2005 Long-Term Incentive Plan and Form of Option Agreement



 EXHIBIT 10.6 
  
 [FORM OF] 
 FREIGHTCAR AMERICA, INC. 
 2005 LONG TERM INCENTIVE PLAN 
  

	1.	Purposes. 

  
 The purposes of the 2005 Long Term Incentive Plan are to advance the interests of FreightCar America, Inc. and its shareholders by providing a means to
attract, retain, and motivate employees, consultants and directors of the Company (as defined below), its subsidiaries and affiliates, to provide for competitive compensation opportunities, to encourage long term service, to recognize individual
contributions and reward achievement of performance goals, and to promote the creation of long term value for stockholders by aligning the interests of such persons with those of stockholders. 
  

	2.	Definitions. 

  
 For purposes of the Plan, the following terms shall be defined as set forth below: 
  
 (a) “Affiliate” means any entity other than the Company and its Subsidiaries that is designated by the Board or
the Committee as a participating employer under the Plan; provided, however, that the Company directly or indirectly owns at least 20% of the combined voting power of all classes of stock of such entity or at least 20% of the ownership
interests in such entity. 
  
 (b) “Award” means any
Option, SAR, Restricted Share, Restricted Share Unit, Performance Share, Performance Unit, Dividend Equivalent, or Other Share-Based Award granted to an Eligible Person under the Plan. 
  
 (c) “Award Agreement” means any written agreement, contract, or other instrument or document evidencing an Award.

  
 (d) “Beneficiary” means the person, persons, trust
or trusts which have been designated by an Eligible Person in his or her most recent written beneficiary designation filed with the Company to receive the benefits specified under this Plan upon the death of the Eligible Person, or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive such benefits. 
  
 (e) “Board” means the Board of Directors of the Company. 
  
 (f) “Code” means the Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code shall be deemed to include successor provisions thereto and regulations thereunder. 
  
 (g) “Committee” means the Compensation Committee of the Board, or such other Board committee (which may include the entire Board) as may be
designated by the Board to administer the Plan; provided, however, that, unless otherwise determined by the Board, the 

  









 
Committee shall consist of two or more directors of the Company, each of whom is a “nonemployee director” within the meaning of Rule 16b-3 under
the Exchange Act, to the extent applicable, and each of whom is an “outside director” within the meaning of Section 162(m) of the Code, to the extent applicable; provided, further, that the mere fact that the Committee shall
fail to qualify under either of the foregoing requirements shall not invalidate any Award made by the Committee which Award is otherwise validly made under the Plan. 
  
 (h) “Company” means FreightCar America, Inc., a corporation organized under the laws of Delaware, or any successor
corporation. 
  
 (i) “Director” means a member of the
Board who is not an employee of the Company, a Subsidiary or an Affiliate. 
  
 (j) “Dividend Equivalent” means a right, granted under Section 5(g), to receive cash, Shares, or other property equal in value to dividends paid with respect to a specified number of Shares. Dividend
Equivalents may be awarded on a free-standing basis or in connection with another Award, and may be paid currently or on a deferred basis. 
  
 (k) “Effective Date” means
                    , 2005. 
  
 (l) “Eligible Person” means (i) an employee or consultant of the Company, a Subsidiary or an Affiliate, including any director who is an
employee, or (ii) a Director. Notwithstanding any provisions of this Plan to the contrary, an Award may be granted to an employee, consultant or Director, in connection with his or her hiring or retention prior to the date the employee, consultant
or Director first performs services for the Company, a Subsidiary or an Affiliate; provided, however, that any such Award shall not become vested or exercisable prior to the date the employee, consultant or Director first performs such
services. 
  
 (m) “Exchange Act” means the Securities
Exchange Act of 1934, as amended from time to time. References to any provision of the Exchange Act shall be deemed to include successor provisions thereto and regulations thereunder. 
  
 (n) “Fair Market Value” means, with respect to Shares or other property, the fair market value of such Shares or
other property determined by such methods or procedures as shall be established from time to time by the Committee. If the Shares are listed on any established stock exchange or a national market system, unless otherwise determined by the Committee
in good faith, the Fair Market Value of Shares shall mean the mean between the high and low selling prices per Share on the date (or, if the Shares were not traded on that day, the next preceding day that the Shares were traded) on the principal
exchange or market system on which the Shares are traded, as such prices are officially quoted on such exchange. 
  
 (o) “ISO” means any Option intended to be and designated as an incentive stock option within the meaning of Section 422 of the Code. 

 
 (p) “NQSO” means any Option that is not an ISO. 
  
 (q) “Option” means a right, granted under Section 5(b), to purchase
Shares. 
  

 - 2 - 








 (r) “Other Share-Based Award” means a right, granted under Section 5(h), that relates to is
valued by reference to Shares. 
  
 (s) “Participant”
means an Eligible Person who has been granted an Award under the Plan. 
  
 (t) “Performance Share” means a performance share granted under Section 5(f). 
  
 (u) “Performance Unit” means a performance unit granted under Section 5(f). 
  
 (v) “Plan” means this 2005 Long Term Incentive Plan. 
  
 (w) “Restricted Shares” means an Award of Shares under Section 5(d) that may be subject to certain restrictions
and to a risk of forfeiture. 
  
 (x) “Restricted Share
Unit” means a right, granted under Section 5(e), to receive Shares or cash at the end of a specified deferral period. 
  
 (y) “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act. 
  
 (z)
“SAR” or “Share Appreciation Right” means the right, granted under Section 5(c), to be paid an amount measured by the difference between the exercise price of the right and the Fair Market Value of Shares on the date of exercise
of the right, with payment to be made in cash, Shares, or property as specified in the Award or determined by the Committee. 
  
 (aa) “Shares” means common stock, $.01 par value per share, of the Company, and such other securities as may be substituted for Shares pursuant
to Section 4(c) hereof. 
  
 (bb) “Subsidiary” means any
corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns shares possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the chain. 
  
 (cc) “Termination of Service” means the termination of the Participant’s employment, consulting services or directorship with the Company, its Subsidiaries and its Affiliates, as the case may be. A
Participant employed by a Subsidiary of the Company or one of its Affiliates shall also be deemed to incur a Termination of Service if the Subsidiary of the Company or Affiliate ceases to be such a Subsidiary or an Affiliate, as the case may be, and
the Participant does not immediately thereafter become an employee or director of, or a consultant to, the Company, another Subsidiary of the Company or an Affiliate. As determined by the Committee, temporary absences from employment because of
illness, vacation or leave of absence and transfers among the Company and its Subsidiaries and Affiliates may not be considered a Termination of Service. 
  

