%
           80%                                                      10%
           85%                                                      20%
           90%                                                      30%
           95%                                                      40%
          100%                                                      50%
          110%                                                      65%
          120%                                                      80%
       130% and up                                                 100%
</TABLE>

         *        Once an Operating Unit has achieved 75% of the Operating
         Unit's 2003 Operating Plan Pre-Tax Income, the Operating Unit shall
         receive credit for additional percentage points under the column on the
         left above only to the extent each such percentage point represents at
         least $5,000 in Pre-Tax Income.

         EXAMPLE:

                                       7

<PAGE>

                  AN OPERATING UNIT'S 2003 OPERATING PRE-TAX INCOME PLAN IS
         $200,000 AND IN 2003 THE OPERATING UNIT ACHIEVES EXACTLY $200,000 IN
         OPERATING INCOME.

                  SINCE $150,000 IN PRE-TAX INCOME ($200,000 X 75%) WAS REQUIRED
         TO MEET THE THRESHOLD FOR ANY PERFORMANCE PERCENTAGE TO BE EARNED UNDER
         3.5(b)(i), THE $50,000 "EXCESS" ($200,000 - $150,000) WILL BE USED TO
         CALCULATE ADDITIONAL PERFORMANCE PERCENTAGES, I.E. $50,000 /$5,000 =
         10. ACCORDINGLY, THE OPERATING UNIT WOULD BE CONSIDERED TO HAVE
         ACHIEVED 85% OF THE OPERATING UNIT'S 2003 OPERATING PLAN (75% + 10%)
         AND TO HAVE EARNED A 20% PERFORMANCE PERCENTAGE INSTEAD OF THE 50%
         PERFORMANCE PERCENTAGE THAT OTHERWISE WOULD HAVE BEEN EARNED DUE TO THE
         OPERATING UNIT ACHIEVING 100% OF ITS 2003 OPERATING PLAN PRE-TAX
         INCOME.

                           (ii)     25% if the Operating Unit met or exceeded
                  its Return on Investment set forth in such Operating Unit's
                  2003 Operating Plan (subject to adjustment by the Chief
                  Executive Officer), otherwise 0%.

                  (c)      Notwithstanding any provision herein to the contrary,
         the sum of all Individual Incentive Awards allocable to an Operating
         Unit may not exceed 25% of such Operating Unit's Operating Unit Income.
         A Participant assigned to an Operating Unit affected by this limit
         shall receive a share of the available Operating Unit Income (i.e. 25%
         of the Operating Unit's Operating Unit Income) equal to the
         Participant's applicable Adjusted Operating Unit Target Award divided
         by the sum of applicable Adjusted Operating Unit Target Awards for all
         applicable Participants assigned to that Operating Unit. Amounts not
         payable because of this limitation shall be used for discretionary
         payments under Section 3.3.

EXAMPLE :

         THE PRODUCT POOL IS $421,929. MANAGER SMITH'S TARGET AWARD ALLOCATED TO
THE PRODUCT POOL IS $50,000 AND IS ALLOCATED TO CXT RAIL. THE ADJUSTED TARGET
AWARD OF ALL PARTICIPANTS IN THE PRODUCT POOL IS $800,000. CXT RAIL MEETS THE
REQUIREMENTS OF B(i) AND B(ii) AND HAS ALSO EXCEEDED ITS PLANNED PRE-TAX INCOME
BY 10% AND $500,000. MANAGER SMITH'S BONUS WOULD BE CALCULATED AS FOLLOWS:

(a)      Operating Performance Percentage

          65%  +  25%   =  90%
          (i)     (ii)

(b)      Determine Smith's Adjusted Operating Target Award

                                       8
<PAGE>

         $50,000 X 90% = $45,000

(c)      Determine Smith's Individual Award from the Product Pool

         $ 45,000 X $421,929 = $23,734
         --------
         $800,000  (sum of all Adjusted Operating Target Awards)

EXAMPLE:

