Stockholder Proposals for Next Year
To be included in the proxy
for the 2018 annual meeting, stockholder proposals must be submitted by December 1, 2017. Only proposals submitted on time may be eligible for inclusion in our proxy statement.
Our amended and restated
by-laws
require that notice of business to be properly brought before the 2018 annual meeting of stockholders must be submitted to us
between December 1, 2017 and January 30, 2018. Only matters for which we receive timely notice may be brought before the 2018 annual meeting.
Stockholder proposals to be brought before the 2018 annual meeting should be sent c/o the Secretary of Wabtec, 1001 Air Brake Avenue, Wilmerding, PA 15148.
By order of the Board of Directors,
David L.
DeNinno
Executive Vice President, General Counsel and Secretary
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Annex A
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
2011 STOCK INCENTIVE PLAN
(as amended and restated effective May 10, 2017)
SECTION 1
Purpose; Definitions
1.1
Purpose
. The purposes of the 2011 Stock Incentive Plan, as
amended and restated effective May 10, 2017 (the Plan), are to encourage eligible employees of Westinghouse Air Brake Technologies Corporation (the Corporation) and its Subsidiaries to increase their efforts to make the
Corporation and each Subsidiary more successful, to provide an additional inducement for such employees to remain with the Corporation or a Subsidiary, to reward such employees by providing an opportunity to acquire shares of Common Stock on
favorable terms and to provide a means through which the Corporation may attract able persons to enter the employ of the Corporation or one of its Subsidiaries.
1.2
Certain Definitions
. In addition to terms defined herein in a place where they are used, the following terms are defined as set forth below:
(a) Award means a stock option, a stock appreciation right, restricted stock, restricted stock units, performance units or
other stock-based award granted under the Plan.
(b) Base Price shall have the meaning set forth in
Section 5.3.
(c) Common Stock shall mean the Common Stock, par value $0.01 per share, of the Corporation.
(d) Fair Market Value with respect to a share of the Common Stock shall mean the mean between the following
prices, as applicable, for the date as of which Fair Market Value is to be determined as quoted in such reliable publication as the Committee, in its sole discretion, may determine to rely upon: (i) if the Common Stock is listed on the New York
Stock Exchange, the highest and lowest sales prices per share of the Common Stock as quoted in the NYSE-Composite Transactions listing for such date, (ii) if the Common Stock is not listed on such exchange, the highest and lowest sales prices
per share of Common Stock for such date on (or on any composite index including) the NASDAQ Exchange or the principal United States of America securities exchange registered under the Securities Exchange Act of 1934, as amended (the 1934
Act) on which the Common Stock is listed. If there are no such sale price quotations for the date as of which Fair Market Value is to be determined but there are such sale price quotations within a reasonable period both before and after such
date, then Fair Market Value shall be determined by taking a weighted average of the means between the highest and lowest sales prices per share of the Common Stock as so quoted on the nearest date before and the nearest date after the date as of
which Fair Market Value is to be determined. The average should be weighted inversely by the respective numbers of trading days between the selling dates and the date as of which Fair Market Value is to be determined. If there are no such sale price
quotations on or within a reasonable period both before and after the date as of which Fair Market Value is to be determined, then Fair Market Value of the Common Stock shall be the weighted average of the means between such bona fide bid and asked
prices on the nearest trading date before and the nearest trading date after the date as of which Fair Market Value is to be determined, if both such dates are within a reasonable period. The average is to be determined in the manner described above
in this definition. If the Fair Market Value of the Common Stock cannot be determined on the basis previously set forth in this definition on the date as of which Fair Market Value is to be determined, the Committee shall in good faith and in
conformance with the requirements of Section 409A of the Code, to the extent applicable to an Award, determine the Fair Market Value of the Common Stock on such date. Fair Market Value shall be determined without regard to any restriction other than
a restriction which, by its terms, will never lapse.
(e) Free-Standing SARs shall have the meaning set forth in
Section 5.2.
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(f) Participant means an eligible employee selected by the Committee who has
received an Award under the Plan and any transferee or transferees of such employee to the extent the transfer is permitted under the Plan.
(g) Performance Goals means the performance goals, if any, established by the Committee in connection with the grant of restricted stock, restricted stock units, performance units or other
Awards. In the case of Qualified Performance-Based Awards, the Performance Goals means such performance goals based on one or more of the following: (i) cash flow; (ii) earnings per share; (iii) earnings or income measures
(including EBIT and EBITDA)); (iv) return measures (including return on assets, capital, invested capital, equity, sales, or revenue); (v) total shareholder return; (vi) share price performance; (vii) revenue; (viii) profit margin;
(ix) customer metrics (including customer satisfaction, customer retention, or customer profitability); (x) productivity; (xi) expense targets; (xii) market share; (xiii) cost control measures; (xiv) balance sheet metrics;
(xv) strategic initiatives; (xvi) implementation, completion or attainment of measurable objectives with respect to recruitment or retention of personnel, employee satisfaction or diversity; (xvii) successful completion of, or
achievement of milestones or objectives related to, financing or capital raising transactions, strategic acquisitions or divestitures, joint ventures, partnerships, collaborations, or other transactions; (xviii) debt levels or reduction or debt
ratios; (xix) operating efficiency; (xx) working capital targets; (xxi) quantifiable, objective measures of individual performance relevant to the particular individuals job responsibilities; (xxii) environmental missions
improvement; (xxiii) innovation as measured by a percentage of sales from new products; (xxiv) safety performance; (xxv) number of accounts; or (xvi) any combination of the forgoing business criteria;
provided
,
however
, that such business criteria shall include any derivations of business criteria listed above (e.g., income shall include
pre-tax
income, net income, or operating income). Any business criteria
that are financial metrics may be determined in accordance with United States Generally Accepted Accounting Principles (GAAP) or may be adjusted when established (or to the extent permitted under Section 162(m), at any time thereafter)
to include or exclude any items otherwise includable or excludable under GAAP. Performance Goals may, in the discretion of the Committee, be established on a Company-wide basis, or with respect to one or more business units, divisions, subsidiaries
or business segments, as applicable. Performance Goals may be absolute or relative (to the performance of one or more comparable companies or indices or based on year-over-year growth).
(h) Qualified Performance-Based Award means an Award intended to qualify for the Section 162(m) Exemption, as provided in
Section 12.
(i) Subsidiary means any corporation, partnership, joint venture, limited liability company or
other entity in an unbroken chain of entities beginning with the Corporation if each of the entities other than the last entity in the unbroken chain owns an equity interest possessing at least fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other entities in the chain.
(j) Tandem SARs shall have the
meaning set forth in Section 5.2.
SECTION 2
Administration
2.1
Committee
. The Plan shall be administered by a Committee (the Committee) appointed by the Board of Directors of the Corporation (the Board) and consisting of not less than two members of the Board, who, at the time of
their appointment to the Committee and at all times during their service as members of the Committee, are (a)
Non-Employee
Directors as then defined under Rule
16b-3
under the 1934 Act, or any successor rule, (b) outside directors under Section 162(m)(4)(C) of the Internal Revenue Code of 1986 as amended (the Code) or any successor provision,
and (c) independent directors under the applicable rules of any applicable stock exchange, if the Common Stock is subject to such rules. The Committee shall have plenary authority to interpret the Plan and prescribe such rules, regulations and
procedures in connection with the operations of the Plan as it shall deem to be necessary and advisable for the administration of the Plan consistent with the purposes
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of the Plan. Without limitation of the foregoing, the Committee shall have the authority, subject to the terms and conditions of the Plan:
(a) to select the employees to whom Awards may be made;
(b) to determine whether and to what extent incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, other Awards of or
based upon Common Stock, or any combination thereof, are to be granted hereunder;
(c) to determine the number of shares of
Common Stock to be covered by each Award made hereunder;
(d) to determine the terms and conditions of each Award made
hereunder, based on such factors as the Committee shall determine;
(e) subject to Section 2.5, to modify, amend or adjust
the terms and conditions of any Award;
(f) to adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall from time to time deem advisable;
(g) to interpret the terms and provisions of the Plan and any
Award under the Plan (and any agreement under Section 2.5 relating thereto);
(h) subject to Section 2.5, to
accelerate the vesting or lapse of restrictions on any outstanding Award, other than a Qualified Performance-Based Award, based in each case on such considerations as the Committee in its sole discretion determines;
(i) to decide all other matters that must be determined in connection with an Award;
(j) to determine whether, to what extent and under what circumstances cash, shares of Common Stock and other property and other amounts
payable with respect to an Award under this Plan shall be deferred either automatically or at the election of the employee;
(k) to establish any blackout period that the Committee in its sole discretion deems necessary or advisable; and
(l) to otherwise administer the Plan.
In determining any Award to be made to any eligible employee, the Committee shall consider the position and the responsibilities of the employee being considered, the nature and value to the Corporation
or a Subsidiary of his or her services, his or her present and/or potential contribution to the success of the Corporation or a Subsidiary and such other factors as the Committee may deem relevant. The Committee may, except to the extent prohibited
by applicable law or the listing standards of the stock exchange which is the principal market for the Common Stock, allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of
its responsibilities and powers to any officers of the Corporation or committee of officers of the Corporation selected by it, except with respect to Awards (including Qualified Performance-Based Awards) to any covered employees as defined in
Section 162(m)(3) of the Code (Covered Employees) or persons subject to Section 16 of the 1934 Act.
2.2
Committee
Action
. The Committee shall keep records of action taken at its meetings. A majority of the Committee shall constitute a quorum at any meeting and the acts of a majority of the members present at any meeting at which a quorum is present, or acts
approved in writing by all members of the Committee, shall be the acts of the Committee.
2.3
Committee Discretion
. Any determination
made by the Committee or by an appropriately delegated officer pursuant to delegated authority under the provisions of the Plan with respect to any Award shall be made in the sole discretion of the Committee or such officer at the time of the Award
or, unless in contravention of any express term of the Plan, at any time thereafter. All decisions made by the Committee or any appropriately delegated officer pursuant to the provisions of the Plan shall be final and binding on all persons,
including the Corporation and the employees eligible under the Plan. No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan, any Award or Award agreement.