 - 3 - 









	3.	Administration. 

  
 (a) Authority of the Committee. The Plan shall be administered by the Committee, and the Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of the Plan: 
  
 (i) to select Eligible Persons to whom Awards may be granted; 
  
 (ii) to designate Affiliates; 
  
 (iii) to determine the type or types of Awards to be granted to each Eligible Person; 
  
 (iv) to determine the type and number of Awards to be
granted, the number of Shares to which an Award may relate, the terms and conditions of any Award granted under the Plan (including, but not limited to, any exercise price, grant price, or purchase price, any restriction or condition, any schedule
for lapse of restrictions or conditions relating to transferability or forfeiture, exercisability, or settlement of an Award, and waiver or accelerations thereof, and waivers of performance conditions relating to an Award, based in each case on such
considerations as the Committee shall determine), and all other matters to be determined in connection with an Award; 
  
 (v) to determine whether, to what extent, and under what circumstances an Award may be settled, or the exercise price of an Award may be
paid, in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, exchanged, or surrendered; 
  
 (vi) to determine whether, to what extent, and under what circumstances cash, Shares, other Awards, or other property payable with respect
to an Award will be deferred either automatically, at the election of the Committee, or at the election of the Eligible Person; 
  
 (vii) to prescribe the form of each Award Agreement, which need not be identical for each Eligible Person; 
  
 (viii) to adopt, amend, suspend, waive, and rescind such
rules and regulations and appoint such agents as the Committee may deem necessary or advisable to administer the Plan; 
  
 (ix) to correct any defect or supply any omission or reconcile any inconsistency in the Plan and to construe and interpret the Plan and
any Award, rules and regulations, Award Agreement, or other instrument hereunder; 
  
 (x) to accelerate the exercisability or vesting of all or any portion of any Award or to extend the period during which an Award is
exercisable; 
  
 (xi) to interpret the Plan and
specify any additional requirements as it deems necessary to comply with Section 409A of the Code; 
  

 - 4 - 








 (xii) to determine whether uncertificated Shares may be used in satisfying Awards and
otherwise in connection with the Plan; and 
  
 (xiii) to make all other decisions and determinations as may be required under the terms of the Plan or as the Committee may deem necessary or advisable for the administration of the Plan. 
  
 (b) Manner of Exercise of Committee Authority. The Committee shall
have sole discretion in exercising its authority under the Plan. Any action of the Committee with respect to the Plan shall be final, conclusive, and binding on all persons, including the Company, Subsidiaries, Affiliates, Eligible Persons, any
person claiming any rights under the Plan from or through any Eligible Person, and shareholders. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or
authority of the Committee. The Committee may delegate to other members of the Board or officers or managers of the Company or any Subsidiary or Affiliate the authority, subject to such terms as the Committee shall determine, to perform
administrative functions and, with respect to Awards granted to persons not subject to Section 16 of the Exchange Act, to perform such other functions as the Committee may determine, to the extent permitted under Rule 16b-3 (if applicable) and
applicable law. 
  
 (c) Limitation of Liability. Each
member of the Committee shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or other employee of the Company or any Subsidiary or Affiliate, the Company’s independent
certified public accountants, or other professional retained by the Company to assist in the administration of the Plan. No member of the Committee, and no officer or employee of the Company acting on behalf of the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Committee and any officer or employee of the Company acting on their behalf shall, to the extent permitted by law,
be fully indemnified and protected by the Company with respect to any such action, determination, or interpretation. 
  
 (d) Limitation on Committee’s Discretion. Anything in this Plan to the contrary notwithstanding, in the case of any Award which provides that
it is intended to qualify as “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, the Committee shall have no discretion to increase the amount of compensation payable under the Award to the extent such
an increase would cause the Award to lose its qualification as such performance-based compensation. 
  
 (e) Option or SAR Repricing. The Committee is authorized to reprice outstanding Options and SARs, including without limitation by lowering their
exercise price or exchanging them for other Options or SARs with lower exercise prices; provided, however, that, without the consent of a Participant, no such repricing may materially and adversely affect the rights of the Participant
under any Option or SAR theretofore granted to him or her. 
  

 - 5 - 









	4.	Shares Subject to the Plan. 

  
 (a) Subject to adjustment as provided in Section 4(c) hereof, the total number of Shares reserved for issuance in connection with Awards under the Plan
shall be 659,616 Shares. No Award may be granted if the number of Shares to which such Award relates, when added to the number of Shares previously issued under the Plan, exceeds the number of Shares reserved under the preceding sentence. If any
Awards are forfeited, canceled, terminated, exchanged or surrendered or such Award is settled in cash or otherwise terminates without a distribution of Shares to the Participant, or if any Shares are delivered by attestation to, or withheld by, the
Company in connection with the exercise of an Award or payment of taxes, any Shares counted against the number of Shares reserved and available under the Plan with respect to such Award shall, to the extent of any such forfeiture, settlement,
termination, cancellation, exchange, surrender, attestation or withholding shall again be available for Awards under the Plan. Upon the exercise of any Award granted in tandem with any other Awards, such related Awards shall be canceled to the
extent of the number of Shares as to which the Award is exercised. 
  
 (b) Subject to adjustment as provided in Section 4(c) hereof, the maximum number of Shares (i) with respect to which Options or SARs may be granted during any one calendar year to any one Eligible Person under this Plan shall be 329,808
Shares, and (ii) with respect to Performance Shares, Performance Units, Restricted Shares or Restricted Share Units intended to qualify as performance-based compensation within the meaning of Section 162(m)(4)(C) of the Code shall be the equivalent
of 329,808 Shares during any one calendar year to any one Eligible Person under this Plan. Notwithstanding the foregoing, the maximum number of Shares that may be issued or transferred to Eligible Persons as Incentive Stock Options is 659,616
Shares, and the maximum number of Shares that may be transferred to Participants as Restricted Shares, Restricted Share Units and other Share Based Awards is 329,808 Shares. 
  