         THE PRODUCT POOL IS $421,929. MANAGER JONES' TARGET AWARD ALLOCATED TO
THE PRODUCT POOL IS $50,000, WITH 50% ALLOCATED TO GEOTECH AND 50% ALLOCATED TO
CXT BUILDINGS. GEOTECH'S OPERATING UNIT INCOME IS 88% OF ITS 2003 PLANNED
PRE-TAX INCOME AND GEOTECH HAS ACHIEVED ITS PLANNED RETURN ON INVESTMENT. CXT
BUILDING'S OPERATING UNIT INCOME IS BOTH $1M ABOVE AND 200% OF ITS 2003 PLANNED
PRE-TAX INCOME AND CXT BUILDINGS HAS SATISFIED ALL REQUIREMENTS UNDER 3.5B(b).
THE SUM OF ADJUSTED OPERATING UNIT TARGET AWARDS FOR ALL PARTICIPANTS WITH
RESPECT TO GEOTECH IS $100,000, FOR ALL PARTICIPANTS WITH RESPECT TO CXT
BUILDINGS IS $200,000 AND FOR ALL PARTICIPANTS WITHIN ALL OPERATING UNITS IS
$800,000. DISREGARDING THE REQUIREMENT THAT AWARDS MAY NOT EXCEED 25% OF THE
OPERATING UNIT INCOME FOR THE APPLICABLE OPERATING UNIT, MANAGER JONES'
INDIVIDUAL INCENTIVE AWARD WOULD BE CALCULATED AS FOLLOWS:

         (a)      OPERATING UNIT PERFORMANCE PERCENTAGE

                  For CXT Buildings:

                  100%  +  25%     =   125%
                  b(i)  +  b(ii)

                  For Geotech

                  20%   +  25%     =   45%
                  b(i)  +  b(ii)

         (b)      DETERMINE JONES' ADJUSTED OPERATING UNIT TARGET AWARDS

                  For CXT Buildings:

                  ($50,000 X 50%) X 125% = $31,250

                  For Geotech:

                  ($50,000 X 50%) X  45% = $11,250

         (c)      DETERMINE JONES' INDIVIDUAL INCENTIVE AWARD

                  For CXT Buildings:

                                       9

<PAGE>

                  $ 31,250     X    $421,929   =      $16,482
                  --------
                  $800,000          (Product Pool)

                  For Geotech:

                  $ 11,250     X    $421,929   =      $ 5,933
                  --------
                  $800,000

                  Total Individual Incentive Award   $22,415 (excluding General
                                                     Pool Award)

EXAMPLE:

         SAME FACTS IN THE PRECEDING EXAMPLE, EXCEPT THAT CXT BUILDING'S
OPERATING UNIT INCOME IS $300,000 AND THE SUM OF CXT BUILDING'S INDIVIDUAL
INCENTIVE AWARDS WOULD BE, BUT FOR THE LIMITS IN 3.5B(c), $100,646.

         (a)      DETERMINE MAXIMUM INDIVIDUAL INCENTIVE AWARDS FOR CXT
                  BUILDING'S PARTICIPANTS

                            25% X $300,000 = $ 75,000

         (b)      DETERMINE MANAGER JONES' SHARE

Jones' Adjusted Operating Unit Target Award    X      Maximum Aggregate
-------------------------------------------
Sum of All CXT Building Adjusted Operating        CXT Building Incentive Awards
Unit Target Awards

                           $ 31,250   X  $ 75,000 = $ 11,719
                           --------
                           $200,000

         (c)      DETERMINE AMOUNT AVAILABLE FOR DISCRETIONARY PAYMENTS

                           ($100,646 - $ 75,000) = $ 25,646

         (d)      Notwithstanding any provision herein to the contrary, a
Participant's Individual Incentive Award from the Product Pool may not exceed
twice the applicable Performance Percentage earned by the Participant's
applicable Operating Unit under each of 3.5(B)(b)(i) and (ii) multiplied by the
Participant's applicable Operating Unit Target Award. Amounts not payable
because of this limitation shall be available for discretionary payments under
Section 3.3.