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2.4
Cancellation; Suspension; Clawback
. Any or all outstanding Awards to a Participant may, at any
time between the date of grant and the third anniversary of any exercise, payment or vesting of such Awards, in the Committees sole discretion and subject to such terms and conditions established by the Committee, be cancelled, suspended, or
required to be repaid to the Corporation if, to the extent permitted by applicable law, the Participant (whether during or after termination of employment with the Corporation and its Subsidiaries) (i) engages in the operation or management of
a business (whether as owner, partner, officer, director, employee or otherwise) which is in competition with the Corporation or any of its Subsidiaries, (ii) induces or attempts to induce any customer, supplier, licensee or other individual,
corporation or other business organization having a business relationship with the Corporation or any of its Subsidiaries to cease doing business with the Corporation or any of its Subsidiaries or in any way interferes with the relationship between
any such customer, supplier, licensee or other person and the Corporation or any of its Subsidiaries, (iii) solicits any employee of the Corporation or any of its Subsidiaries to leave the employment thereof or in any way interferes with the
relationship of such employee with the Corporation or any of its Subsidiaries, or (iv) makes any statements or comments, orally or in writing, of a defamatory or disparaging nature regarding the Corporation or any of its Subsidiaries (including
but not limited to regarding any of their respective businesses, officers, directors, personnel, products or policies), provided, however, that this sentence shall not apply following the occurrence of a Section 11 Event (as defined in
Section 11) unless the agreement under Section 2.5 specifically so provides. Whether a Participant has engaged in any such activities shall also be determined, in its sole discretion, by the Committee, and any such determination by the
Committee shall be final and binding. In addition, Awards shall be subject to the requirements of (i) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and
any implementing rules and regulations thereunder, (ii) similar rules under the laws of any other jurisdiction, (iii) any compensation recovery policies adopted by the Company to implement any such requirements or (iv) any other
compensation recovery policies as may be adopted from time to time by the Company, all to the extent determined by the Committee in its discretion to be applicable to a Participant.
2.5
Agreements
. The terms and conditions of each Award shall be set forth in a written (or electronic) agreement, which shall be delivered to the Participant receiving such Award upon, or as
promptly as is reasonably practicable following, the making of such Award. The effectiveness of an Award shall be subject to the agreement being signed by the Corporation and the Participant receiving the Award unless otherwise provided in the
agreement. Unless otherwise provided in the agreement, each agreement or amendment thereto shall be executed on behalf of the Corporation by the Chief Executive Officer (if other than the President), the President or any Vice President and by the
Participant. The agreement confirming a stock option shall specify whether the stock option is an incentive stock option or a nonstatutory stock option. The provisions of such agreements need not be identical. Without the consent of the Participant,
upon notice to the Participant thereof, the Committee may amend any Award to the Participant and the corresponding agreement in any respect not materially adverse to the Participant. All other amendments to the agreement shall be in writing
(including electronic amendments) and executed on behalf of the Corporation and by the Participant. Any reference in the Plan to the agreement under Section 2.5 shall include any amendment to such agreement.
SECTION 3
Eligibility
Those
employees of the Corporation or any Subsidiary (including, but not limited to, Covered Employees) who share responsibility for the management, growth or protection of the business of the Corporation or any Subsidiary shall be eligible to receive
Awards as described herein; provided, however, that incentive stock options may be granted only to employees of the Corporation and Subsidiaries which are its subsidiaries within the meaning of Section 424(f) of the Code.
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SECTION 4
Shares Subject to the Plan
4.1
Number of Shares
. Subject to adjustment as provided
in Section 4.5, the maximum aggregate number of shares of the Common Stock for which Awards may be made under the Plan shall be (i) 3,800,000 shares (after giving effect to the
2-for-1
stock split in the form of a stock dividend in June 2013), plus (ii) any shares which remained available for grant under the Corporations 2000 Stock
Incentive Plan as of the original effective date of this Plan (also after giving effect to the
2-for-1
stock split in the form of a stock dividend in June 2013), plus
(iii) effective as of May 10, 2017 upon stockholder approval, an additional 1,000,000 shares. The maximum number of shares of Common Stock that may be granted pursuant to options intended to be incentive stock options shall be 1,000,000
shares.
4.2
Individual Limits
. Subject to adjustment under Section 4.5, the maximum number of each type of Award (other than
cash-based performance units) granted to any Participant in any calendar year shall not exceed the following number of shares of Common Stock: (i) options and stock appreciation rights: 600,000 shares; and (ii) all Awards of restricted
stock, restricted stock units, share-based performance units and other stock-based awards that are intended to be Qualified Performance-Based Awards: 600,000 shares. The maximum amount of cash-based performance unit Awards intended to be Qualified
Performance-Based Awards granted to any Participant in any calendar year shall not exceed the following: (x) any cash-based performance unit Award with a performance period that is the Companys fiscal year or other
12-month
(or shorter) performance period as specified under the terms of the Award as approved by the Committee (an annual incentive award): $5,000,000; and (y) all other cash-based performance unit
Awards: $5,000,000.
4.3
Share Counting
.
(a) To the extent that any Award is forfeited, or any option and the Tandem SAR (if any) or any Free-Standing SAR terminates, expires or lapses without being exercised, or any Award is settled for cash,
the shares of Common Stock subject to such Awards shall again be available for Awards under the Plan under Section 4.1. However, shares of Common Stock subject to such Awards shall continue to be counted for purposes of Section 4.2 or
Section 9, as applicable.
(b) If the exercise price of any option and/or the tax withholding obligations relating to any
Awards are satisfied by delivering shares (either actually or through attestation) or withholding shares relating to such Award, the gross number of shares subject to the Award shall nonetheless be deemed to have been granted for purposes of
Sections 4.1 and 4.2 and any shares which are delivered will not be added to the aggregate number of shares under Section 4.1 for which Awards may be made under the Plan. Shares of Common Stock that the Company may repurchase from time to time
with proceeds from the exercise of options or otherwise shall not be added to the aggregate number of shares under Section 4.1 for which Awards may be made under the Plan.
(c) If a Tandem SAR is granted, each share of Common Stock subject to both the Tandem SAR and related stock option shall be counted as only one share of Common Stock for purposes of Sections 4.1 and 4.2.
(d) Each share of Common Stock subject to a stock option (with or without a Tandem SAR) or a Free-Standing SAR shall be
counted as one share of Common Stock for purposes of Sections 4.1 and 4.2.
(e) All shares of Common Stock covered by a stock
appreciation right, to the extent it is exercised and shares of Common Stock are actually issued upon exercise of the right, shall be counted for purposes of Sections 4.1 and 4.2, regardless of the number of shares used to settle the stock
appreciation right upon exercise.
(f) Awards granted in assumption of or in substitution for an award of a company or business
acquired by the Company or a Subsidiary or with which the Company or a Subsidiary combines (substitute awards) shall not be counted against the number of shares reserved under the Plan.
4.4
Common Stock
. To the extent that the Corporation has such shares of Common Stock available to it and can issue such shares without violating
any law or regulation, the Corporation will reserve Common Stock for
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issuance with respect to an Award payable in Common Stock. The shares of Common Stock which may be issued under the Plan may be either authorized but unissued shares or shares previously issued
and thereafter acquired by the Corporation or partly each, as shall be determined from time to time by the Board.
4.5
Adjustment and
Substitution of Shares
. In the event of a merger, consolidation, acquisition of shares, stock rights offering, liquidation, separation, spinoff, disaffiliation of a Subsidiary from the Corporation, extraordinary dividend of cash or other
property, or similar event affecting the Corporation or any of its Subsidiaries (each, a Corporate Transaction), the Committee or the Board shall make such substitutions or adjustments as it deems appropriate and equitable to prevent the
dilution or enlargement of the rights of Participants to (A) the aggregate number and kind of shares of Common Stock reserved for issuance and delivery under the Plan, (B) the various maximum limitations set forth in Sections 4.1 and 4.2
upon certain types of Awards and upon the Awards to individuals, (C) the number and kind of shares of Common Stock subject to outstanding Awards; and (D) the exercise price of outstanding Awards. In the event of a stock dividend, stock
split, reverse stock split, reorganization, share combination, or recapitalization or similar event affecting the capital structure of the Corporation (each, a Share Change), the Committee or the Board shall make such substitutions or
adjustments as it deems appropriate and equitable to prevent the dilution or enlargement of the rights of Participants to (A) the aggregate number and kind of shares of Common Stock reserved for issuance and delivery under the Plan,
(B) the various maximum limitations set forth in Sections 4.1 and 4.2 upon certain types of Awards and upon the Awards to individuals, (C) the number and kind of shares of Common Stock subject to outstanding Awards; and (D) the
exercise price of outstanding Awards. In the case of Corporate Transactions, such adjustments may include, without limitation, (1) the cancellation of outstanding Awards in exchange for payments of cash, property or a combination thereof having
an aggregate value equal to the value of such Awards, as determined by the Committee or the Board in its sole discretion (it being understood that in the case of a Corporate Transaction with respect to which shareholders of Common Stock receive
consideration other than publicly-traded equity securities of the ultimate surviving entity, any such determination by the Committee that the value of an option or stock appreciation right shall for this purpose be deemed to equal the excess, if
any, of the value of the consideration being paid for each share pursuant to such Corporate Transaction over the exercise price of such option or stock appreciation right shall conclusively be deemed valid); (2) the substitution of other property
(including, without limitation, cash or other securities of the Corporation and securities of entities other than the Corporation) for the shares subject to outstanding Awards; and (3) in connection with any disaffiliation of a Subsidiary,
arranging for the assumption of Awards, or replacement of Awards with new Awards based on other property or other securities (including, without limitation, other securities of the Corporation and securities of entities other than the Corporation),
by the affected Subsidiary, or by the entity that controls such Subsidiary following such disaffiliation (as well as any corresponding adjustments to Awards that remain based upon Corporation securities). The Committee shall adjust the Performance
Goals applicable to any Awards to reflect any unusual or
non-recurring
events and other extraordinary items, impact of charges for restructurings, discontinued operations, and the cumulative effects of
accounting or tax changes, each as defined by generally accepted accounting principles or as identified in the Corporations financial statements, notes to the financial statements, managements discussion and analysis or other of the
Corporations SEC filings, provided that in the case of Performance Goals applicable to any Qualified Performance-Based Awards, such adjustment does not violate Section 162(m) of the Code or cause such Awards not to qualify for the Section
162(m) Exemption, as defined in Section 12.1. No adjustment or substitution provided in this Section 4.5 shall require the Corporation or any other entity to issue or sell a fraction of a share or other security. Except as provided in this
Section 4.5, a Participant shall not have any rights with respect to any Corporate Transaction or Share Change.