 (c) In the event that the Committee shall determine that any dividend in Shares, recapitalization, Share split, reverse
split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event, affects the Shares such that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Eligible Persons under the Plan, then the Committee shall make such equitable changes or adjustments as it deems appropriate and, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of
shares which may thereafter be issued under the Plan, (ii) the number and kind of shares, other securities or other consideration issued or issuable in respect of outstanding Awards, and (iii) the exercise price, grant price, or purchase price
relating to any Award; provided, however, in each case that, with respect to ISOs, such adjustment shall be made in accordance with Section 424(a) of the Code, unless the Committee determines otherwise. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria and performance objectives, if any, included in, Awards in recognition of unusual or non-recurring events (including, without limitation, events described in the
preceding sentence) affecting the Company or any Subsidiary or Affiliate or the financial statements of the Company or any Subsidiary or Affiliate, or in response to changes in applicable laws, regulations, or accounting principles; provided,
however, that, if an Award provides that it is intended to qualify as “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, the Committee shall not have discretion to increase the amount of
compensation payable under the Award to the extent such an increase would cause the Award to lose its qualification as performance-based compensation for purposes of Section 162(m)(4)(C) of the Code and the regulations thereunder. 
  

 - 6 - 








 (d) Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or treasury Shares including Shares acquired by purchase in the open market or in private transactions. 
  

	5.	Specific Terms of Awards. 

  
 (a) General. Awards may be granted on the terms and conditions set forth in this Section 5. In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to Section 9(d)), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine, including terms regarding forfeiture of
Awards or continued exercisability of Awards in the event of Termination of Service by the Eligible Person. 
  
 (b) Options. The Committee is authorized to grant Options, which may be NQSOs or ISOs, to Eligible Persons on the following terms and conditions:

  
 (i) Exercise Price. The exercise price
per Share purchasable under an Option shall be determined by the Committee. The Committee may, without limitation, set an exercise price that is based upon achievement of performance criteria if deemed appropriate by the Committee. 
  
 (ii) Option Term. The term of each Option shall be
determined by the Committee. 
  
 (iii) Time
and Method of Exercise. The Committee shall determine at the date of grant or thereafter the time or times at which an Option may be exercised in whole or in part (including, without limitation, upon achievement of performance criteria if deemed
appropriate by the Committee), the methods by which such exercise price may be paid or deemed to be paid (including, without limitation, broker-assisted exercise arrangements), the form of such payment (including, without limitation, cash, Shares or
other property), and the methods by which Shares will be delivered or deemed to be delivered to Eligible Persons; provided, however, that, unless the Committee determines otherwise, in no event may any portion of the exercise price be
paid with Shares acquired either under an Award granted pursuant to this Plan, upon exercise of a stock option granted under another Company plan or as a stock bonus or other stock award granted under another Company plan unless, in any such case,
the Shares were acquired and vested more than six months in advance of the date of exercise. 
  
 (iv) ISOs. The terms of any ISO granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code,
including but not limited to the requirements that (1) ISOs may only be granted to employees of the Company or a Subsidiary, (2) the amount of the aggregate Fair Market Value of Shares (determined at the time of grant of the Option) with respect to
which ISOs are exercisable for the first time by an ISO holder during any calendar year (under all such plans of his or her employer corporation and its parent and subsidiary corporations) shall not exceed $100,000 or such other amount as is
specified in the Code, and (3) the ISO shall be 

  

 - 7 - 








 
granted within ten years from the earlier of the date of adoption or shareholder approval of the Plan. 
  
 (c) SARs. The Committee is authorized to grant SARs (Share
Appreciation Rights) to Eligible Persons on the following terms and conditions: 
  
 (i) Right to Payment. A SAR shall confer on the Eligible Person to whom it is granted a right to receive with respect to each Share
subject thereto the excess of (1) the Fair Market Value of one Share on the date of exercise (or, if the Committee shall so determine in the case of any such right, the Fair Market Value of one Share at any time during a specified period before or
after the date of exercise) over (2) the exercise price per Share of the SAR as determined by the Committee as of the date of grant of the SAR (which, in the case of a SAR granted in tandem with an Option, shall be equal to the exercise price of the
underlying Option). 
  
 (ii) Other Terms.
The Committee shall determine, at the time of grant or thereafter, the time or times at which a SAR may be exercised in whole or in part, the method of exercise, method of settlement, form of consideration payable in settlement, method by which
Shares will be delivered or deemed to be delivered to Eligible Persons, whether or not a SAR shall be in tandem with any other Award, and any other terms and conditions of any SAR. Unless the Committee determines otherwise, a SAR (1) granted in
tandem with an NQSO may be granted at the time of grant of the related NQSO or at any time thereafter and (2) granted in tandem with an ISO may only be granted at the time of grant of the related ISO. 
  
 (d) Restricted Shares. The Committee is authorized to grant Restricted
Shares to Eligible Persons on the following terms and conditions: 
  
 (i) Issuance and Restrictions. Restricted Shares shall be subject to such restrictions on transferability and other restrictions, if any, as the Committee may impose at the date of grant or thereafter, which
restrictions may lapse separately or in combination at such times, under such circumstances (including, without limitation, upon achievement of performance criteria if deemed appropriate by the Committee), in such installments, or otherwise, as the
Committee may determine. Except to the extent restricted under the Award Agreement relating to the Restricted Shares, an Eligible Person granted Restricted Shares shall have all of the rights of a shareholder including, without limitation, the right
to vote Restricted Shares and the right to receive dividends thereon. 
  
 (ii) Forfeiture. Except as otherwise determined by the Committee, at the date of grant or thereafter, upon Termination of Service during the applicable restriction period, Restricted Shares and any accrued but
unpaid dividends or Dividend Equivalents that are at that time subject to restrictions shall be forfeited; provided, however, that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any
individual case, that restrictions or forfeiture conditions relating to Restricted Shares will be waived in whole or in part in the event of Termination of 

  

 - 8 - 








 
Service resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted Shares. 
  
 (iii) Certificates for Shares. Restricted Shares
granted under the Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted Shares are registered in the name of the Eligible Person, such certificates shall bear an appropriate legend referring
to the terms, conditions, and restrictions applicable to such Restricted Shares, the Company shall retain physical possession of the certificate and the Participant shall deliver a stock power to the Company, endorsed in blank, relating to the
Restricted Shares 
  
 (iv) Dividends.
Dividends paid on Restricted Shares shall be either paid at the dividend payment date, or deferred for payment to such date as determined by the Committee, in cash or in unrestricted Shares having a Fair Market Value equal to the amount of such
dividends. Shares distributed in connection with a Share split or dividend in Shares, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Shares with respect to
which such Shares or other property has been distributed. 
  
