Exhibit 10.1                              

 

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December 13, 2012

Kathleen M. Boege

1555 North Dearborn Parkway #24E

Chicago, IL 60610

 

  Re: Terms of Employment

Dear Kate:

This letter agreement (“letter”) sets forth the terms of your employment with
FreightCar America, Inc. (the “Company”). Commencing on January 14, 2013, you
will be employed as the Company’s General Counsel and Corporate Secretary, based
at the Company’s offices in Chicago, Illinois, reporting to the Company’s
President and Chief Executive Officer. During your employment, you will devote
your full-time business attention to the Company and will use your best efforts
to discharge your responsibilities. You may, however, engage in civic and
charitable activities and, with the prior consent of the Company’s Board of
Directors (“Board”), corporate boards, provided that these activities do not
interfere with your duties to the Company.

This letter and your employment is for no specific term. Your employment may be
terminated at any time for any reason (or no reason), subject to the terms of
this letter below, by the Company or you upon notice to the other such party.

1. Salary. Effective on your start date with the Company, you will receive an
annual base salary in the amount of $300,000 (“Salary”), paid in accordance with
payroll practices applicable to senior executives. Your Salary will be reviewed
by the Company annually.

2. Bonus. You will be eligible to participate in the Company’s annual cash
incentive plan applicable to senior executives (the “Bonus Plan”) and to earn a
bonus (“Bonus”) for each fiscal year of the Company ending during your
employment. The measurement period for the annual cash incentive plan runs
concurrent with the Company’s fiscal calendar which concludes on December 31st
of each year. Your target Bonus is 50% of your Salary, upon achievement of a
target level of performance set forth in the Bonus Plan, payable in cash or
securities of the Company, as may be determined under the Bonus Plan, within two
and one-half months after the end of the fiscal year to which it relates. Your
maximum Bonus, to the extent earned under the Bonus Plan, may be as much as 75%
of your Salary.

 

Two North Riverside Plaza

Suite 1300

Chicago, IL 60606 USA

312.928.0850

Fax 312.928.0890

www.freightcaramerica.com

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3. Long-Term Incentive and Other Executive Compensation Plans. You will be
eligible to participate in all of the Company’s equity-based and cash-based
long-term incentive and other executive and deferred compensation plans on a
basis no less favorable than other similarly situated executives. Any awards
under these plans may be made from time to time in the sole discretion of the
Compensation Committee of the Board or the Board. Your participation in the
Company’s long-term incentive plan for 2013 will take the form of the sign-on
award described in the next paragraph.

4. Sign-On Award. Effective on January 14, 2013, you will be granted 3,250
options to purchase shares of the Company’s common stock under the Company’s
2005 Long Term Incentive Plan, having such terms and conditions as are set forth
in the stock option award agreement attached to this letter as Exhibit A. The
exercise price of the shares subject to the options will be the fair market
value of a share on January 14, 2013. Effective also on January 14, 2013, you
will be granted 1,200 restricted shares of Company common stock under the
Company’s 2005 Long Term Incentive Plan, having such terms and conditions as are
set forth in the restricted share award agreement attached to this letter as
Exhibit B.

5. Benefits; Business Expenses. During your employment, you will be entitled to
participate in each of the Company’s employee retirement, savings, welfare and
fringe benefit plans, and perquisites, offered to its senior executives, as in
effect from time to time. You will be entitled to paid annual vacation on a
basis that is at least as favorable as that provided to other similarly situated
executives of the Company, but not less than four (4) weeks per year, earned in
accordance with applicable Company policy. You will be reimbursed for all
business, including entertainment, expenses incurred by you in connection with
your duties, subject to the Company’s policy with respect to such expenses.

6. Termination. Upon a termination of your employment for any reason, you will
be entitled to (i) your accrued Salary and accrued and unused vacation through
the date of termination, (ii) your prior fiscal year bonus, to the extent earned
and unpaid, and (iii) any accrued and vested benefits and unreimbursed expenses
incurred and unpaid on the date of termination in accordance with Section 5. You
will also participate in and be entitled to benefits under the Company’s
Executive Severance Plan as then in effect, subject to your prior written
acknowledgement and acceptance of the terms and conditions of that plan. A copy
of the Executive Severance Plan as currently in effect is attached as Exhibit C
to this letter.