4.6
Section 409A;
Section 162(m); Incentive Stock Options
. Notwithstanding the foregoing: (i) any adjustments made pursuant to Section 4.5 to Awards that are considered deferred compensation within the meaning of Section 409A of the Code
shall be made in compliance with the requirements of Section 409A of the Code; (ii) any adjustments made pursuant to Section 4.5 to Awards that are not considered deferred compensation subject to Section 409A of the Code shall
be made in such a manner as to ensure that after such adjustment, the Awards either (A) continue not to be subject to Section 409A of the Code or (B) comply with the requirements of Section 409A of the Code; and (iii) in any event,
neither the Committee nor the Board shall have the authority to
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make any adjustments pursuant to Section 4.5 to the extent the existence of such authority would cause an Award that is not intended to be subject to Section 409A of the Code at the grant
date of the Award to be subject thereto. If any such adjustment or substitution provided for in Section 4.5 requires the approval of shareholders in order to enable the Corporation to grant incentive stock options or to comply with Section
162(m) of the Code, then no such adjustment or substitution shall be made without the required shareholder approval. Notwithstanding the foregoing, in the case of incentive stock options, if the effect of any such adjustment or substitution would be
to cause the option to fail to continue to qualify as an incentive stock option or to cause a modification, extension or renewal of such option within the meaning of Section 424 of the Code, the Committee may determine that such adjustment or
substitution not be made but rather shall use reasonable efforts to effect such other adjustment of each then outstanding incentive stock option as the Committee, in its sole discretion, shall deem equitable and which will not result in any
disqualification, modification, extension or renewal (within the meaning of Section 424 of the Code) of such incentive stock option.
SECTION 5
Grant of Stock Options and Stock Appreciation Rights
5.1
Types of Options; Limit on Incentive Stock Options
. The Committee shall have authority, in its sole discretion, to grant
incentive stock options pursuant to Section 422 of the Code, to grant nonstatutory stock options (i.e., stock options which do not qualify under Sections 422 or 423 of the Code) or to grant both types of stock options
(but not in tandem). Notwithstanding any other provision contained in the Plan or in any agreement under Section 2.5, but subject to the possible exercise of the Committees discretion contemplated in the last sentence of this
Section 5.1, the aggregate Fair Market Value on the date of grant of the shares with respect to which such incentive stock options are exercisable for the first time by a Participant during any calendar year under all plans of the corporation
employing such Participant, any parent or subsidiary corporation of such corporation and any predecessor corporation of any such corporation shall not exceed $100,000. If the date on which one or more incentive stock options could first be exercised
would be accelerated pursuant to any provision of the Plan or any agreement under Section 2.5 and the acceleration of such exercise date would result in a violation of the $100,000 restriction set forth in the preceding sentence, then,
notwithstanding any such provision, but subject to the provisions of the next succeeding sentence, the exercise dates of such incentive stock options shall be accelerated only to the extent, if any, that does not result in a violation of such
restriction and, in such event, the exercise dates of the incentive stock options with the lowest option prices shall be accelerated to the earliest such dates. The Committee may, in its sole discretion, authorize the acceleration of the exercise
date of one or more incentive stock options even if such acceleration would violate the $100,000 restriction set forth in the second sentence of this Section 5.1 and even if one or more such incentive stock options are thereby converted in
whole or in part to nonstatutory stock options.
5.2
Types and Nature of Stock Appreciation Rights
. Stock appreciation rights may be
tandem stock appreciation rights which are granted in conjunction with incentive stock options or nonstatutory stock options (Tandem SARs), or stock appreciation rights which are not granted in conjunction with options
(Free-Standing SARs). Upon the exercise of a stock appreciation right, the Participant shall be entitled to receive an amount in cash, shares of Common Stock, or both, in value equal to the product of (i) the excess of the Fair
Market Value of one share of Common Stock on the date of exercise of the stock appreciation right over, in the case of a Tandem SAR, the exercise price of the related option, or in the case of a Free-Standing SAR, the Base Price per share (the
Spread), multiplied by (ii) the number of shares of Common Stock in respect of which the stock appreciation right has been exercised. Notwithstanding the foregoing, the Committee at the time it grants a stock appreciation right may
provide that the Spread covered by such stock appreciation right may not exceed a lower specified amount. The applicable agreement under Section 2.5 governing the stock appreciation rights shall specify whether such payment is to be made in
cash or Common Stock or both, or shall reserve to the Committee or the Participant the right to make that determination prior to or upon the exercise of the stock appreciation right. Tandem SARs may be granted at the grant date of the related stock
options or, in the case of a related nonstatutory stock option, also at a later date. At the time a Tandem SAR is granted, the Committee may limit the exercise period for such Tandem SAR, before and after which period no Tandem SAR shall attach to
the
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underlying stock option. In no event shall the exercise period for a Tandem SAR exceed the exercise period for the related stock option. A Tandem SAR shall be exercisable only at such time or
times and to the extent that the related option is exercisable in accordance with the provisions of this Section 5. A Tandem SAR shall terminate or be forfeited upon the exercise or forfeiture of the related stock option, and the related stock
option shall terminate or be forfeited upon the exercise or forfeiture of the Tandem SAR. Any Tandem SAR granted with a related incentive stock option shall be exercisable only when the Fair Market Value of a share of Common Stock exceeds the
exercise price for a share of Common Stock under the related incentive stock option.
5.3
Exercise Price and Base Price
.
(a) The exercise price per share of Common Stock subject to an option and any Tandem SAR, and the base price per share for any
Free-Standing SAR (the Base Price), shall be determined by the Committee and set forth in the applicable agreement under Section 2.5, and shall not be less than the Fair Market Value of a share of the Common Stock on the applicable
grant date, except that in the case of an incentive stock option granted to a Participant who, immediately prior to such grant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the
Corporation or any Subsidiary which is a corporation (a Ten Percent Employee), the exercise price shall not be less than one hundred ten percent (110%) of the Fair Market Value on the date of grant. For purposes of this Section 5.3,
an individual (i) shall be considered as owning not only shares of stock owned individually but also all shares of stock that are at the time owned, directly or indirectly, by or for the spouse, ancestors, lineal descendants and brothers and
sisters (whether by the whole or half blood) of such individual and (ii) shall be considered as owning proportionately any shares owned, directly or indirectly, by or for any corporation, partnership, estate or trust in which such individual is
a shareholder, partner or beneficiary.
(b) In no event may any option or stock appreciation right granted under this Plan,
other than pursuant to Section 4.5, be amended to decrease the exercise price or Base Price thereof, be cancelled in conjunction with the grant of any new option or stock appreciation right with a lower exercise price or Base Price, be
cancelled or repurchased for cash, property, or another Award at a time when the exercise price or Base Price is greater than the Fair Market Value of the underlying Common Stock, or otherwise be subject to any action that would be treated, for
accounting purposes, as a repricing of such option or stock appreciation right, unless such amendment, cancellation, or action is approved by the Corporations shareholders.
5.4
Term; Vesting and Exercisability
. The term of each option and each stock appreciation right shall be fixed by the Committee, but shall not exceed ten years from the date of grant (five years in
the case of an incentive stock option granted to a Ten Percent Employee). Except as otherwise provided herein, options and stock appreciation rights shall be exercisable at such time or times and subject to such terms and conditions as shall be
determined by the Committee and may be exercisable commencing with the grant date.
5.5
Method of Exercise
. Subject to the provisions
of this Section 5, options and stock appreciation rights may be exercised, in whole or in part (unless otherwise specified by the Committee in its sole discretion), at any time during the applicable term by giving written notice of exercise to
the Corporation specifying the number of shares of Common Stock as to which the option or stock appreciation rights is being exercised. In the case of the exercise of an option, such notice shall be accompanied by payment in full of the exercise
price in United States of America dollars by certified or bank check or wire of immediately available funds. If approved by the Committee (at the time of grant in the case of an incentive stock option or at any time in the case of a nonstatutory
stock option), payment, in full or in part, may also be made as follows:
(a) Payment may be made in the form of unrestricted
shares of Common Stock (by delivery of such shares or by attestation) of the same class as the Common Stock subject to the option already owned by the Participant (based on the Fair Market Value of the Common Stock on the date the option is
exercised); provided, however, that any portion of the exercise price representing a fraction of a share shall be paid in cash;
(b) To the extent permitted by applicable law, payment may be made by delivering a properly executed exercise notice to the Corporation,
together with a copy of irrevocable instructions to a broker to deliver
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promptly to the Corporation the amount of sale or loan proceeds necessary to pay the exercise price, and, if requested, the amount of any federal, state, local or foreign withholding taxes. To
facilitate the foregoing, the Corporation may, to the extent permitted by applicable law, enter into agreements for coordinated procedures with one or more brokerage firms. In the event the broker sells any shares on behalf of a Participant, the
broker shall be acting solely as the agent of the Participant, and the Corporation disclaims any responsibility for the actions of the broker in making any such sales;
(c) To the extent permitted by applicable law and if authorized by the Corporation, payment may be made by a net exercise by the Corporation withholding shares of Common Stock otherwise due to
the Participant upon exercise; and/or
(d) With such other instrument as approved by the Committee, including Corporation
loans, to the extent permitted by applicable law.
5.6
Delivery; Rights of Shareholders
. No shares shall be delivered pursuant to the
exercise of an option until the exercise price for the option has been fully paid and applicable taxes have been withheld. Unless otherwise specified by the Committee, the applicable Participant shall have all of the rights of a shareholder of the
Corporation holding Common Stock with respect to the shares of Common Stock to be issued upon the exercise of the option or stock appreciation right (including the right to vote the applicable shares and the right to receive dividends), when the
Participant (i) has given written notice of exercise in accordance with the procedures established by the Committee, (ii) if requested, has given the representation described in Section 10, and (iii) in the case of an option, has
paid in full the exercise price for such shares.
5.7
Nontransferability of Options and Stock Appreciation Rights
. Unless the Committee
shall otherwise determine in the case of nonstatutory stock options and stock appreciation rights and limited to a transfer without the payment of value or consideration to the Participant, (i) no option or stock appreciation right shall be
transferable by a Participant other than by will, or if the Participant dies intestate, by the laws of descent and distribution of the state of domicile of the Participant at the time of death, and (ii) all stock options and stock appreciation
rights shall be exercisable during the lifetime of the Participant only by the Participant (or the Participants guardian or legal representative). Any Tandem SAR shall be transferable only when the related stock option is transferable and with
the related stock option.