 (e)
Restricted Share Units. The Committee is authorized to grant Restricted Share Units to Eligible Persons, subject to the following terms and conditions: 
  

(i) Award and Restrictions. Delivery of Shares will occur upon expiration of the deferral period specified for Restricted Share
Units by the Committee (or, if permitted by the Committee, as elected by the Eligible Person). In addition, Restricted Share Units shall be subject to such restrictions as the Committee may impose, if any (including, without limitation, the
achievement of performance criteria if deemed appropriate by the Committee), at the date of grant or thereafter, which restrictions may lapse at the expiration of the deferral period or at earlier or later specified times, separately or in
combination, in installments or otherwise, as the Committee may determine. 
  
 (ii) Forfeiture. Except as otherwise determined by the Committee at date of grant or thereafter, upon Termination of Service during the applicable deferral period or portion thereof to which forfeiture
conditions apply (as provided in the Award Agreement evidencing the Restricted Share Units), or upon failure to satisfy any other conditions precedent to the delivery of Shares or cash to which such Restricted Share Units relate, all Restricted
Share Units that are at that time subject to deferral or restriction shall be forfeited; provided, however, that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Restricted Share Units will be waived in whole or in part in the event of Termination of Service resulting from specified causes, and the Committee may in other cases waive in whole or in part the
forfeiture of Restricted Share Units. 
  
 (iii)
Dividend Equivalents. Unless otherwise determined by the Committee at date of grant, Dividend Equivalents on the specified number of Shares covered by a Restricted Share Unit shall be either (A) paid with respect to such Restricted Share Unit


  

 - 9 - 








 
at the dividend payment date in cash or in unrestricted Shares having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect
to such Restricted Share Unit and the amount or value thereof automatically deemed reinvested in additional Restricted Share Units or other Awards, as the Committee shall determine or permit the Participant to elect. 
  
 (f) Performance Shares and Performance Units. The Committee is
authorized to grant Performance Shares or Performance Units or both to Eligible Persons on the following terms and conditions: 
  
 (i) Performance Period. The Committee shall determine a performance period (the “Performance Period”) and shall determine
the performance objectives for grants of Performance Shares and Performance Units. Performance objectives may vary from Eligible Person to Eligible Person and shall be based upon the performance criteria as the Committee may deem appropriate. The
performance objectives may be determined by reference to the performance of the Company, or of a Subsidiary or Affiliate, or of a division or unit of any of the foregoing. Performance Periods may overlap and Eligible Persons may participate
simultaneously with respect to Performance Shares and Performance Units for which different Performance Periods are prescribed. 
  
 (ii) Award Value. At the beginning of a Performance Period, the Committee shall determine for each Eligible Person or group of
Eligible Persons with respect to that Performance Period the range of number of Shares, if any, in the case of Performance Shares, and the range of dollar values, if any, in the case of Performance Units, which may be fixed or may vary in accordance
with such performance or other criteria specified by the Committee, which shall be paid to an Eligible Person as an Award if the relevant measure of Company performance for the Performance Period is met. 
  
 (iii) Significant Events. If during the course of a
Performance Period there shall occur significant events as determined by the Committee which the Committee expects to have a substantial effect on a performance objective during such period, the Committee may revise such objective; provided,
however, that, if an Award provides that it is intended to qualify as “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, the Committee shall not have any discretion to increase the amount of
compensation payable under the Award to the extent such an increase would cause the Award to lose its qualification as performance-based compensation for purposes of Section 162(m)(4)(C) of the Code and the regulations thereunder. 
  
 (iv) Forfeiture. Except as otherwise determined by
the Committee, at the date of grant or thereafter, upon Termination of Service during the applicable Performance Period, Performance Shares and Performance Units for which the Performance Period was prescribed shall be forfeited; provided,
however, that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in an individual case, that restrictions or forfeiture conditions relating to Performance Shares and Performance Units will be waived
in whole or in part in the event of Termination of Service resulting 

  

 - 10 - 








 
from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Performance Shares and Performance Units. 

 
 (v) Payment. Each Performance Share or Performance
Unit may be paid in whole Shares, or cash, or a combination of Shares and cash either as a lump sum payment or in installments, all as the Committee shall determine at the time of grant of the Performance Share or Performance Unit,
commencing as soon as practicable after the end of the relevant Performance Period. 
  
 (g) Dividend Equivalents. The Committee is authorized to grant Dividend Equivalents to Eligible Persons. The Committee may provide, at the date of grant or thereafter, that Dividend Equivalents shall be paid or
distributed when accrued or shall be deemed to have been reinvested in additional Shares, or other investment vehicles as the Committee may specify; provided, however, that Dividend Equivalents (other than freestanding Dividend
Equivalents) shall be subject to all conditions and restrictions of the underlying Awards to which they relate. 
  
 (h) Other Share-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to Eligible Persons such other
Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation,
unrestricted shares awarded purely as a “bonus” and not subject to any restrictions or conditions, other rights convertible or exchangeable into Shares, purchase rights for Shares, Awards with value and payment contingent upon performance
of the Company or any other factors designated by the Committee, and Awards valued by reference to the performance of specified Subsidiaries or Affiliates. The Committee shall determine the terms and conditions of such Awards at date of grant or
thereafter. Shares delivered pursuant to an Award in the nature of a purchase right granted under this Section 5(h) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including, without limitation,
cash, Shares, notes or other property, as the Committee shall determine. Cash awards, as an element of or supplement to any other Award under the Plan, shall also be authorized pursuant to this Section 5(h). 
  

	6.	Certain Provisions Applicable to Awards. 

  
 (a) Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted under the Plan may, in the discretion of the Committee, be granted to
Eligible Persons either alone or in addition to, in tandem with, or in exchange or substitution for, any other Award granted under the Plan or any award granted under any other plan or agreement of the Company, any Subsidiary or Affiliate, or any
business entity to be acquired by the Company or a Subsidiary or Affiliate, or any other right of an Eligible Person to receive payment from the Company or any Subsidiary or Affiliate. Awards may be granted in addition to or in tandem with such
other Awards or awards, and may be granted either as of the same time as or a different time from the grant of such other Awards or awards. The per Share exercise price of any Option, grant price of any SAR, or purchase price of any other Award
conferring a right to purchase Shares which is granted in connection with the substitution of awards granted under any other plan or agreement of the Company or any Subsidiary or Affiliate or any business entity to be acquired by the Company or any
Subsidiary or Affiliate, shall be determined by the Committee, in its discretion. 
  