IV.      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:

                                       10

<PAGE>

         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 or
                  Chief Executive Officer, for at least six (6) months of the
                  entire fiscal year, unless deceased or retired.

         B.       A Participant may 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 may not primarily be provided to the
                  Natmaya, Inc., Fosmart, Inc. or Foster Technologies Inc.
                  unless otherwise approved by the Chief Executive Officer.

         D.       A Participant may not, unless agreed to in writing by the
                  Chief Executive Officer, be a participant in any other
                  incentive plan maintained by the Corporation, other than the
                  Corporation's stock option plans.

         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).

V.       REALLOCATIONS

         Any portion of the Fund not otherwise distributed shall be available
for discretionary payments under Section 3.3.

VI.      PAYMENT OF AWARDS

         Payment of Individual Incentive Awards will be made on or before March
15, 2004.

VII.     ADMINISTRATION AND INTERPRETATION OF THE PLAN

         The Chief Executive Officer, if there is a dispute, shall determine the
Operating Unit(s) that will receive credit for any sale and/or how credit for
any sale is to be allocated among any Operating Units. The Chief Executive
Officer's decisions are subject to final review by the Committee if the
Committee requests such review.

         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.

                                       11

<PAGE>

         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, subject to any reversions
permitted under Section 3.3.

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

         The Corporation's Internal Audit Department will review and verify the
calculation of Individual Incentive Awards.

                                       12<PAGE>

                                                                   EXHIBIT 10.55

                                                                           FINAL

                            L. B. FOSTER COMPANY 2004
                     MANAGEMENT INCENTIVE COMPENSATION PLAN

I.       PURPOSE

         This Plan is designed to motivate employees to achieve goals, to reward
         employees who achieve such goals and to improve corporate performance.

II.      CERTAIN DEFINITIONS

         The terms below shall be defined as follows for the purposes of this
         Plan. The definitions shall be subject to such adjustments as, from
         time to time, may be made, by the Committee.

         2.1      "BASE COMPENSATION" shall mean the total base salary, rounded
                  to the nearest whole dollar, actually paid to a Participant
                  during the Fiscal Year, excluding payment of overtime,
                  incentive compensation, commissions, reimbursement of
                  expenses, severance, car allowances 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 Participants who die,
                  retire or are terminated shall include only such compensation
                  paid to such during the fiscal year with respect to the period
                  prior to death, retirement or termination.

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

         2.3      "CORPORATION" shall mean L. B. Foster Company and those
                  subsidiaries thereof in which L.B. Foster Company owns 100% of
                  the outstanding common stock.

         2.4      "DEPARTMENT/INDIVIDUAL GOALS" are those goals approved by the
                  Chief Executive Officer and utilized to establish incentive
                  awards pursuant to Section 4.3

         2.5      "FISCAL YEAR" means the 2004 calendar year.

         2.6      "INCENTIVE AWARD" shall mean the payment made to a Participant
                  under this Plan, after and/or subject to adjustments under
                  this Plan.

<PAGE>

         2.7      " INCENTIVE INCOME" shall mean the pre-tax income (after,
                  inter alia, deductions for benefits payable under the annual
                  sales incentive and profit sharing plans) for the Corporation
                  or, as applicable, for an Operating Unit for the Fiscal Year,
                  but determined in accordance with generally-accepted
                  accounting principles, excluding (i) benefits payable under
                  this Plan; (ii) dividends with respect to Dakota Minnesota &
                  Eastern Railroad Corporation preferred stock to the extent not
                  included in the Corporation's Planned Incentive Income; and
                  (iii) 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.

         2.8      "OPERATING UNIT" shall mean the following units or divisions
                  which are reported in the Company's internal financial
                  statements: CXT Rail, CXT Buildings, Foster Coated Pipe,
                  Threaded Products, Rail Products (excluding CXT Rail), Piling,
                  Fabricated Products and Geotech, subject to such adjustments
                  as may be made by the Chief Executive Officer.

