Document:

Amendment No. 1 to Sharedholders' Agreement

 Exhibit 4.2 
  

AMENDMENT NO. 1 TO 
 SHAREHOLDERS’
AGREEMENT 
  
 THIS AMENDMENT AGREEMENT, dated as of February 15,
2001 by and among Rabbit Hill Holdings, Inc., a Delaware corporation (“RHH”), Hancock Mezzanine Partners, L.P., a Delaware limited liability company (“Hancock”), John Hancock Mutual Life Insurance Company, a Massachusetts life
insurance corporation (“JHMLIC”), Caravelle Investment Fund, L.L.C., a Delaware limited liability company (“Caravelle”), Transportation Technologies Industries, Inc., formerly Johnstown America Industries, Inc., a Delaware
corporation (“TTII”), Camillo M. Santomero, III, an individual residing in New York (“Santomero”), Transportation Investment Partners, L.L.C., a Delaware limited liability company (“TIP” and, together with Caravelle and
Santomero, collectively, in such capacity, the “CAC Purchasers”) and the Individual Investors listed on Exhibit “A” attached hereto, who now or hereafter become signatories to this Amendment Agreement (the “Individual
Investors” - Hancock, JHMLIC, Caravelle, TTII, Santomero, TIP, the Individual Investors and any other person now or hereafter executing this Agreement are herein collectively referred to as the “Shareholders”). 
  
 BACKGROUND 
  
 The parties hereto (with the exception of TIP) are all parties to a certain Shareholders’ Agreement dated June 3, 1999
(the “Shareholders’ Agreement”). By letter dated January 30, 2001, TTII has notified the Shareholders that it desires to Transfer 2,500 shares of Non-Voting Preferred Stock and 2,500 shares of Voting Common Stock (collectively, the
“TTII Shares”), as required by Section 4(a) of the Shareholders’ Agreement. In connection with such proposed Transfer of the TTII Shares, and to clarify or amend certain other matters relating to the Shareholders’ Agreement, the
parties hereto desire to amend, modify and supplement the Shareholders’ Agreement, all on the terms and conditions set forth herein. 
  

  
 AGREEMENTS 
  
 The parties hereto, intending to be legally bound, hereby agree as follows:

  
 1. Section 1(a)(iii) of the
Shareholders’ Agreement shall be amended by deleting the language found therein in its entirety, and by substituting therefor the following: 
  

	 	(iii)	“for as long as TIP or TTII and/or any of their respective Permitted Transferees owns an aggregate of at least 1,250 shares of Common Stock (or ten percent (10%) of the number
of shares of Common Stock outstanding as of the date hereof), one director shall be designated by TIP or any Permitted Transferee of TIP to which TIP shall have assigned, in writing, its rights to designate such director.”

  
 2. Each reference in the
Shareholders’ Agreement to JAII shall, from and after the date hereof, mean TTII (for as long as TTII is a Shareholder) and/or its Permitted Transferees; provided that for purposes of Section 1 of the Shareholders’ Agreement, for so long
as TIP shall be entitled to designate a director pursuant to Section 1(a)(iii) of the Shareholders’ Agreement, all references in Section 1 to JAII shall mean TIP. Further, in Section 1(b) of the Shareholders’ Agreement, the reference to
“Thomas M. Begel as the nominee of JAII” shall be deleted and replaced by “Jay Bloom as the nominee of TIP”. 
  
 3. Section 1(d)(viii) of the Shareholders’ Agreement shall be amended by deleting the language found therein in its entirety, and by
substituting therefor the following: 
  
 “(viii) the
granting of any stock ownership, stock purchase, stock option or similar plans or rights to directors, officers, employees or others, except that the parties contemplate that up to 1,014 shares of Non-Voting Preferred Stock or Voting Preferred Stock
(as the Board shall elect), and up to 1,014 shares of Non-Voting Common Stock, or Voting Common Stock (as the Board shall elect) constituting 71⁄2% of RHH’s Common Stock and Preferred Stock after giving effect to the issuance of the options
described herein, may be issued to directors, officers, employees or managers of RHH or Subsidiaries thereof;” 
  

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 4. The last paragraph of Section 1(d) of the Shareholders’ Agreement shall be
amended by deleting the language found therein in its entirety, and by substituting therefor the following: 
  
 “With respect to each item set forth above to be submitted to the Board, and, with respect to (viii) above, if any such options to be issued to
directors, officers, employees or managers of RHH or subsidiaries thereof are to be issued to Santomero or to James D. Cirar, the affirmative vote of the Hancock/JHMLIC representative, the Caravelle representative and two Santomero representatives
shall, at a minimum, be required in order to authorize such action. In addition, with respect to the items described in subparagraphs (i) and (viii) above, (with respect to (viii), only to the extent not issued to directors, officers, employees or
managers of RHH or subsidiaries thereof), and subparagraph (iii) above if such transactions will implicate the provisions of Section 16(d) hereof, the affirmative vote of the director designated by JAII shall also be required.” 
  