 - 11 - 








 (b) Term of Awards. The term of each Award granted to an Eligible Person shall be for such period
as may be determined by the Committee; provided, however, that in no event shall the term of any ISO or a SAR granted in tandem therewith exceed a period of ten years from the date of its grant (or such shorter period as may be
applicable under Section 422 of the Code). 
  
 (c) Form of
Payment Under Awards. Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or a Subsidiary or Affiliate upon the grant, maturation, or exercise of an Award may be made in such forms as the
Committee shall determine at the date of grant, including, without limitation, cash, Shares, notes or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. The Committee may make rules
relating to installment or deferred payments with respect to Awards, including the rate of interest to be credited with respect to such payments, and the Committee may require deferral of payment under an Award if, in the sole judgment of the
Committee, it may be necessary in order to avoid nondeductibility of the payment under Section 162(m) of the Code. 
  
 (d) Nontransferability. Unless otherwise set forth by the Committee in an Award Agreement, Awards shall not be transferable by an Eligible Person
except by will or the laws of descent and distribution (except pursuant to a Beneficiary designation) and shall be exercisable during the lifetime of an Eligible Person only by such Eligible Person or his or her guardian or legal representative. An
Eligible Person’s rights under the Plan may not be pledged, mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to claims of the Eligible Person’s creditors. 
  
 (e) Other Conditions. The Committee may, by way of the Award
Agreements or otherwise, establish such other terms, conditions, restrictions and/or limitations, if any, of any Award, provided they are not inconsistent with the Plan. 
  

	7.	Performance Awards. 

  
 (a) Performance Awards Granted to Covered Employees. If the Committee determines that an Award (other than an Option or SAR) to be granted to an
Eligible Person should qualify as “performance-based compensation” for purposes of Section 162(m) of the Code, the grant, vesting, exercise and/or settlement of such Award (each, a “Performance Award”) shall be contingent upon
achievement of preestablished performance goals and other terms set forth in this Section 7(a). 
  
 (i) Performance Goals Generally. The performance goals for such Performance Awards shall consist of one or more business criteria
and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 7(a). The performance goals shall be objective and shall otherwise meet the requirements of Section
162(m) of the Code and regulations thereunder (including Treasury Regulation 1.162-27 and successor regulations thereto), including the requirement that the level or levels of performance targeted by the Committee result in the achievement of
performance goals being “substantially uncertain.” The Committee may determine that such Performance Awards shall be 

  

 - 12 - 








 
granted, vested, exercised and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a
condition to grant, vesting, exercise and/or settlement of such Performance Awards. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants. 
  
 (ii) Business Criteria. One or more of the following
business criteria for the Company, on a consolidated basis, and/or for specified Subsidiaries or Affiliates or other business units or lines of business of the Company shall be used by the Committee in establishing performance goals for such
Performance Awards: (1) earnings per share (basic or fully diluted); (2) revenues; (3) earnings, before or after taxes, from operations (generally or specified operations), or before or after interest expense, depreciation, amortization, incentives,
or extraordinary or special items; (4) cash flow, free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (5) return on net assets, return on assets,
return on investment, return on capital, return on equity; (6) economic value added; (7) operating margin or operating expense; (8) net income; (9) Share price or total stockholder return; and (10) strategic business criteria, consisting of one or
more objectives based on meeting specified market penetration, geographic business expansion goals, cost targets, customer satisfaction, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of
Subsidiaries, Affiliates or joint ventures. The targeted level or levels of performance with respect to such business criteria may be established at such levels and in such terms as the Committee may determine, in its discretion, including in
absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies. 
  
 (iii) Performance Period; Timing for Establishing Performance Goals; Per-Person Limit. Achievement of
performance goals in respect of such Performance Awards shall be measured over a performance period, as specified by the Committee. A performance goal shall be established not later than the earlier of (A) 90 days after the beginning of any
performance period applicable to such Performance Award or (B) the time 25% of such performance period has elapsed. In all cases, the maximum Performance Award of any Participant shall be subject to the limitation set forth in Section 4(b).

  
 (iv) Settlement of Performance Awards;
Other Terms. Settlement of such Performance Awards shall be in cash, Shares, other Awards or other property, in the discretion of the Committee. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in
connection with such Performance Awards, but may not exercise discretion to increase any such amount payable to the Participant in respect of a Performance Award subject to this Section 7(a). Any settlement which changes the form of payment from
that originally specified shall be implemented in a manner such that the Performance Award and other related Awards do not, solely for that reason, fail to qualify as “performance-based compensation” for purposes of Section 162(m) of the
Code. The Committee shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of Termination of Service of the Participant 

  

 - 13 - 








 
or other event (including a Change of Control) prior to the end of a performance period or settlement of such Performance Awards. 
  
 (b) Written Determinations. Determinations by the Committee as to the
establishment of performance goals, the amount potentially payable in respect of Performance Awards, the level of actual achievement of the specified performance goals relating to Performance Awards and the amount of any final Performance Award
shall be recorded in writing in the case of Performance Awards intended to qualify under Section 162(m) of the Code. Specifically, the Committee shall certify in writing, in a manner conforming to applicable regulations under Section 162(m), prior
to settlement of each such Award, that the performance objective relating to the Performance Award and other material terms of the Award upon which settlement of the Award was conditioned have been satisfied. 
  

	8.	Change of Control Provisions. 

  
 (a) Acceleration of Exercisability and Lapse of Restrictions. Unless otherwise provided by the Committee at the time of the Award grant, in the
event of a Change of Control, all outstanding Awards pursuant to which the Participant may have rights the exercise of which is restricted or limited, shall become fully exercisable at the time of the Change of Control, and all restrictions or
limitations (including risks of forfeiture and deferrals) on outstanding Awards subject to restrictions or limitations under the Plan shall lapse, and all performance criteria and other conditions to payment of Awards under which payments of cash,
Shares or other property are subject to conditions shall be deemed to be achieved or fulfilled and shall be waived by the Company at the time of the Change of Control. 
  