5.8
Termination of Employment
. Unless the Committee, in its sole discretion, shall otherwise determine at
the time of grant of the Award or, other than in the case of incentive stock options, thereafter, but subject to the provisions of Section 5.1 in the case of incentive stock options:
(a) If the employment of a Participant who is not disabled within the meaning of Section 422(c)(6) of the Code (a Disabled
Participant) is voluntarily terminated with the consent of the Corporation or a Subsidiary or a Participant retires under any retirement plan of the Corporation or a Subsidiary, any then outstanding incentive stock option held by such
Participant shall be exercisable by the Participant (but only to the extent exercisable by the Participant immediately prior to the termination of employment) at any time prior to the expiration date of such incentive stock option or within three
months after the date of termination of employment, whichever is the shorter period;
(b) If the employment of a Participant
who is not a Disabled Participant is voluntarily terminated with the consent of the Corporation or a Subsidiary or a Participant retires under any retirement plan of the Corporation or a Subsidiary, any then outstanding nonstatutory stock option or
stock appreciation right held by such Participant shall be exercisable by the Participant (but only to the extent exercisable by the Participant immediately prior to the termination of employment) at any time prior to the expiration date of such
nonstatutory stock option or stock appreciation right or within one year after the date of termination of employment, whichever is the shorter period;
(c) If the employment of a Participant who is a Disabled Participant is voluntarily terminated with the consent of the Corporation or a Subsidiary, any then outstanding stock option or stock appreciation
right
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held by such Participant shall be exercisable in full (whether or not so exercisable by the Participant immediately prior to the termination of employment) by the Participant at any time prior to
the expiration date of such stock option or stock appreciation right or within one year after the date of termination of employment, whichever is the shorter period;
(d) Following the death of a Participant during employment, any outstanding stock option or stock appreciation right held by the Participant at the time of death shall be exercisable in full (whether or
not so exercisable by the Participant immediately prior to the death of the Participant) by the person entitled to do so under the will of the Participant, or, if the Participant shall fail to make testamentary disposition of the stock option or
stock appreciation right or shall die intestate, by the legal representative of the Participant at any time prior to the expiration date of such stock option or stock appreciation right or within one year after the date of death, whichever is the
shorter period;
(e) Following the death of a Participant after termination of employment during a period when a stock option
or stock appreciation right is exercisable, any outstanding stock option or stock appreciation right held by the Participant at the time of death shall be exercisable by such person entitled to do so under the will of the Participant or by such
legal representative (but only to the extent the stock option or stock appreciation right was exercisable by the Participant immediately prior to the death of the Participant) at any time prior to the expiration date of such stock option or stock
appreciation right or within one year after the date of death, whichever is the shorter period; and
(f) Unless the exercise
period of a stock option or stock appreciation right following termination of employment has been extended as provided in Section 11.3, if the employment of a Participant terminates for any reason other than voluntary termination with the
consent of the Corporation or a Subsidiary, retirement under any retirement plan of the Corporation or a Subsidiary or death, all outstanding stock options and stock appreciation rights held by the Participant at the time of such termination of
employment shall automatically terminate.
Whether termination of employment is a voluntary termination with the consent of the Corporation or
a Subsidiary and whether a Participant is a Disabled Participant shall be determined in each case, in its sole discretion, by the Committee (or, in the case of Participants who are not (i) Covered Employees as of the end of the
Corporations immediately preceding fiscal year or (ii) the Chief Executive Officer of the Corporation, by such Chief Executive Officer, in his sole discretion) and any such determination by the Committee or such Chief Executive Officer
shall be final and binding. Without limitation of the foregoing, a termination of employment by the Participant shall not be a voluntary termination with the consent of the Corporation unless the Committee or, if applicable, such Chief Executive
Officer, in its or his sole discretion, specifically consents to the termination of employment in writing.
5.9
Other Terms and
Conditions
. Subject to the foregoing provisions of this Section 5 and the other provisions of the Plan, any stock option or stock appreciation right granted under the Plan may be exercised at such times and in such amounts and be subject to
such restrictions and other terms and conditions, if any, as shall be determined, in its sole discretion, by the Committee and set forth in the agreement under Section 2.5.
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SECTION 6
Restricted Stock
6.1
Restricted Stock Awards; Certificates
. Shares of restricted
stock are actual shares of Common Stock issued to a Participant, and shall be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of one or more stock certificates. Any certificate issued in
respect of shares of restricted stock shall be registered in the name of the applicable Participant and, unless held by or on behalf of the Corporation in escrow or custody until the restrictions lapse or the shares are forfeited, shall bear an
appropriate conspicuous legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:
The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Westinghouse Air Brake Technologies
Corporation 2011 Stock Incentive Plan and a corresponding agreement. Copies of such Plan and agreement are on file at the offices of Westinghouse Air Brake Technologies Corporation, 1001 Air Brake Avenue, Wilmerding, PA 15148.
The Committee may require that the certificates evidencing such shares be held in escrow or custody by or on behalf of the Corporation until the
restrictions thereon shall have lapsed or the shares are forfeited and that, as a condition of any Award of restricted stock, the applicable Participant deliver to the Corporation a stock power, endorsed in blank, relating to the Common Stock
covered by such Award.
6.2
Terms and Conditions
. Shares of restricted stock shall be subject to the following terms and conditions:
(a) The Committee shall, prior to or at the time of grant, condition the vesting of an Award of restricted stock upon
(i) the continued service of the applicable Participant, (ii) the attainment of Performance Goals, or (iii) the attainment of Performance Goals and the continued service of the applicable Participant. The Committee shall establish at
the time the restricted stock is granted the performance periods during which any Performance Goals specified by the Committee with respect to the restricted stock Award are to be measured. In the event that the Committee conditions the vesting of
an Award of restricted stock upon the attainment of Performance Goals or the attainment of Performance Goals and the continued service of the applicable Participant, the Committee may, prior to or at the time of grant, designate an Award of
restricted stock as a Qualified Performance-Based Award. The conditions for vesting and the other provisions of restricted stock Awards (including without limitation any applicable Performance Goals) need not be the same with respect to each
recipient, and shall be established by the Committee in its sole discretion. Except in the case of a Qualified Performance-Based Award, the Committee at any time after the date of grant, in its sole discretion, may modify or waive any of the
conditions applicable to an Award of restricted stock.
(b) Subject to the provisions of the Plan (including Section 6.3)
and the applicable agreement under Section 2.5, during the period, if any, set by the Committee, commencing with the date of such restricted stock Award for which such vesting restrictions apply (the Restriction Period), and until
the expiration of the Restriction Period, the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber shares of such restricted stock. A restricted stock Award may vest in part on a pro rata basis prior to the
expiration of any Restriction Period.
(c) Except as provided in this Section 6 and in the applicable agreement under
Section 2.5, the applicable Participant shall have, with respect to the shares of restricted stock, all of the rights of a shareholder of the Corporation holding the Common Stock that is the subject of the restricted stock, including, if
applicable, the right to vote the shares and the right to receive any cash dividends. If so determined by the Committee and set forth in the applicable agreement under Section 2.5 and subject to Section 15.4, cash dividends on the Common
Stock that is the subject of the restricted stock Award may be (i) automatically deferred and reinvested in additional restricted stock, and held subject to the same vesting and forfeiture conditions of the underlying restricted stock, or
(ii) held by the Corporation in cash (without any payment of interest thereon) subject to the same vesting and forfeiture conditions of the restricted stock with respect to which the dividends are payable. Unless otherwise determined by the
Committee and set forth in the applicable
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agreement under Section 2.5, any Common Stock or other securities payable with respect to any restricted stock as a result of or pursuant to Section 4.5, shall be held subject to the
same vesting and forfeiture conditions of the underlying restricted stock.
(d) As soon as practicable after the applicable
Restriction Period has ended, the Committee shall determine and certify (in writing in the case of Qualified Performance-Based Awards) whether and the extent to which the service period and/or the Performance Goals were met for the applicable
restricted stock. If the vesting condition or conditions applicable to the restricted stock are not satisfied by the time the Restriction Period has expired, such restricted stock shall be forfeited. If and when the Restriction Period expires
without a prior forfeiture of the shares of restricted stock (i) if legended certificates have been issued, unlegended certificates for such shares shall be delivered to the Participant upon surrender of the legended certificates, (ii) if
legended certificates have not yet been issued, unlegended certificates (and any related blank stock powers previously executed by the Participant) shall be delivered to the Participant, and (iii) any cash dividends held by the Corporation
pursuant to Section 6.2(c) shall be delivered to the Participant.
6.3
Permitted Transfers
. Neither this Section 6 nor any
other provision of the Plan shall preclude a Participant from transferring or assigning restricted stock, without the payment of value or consideration to the Participant, to (i) the trustee of a trust that is revocable by such Participant
alone, both at the time of the transfer or assignment and at all times thereafter prior to such Participants death or (ii) the trustee of any other trust to the extent approved in advance by the Committee, in its sole discretion, in
writing. A transfer or assignment of restricted stock from such trustee to any person other than such Participant shall be permitted only to the extent approved in advance by the Committee, in its sole discretion, in writing, and restricted stock
held by such trustee shall be subject to all of the conditions and restrictions set forth in the Plan and in the applicable agreement under Section 2.5 as if such trustee were a party to such agreement.
SECTION 7
Restricted Stock Units
7.1
Restricted Stock Unit Awards
. Restricted stock units are Awards denominated in shares of Common Stock that will be settled, subject to the
terms and conditions of the restricted stock units and at the sole discretion of the Committee, in an amount in cash, shares of Common Stock, or both, based upon the Fair Market Value of a specified number of shares of Common Stock.
7.2
Terms and Conditions
. Restricted stock units shall be subject to the following terms and conditions:
(a) The Committee shall, prior to or at the time of grant, condition the vesting of restricted stock units upon (i) the continued
service of the applicable Participant, (ii) the attainment of Performance Goals or (iii) the attainment of Performance Goals and the continued service of the applicable Participant. In the event that the Committee conditions the vesting of
restricted stock units upon the attainment of Performance Goals or the attainment of Performance Goals and the continued service of the applicable Participant, the Committee may, prior to or at the time of grant, designate the restricted stock units
as a Qualified Performance-Based Award. The Committee shall determine the performance period(s) during which any Performance Goals are to be achieved. The conditions for grant or vesting and the other provisions of restricted stock units (including
without limitation any applicable Performance Goals) need not be the same with respect to each recipient. An Award of restricted stock units shall be settled as and when the restricted stock units vest, as determined and certified (in writing in the
case of Qualified Performance-Based Awards) by the Committee, or at a later time specified by the Committee or in accordance with an election of the Participant, if the Committee so permits. Except in the case of a Qualified Performance-Based Award,
the Committee at any time after the date of grant, in its sole discretion, may modify or waive any of the conditions applicable to an Award of restricted stock units.