7. Restrictive Covenants

(a) Confidential Information. You understand that the Company possesses and will
possess Confidential Information that is important to its business. The Company
devotes significant financial, human and other resources to the development of
its products, its customer base and the general goodwill associated with

 

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its business and the Company diligently maintains the secrecy and
confidentiality of its Confidential Information. For this purpose, “Confidential
Information” is information that was or will be developed, created, or
discovered by or on behalf of the Company, or that became or will become known
by, or was or is conveyed to the Company, which has commercial value in the
Company’s business. Confidential Information is sufficiently secret to derive
economic value from its not being generally known to other persons. Confidential
Information also includes any and all financial, technical, commercial or other
information concerning the business and affairs of the Company that is
confidential and proprietary to the Company, including without limitation,
(i) information relating to the Company’s past and existing customers and
vendors and development of prospective customers and vendors, including without
limitation specific customer product requirements, pricing arrangements, payment
terms, customer lists and other similar information; (ii) inventions, designs,
methods, discoveries, works of authorship, creations, improvements or ideas
developed or otherwise produced, acquired or used by the Company; (iii) the
Company’s proprietary programs, processes or software, including but not limited
to, computer programs in source or object code and all related documentation and
training materials, including all upgrades, updates, improvements, derivatives
and modifications thereof and including programs and documentation in incomplete
stages of design or research and development; (iv) the subject matter of the
Company’s patents, design patents, copyrights, trade secrets, trademarks,
service marks, trade names, trade dress, manuals, operating instructions,
training materials, and other industrial property, including such information in
incomplete stages of design or research and development; and (v) other
confidential and proprietary information or documents relating to the Company’s
products, business and marketing plans and techniques, sales and distribution
networks and any other information or documents which the Company reasonably
regards as being confidential.

You understand that the Company possesses or will possess “Company Materials”
that are important to its business. For this purpose, “Company Materials” are
documents or other media or tangible items that contain or embody Confidential
Information or any other information concerning the business, operations or
future/strategic plans of the Company, whether such documents have been prepared
by you or by others. In consideration of your employment by the Company, the
compensation received by you from the Company, and the Company’s agreement to
give you access to certain Confidential Information, you agree as follows:

(i) All Confidential Information and trade secret rights, and other intellectual
property and rights (collectively “Rights”) in connection therewith will be the
sole property of the Company. At all times, both during your employment by the
Company and after its termination for any reason, you will keep in confidence
and trust and will not use or disclose any Confidential Information or anything
relating to it without the prior written consent of a then current officer of
the Company except as may be necessary and appropriate in the ordinary course of
performing your duties to the Company.

 

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(ii) All Company Materials will be the sole property of the Company. You agrees
that during your employment by the Company, you will not remove any Company
Materials from the business premises of the Company or deliver any Company
Materials to any person or entity outside the Company, except as you are
required to do so in connection with performing the duties of your employment.
You further agree that, immediately upon the termination of your employment by
you or by the Company for any reason, or during your employment if so requested
by the Company, you will return all Company Materials, apparatus, equipment and
other physical property, or any reproduction of such property.

(b) Noncompetition and Non-solicitation. While employed by the Company and for a
period of twelve (12) consecutive months thereafter, you will not, directly or
indirectly:

(i) Contact, solicit, interfere with, or divert, or induce or attempt to
contact, solicit, interfere with or divert, any of the Company’s customers;

(ii) Participate or engage in (as an owner, partner, employee, officer,
director, independent contractor, consultant, advisor or in any other capacity
calling for the rendition of services, advice, or acts of management, operation
or control) any business engaged in the manufacture, maintenance and/or repair
of railcars in North America; and

(iii) Solicit or induce or attempt to solicit or induce, by or for yourself, or
as the agent of another, or through others as an agent in any way, any person
who is employed by the Company for the purpose of encouraging that employee to
join you as a partner, agent, employee or otherwise in any business activity
which is competitive with the Company.

(c) Forfeitures. In the event that you materially breach any of the restrictions
in this Section 7, you shall forfeit all of the applicable payments and benefits
described in this letter, and the Company shall have the right to recapture and
seek repayment of any such applicable payments and benefits under this
Agreement.

(d) Intellectual Property. “Inventions” includes all improvements, inventions,
designs, formulas, works of authorship, trade secrets, technology, computer
programs, compositions, ideas, processes, techniques, know-how and data, whether
or not patentable, made or conceived or reduced to practice or developed by you,
either

 

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alone or jointly with others, during the term of your employment, including
during any period prior to the date of this letter. Except as defined in this
letter all Inventions that you make, conceive, reduce to practice or develop (in
whole or in part, either alone or jointly with others) during your employment
will be the sole property of the Company to the maximum extent permitted by law.
You agree to assign such Inventions and all rights in them to the Company.
Exemptions from this agreement to assign may be authorized in those
circumstances where the mission of the Company is better served by such action,
provided that overriding obligations to other parties are met and such
exemptions are not inconsistent with other Company policies. Further, you may
petition the Company for license to make, market or sell a particular Invention.