 (b) Definitions of Certain Terms. For purposes of this Section 8, the following definitions, in addition to those set
forth in Section 2, shall apply: 
  
 (i)
“Change of Control” means and shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied: 
  
 (a) Change in Ownership. A change in the ownership of the Company is deemed to occur on the date that
any one person, or more than one person acting as a group (as defined in subsection (ii) below), acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50 percent of the total fair
market value or total voting power of the stock of the Company. However, if any one person or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of the
Company, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the corporation. An increase in the percentage of stock owned by any one person, or persons acting as a group, as a
result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this section. This section applies only when there is a transfer or issuance of stock of the Company
and the stock remains outstanding after the transaction. 
  

 - 14 - 








 (b) Change in Effective Control. Change in the effective control of the Company
occurs on the date that either (1) any one person, or more than one person acting as a group (as described in subsection (ii) below), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such
person or persons) ownership of stock of the Company possessing 35 percent or more of the total voting power of the stock of the Company; or (2) a majority of members of the Board is replaced during any 12-month period by directors whose appointment
or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. If any one person, or more than one person acting as a group, is considered to effectively control the Company, the acquisition
of additional control of the Company by the same person or persons is not considered to cause a change in the effective control of the Company. 
  
 (c) Sale of a Substantial Portion of Assets. A change in the ownership of a substantial portion of the Company’s assets occurs
on the date that any one person or persons acting as a group acquire (or have acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair
market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of
the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. A transfer of assets to an entity that is controlled by the shareholders of the Company immediately after the
transfer, or a transfer of assets by the Company to any of the following, are not considered to be a change in the ownership of a substantial portion of the Company’s assets for purposes of this paragraph: (1) a shareholder of the Company
(immediately before the asset transfer) in exchange for or with respect to its stock; (2) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Company; (3) a person, or more than one
person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all the outstanding stock of the Company; or (4) an entity, at least 50 percent of the total value or voting power of which is
owned, directly or indirectly, by a person described in clause (3). For purposes of this paragraph (c) and except as otherwise provided, a person’s status is determined immediately after the transfer of the assets. For example, a transfer to a
corporation in which the Company has no ownership interest before the transaction, but which is a majority-owned subsidiary of the Company after the transaction is not treated as a change in the ownership of the assets of the Company. 
  
 (ii) Persons will not be considered to be acting as a group
solely because they purchase or own stock of the Company at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction with the Company. If a person, including an entity, owns stock in the Company and another corporation that enters into a merger, consolidation, 

  

 - 15 - 








 
purchase or acquisition of stock, or similar transaction with the Company, such shareholder is considered to be acting as a group with other shareholders of
the other corporation only with respect to their ownership interest in that corporation prior to the transaction. 
  
 (iii) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used herein; however, a
Person shall not include (i) the Company or any of its Subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of the stock of the Company. 
  

	9.	General Provisions. 

  
 (a) Compliance with Legal and Trading Requirements. The Plan, the granting and exercising of Awards thereunder, and the other obligations of the
Company under the Plan and any Award Agreement, shall be subject to all applicable federal, state and foreign laws, rules and regulations, and to such approvals by any stock exchange, regulatory or governmental agency as may be required. The
Company, in its discretion, may postpone the issuance or delivery of Shares under any Award until completion of such stock exchange or market system listing or registration or qualification of such Shares or other required action under any state,
federal or foreign law, rule or regulation as the Company may consider appropriate, and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery
of Shares in compliance with applicable laws, rules and regulations. No provisions of the Plan shall be interpreted or construed to obligate the Company to register any Shares under federal, state or foreign law. The Shares issued under the Plan may
be subject to such other restrictions on transfer as determined by the Committee. 
  
 (b) No Right to Continued Employment or Service. Neither the Plan nor any action taken thereunder shall be construed as giving any employee, consultant or director the right to be retained in the employ or
service of the Company or any of its Subsidiaries or Affiliates, nor shall it interfere in any way with the right of the Company or any of its Subsidiaries or Affiliates to terminate any employee’s, consultant’s or director’s
employment or service at any time. 
  
 (c) Taxes. The
Company or any Subsidiary or Affiliate is authorized to withhold from any Award granted, any payment relating to an Award under the Plan, including from a distribution of Shares, or any payroll or other payment to an Eligible Person, amounts of
withholding and other taxes due in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company and Eligible Persons to satisfy obligations for the payment of withholding
taxes and other tax obligations relating to any Award. This authority shall include authority to withhold or receive Shares or other property and to make cash payments in respect thereof in satisfaction of an Eligible Person’s tax obligations;
provided, however, that the amount of tax withholding to be 

  

 - 16 - 








 
satisfied by withholding Shares shall be limited to the minimum amount of taxes, including employment taxes, required to be withheld under applicable
Federal, state and local law. 
  
 (d) Changes to the Plan and
Awards. The Board may amend, alter, suspend, discontinue, or terminate the Plan or the Committee’s authority to grant Awards under the Plan without the consent of shareholders of the Company or Participants, except that (i) any such
amendment or alteration shall be subject to shareholder approval to the extent such shareholder approval is required under the rules of any stock exchange or automated quotation system on which the Shares may then be listed or quoted and (ii) any
such amendment or alteration as it applies to ISOs shall be subject to the approval of the Company’s shareholders to the extent such shareholder approval is required under Section 422 of the Code; provided, however, that, without
the consent of an affected Participant, no amendment, alteration, suspension, discontinuation, or termination of the Plan may materially and adversely affect the rights of such Participant under any Award theretofore granted to him or her. The
Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue or terminate, any Award theretofore granted, prospectively or retrospectively; provided, however, that, without the consent
of a Participant, no amendment, alteration, suspension, discontinuation or termination of any Award may materially and adversely affect the rights of such Participant under any Award theretofore granted to him or her. 
  
 (e) No Rights to Awards; No Shareholder Rights. No Eligible Person or
employee shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Eligible Persons and employees. No Award shall confer on any Eligible Person any of the rights of a shareholder of the
Company unless and until Shares are duly issued or transferred to the Eligible Person in accordance with the terms of the Award. 
  
 (f) Unfunded Status of Awards. The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided, however,
that the Committee may authorize the creation of trusts or make other arrangements to meet the Company’s obligations under the Plan to deliver cash, Shares, other Awards, or other property pursuant to any Award, which trusts or other
arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of each affected Participant. 
  
 (g) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board nor its submission to the shareholders
of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of options and other awards
otherwise than under the Plan, and such arrangements may be either applicable generally or only in specific cases. 
  
 (h) Not Compensation for Benefit Plans. No Award payable under this Plan shall be deemed salary or compensation for the purpose of computing
benefits under any benefit plan or other arrangement of the Company for the benefit of its employees, consultants or directors unless the Company shall determine otherwise. 
  