(b) Subject to the provisions of the Plan and the applicable agreement under Section 2.5, during the period, if any, set by the Committee, commencing with the date of grant of such restricted stock
units for which
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such vesting restrictions apply (the Units Restriction Period), and until the expiration of the Units Restriction Period, the Participant shall not be permitted to sell, assign,
transfer, pledge or otherwise encumber restricted stock units. A restricted stock unit may vest in part prior to the expiration of any Units Restriction Period.
(c) Participants granted restricted stock units shall not be entitled to any dividends payable on the Common Stock unless the agreement under Section 2.5 for restricted stock units specifies to what
extent and on what terms and conditions the applicable Participant shall be entitled to receive current or deferred payments of cash, Common Stock or other property corresponding to the dividends payable on the Common Stock (subject to
Section 15.4 below). Restricted stock units shall not have any voting rights, and holders of restricted stock units shall not be shareholders of the Corporation unless and until shares of Common Stock are issued by the Corporation (in
book-entry form or otherwise).
SECTION 8
Performance Units
Performance units may be granted hereunder to eligible employees, for no
cash consideration or for such minimum consideration as may be required by applicable law, either alone or in addition to other Awards granted under the Plan. Performance units may be share-based or cash-based, including annual incentive awards. The
Committee shall establish at the time the performance unit is granted the performance period(s) during which any Performance Goals specified by the Committee with respect to the Award are to be measured. The Performance Goals to be achieved during
any performance period(s) and the length of the performance period(s) shall be determined by the Committee upon the grant of each performance unit. The Committee may, in connection with the grant of performance units, designate them as Qualified
Performance-Based Awards. The conditions for grant or vesting and the other provisions of performance units (including without limitation any applicable Performance Goals) need not be the same with respect to each Participant. Performance units may
be paid in cash, shares of Common Stock, other property or any combination thereof, in the sole discretion of the Committee as set forth in the applicable agreement under Section 2.5. Performance units shall not have any voting rights, and
holders of performance units shall not be shareholders of the Corporation unless and until shares of Common Stock are issued by the Corporation (in book-entry form or otherwise). The Performance Goals to be achieved for each performance period,
whether the Performance Goals have been achieved, and the amount of the Award to be distributed shall be conclusively determined and certified (in writing in the case of Qualified Performance-Based Awards) by the Committee. Performance units may be
paid in a lump sum or in installments following the close of the performance period(s). The Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber performance units. Except in the case of a Qualified
Performance-Based Award, the Committee at any time after the grant of performance units, in its sole discretion, may modify or waive any of the conditions applicable to an Award of performance units.
SECTION 9
Other Stock-Based Awards
The Committee may award Common Stock and other Awards that are valued in whole or in part by reference to, or are otherwise based upon, Common Stock,
including but not limited to, unrestricted stock or dividend equivalents. Any such Award shall be subject to such terms and conditions as established by the Committee, and may include Qualified Performance-Based Awards.
SECTION 10
Issuance of Shares
The
Committee may require each person purchasing or receiving shares of Common Stock pursuant to an Award to represent to and agree with the Corporation in writing that such person is acquiring the shares without a view to the distribution thereof. The
certificates for such shares may include any legend which the Committee deems
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appropriate to reflect any restrictions on transfer. The obligation of the Corporation to issue shares of Common Stock under the Plan shall be subject to (i) the effectiveness of a
registration statement under the Securities Act of 1933, as amended, with respect to such shares, if deemed necessary or appropriate by counsel for the Corporation, (ii) the condition that the shares shall have been listed (or authorized for
listing upon official notice of issuance) upon each stock exchange, if any, on which the shares of Common Stock may then be listed, (iii) all other applicable laws, regulations, rules and orders which may then be in effect and
(iv) obtaining any other consent, approval, or permit from any state or federal governmental agency which the Committee shall, in its sole discretion, determine to be necessary or advisable.
SECTION 11
Additional Rights in Certain Events
11.1
Definitions
.
For purposes of this Section 11, the following terms shall have
the following meanings:
(1) The term Person shall be used as that term is used in Sections 13(d) and 14(d) of the
1934 Act as in effect on the effective date of the Plan.
(2) Beneficial Ownership shall be determined as provided
in Rule
13d-3
under the 1934 Act as in effect on the effective date of the Plan.
(3) A
specified percentage of Voting Power of a company shall mean such number of the Voting Shares as shall enable the holders thereof to cast such percentage of all the votes which could be cast in an annual election of directors (without
consideration of the rights of any class of stock other than the common stock of the company to elect directors by a separate class vote); and Voting Shares shall mean all securities of a company entitling the holders thereof to vote in
an annual election of directors (without consideration of the rights of any class of stock other than the common stock of the company to elect directors by a separate class vote).
(4) Continuing Directors shall mean a director of the Corporation who either (a) was a director of the Corporation on the
effective date of the Plan or (b) is an individual whose election, or nomination for election, as a director of the Corporation was approved by a vote of at least
two-thirds
of the directors then still in
office who were Continuing Directors (other than an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Corporation which would be subject to Rule
14a-11
under the 1934 Act, or any successor rule).
(5) Section 11 Event
shall mean the date upon which any of the following events occurs:
(a) The Corporation acquires actual knowledge that any
Person, other than the Corporation, a Subsidiary, or any employee benefit plan(s) sponsored by the Corporation or a Subsidiary, has acquired the Beneficial Ownership, directly or indirectly, of securities of the Corporation entitling such Person to
30% or more of the Voting Power of the Corporation;
(b) At any time less than 51% of the members of the Board (excluding
vacant seats) shall be Continuing Directors; or
(c) The consummation of a merger, consolidation, share exchange, division or
sale or other disposition of assets of the Corporation as a result of which the stockholders of the Corporation immediately prior to such transaction shall not hold, directly or indirectly, immediately following such transaction a majority of the
Voting Power of (i) in the case of a merger or consolidation, the surviving or resulting corporation, (ii) in the case of a share exchange, the acquiring corporation or (iii) in the case of a division or a sale or other disposition of
assets, each surviving, resulting or acquiring corporation which, immediately following the transaction, holds more than 30% of the consolidated assets of the Corporation immediately prior to the transaction;
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provided
,
however
, that if securities beneficially owned by a Participant are included in
determining the Beneficial Ownership of a Person referred to in paragraph 6(a) above, then no Section 11 Event with respect to such Participant shall be deemed to have occurred by reason of such event.
11.2
Acceleration of the Exercise Date of Stock Options and Stock Appreciation Rights
. Subject to the provisions of Section 5 in the case of
incentive stock options and Section 11.6, unless the agreement under Section 2.5 shall otherwise provide, notwithstanding any other provision contained in the Plan, in case any Section 11 Event occurs all outstanding stock options and
stock appreciation rights (other than those held by a Participant referred to in the proviso to Section 11.1(6)) shall become immediately and fully exercisable whether or not otherwise exercisable by their terms.
11.3
Extension of the Expiration Date of Stock Options and Stock Appreciation Rights
. Subject to the provisions of Section 5 in the case of
incentive stock options and Section 11.6, unless the agreement under Section 2.5 shall otherwise provide, notwithstanding any other provision contained in the Plan, all stock options and stock appreciation rights held by a Participant
(other than a Participant referred to in the proviso to Section 11.1(6)) whose employment with the Corporation or a Subsidiary terminates within one year of any Section 11 Event for any reason other than voluntary termination with the
consent of the Corporation or a Subsidiary, retirement under any retirement plan of the Corporation or a Subsidiary or death shall be exercisable for a period of three years from the date of such termination of employment, but in no event after the
expiration date of the stock option or stock appreciation right.
11.4
Lapse of Restrictions on Restricted Stock Awards
. Unless the
agreement under Section 2.5 shall otherwise provide, notwithstanding any other provision contained in the Plan other than Section 11.6, if any Section 11 Event occurs prior to the scheduled lapse of all restrictions applicable to
restricted stock Awards under the Plan (including but not limited to Qualified Performance-Based Awards), all such restrictions (other than those applicable to a Participant referred to in the proviso to Section 11.1(6)) shall lapse upon the
occurrence of any such Section 11 Event regardless of the scheduled lapse of such restrictions.
11.5
Vesting of Restricted Stock
Units and Performance Units
. Unless the agreement under Section 2.5 shall otherwise provide, notwithstanding any other provision contained in the Plan other than Section 11.6, if any Section 11 Event occurs, all restricted stock
units and performance units (including but not limited to Qualified Performance-Based Awards) (other than those held by a Participant referred to in the proviso to Section 11.1(6)) shall be considered to be earned and payable in full, any
vesting conditions shall be considered to have been satisfied, and such restricted stock units and performance units shall be settled in cash as promptly as is practicable after the Section 11 Event.
11.6
Code Section 409A
. Notwithstanding the foregoing, if any Award is subject to Section 409A of the Code, this Section 11 shall be
applicable only to the extent specifically provided in the agreement under Section 2.5 applicable to the Award and permitted pursuant to Section 12.2.
SECTION 12
Qualified Performance-Based Awards; Section 409A
12.1
Qualified Performance-Based Awards
.
(a) The provisions of this Plan are intended to ensure that all options and stock appreciation rights granted hereunder to any Participant who is or may be a Covered Employee in the tax year in which such
option or stock appreciation right is expected to be deductible to the Corporation qualify for the exemption from the limitation on deductions imposed by Section 162(m) of the Code (the Section 162(m) Exemption), and all such Awards
shall therefore be considered Qualified Performance-Based Awards and this Plan shall be interpreted and operated consistent with that intention. When granting any Award other than an option or stock appreciation right, the Committee may designate
such Award as a Qualified Performance-Based
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Award, based upon a determination that (i) the recipient is or may be a Covered Employee with respect to such Award, and (ii) the Committee wishes such Award to qualify for the Section
162(m) Exemption, and the terms of any such Award (and of the grant thereof) shall be consistent with such designation. With respect to Qualified Performance-Based Awards, within 90 days after the commencement of a performance period or, if earlier,
by the expiration of 25% of a performance period, the Committee will designate one or more performance periods, determine the Participants for the performance periods and establish the Performance Goals for the performance periods.