         2.9      "PARTICIPANT" shall mean a salaried employee of the
                  Corporation who satisfies all of the eligibility requirements
                  set forth in Article III hereof.

         2.10     "PLAN" shall mean the L. B. Foster Company Management
                  Incentive Compensation Plan, which Plan shall be in effect
                  with respect to the Fiscal Year.

         2.11     "PLANNED INCENTIVE INCOME" shall mean, as applicable,
                  Incentive Income for the Corporation and each Operating Unit
                  as approved by the Corporation's Board of Directors.

         2.12     "TARGET AWARD" shall mean the product of a Participant's Base
                  Compensation multiplied by said Participant's Target
                  Percentage.

         2.13     "TARGET PERCENTAGE" shall mean those percentages assigned to
                  Participants pursuant to Section 4.1 hereof, multiplied by
                  80%.

III.     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:

         3.1      A Participant must be a salaried employee of the Corporation,
                  at a grade level set forth in Section 4.1 or as otherwise
                  approved by the Corporation's Chairman of the Board and Chief
                  Executive Officer, for at least six (6) months of the entire
                  fiscal year, unless deceased or retired.

         3.2      A Participant may 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; (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

                                       2

<PAGE>

                  money from the Corporation in connection with said
                  termination, or (iv) have been primarily employed by Natmaya
                  or Fosmart during the Fiscal Year.

         3.3      A Participant's Target Percentage shall be based on the
                  Participant's Grade Level on July 1, 2004. Those Participants
                  who have retired or died prior to July 1, 2004 shall have a
                  Target Percentage based upon their grade level at death or
                  retirement.

         3.4      A Participant may not, unless agreed to in writing by the
                  Chief Executive Officer, be a participant in any other
                  incentive plan maintained by the Corporation, other than the
                  Corporation's stock option plans.

         3.5      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).

IV.               CALCULATION OF INCENTIVE AWARDS

         4.1      ELIGIBILITY AND TARGET PERCENTAGES. Each Participant shall
                  have a Target Percentage, prior to adjustment under Section
                  2.13, based upon the grade level of such Participant, as
                  follows:

<TABLE>
<CAPTION>
MANAGEMENT            TARGET
GRADE LEVEL         PERCENTAGE
-----------         ----------
<S>                 <C>
Grade 23+             45.0%
Grade 22              35.0%
Grade 21              35.0%
Grade 20              35.0%
Grade 19              30.0%
Grade 18              30.0%
Grade 17              30.0%
Grade 16              30.0%
Grade 15              20.0%
Grade 14              20.0%
Grade 13              15.0%
Grade 12              10.0%
Grade 11                 5%
Grade 10                 5%
</TABLE>

         Other employees selected, in writing, by the Corporation'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.

                                       3

<PAGE>

         4.2      THRESHOLDS. The following table shows how Incentive Awards are
                  calculated, prior to adjustment and to limitations under this
                  Plan:

<TABLE>
<CAPTION>
                                              UNADJUSTED INCENTIVE  AWARD, AS
ACTUAL PERFORMANCE, BASED ON                   PERCENTAGE OF  LOWER OF TARGET
PERCENTAGE OF PLANNED INCENTIVE             AWARD OR TARGET AWARD AT INCENTIVE
     INCOME ACHIEVED                                  PLANNED INCOME
-------------------------------             ----------------------------------
OUTSTANDING                                 CORPORATE           OPERATING UNIT
<S>                                         <C>                 <C>
         160% and over                         200%                 200%
155%                                           190%                 190%
150%                                           180%                 180%
145%                                           170%                 170%
140%                                           160%                 160%
135%                                           150%                 150%
130%                                           140%                 140%
125%                                           130%                 130%

EXCEEDING

120%                                           120%                 120%
115%                                           115%                 115%
110%                                           110%                 110%
105%                                           105%                 105%

TARGET

100%                                           100%                 100%

THRESHOLD

90%                                             80%                  80%
80%                                             60%                  60%
70%                                             40%
</TABLE>

                  The calculation of "Unadjusted Incentive Award" in the second
                  and third columns of the above table shall be adjusted
                  proportionately to reflect "Percentage of Income Achieved"
                  between the levels in the table. For example, if Corporate
                  achieved 73% of "Planned Incentive Income", the percentage in
                  the second column would be deemed to be 46%; if Corporate
                  achieved 137% of "Planned Incentive Income" the percentage in
                  the second column would be deemed to be 154%.