 - 17 - 








 (i) No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan
or any Award. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.

  
 (j) Successors. All obligations of the Company under
the Plan or any Award Agreement will be binding on any successor to the Company, whether the existence of the successor results from a direct or indirect purchase of all or substantially all of the business or assets of the Company or both, or a
merger, consolidation or otherwise. 
  
 (k) Governing Law.
The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan, and any Award Agreement shall be determined in accordance with the laws of Delaware without giving effect to principles of conflict of laws thereof.

  
 (l) Effective Date; Plan Termination. The Plan shall
become effective as of                     , 2005 (the “Effective Date”). The Plan shall terminate as to future awards on the date
which is ten (10) years after the Effective Date. 
  
 (m)
Titles and Headings. The titles and headings of the sections in the Plan are for convenience of reference only. In the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. 
  

 - 18 - 








  
 (Sample Form of)

 STOCK OPTION AGREEMENT 
  
 THIS STOCK OPTION AGREEMENT (this “Agreement”) is made and entered into this        day of
                            , 2005 by and between FreightCar America, Inc., a Delaware
corporation (the “Company”), and [                    ] (the “Option Holder”). 
  
 WHEREAS, the Option Holder has been designated by the Compensation Committee
of the Board of Directors of the Company (the “Committee”) to participate in the 2005 Long Term Incentive and Share Award Plan (the “Plan”) (capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Plan); 
  
 NOW, THEREFORE,
in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the Company and the Option Holder agree as follows: 
  
 1. Grant. Pursuant to the provisions of the Plan, all of the terms of which are incorporated herein by reference
unless otherwise provided herein, the Company hereby grants to the Option Holder an option (the “Option”) to purchase [         ] shares of the Company’s common stock (the “Common
Stock”). The Option is granted as of                             , 2005 (the
“Date of Grant”), and such grant is subject to all of the terms and conditions herein and to all of the terms and the conditions of the Plan. In the event of a conflict between the Plan and this Agreement, the terms of the Plan
shall govern. The Option is intended to be non-qualified, and is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended. 
  
 2. Exercise Price. The exercise price of the shares subject to the Option shall be equal to the per share price at
the time of the consummation of the Company’s initial public offering, subject to adjustment as provided in the Plan. 
  
 3. Term of Option. The Option may, subject to the vesting and termination provisions of paragraphs 4 and 5 below, be exercised only during the
period commencing on the Date of Grant and continuing until the close of business on tenth anniversary of the Date of Grant (the “Option Period”). At the end of the Option Period, the Option shall terminate, unless sooner terminated
pursuant to paragraph 5 below. 
  
 4. Vesting. The Option
Holder’s right to purchase shares of Common Stock under the Option shall be exercisable only to the extent that the Option has vested. Subject to subparagraph 7 below, the Option shall vest and become exercisable upon the following schedule
(provided the Option Holder remains in the employ of the Company on the applicable vesting date): 
  
 (a) one-third (1/3) of the shares subject to the Option vest on the first anniversary of the Date of Grant; 
  
 (b) an additional one-third (1/3) of the shares subject to
the Option vest on the second anniversary of the Date of Grant; and 
  









 (c) the final one-third (1/3) of the shares subject to the Option vest on the third
anniversary of the Date of Grant. 
  
 (d) In
addition, the Option shall vest and become exercisable upon a termination by the Company without Cause (as defined in Appendix A) or a termination by the Option Holder for Good Reason (as defined in Appendix A).1 
  
 5. Termination of Employment. If the employment of the Option Holder terminates for any reason other than a Qualifying Termination (as defined
below) during the Option Period, the Option shall immediately terminate. If the employment of the Option Holder terminates by reason of a Qualifying Termination during the Option Period, the Option shall be exercisable only to the extent that it was
exercisable on the date of the Option Holder’s termination of employment and shall terminate on the earlier of (i) the first anniversary of the date of the Option Holder’s termination of employment or (ii) the end of the Option Period. For
purposes of this Agreement, the term “Qualifying Termination” shall mean a termination of the Option Holder’s employment by reason of the Option Holder’s death, Disability (as defined in Appendix A) or Retirement (as
defined in Appendix A), a termination by the Company without Cause (as defined in Appendix A) or a termination by the Option Holder for Good Reason (as defined in Appendix A).2 
  
 6. Exercise of Option. In order to exercise the Option, the Option Holder shall submit to the Secretary of the Company an instrument in writing specifying the number of shares of Common Stock in respect of
which the Option is being exercised, accompanied by payment, in a manner acceptable to the Committee, of the exercise price of the shares in respect of which the Option is being exercised. Shares shall then be issued by the Company and a share
certificate delivered to the Option Holder; provided, however, that the Company shall not be obligated to issue any Shares hereunder if the issuance of such Shares would violate the provisions of any applicable law. 
  
 7. Conditions. The Option Holder will not have any of the rights of a
shareholder with respect to Shares until the Company has issued or transferred such Shares to the Option Holder after the exercise of the Option. As a condition to the Company’s obligation to issue or transfer Shares to the Option Holder after
the exercise of the Option, the Option Holder shall have paid in full for the Shares as to which he or she exercised the Option. 
  
 8. Change of Control. In the event of a Change of Control (as defined in the Plan), the Option shall become fully vested and exercisable.

  


	1	This provision related to “Cause” and “Good Reason” shall not be included in the option agreements of Option Holders who are not party to
employment agreements with the Company. 

  

	2	For Option Holders who do not have employment agreements defining these terms, a “Qualifying Termination” shall be limited to a termination of the Option
Holder’s employment by reason of the Option Holder’s death or Termination of Service (as defined in the Plan). 

  

 - 2 - 








 9. Non-Transferable. The Option may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of, except by will or the laws of descent. 
  
 10. No Obligation to Exercise. Neither the Option Holder nor any permissible transferee is or will be obligated by the grant of the Option to exercise it. 
  
 11. References. References herein to rights and obligations of the Option Holder shall apply, where appropriate, to
the Option Holder’s legal representative or guardian without regard to whether specific reference to such legal representative or guardian is contained in a particular provision of this Agreement or the Plan. 
  
 12. Taxes. The Option Holder shall be responsible for all taxes
required to be paid under applicable tax laws with respect to the Option. 
  