(b) Each Qualified Performance-Based Award (other than an option or stock appreciation right) shall be earned, vested and/or payable (as
applicable) upon certification in writing by the Committee of the achievement of one or more Performance Goals, together with the satisfaction of any other conditions, such as continued employment, as previously established by the Committee with
respect to such Award. Subject to the terms of any applicable Award agreement, the Committee may, in its discretion, reduce (but not increase) the amount of a settlement otherwise to be made in connection with a Qualified Performance-Based Award.
(c) Notwithstanding any provision in the Plan or in any agreement under Section 2.5, to the extent that any such
provision or action of the Committee would cause any Qualified Performance-Based Award not to qualify for the Section 162(m) Exemption, such provision or action shall be null and void as it relates to Covered Employees, to the extent permitted by
law and deemed advisable by the Committee.
12.2
Code Section 409A
. It is the intention of the Corporation that no Award shall be
deferred compensation subject to Section 409A of the Code, unless and to the extent that the Committee specifically determines otherwise as provided in the immediately following sentence, and the Plan and the terms and conditions of all
Awards shall be interpreted accordingly. The terms and conditions governing any Awards that the Committee determines will be subject to Section 409A of the Code, including any rules for elective or mandatory deferral of the delivery of cash or
shares of Common Stock pursuant thereto and any rules regarding treatment of such Awards in the event of a Section 11 Event, shall be set forth in the applicable agreement under Section 2.5, and shall comply in all respects with Section
409A of the Code.
SECTION 13
Effect of the Plan on the Rights of Employees and Employer
Neither the adoption of the
Plan nor any action of the Board or the Committee pursuant to the Plan shall be deemed to give any employee any right to be granted any Award under the Plan. Nothing in the Plan, in any Award under the Plan or in any agreement under Section 2.5
providing for any Award under the Plan shall confer any right to any employee to continue in the employ of the Corporation or any Subsidiary or interfere in any way with the rights of the Corporation or any Subsidiary to terminate the employment of
any employee at any time or adjust the compensation of any employee at any time.
SECTION 14
Amendment or Termination
The right to amend the Plan at any time and from time to time and the right to terminate the Plan are hereby specifically reserved to the Board; provided
that no such amendment of the Plan shall, without shareholder approval (a) increase the maximum aggregate number of shares of Common Stock for which Awards may be made under Section 4.1 of the Plan, (b) increase the maximum aggregate
number of shares of Common Stock as to which incentive stock options may be granted under Section 4.1 of the Plan, (c) make any changes in the class of employees eligible to receive Awards under the Plan, (d) change the maximum number
of shares of Common Stock as to which Awards may be made to any Participant under Section 4.2 of the Plan, or the maximum amount that may be paid or distributed to any Participant pursuant to a grant of performance units or other stock-based
Awards made in any one calendar year under Section 8 or 9 of the Plan, respectively, (e) change the exercise price or Base Price permitted under Section 5.3 of the Plan or the restrictions regarding repricing under
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Section 5.3 of the Plan, (f) be made if shareholder approval of the amendment is at the time required for Awards under the Plan to qualify for the exemption from Section 16(b) of the
1934 Act provided by Rule
16b-3
or by the rules of any stock exchange on which the Common Stock may then be listed or (g) be made to the extent such approval is needed for Qualified Performance-Based
Awards to qualify for the Section 162(m) Exemption. No amendment or termination of the Plan shall, without the written consent of the holder of an Award under the Plan, adversely affect the rights of such holder with respect thereto.
SECTION 15
General Provisions
15.1
Additional Compensation Arrangements
. Nothing contained in the Plan shall prevent the Corporation or any Subsidiary from adopting other or additional compensation arrangements for its employees.
15.2
Tax Withholding
. No later than the date as of which an amount first becomes includible in the gross income of a Participant for federal,
state, local or foreign income or employment or other tax purposes with respect to any Award under the Plan, such Participant shall pay to the Corporation (or, if applicable, a Subsidiary), or make arrangements satisfactory to the Corporation (or,
if applicable, a Subsidiary) regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Committee, withholding obligations may be
settled with Common Stock, including Common Stock that is part of the Award that gives rise to the withholding requirement, having a Fair Market Value on the date of withholding equal to the maximum amount required to be withheld for tax purposes,
all in accordance with such procedures as the Committee establishes, and provided that any fractional share amount must be paid in cash or withheld from compensation otherwise due to the Participant. The obligations of the Corporation under the Plan
shall be conditional on such payment or arrangements, and the Corporation and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to such Participant. The Committee may
establish such procedures as it deems appropriate, including making irrevocable elections, for the settlement of withholding obligations with Common Stock.
15.3
Limitation of Liability
. The grant of any Award shall not:
(a) give a
Participant any rights except as expressly set forth in the Plan or in the agreement under Section 2.5;
(b) create any
fiduciary or other obligation of the Corporation or any Subsidiary to take any action or provide to the Participant any assistance or dedicate or permit the use of any assets of the Corporation or any Subsidiary that would permit the Participant to
be able to attain any Performance Goals associated with any Award;
(c) create any trust, fiduciary or other duty or obligation
of the Corporation or any Subsidiary to engage in any particular business, continue to engage in any particular business, engage in any particular business practices or sell any particular product or products; or
(d) create any obligation of the Corporation or any Subsidiary that shall be greater than the obligation of the Corporation or that
Subsidiary to any of their general unsecured creditors.
15.4
Limitation on Dividend Reinvestment and Dividend Equivalents
.
Reinvestment of dividends in additional restricted stock at the time of any dividend payment, and the payment of shares with respect to dividends to Participants holding Awards of restricted stock units, shall only be permissible if authorized by
the Committee and if sufficient shares of Common Stock are available under Section 4 for such reinvestment or payment (taking into account then outstanding Awards). In the event that sufficient shares of Common Stock are not available for such
reinvestment or payment, such reinvestment or payment shall be made in the form of a grant of restricted stock units equal in number to the shares of Common Stock that would have been obtained by such payment or reinvestment, the terms of which
restricted stock units shall provide for settlement in cash and for dividend equivalent reinvestment in further restricted stock units on the terms contemplated by this Section 15.4.
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15.5
Governing Law and Interpretation
. To the extent not preempted by federal Law, the Plan and all
Awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without reference to principles of conflict of laws. The captions of this Plan are not part of the
provisions hereof and shall have no force or effect.
15.6
Dispute Resolution
. Since Awards are granted in Western Pennsylvania,
records relating to the Plan and Awards are located in Western Pennsylvania, and the Plan and Awards are administered in Western Pennsylvania, the Corporation and the Participant to whom an Award is granted, for themselves and their heirs,
representatives, successors and assigns (collectively, the Parties) irrevocably submit to the exclusive and sole jurisdiction and venue of the state courts of Allegheny County, Pennsylvania and the federal courts of the Western District
of Pennsylvania with respect to any and all disputes arising out of or relating to the Plan, the subject matter of the Plan or any Awards under the Plan, including but not limited to any disputes arising out of or relating to the interpretation and
enforceability of any Awards or the terms and conditions of the Plan. To achieve certainty regarding the appropriate forum in which to prosecute and defend actions arising out of or relating to the Plan, and to ensure consistency in application and
interpretation of the governing law under Section 15.5 of the Plan, the Parties agree that (a) sole and exclusive appropriate venue for any such action shall be the Pennsylvania courts described in the immediately preceding sentence, and
no other, (b) all claims with respect to any such action shall be heard and determined exclusively in such Pennsylvania courts, and no other, (c) such Pennsylvania courts shall have sole and exclusive jurisdiction over the Parties and over
the subject matter of any dispute relating hereto and (d) the Parties waive any and all objections and defenses to bringing any such action before such Pennsylvania courts, including but not limited to those relating to lack of personal
jurisdiction, improper venue or
forum non conveniens
.
15.7
Non-Transferability
. Except
as otherwise specifically provided in the Plan or by the Committee and limited to a transfer without the payment of value or consideration to the Participant, Awards under the Plan are not transferable except by will or by laws of descent and
distribution of the state of domicile of the Participant at the time of death.
15.8
Deferrals
. The Committee shall be authorized to
establish procedures pursuant to which the payment of any Award may be deferred, provided that any such deferral is consistent with all aspects of Section 409A of the Code. Subject to the provisions of this Plan and any agreement under
Section 2.5, the recipient of an Award (including, without limitation, any deferred Award) may, if so determined by the Committee, be entitled to receive, currently or on a deferred basis, interest or dividends, or interest or dividend
equivalents, with respect to the number of shares covered by the Award, as determined by the Committee, in its sole discretion, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional shares or
otherwise reinvested; provided, however, that in no event shall interest, dividends or dividend equivalents be paid on any unearned performance units or performance share units until such units have vested.
15.9
Integration
. The Plan and any written agreements executed by Participants and the Corporation under Section 2.5 contain all of the
understandings and representations between the parties and supersede any prior understandings and agreements entered into between them regarding the subject matter within. There are no representations, agreements, arrangements or understandings,
oral or written, between the parties relating to the subject matter of the Plan which are not fully expressed in the Plan and the written agreements.
15.10
Foreign Employees and Foreign Law Considerations
. The Committee may grant Awards to eligible employees who are foreign nationals, who are located outside the United States of America or who
are not compensated from a payroll maintained in the United States of America, or who are otherwise subject to (or could cause the Corporation to be subject to) legal or regulatory provisions of countries or jurisdictions outside the United States
of America, on such terms and conditions different from those specified in the Plan as may, in the judgment of the Committee, be necessary or desirable to foster and promote achievement of the purposes of the Plan, and, in furtherance of such
purposes, the Committee may make such modifications, amendments, procedures, or subplans as may be necessary or advisable to comply with such legal or regulatory provisions.
A-18
SECTION 16
Effective Date and Duration of Plan
The Plan was originally adopted by the Board effective
as of March 28, 2011, and was subsequently approved by the Companys stockholders at the 2011 annual meetings of stockholders and
re-approved
at the 2016 annual meeting of stockholders. This amended
and restated Plan shall become effective upon approval by the Companys stockholders at the 2017 annual meeting of stockholders on May 10, 2017. No Award under the Plan may be made subsequent to May 10, 2027.