 5. Section 3(b)(ii) of the Shareholders’ Agreement
shall be amended by deleting the language found therein in its entirety, and by substituting therefor the following: 
  
 “A Shareholder who is not an individual may Transfer any or all of the shares of Capital Stock to an Affiliate (which, for purposes of TIP, shall
include Trimaran and each Trimaran Affiliate) of such Shareholder. 
  

 -3- 

 6. Section 3(b)(vi) of the Shareholders’ Agreement shall be amended by deleting the
language found therein in its entirety, and by substituting therefor the following: 
  
 “Caravelle, Hancock, JHMLIC and TIP, and each of their Permitted Transferees, may transfer shares of Capital Stock to each other, and to each of their respective Permitted Transferees.” 
  
 7. Section 3(b) of the Shareholders’ Agreement shall be
amended by deleting the “.” at the end of subsection 3(b)(x), and by substituting therefor “; and”, and, further, by adding a new subsection thereto, designated subsection (xi), which shall read as follows: 
  
 “(xi) JAII may Transfer shares of Capital Stock to the CAC Purchasers,
and each of the CAC Purchasers (and their Permitted Transferees) may transfer shares of Capital Stock to TTII. 
  
 8. Section 16(a) of the Shareholders’ Agreement shall be amended by deleting the language found therein in its entirety, and by
substituting therefor the following: 
  
 “(a) Issuance
for Fair Value. RHH will, from and after the date hereof, issue Preferred Stock or Common Stock only for “fair equivalent value,” as shall be determined in good faith by the Board (subject to Section 1(d) hereof) from time to time;
provided, however, that nothing contained herein shall prevent the Board from issuing for nominal value, or other value less than “fair equivalent value”, options, warrants or other similar rights to officers, directors or other employees
of RHH or any Subsidiary thereof in an amount not to exceed 1,014 shares of Preferred Stock (constituting 71⁄2% of the amount of the Preferred Stock, after giving effect to the issuance of the options described herein) and 1,014 shares of Common
Stock (constituting 71⁄2% of the amount of the Common Stock, after giving effect to the issuance of the options described herein), as long as all existing Shareholders are equally diluted as a result of the issuance of any Preferred Stock or
Common Stock of RHH upon the exercise of such options, warrants or other similar rights or the issuance of any related Shares, except only such unequal dilution as may result from the exercise of such options, warrants or other similar rights or the
issuance of any related Shares by or to a Shareholder. 
  
 9. Section 16(e) of the Shareholders’ Agreement shall be deleted in its entirety. 
  
 10. Section 17 of the Shareholders’ Agreement shall be modified by adding the following definitions: 
  
 “Trimaran” means Trimaran Fund II, LLC, a Delaware limited
liability company. 
  

 -4- 

 “Trimaran Affiliates” means each Affiliate of Trimaran and each investor in the Trimaran
investment program. 
  
 In addition, the definition C/H/J Holder shall be amended
by deleting the language found therein in its entirety, and by substituting therefor the following: 
  
 “C/H/J Holder means either Caravelle, Hancock, JHMLIC or TIP, and any Permitted Transferee thereof holding Registrable Securities.” 

 
 Finally, the definition of Change of Control Involving JAII shall be deleted in its
entirety. 
  
 11. Section 18(a) shall be amended
by deleting the language found therein in its entirety, and by substituting therefor the following: 
  
 “Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against RHH or the
Shareholders unless such modification, amendment or waiver is approved in writing by Shareholders holding at least 85% of the Capital Stock; provided that no such modification, amendment or waiver that has a materially disproportionate adverse
affect on any Shareholder(s) shall be effective against such Shareholder(s) unless approved in writing by the Shareholder(s) so affected.” 
  
 12. From and after the Permitted Transfer of shares of Capital Stock owned by TTII to TIP, TIP hereby joins in the Shareholders’
Agreement as if an original party thereto, and hereby agrees to be bound by, and subject to, all the covenants, terms and provisions thereof, including, but not limited to, those relating to JAII, and shall be deemed a Shareholder for all purposes
under the Shareholders’ Agreement. 
  