(e) Injunction. You acknowledge that monetary damages will not be an adequate
remedy for the Company in the event of a breach of this Section 7, and that it
would be impossible for the Company to measure damages in the event of such a
breach. Therefore, you agree that, in addition to other rights and remedies that
the Company may have, the Company is entitled to an injunction preventing you
from any breach of this Section 7, and you hereby waive any requirement that the
Company post any bond in connection with any such injunction. You further agree
that injunctive relief is reasonable and necessary to protect a legitimate,
protectable interest of the Company.

(f) Blue Pencil. If any court determines that the covenants contained in this
Section 7, or any part hereof, are unenforceable because of the duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, to as close to the
terms hereof as shall be enforceable and, in its reduced form, such provision
shall then be enforceable.

(g) Survival. The restrictive covenants contained in this Section 7 shall
survive the termination of your employment, provided, however, that the
covenants set forth in Section 7(b) shall expire after twelve (12) months
following termination of your employment with the Company.

8. Section 409A. Anything in this Agreement to the contrary notwithstanding, if
any payment(s) or benefit(s) under this Agreement would be subject to the
provisions of Section 409A of the Internal Revenue Code of 1986 (the “Code”) at
the time they become payable or benefits due you, to the extent required to
comply with Section 409A of the Code any such payments or benefits will be
delayed for six (6) months or such other earliest day on which such payments
could be made or benefits provided in compliance with Section 409A of the Code
and the regulations thereunder (at which point all payments so delayed will be
provided or reimbursed to you in one lump sum, without interest, within two and
one-half months after the date they then become so payable or due to you).

 

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9. Miscellaneous.

(a) Entire Agreement. Except as otherwise contemplated herein, this letter
(including Exhibits A, B and C) contains the entire agreement between you and
the Company with respect to the subject matter hereof. No amendment,
modification or termination of this letter may be made orally, but must be made
in writing and signed by you and the Company. In the event of any inconsistency
between this letter (including Exhibits A, B and C) and any plan, program,
practice or agreement of or with the Company and you, this letter (including
Exhibits A, B and C) shall control.

(b) Survival. The provisions of Sections 6 and 7 shall survive any termination
of your employment, provided, however, that the covenants set forth in
Section 7(b) shall expire after twelve (12) months following termination of your
employment with the Company.

(c) Successors; Assignment. Neither party hereto may assign any rights or
delegate any duties under this letter without the prior written consent of the
other party; provided, however, that (a) this letter will inure to the benefit
of and be binding upon the successors and assigns of the Company upon any sale
of all or substantially all of the Company’s stock and/or assets, or upon any
merger, consolidation or reorganization of the Company with or into any other
corporation or other legal entity, all as though such successors and assigns of
the Company and their respective successors and assigns were the Company; and
(b) this letter will inure to the benefit of and be binding upon your heirs,
assigns or designees to the extent of any payments due to them hereunder.

(d) Governing Law. This letter will be governed by and construed in accordance
with the law of the State of Illinois, and not its choice of law rules,
applicable to contracts made and to be performed entirely within that State.

(e) No Set-off or Mitigation. Your rights to payments under this letter will not
be affected by any set-off, counterclaim, recoupment or other right the Company
may have against you or anyone else. You do not need to seek other employment or
take any other action to mitigate any amounts owed to you under this letter, and
those amounts will not be reduced if you do obtain other employment.

(f) Notices. All notices, requests, demands and other communications under this
letter must be in writing and will be deemed given (i) when hand-delivered,
(ii) on the first business day after the business day sent from within the
United States, if delivered by a nationally recognized overnight courier or
(iii) on the third business day after the business day sent if delivered by
registered or certified mail, return receipt requested, in each case to the
following address (or to such other address as may be specified by notice that
conforms to this Section 9(f)):

 

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If to the Company, to:

FreightCar America, Inc.

Two North Riverside Plaza

Suite 1300

Chicago, Illinois 60606

Attention: President and CEO

If to you, to your last address shown on the payroll records of the Company.

(g) Counterparts. This letter may be executed in counterparts, each of which
will constitute an original and all of which, taken together, will constitute
one and the same instrument.

 

 

Very truly yours,

FREIGHTCAR AMERICA, INC.

 

By:     President and Chief Executive Officer

 

Accepted and agreed:

 

 

      Kathleen M. Boege

 

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EXHIBIT A

STOCK OPTION AWARD AGREEMENT

 

[See following pages.]

 

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EXHIBIT B

RESTRICTED SHARE AWARD AGREEMENT

 

[See following pages.]

 

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EXHIBIT C

EXECUTIVE SEVERANCE PLAN

 

[See following pages.]

 

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