A-19
Annex B
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
1995
NON-EMPLOYEE
DIRECTORS FEE AND STOCK OPTION PLAN
(As amended and restated effective May 10, 2017)
The purposes of the 1995
Non-Employee
Directors Fee and Stock Option Plan (as amended and restated, the Plan) are to provide for each director of Westinghouse Air Brake Technologies Corporation (the Company)
who is not also an employee of the Company or any of its subsidiaries (a
non-employee
Director) the payment of all or a portion of the retainer fees for future services to be performed by such
non-employee
Director (Director Fees) as a member of the Board of Directors of the Company (the Board) in shares of Common Stock of the Company. The purposes of the Plan are further to
promote the long-term success of the Company by creating a long-term mutuality of interests between the
non-employee
Directors and stockholders of the Company, to provide an additional inducement for such
non-employee
Directors to remain with the Company and to provide a means through which the Company may attract able persons to serve as Directors of the Company.
SECTION 1
Administration
The Plan
shall be administered by a Committee (the Committee) appointed by the Board of Directors of the Company (the Board) and consisting of not less than two members of the Board, each of whom at the time of appointment to the
Committee and at all times during service as a member of the Committee shall be
Non-Employee
Directors as then defined under Rule
16b-3
under the Securities
Exchange Act of 1934, as amended (the 1934 Act), or any successor Rule. The Committee shall keep records of action taken at its meetings. A majority of the Committee shall constitute a quorum at any meeting, and the acts of a majority of
the members present at any meeting at which a quorum is present, or acts approved in writing by all the members of the Committee, shall be the acts of the Committee.
The Committee shall interpret the Plan and prescribe such rules, regulations and procedures in connection with the operations of the Plan as it shall deem to be necessary and advisable for the
administration of the Plan consistent with the purposes of the Plan. All questions of interpretation and application of the Plan, or as to stock issued or delivered or stock options granted under the Plan, shall be subject to the determination of
the Committee, which shall be final and binding.
SECTION 2
Shares Available under the Plan
The aggregate number of shares which may be issued or delivered and as to which grants of stock options may be made under the Plan is (i) 1,000,000 shares of the Common Stock, par value $.01 per share, of
the Company (the Common Stock) (after giving effect to the
2-for-1
stock split in the form of a stock dividend in June 2013) plus (ii) effective as of
May 10, 2017 upon stockholder approval, an additional 100,000 shares of Common Stock, subject to adjustment and substitution as set forth in Section 6. If any stock option granted under the Plan is canceled by mutual consent, is forfeited
or terminates or expires for any reason without having been exercised in full, the number of shares subject thereto shall again be available for purposes of the Plan. The shares which may be issued or delivered under the Plan may be either
authorized but unissued shares or reacquired shares or partly each, as shall be determined from time to time by the Board. If the number of shares then remaining available, either for the payment of Directors Fees through the use of shares as
described in Section 3 below or for the grant of stock options as described in Section 4 below, is not sufficient for each
non-employee
Director entitled to receive the same to be issued or delivered
the number of shares or to be granted an option for the number of shares, as the case may be, to which such
non-employee
Director is entitled (or the number of adjusted or substituted shares pursuant to
Section 6), then each
non-employee
Director shall be issued or delivered a number
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of whole shares or granted an option for a number of whole shares, as the case may be, equal to the number of shares then remaining times a percentage obtained by dividing the number of shares or
option shares to which such
non-employee
Director is entitled by the total number of shares or option shares to be granted to all
non-employee
Directors at such time,
disregarding any fractions of a share. In addition to the number of shares of Common Stock authorized for issuance by the first sentence of this Section 2, the number of shares of Common Stock which are surrendered (or to which ownership has
been certified) in full or partial payment to the Corporation of the option price of a stock option granted under this Plan shall be available for all purposes of the Plan.
SECTION 3
Payment of Director Fees
Each
non-employee
Director shall automatically and without further action by the Board or the Committee receive
payment of a portion of Director Fees in the form of a grant of shares of Common Stock based on a dollar amount to be determined by the Board from time to time ($150,000 as of May 10, 2017), payable on the first business day following the
annual meeting of the stockholders of the Company to the
non-employee
Directors as of that date, with the number of shares determined by dividing the specified dollar amount by the fair market value of a share
of Common Stock on the applicable payment date, rounded up to the next whole share. A
non-employee
Director who is first appointed to the Board other than at an annual meeting of the stockholders will receive
a prorated award (based on the time to be served until the next annual meeting of stockholders), granted as of the date of appointment. The Committee shall have the authority from time to time to modify the dollar amount or number of shares to be
paid for Director Fees and the date of any such payment under this Section 3.
SECTION 4
Grant of Stock Options
The Board may determine to grant
non-statutory
stock options to
non-employee
Directors at such times, in such amounts and on such terms as the Board may determine from time to time, subject to the provisions of Section 5.
SECTION 5
Terms and Conditions of Stock Options
Stock options granted under the Plan shall be subject to the following terms and conditions:
(a) The purchase price at which each stock option may be exercised (the option price) shall be one hundred percent (100%) of the fair market value per share of the Common Stock on the date of
the grant of such stock option pursuant to the Plan, determined as provided in Section 5(g).
(b) The option price for each
stock option shall be paid in full upon exercise and shall be payable in cash in United States of America dollars (including check, bank draft or money order), which may include cash forwarded through a broker or other agent-sponsored exercise or
financing program;
provided
,
however
, that in lieu of such cash the person exercising the stock option may pay the option price in whole or in part by delivering to the Company shares of the Common Stock having a fair market value on
the date of exercise of the stock option, determined as provided in Section 5(g), equal to the option price for the shares being purchased; except that any portion of the option price representing a fraction of a share shall in any event be paid in
cash. If the person exercising a stock option participates in a broker or other agent-sponsored exercise or financing program, the Company will cooperate with all reasonable procedures of the broker or other agent to permit participation by the
person exercising the stock option in the exercise or financing program. Notwithstanding any procedure of the broker or other agent-sponsored exercise or financing program, if the option price is paid in cash, the exercise of the stock option shall
not be deemed to occur and no shares of the Common Stock will be issued or delivered until the Company has received full payment in cash (including check, bank draft or money order) for the option price from the broker or other agent. The
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date of exercise of a stock option shall be determined under procedures established by the Committee, and as of the date of exercise the person exercising the stock option shall be considered for
all purposes to be the owner of the shares with respect to which the stock option has been exercised.
(c) Subject to the terms
of Section 5(e) providing for earlier or later termination of a stock option, no stock option shall be exercisable after the expiration of ten years from the date of grant. A stock option to the extent exercisable at any time may be exercised in
whole or in part.
(d) No stock option shall be transferable by the grantee otherwise than by will or, if the grantee dies
intestate, by the laws of descent and distribution of the state of domicile of the grantee at the time of death. All stock options shall be exercisable during the lifetime of the grantee only by the grantee or the grantees guardian or legal
representative.
(e) If a grantee ceases to be a
non-employee
Director of the Company,
any outstanding stock options held by the grantee shall vest and be exercisable and shall terminate, according to the following provisions:
(i) If a grantee ceases to be a
non-employee
Director of the Company because he is removed without cause or because his term lapses and he is not
re-nominated
for a new term, any then outstanding stock option held by such grantee shall vest and become exercisable in accordance with the normal vesting schedule (including vesting upon grant of an option)
applicable to such option and shall remain exercisable until the expiration date of such stock option;
(ii) If during his term
of office as a
non-employee
Director a grantee is removed from office for cause, any then outstanding stock option held by such grantee shall be exercisable by the grantee (but only to the extent that such
stock option is vested and exercisable by the grantee immediately prior to ceasing to be a
non-employee
Director) at any time prior to the expiration date of such stock option or within 90 days after the date
of removal, whichever is the shorter period;
(iii) Following the death of a grantee whether during service as a
non-employee
Director of the Company or thereafter, any outstanding stock option held by the grantee at the time of death (whether or not vested and exercisable by the grantee immediately prior to death) shall vest
and be exercisable by the person entitled to do so under the will of the grantee, or, if the grantee shall fail to make testamentary disposition of the stock option or shall die intestate, by the legal representative of the grantee at any time prior
to the expiration date of such stock option or within one year after the date of death, whichever is the shorter period; and
(iv) If during his or her term of office as a
non-employee
Director a grantee resigns from the
Board during his or her term or is nominated for
re-election
to the Board but fails to win such
re-election,
any then outstanding stock option held by such grantee shall
be exercisable by the grantee (but only to the extent that such stock option is vested and exercisable by the grantee immediately prior to ceasing to be a
non-employee
Director) at any time prior to the
expiration date of such stock option.
(f) All stock options shall be confirmed by an agreement, or an amendment thereto, which
shall be executed on behalf of the Company by the Chief Executive Officer (if other than the President), the President or any Vice President and by the grantee.
(g) Fair market value of the Common Stock shall be the mean between the following prices, as applicable, for the date as of which fair market value is to be determined as quoted in
The Wall Street
Journal
(or in such other reliable publication as the Committee, in its discretion, may determine to rely upon): (a) if the Common Stock is listed on the New York Stock Exchange, the highest and lowest sales prices per share of the Common Stock
as quoted in the NYSE-Composite Transactions listing for such date, (b) if the Common Stock is not listed on such exchange, the highest and lowest sales prices per share of Common Stock for such date on (or on any composite index including) the
principal United States securities exchange registered under the Securities Exchange Act of 1934 (the 1934 Act) on which the Common Stock is listed, or (c) if the Common Stock is not listed on any such exchange, the highest and
lowest sales prices per share of the Common Stock for such date on the National Association of Securities Dealers Automated
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Quotations System or any successor system then in use (NASDAQ). If there are no such sale price quotations for the date as of which fair market value is to be determined but there are
such sale price quotations within a reasonable period both before and after such date, then fair market value shall be determined by taking a weighted average of the means between the highest and lowest sales prices per share of the Common Stock as
so quoted on the nearest date before and the nearest date after the date as of which fair market value is to be determined. The average should be weighted inversely by the respective numbers of trading days between the selling dates and the date as
of which fair market value is to be determined. If there are no such sale price quotations on or within a reasonable period both before and after the date as of which fair market value is to be determined, then fair market value of the Common Stock
shall be the mean between the bona fide bid and asked prices per share of Common Stock as so quoted for such date on NASDAQ, or if none, the weighted average of the means between such bona fide bid and asked prices on the nearest trading date before
and the nearest trading date after the date as of which fair market value is to be determined, if both such dates are within a reasonable period. The average is to be determined in the manner described above in this Section 5(g). If the fair market
value of the Common Stock cannot be determined on the basis previously set forth in this Section 5(g) for the date as of which fair market value is to be determined, the Committee shall in good faith determine the fair market value of the Common
Stock on such date. Fair market value shall be determined without regard to any restriction other than a restriction which, by its terms, will never lapse.