         4.3      ALLOCATED TARGET AWARDS. For purposes of calculating Incentive
                  Awards, a Participant's Target Award shall be allocated as
                  follows, which allocations shall be approved by the Chief
                  Executive Officer.

                                       4

<PAGE>

<TABLE>
<CAPTION>
                                                      Department/Individual
                     Corporate       Operating Unit           Goals
                     ---------       --------------   ---------------------
<S>                  <C>             <C>              <C>
CEO,
Chairman                100%

Operating Unit
Heads                    20%              70%                  10%

Corporate                90%                                   10%

General Managers         20%              70%                  10%

Sr Product Mgrs                           80%                  20%

Key Exempt Staff                          80%                  20%
</TABLE>

         4.4      LIMITATIONS AND ADJUSTMENTS TO AWARDS. The portion of a
                  Participant's Target Award allocated to "Department/Individual
                  Goals" shall be adjusted to the same extent that the
                  Participant's Target Award(s) allocated to Corporate or
                  Operating Units are adjusted under Sections 4.2 and 4.4 based
                  upon the primary allocation of the Participant's Target Award
                  between Corporate and Operating Units(s).

                  All Incentive Awards attributable to an Operating Unit or the
                  Corporation (including Incentive Awards attributable to
                  Department/Individual Goals) may not exceed 16% of the
                  Operating Unit's or Corporation's actual Incentive Income when
                  the Corporation or the Operating Unit, as applicable, attains
                  100% or less of its Planned Incentive Income. Such Incentive
                  Awards allocated to an Operating Unit or the Corporation, if
                  necessary, shall be proportionately adjusted downward so that
                  the sum of such resulting Incentive Awards does not exceed 16%
                  of the applicable Corporation's or Operating Unit's actual
                  Incentive Income.

                  If Incentive Income exceeds 100% of Planned Incentive Income,
                  the Incentive Award shall be adjusted by (i) proportionately
                  adjusting downward, if necessary, the Incentive Awards
                  allocated to the Operating Unit or the Corporation so that the
                  sum of the resulting Incentive Awards allocated to the
                  Operating Unit or the Corporation does not exceed 16% of the
                  applicable Corporation's or Operating Unit's Planned
                  Incentive Income; and then (ii) by multiplying the Incentive
                  Award that would have been paid at Planned Incentive Income by
                  the applicable percentage in the right hand column of the
                  table in Section 4.2.

                  The Chief Executive Officer may, in his discretion and except
                  for awards to the Chief Executive Officer, adjust Incentive
                  Awards actually payable under this Plan +/- 25% ; provided,
                  however, that the total awards payable under the Plan after
                  such adjustments shall not exceed the total Incentive Awards
                  that would have been payable if no adjustments had been made;
                  and provided further that any adjustment made with respect to
                  an officer, elected by the Board of Directors, must be
                  approved by the Committee.

                  The Chief Executive Officer may, in his discretion and except
                  for awards to the Chief Executive Officer, adjust Incentive
                  Awards actually payable under this Plan +/- 25% ; provided,
                  however, that the total awards payable under the Plan after
                  such adjustments shall not exceed the total Incentive Awards
                  that would have been payable if no adjustments had been made;
                  and provided further that any adjustment made with respect to
                  an officer, elected by the Board of Directors, must be
                  approved by the Committee.

                                       5

<PAGE>

         4.5      DEPARTMENT/INDIVIDUAL GOALS. Determinations on the achievement
                  of Department/Individual Goals shall be approved by the Chief
                  Executive Officer.