 13. Entire Agreement. This Agreement contains all the understandings between the parties hereto pertaining to the matters referred to herein, and supersedes all undertakings and agreements, whether oral or in
writing, previously entered into by them with respect thereto. The Option Holder represents that, in executing this Agreement, he does not rely and has not relied upon any representation or statement not set forth herein made by the Company with
regard to the subject matter, bases or effect of this Agreement or otherwise. 
  
 14. Amendment or Modification, Waiver. No provision of this Agreement may be amended or waived unless such amendment or waiver is agreed to in writing, and is signed by both the Option Holder and a duly
authorized officer of the Company. No waiver by any party hereto of any breach by another party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar condition
or provision at the same time, any prior time or any subsequent time. 
  
 15. Notices. Any notice to be given hereunder shall be in writing and shall be deemed given hereunder when delivered personally, sent by courier or telecopy or registered or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other address as such party may subsequently give notice of hereunder in writing: 
  
 To Option Holder at: 
  
 [                                ] 
 c/o FreightCar America, Inc. 
 Two North
Riverside Plaza 
 Suite 1250 
 Chicago, IL 60606 
  
 To the Company at: 
  
 FreightCar America, Inc. 
 Two North Riverside Plaza 
 Suite 1250

 Chicago, IL 60606 
 Attention:
Secretary 
  

 - 3 - 








 Any notice delivered personally or by courier under this paragraph (m) shall be deemed given on the date
delivered and any notice sent by telecopy or registered or certified mail, postage prepaid, return receipt requested, shall be deemed given on the date telecopied or mailed. 
  
 16. Severability. If any provision of this Agreement or the application of any such provision to any party or
circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances other than those to which it
is so determined to be invalid and unenforceable, shall not be affected thereby, and each provision hereof shall be validated and shall be enforced to the fullest extent permitted by law. 
  
 17. Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of
Delaware, without regard to its conflicts of laws principles. 
  
 18. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year set forth above. 
  

									
	FREIGHTCAR AMERICA, INC.	 	 	 	OPTION HOLDER:
					
	By:	 	 	 	 	 	 	 	 
	 Title:
	 	 	 	 	 	 	 	 
	 Name:
	 	 	 	 	 	 Name:
	 	 [                                       
                         ]


  

 - 4 - 








  
 APPENDIX A3 
  
 For purposes of this Agreement: 
  
 1. “Disability” means that, in the written opinion of a qualified physician selected by the Company, the Option Holder shall become unable to perform his duties hereunder due to physical or mental
illness that continues for one year. 
  
 2. “Cause” means

  

	 	(i)	the willful and continuous neglect or refusal to perform the Option Holder’s duties or responsibilities, or the willful taking of actions (or willful failures to take actions)
that materially impair the Option Holder’s ability to perform his duties or responsibilities that in each case continues after being communicated in writing to the Option Holder (other than any such failure resulting from the Option
Holder’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a written notice of termination of the Option Holder’s employment by the Company; or 

  

	 	(ii)	any act by the Option Holder that constitutes gross negligence or willful misconduct in the performance of his duties hereunder, or the conviction of the Option Holder for any
felony, in each case which is materially and manifestly injurious to the Company and which is brought to the attention of the Option Holder in writing not more than thirty days from the date of its discovery by the Company or the Board of Directors
of the Company (the “Board”). 

  
 For purposes of this definition, no act, or failure to act, on the Option Holder’s part shall be considered “willful,” unless done, or omitted to be done, by him not in good faith 
  


	3	The definitions of the terms “Disability,” “Cause,” and “Good Reason” in this Appendix A may differ for Option
Holders (a) other than Begel, Weller, Cirar, Mueller and Tallering and (ii) who are party to an employment agreement with the Company, depending on the definitions of such terms in each Option Holder’s respective employment agreement. The
definitions of the terms “Disability,” “Cause,” and “Good Reason” in this Appendix A shall not be included in the option agreements of Option Holders who are not party to employment agreements with
the Company. 

  

 A-1 








 or without reasonable belief that his action or omission was in the best interest of the Company. Any act, or failure to
act, based upon the direction or instruction of the Board pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Company shall be presumed to be done, or omitted to be done, in good faith and in the best
interests of the Company absent knowledge by the Option Holder the contrary. Notwithstanding the foregoing, the Option Holder shall not be deemed to have been terminated for Cause without (1) written notice to the Option Holder specifying in detail
the specific reasons for the Company’s intention to terminate for Cause, (2) an opportunity for the Option Holder, together with his counsel, to be heard before the Board, (3) with respect to actions or inaction specified in paragraph (i)
above, a reasonable opportunity for the Option Holder to cure the action or inaction specified by the Company and (4) delivery to the Option Holder of a written notice of termination of the Option Holder’s employment by the Company. 

 
 3. “Good Reason” means, without the Option Holder’s
express written consent, the occurrence of any of the following circumstances unless such circumstances are fully corrected prior to the date of termination of employment (which date shall not be less than twenty (20) nor more than thirty (30) days
from the date of the issuance of a written notice of termination of the Option Holder’s employment by the Company) specified in such written notice of termination given in respect thereof: (A) a material change in the Option Holder’s
position, duties, responsibilities (including reporting responsibilities) or authority (except during periods when the Option Holder is unable to perform all or substantially all of the Option Holder’s duties and/or responsibilities on account
of the Option Holder’s illness (either physical or mental) or other incapacity), which, in the Option Holder’s reasonable judgment, represent an adverse change, (B) a reduction in either the Option Holder’s annual rate of base salary
or level of participation in any bonus plans for which he is eligible, (C) failure to provide facilities or services that are suitable as determined by the Board to the Option Holder’s position and adequate for the performance of the Option
Holder’s duties and responsibilities, including the failure to maintain the Chicago office (or comparable office facilities so long as the Option Holder does not have to relocate outside the city of Chicago, Illinois), without the prior written
consent of the Option Holder, (D) any purported termination by the Company of the Option Holder’s employment that is not effected pursuant to a written notice of termination of the Option Holder’s employment by the Company or (E) failure
of any successor (by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to become liable for the performance of the Option Holder’s employment agreement with the Company by
assumption or by operation of law or otherwise. The Option Holder’s right to terminate employment pursuant to this definition shall not be affected by the Option Holder’s incapacity due to physical or mental illness. 
  
 4. “Retirement” shall have the same meaning ascribed to such
term in the corporate policy and/or relevant document of the Option Holder’s employment entity. 
  

 A-2