(h) The obligation of the Company to issue or deliver shares of the Common Stock under the Plan shall be subject to (i) the effectiveness of a registration statement under the Securities Act of 1933,
as amended, with respect to such shares, if deemed necessary or appropriate by counsel for the Company, (ii) the condition that the shares shall have been listed (or authorized for listing upon official notice of issuance) upon each stock
exchange, if any, on which the Common Stock shares may then be listed and (iii) all other applicable laws, regulations, rules and orders which may then be in effect.
Subject to the foregoing provisions of this Section 5 and the other provisions of the Plan, any stock option granted under the Plan may be subject to such restrictions and other terms and conditions,
if any, as shall be determined, in its discretion, by the Committee and set forth in the agreement referred to in Section 5(f), or an amendment thereto. Stock options shall be structured and administered in such a manner that they are either exempt
from the application of, or comply with, the requirements of Section 409A of the Code.
SECTION 6
Adjustment and Substitution of Shares
If a dividend or other distribution payable in shares of the Common Stock shall be declared upon the Common Stock, each number of shares of the Common Stock set forth in Sections 3 and 4, the number of
shares of the Common Stock then subject to any outstanding stock options and the number of shares of the Common Stock which may be issued or delivered under the Plan but are not then subject to outstanding stock options shall be adjusted by adding
thereto the number of shares of the Common Stock which would have been distributable thereon if such shares had been outstanding on the date fixed for determining the stockholders entitled to receive such stock dividend or distribution.
If the outstanding shares of the Common Stock shall be changed into or exchangeable for a different number or kind of shares of stock or other securities
of the Company or another corporation, whether through reorganization, reclassification, recapitalization, stock
split-up,
combination of shares, merger or consolidation, then there shall be substituted for
each share of the Common Stock set forth in Sections 3 and 4, for each share of the Common Stock subject to any then outstanding stock option, and for each share of the Common Stock which may be issued or delivered under the Plan but which is not
then subject to any outstanding stock option, the number and kind of shares of stock or other securities into which each outstanding share of the Common Stock shall be so changed or for which each such share shall be exchangeable. In case of any
adjustment or substitution as provided for in this Section 6, the aggregate option price for all shares subject to each then outstanding stock
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option prior to such adjustment or substitution shall be the aggregate option price for all shares of stock or other securities (including any fraction) to which such shares shall have been
adjusted or which shall have been substituted for such shares. Any new option price per share shall be carried to at least three decimal places with the last decimal place rounded upwards to the nearest whole number.
If the outstanding shares of Common Stock shall be changed in value by reason of
spin-off,
split-off,
or dividend in partial liquidation, dividend in property other than cash or extraordinary distribution to holders of the Common Stock, the Committee shall make any adjustments to any then outstanding
stock option which it determines are equitably required to prevent dilution or enlargement of the rights of grantees which would otherwise result from any such transaction.
No adjustment or substitution provided for in this Section 6 shall require the Company to issue or deliver or sell a fraction of a share or other security. Accordingly, all fractional shares or other
securities which result from any such adjustment or substitution shall be eliminated and not carried forward to any subsequent adjustment or substitution.
Except as provided in this Section 6, a grantee shall have no rights by reason of any issue or delivery by the Company of stock of any class or securities convertible into stock of any class, any
subdivision or consolidation of shares of stock of any class, the payment of any stock dividends or any other increase or decrease in the number of shares of stock of any class.
SECTION 7
Effect of the Plan on the Rights of Company and Stockholders
Nothing in the Plan, in any Director Fees paid or stock option granted under the Plan, or in any stock option agreement shall confer any right to any person to continue as a Director of the Company or
interfere in any way with the rights of the stockholders of the Company or the Board of Directors to elect and remove Directors.
SECTION 8
Amendment and Termination
The right to amend the Plan at any time and from time to time and the right to terminate the Plan at any time are hereby specifically reserved to the
Board; provided always that no such termination shall terminate any outstanding stock options granted under the Plan; and provided further that no amendment of the Plan shall (a) be made without stockholder approval if stockholder approval of
the amendment is at the time required for stock issued or delivered for Director Fees or stock options under the Plan to qualify for the exemption from Section 16(b) of the 1934 Act provided by Rule
16b-3
or
by the rules of the New York Stock Exchange or any other stock exchange on which the Common Stock may then be listed or (b) otherwise amend the Plan in any manner that would cause stock issued or delivered for Director Fees or stock options
under the Plan not to qualify for the exemption provided by Rule
16b-3.
No amendment or termination of the Plan shall, without the written consent of the holder of a stock option theretofore awarded under the
Plan, adversely affect the rights of such holder with respect thereto.
Notwithstanding anything contained in the preceding paragraph or any
other provision of the Plan or any stock option agreement, the Board shall have the power to amend the Plan in any manner deemed necessary or advisable for stock issued or delivered for Director Fees or stock options granted under the Plan to
qualify for the exemption provided by Rule
16b-3
(or any successor rule relating to exemption from Section 16(b) of the 1934 Act), and any such amendment shall, to the extent deemed necessary or advisable by
the Board, be applicable to any outstanding stock options theretofore granted under the Plan notwithstanding any contrary provisions contained in any stock option agreement. In the event of any such amendment to the Plan, the holder of any stock
option outstanding under the Plan shall, upon request of the Committee and as a condition to the exercisability of such option, execute a conforming amendment in the form prescribed by the Committee to the stock option agreement referred to in
Section 5(f) within such reasonable time as the Committee shall specify in such request.
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SECTION 9
Integration
The Plan and any written agreements executed by the
non-employee
Directors and the Company contain all of the understandings and representations between the parties and supersede any prior understandings and agreements entered into between them regarding the subject
matter within. There are no representations, agreements, arrangements or understandings, oral or written, between the parties relating to the subject matter within which are not fully expressed in the Plan and the agreements.
SECTION 10
Effective Date and Duration of Plan
The Plan was originally adopted effective as of November 1, 1995. This amendment and restatement of the Plan is effective as of May 10, 2017 upon approval by the Companys stockholders. No
stock may be issued or delivered for Director Fees and no stock option may be granted under the Plan subsequent to May 10, 2027.
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Shareowner Services
P.O. Box
64945
St. Paul, MN 55164-0945
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Address Change? Mark box, sign, and indicate changes below: ☐
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TO VOTE BY INTERNET OR TELEPHONE, SEE REVERSE SIDE
OF THIS PROXY CARD.
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The Board of Directors Recommends a Vote FOR ALL nominees in Item 1, FOR Items 2, 4, 5 and 6, and
with respect to Item 3, FOR 1 year.
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1
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Elect four directors
for a term of three years
expiring in 2020:
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01 Philippe Alfroid
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☐
Vote FOR
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☐
Vote WITHHELD
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02 Raymond T. Betler
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all nominees
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from all nominees
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03 Emilio A. Fernandez
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(except as marked)
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04 Lee B. Foster, II
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(Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.)
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ò
Please fold here Do not separate
ò
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2.
Approve an advisory
(non-binding)
resolution relating to the approval of 2016 named executive officer compensation
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☐
For
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☐
Against
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☐
Abstain
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3.
Advisory
(non-binding)
vote on how often the company should conduct a stockholder advisory vote on named executive officer compensation
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1 Year
☐
2 Years
☐
3 Years
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☐
Abstain
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4.
Approve amendment and restatement of the 2011 Stock Incentive
Plan, including material terms of the performance goals under the plan
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☐
For
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Against
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☐
Abstain
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5.
Approve amendment and restatement of the 1995
Non-Employee
Directors Fee and Stock Option Plan
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For
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Against
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Abstain
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6.
Ratify the appointment of Ernst & Young LLP as our
independent registered public accounting firm for the 2017 fiscal year
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☐
For
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☐
Against
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Abstain
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In their discretion, the proxies are authorized to vote upon such other business if properly raised at the annual meeting or any adjournment thereof.
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THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD RECOMMENDS.
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Date
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Signature(s) in Box
Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title
and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.
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WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
Wednesday, May 10, 2017
11:30 a.m. Local Time
The Duquesne Club
325
Sixth Avenue
Pittsburgh, Pennsylvania 15222
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Westinghouse Air Brake Technologies Corporation
1001 Air Brake Avenue
Wilmerding, Pennsylvania
15148
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proxy
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The undersigned stockholder of WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION (the Company) does hereby appoint
Albert J. Neupaver and David L. DeNinno, or any one or both of them, with full power of substitution, as proxies of the undersigned to vote at the Annual Meeting of Stockholders of the Company, to be held Wednesday, May 10, 2017 (the
Annual Meeting), and at all adjournments thereof, all the shares of Common Stock of the Company which the undersigned may be entitled to vote, on the matters set out on the reverse side of this proxy card and described in the Proxy
Statement and, at their discretion, on any other business which may properly come before the Annual Meeting.
The undersigned stockholder hereby revokes
all previous proxies for the Annual Meeting and acknowledges receipt of the Notice of Internet Availability of Proxy Materials describing how to access or receive paper or
e-mail
copies of the Notice of Annual
Meeting of Stockholders and Proxy Statement for 2017 and the Annual Report to Stockholders for 2016.
If you requested a copy of the proxy materials by
mail, you are urged to promptly return this proxy card in the enclosed envelope whether or not you expect to attend the Annual Meeting in person so that your shares may be voted in accordance with your wishes and in order that the presence of a
quorum may be assured at the Annual Meeting.
The shares represented by this proxy card will be voted as directed by the stockholder. If this proxy card
is executed but no direction is given, such shares will be voted
FOR ALL
nominees in Item 1 and
FOR
Items 2, 4, 5 and 6 and with respect to Item 3,
FOR
1 year.
Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week
Your phone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
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INTERNET/MOBILE
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PHONE
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MAIL
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www.proxypush.com/wab
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1-866-883-3382
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Mark, sign and date your proxy
card and return it in the
postage-paid envelope provided.
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Use the Internet to vote your proxy
until 11:59 p.m. (CT) on
May 9, 2017.
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Use a touch-tone telephone to
vote your proxy until 11:59 p.m.
(CT) on May 9, 2017.
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Scan code on front for mobile voting.
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If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your Proxy Card.