         EXAMPLE 1:

         General Manager Smith works for Fabricated Products and has a Target
         Award of $16,000 (i.e. Base Compensation of $100,000 and a 16% Target
         Percent age). In 2004, the Corporation earns $6,500,000 of Incentive
         Income, which is 100% of its Planned Incentive Income and Fabricated
         Products earns $1,875,000 of Incentive Income which is 125% of its
         Planned Incentive Income ($1,500,000). The CEO determines that Mr.
         Smith has achieved 1/2 of his department/individual goals. Mr. Smith's
         Incentive Award (ignoring the 16% limits and the CEO's ability to
         adjust upward or downward), would be calculated as follows:

         a.       $ 3,200 of Mr. Smith's Target Award (20% X $16,000) would be
         allocated to Corporate. Assuming that Corporate total awards do not
         exceed 16% of the Corporation's Incentive Income and since Corporate
         achieved 100% of its Planned Incentive Income, Mr. Smith would receive
         $ 3,200 from the Corporate allocation. See Sec. 4.2.

         b.       $ 11,200 of the Target Award (or 70% of $16,000) would be
         allocated to the Operating Unit. Since Fabricated Products earned 125%
         of Planned Income, Mr. Smith would receive $ 14,560 ($ 11,200 X 130%)
         from the Operating Unit allocation.

         c.       $1,600 (or 10% of $16,000) was allocated to individual/
         departmental goals. Since Mr. Smith's Target Award was primarily
         allocated to an Operating Unit, Mr. Smith would have been eligible to
         receive a maximum of $2,080 ($1600 X 130%) from the achievement of
         individual/departmental goals. Since Mr. Smith achieved 50% of his
         goals, he would receive $1,040 from the individual/departmental goals
         allocation.

         d.       Mr. Smith's total Incentive Award would be $ 18,800.

         EXAMPLE 2:

         Same facts as Example 1, except that: (i) the total of all unadjusted
         Incentive Awards (without reference to 16% limitations and with
         Fabricated Products' Incentive Income being 125% of its Planned Income
         of $1,500,000) based on Target Awards allocated to Fabricated Products
         would have been $450,000;

                                       6

<PAGE>

         and (ii) the total Incentive Awards payable from Corporate, without
         adjustment, would have been $1,300,000. Mr. Smith's Incentive Award
         would be calculated as follows:

         a.       Mr. Smith's Corporate allocations would be affected by the 16%
         caps since the maximum Corporate allocation would be 16% X $6,500,000,
         or $1,040,000; accordingly, only 80% ($1,040,000 / $1,300,000) of the
         Corporate allocation would be payable. Mr. Smith would receive $ 2,560
         ($3,200, see (a) of Example 1, x 80%) from his Corporate allocation.

         b.       If Fabricated Products had achieved its Planned Incentive
         Income of $1,500,000, its maximum aggregate Incentive Awards could not
         have exceeded $240,000 ($1,500,000 X 16%). Since Fabricated achieved
         125% of its Planned Incentive Income, the total Incentive Awards would
         be limited to $240,000 X 130%, see Sec. 4.2, or $312,000. Accordingly,
         Mr. Smith would receive 69-1/3% ($312,000 / $450,000) of the unadjusted
         $ 15,600 ($14,560 + $1,040, see (b) and (c) of Example 1), or $ 10,816
         from the Operating Unit allocation.

         c.       Mr. Smith's total Incentive Award would be $ 13,376.

V.       PAYMENT OF AWARDS

         Payment of Individual Incentive Awards will be made on or before the
         later of March 15, 2005 or the completion of the audit for the
         Corporation's Fiscal Year.

VI.      ADMINISTRATION AND INTERPRETATION OF THE PLAN

         The Chief Executive Officer, if there is a dispute, shall determine the
         Operating Unit(s) that will receive credit for any sale and/or how
         credit for any sale is to be allocated among any Operating Units. The
         Chief Executive Officer's decisions are subject to final review by the
         Committee if the Committee requests such review.

                                       7

<PAGE>

         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;.

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

         The Corporation's Internal Audit Department will review and verify the
         calculation of Incentive Awards.

                                       8

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