For those participants that are eligible, the Company makes an annual basic contribution of 3% of a
participants eligible compensation, with the general requirement that the Company employs the participant on the last work day of the year for which the basic contribution is made. In addition, the Company will match 100% of the
participants pre-tax, Roth, and/or after-tax contributions to the Plan up to a total of 3% of eligible compensation. Different levels of annual basic contributions
and matching contributions may apply to certain collectively bargained employees.
The Plan allows participants to direct their
contributions, and contributions made on their behalf, to any of the investment alternatives offered under the Plan, which includes a self-directed brokerage account through which participants can access a broad range of mutual funds not offered
directly through the Plan. The Plan permits participants to invest in Wabtec common stock. Effective January 1, 2018, the Plan was amended to limit participants investments in Wabtec common stock such that (1) participants with more
than 20% of their account invested in Wabtec common stock may not elect to transfer additional portions of their account into Wabtec common stock, and (2) participants may not elect to invest more than 20% of their future contributions to the
Plan (or future contributions made to the Plan on their behalf by Wabtec) in Wabtec common stock.
Withdrawals
Participants may make the following types of withdrawals:
In-Service Withdrawals Once every six months, a participant may withdraw all or any portion of
his or her account attributable to employee after-tax contributions or rollover contributions. Once every six months, a participant may withdraw the vested portion of his or her account attributable to
employer matching, or employer basic contributions contributed to the Plan before October 1, 2016. Once a participant has reached age 591⁄2, he or she can
withdraw any portion of his or her vested account.
Hardship Withdrawals In the case of hardship, as defined in the plan document,
the participant can elect to withdraw up to 100% of his or her account attributable to employee elective or Roth contributions. Hardship withdrawals are limited to once every plan year. For periods prior to January 1, 2019, employee
contributions cannot be made to the Plan for a period of six months following the hardship withdrawal.
Notes Receivable from Participants
Notes receivable from participants (loans) are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income is recorded on
the accrual basis. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2019 and 2018. Delinquent participant loans are reclassified as
distributions based upon the terms of the plan document. A participant may borrow from his or her fund accounts a maximum loan amount equal to the lesser of 50% of the value of the participants vested balance of his or her account, reduced by
any outstanding loan balance, or $50,000. The loans bear interest based on the Reuters Prime Rate as adjusted monthly. The interest rates on participant loans for the year ending December 31, 2019, range from 4.25% to 9.25%. Principal and
interest are paid ratably through monthly payroll deductions.
Participant Accounts
Each participants account is credited with the participants contributions and allocations of (a) the Companys contribution and
(b) Plan earnings and may be charged with an allocation of administrative expenses and other applicable Plan expenses (such as for initiating a Plan loan). The benefit to which a participant is entitled is the benefit that can be provided from
the participants vested account.
Plan Termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time as well as terminate
the Plan subject to the provisions of The Employee Retirement Income Security Act of 1974 (ERISA). In the event the Plan is terminated, the Company will direct either (a) that the investment manager and trustee continue to hold the
participants accounts in accordance with the Plan, or (b) that the investment manager and trustee immediately distribute to each participant all amounts in the participants account in a single
lump-sum payment. In the event of Plan termination, participants would become 100% vested in their employer contributions.
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