 13.
Except as expressly set forth herein, all other terms and conditions of the Shareholders’ Agreement shall remain in full force and effect, and are hereby ratified and confirmed. 
  
 14. This Agreement may be executed in separate counterparts, any one of which need not contain the
signatures of more than one party, but all such counterparts taken 

  

 -5- 

 
together shall constitute one and the same agreement. Delivery of an executed counterpart of this Agreement by telefacsimile shall be equally as effective as
delivery of a manually executed counterpart of this Agreement, but the failure to deliver a manually executed counterpart of this Agreement shall not affect the delivery, enforceability or binding effect of this Agreement. This Agreement shall be
binding upon each Shareholder executing this Agreement when executed by such Shareholder, and by RHH. 
  
 IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to the Shareholders’ Agreement on the day and year first above written.

  

											
	 Attest:
	 	 	 	 RABBIT HILL HOLDINGS, INC.

				
	[Illegible]	 	 	 	By	 	 /s/ John E. Carroll Jr.

	 	 	 	 	 	 	 	 	 Name: John E. Carroll Jr.

	 	 	 	 	 	 	 	 	 Title: President

			
	 Attest:
	 	 	 	 HANCOCK MEZZANINE PARTNERS, L.P.

				
	 	 	 	 	By:	 	Hancock Mezzanine Investments, LLC,
	 	 	 	 	 	 	 	 	 its General Partner

				
	 	 	 	 	By:	 	 John Hancock Mutual Life Insurance Company,
 as Investment Manager

				
	[Illegible]	 	 	 	By	 	/s/ Steven M. Ray
	 	 	 	 	 	 	 	 	 Name: Steven M. Ray

	 	 	 	 	 	 	 	 	 Title: Managing Director

				
	 	 	 	 	Address:	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
			
	 Attest:
	 	 	 	JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
				
	[Illegible]	 	 	 	By	 	/s/ Steven M. Ray
	 	 	 	 	 	 	 	 	 Name: Steven M. Ray

	 	 	 	 	 	 	 	 	 Title: Managing Director

				
	 	 	 	 	Address:	 	 200 Clarendon Street

	 	 	 	 	 	 	 	 	 	 	 Boston, MA 02117

	 	 	 	 	 	 	 	 	 	 	 

  

 -6- 

											
	 Attest:
	 	 	 	CARAVELLE INVESTMENT FUND, L.L.C.
				
	 	 	 	 	By:	 	Caravelle Advisors, L.L.C., its Investment Manager and Attorney-in-Fact
				
	 [Illegible]
	 	 	 	 	 	/s/    Caravelle Advisors, L.L.C.
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
				
	 	 	 	 	Address:	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

  

 -7- 

											
	 Attest:
	 	 	 	TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC. (formerly Johnstown America Industries, Inc.)
			
	 [Illegible]
	 	 	 	/s/ Transportation Technologies Industries, Inc.
	 	 	 	 	 	 	 	 	 
				
	 	 	 	 	Address:	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ Camillo M. Santomero, III
	 	 	 	 	 	 	 CAMILLO M. SANTOMERO, III

				
	 	 	 	 	Address:	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
			
	 Attest:
	 	 	 	 US BANCORP TRUST CO.
 FBO JOHN E . CARROLL,
JR.
 IRA DATED 6/11/99

				
	 [Illegible]
	 	 	 	By	 	/s/ Nicholas E. Dobias Jr.
	 	 	 	 	 	 	 	 	 Name: Nicholas E. Dobias Jr.

	 	 	 	 	 	 	 	 	 Title:   Vice President

				
	 	 	 	 	Address:	 	 216 Franklin St.

	 	 	 	 	 	 	 	 	 	 	 Johnstown, PA 15907-0520

	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ John E. Carroll, Jr.
	 	 	 	 	 	 	 JOHN E. CARROLL, JR.

				
	 	 	 	 	Address:	 	 17 John Street

	 	 	 	 	 	 	 	 	 	 	 Johnstown, PA 15907

	 	 	 	 	 	 	 	 	 	 	 

  

 -8- 

											
	 Witness:
	 	 	 	 
			
	[Illegible]	 	 	 	/s/ James D. Cirar
	 	 	 	 	 	 	 JAMES D. CIRAR

				
	 	 	 	 	Address:	 	 4855 Cedar Hill Dr.

	 	 	 	 	 	 	 	 	 	 	 Rochester, MI 48306

	 	 	 	 	 	 	 	 	 	 	 
			
	 Attest:
	 	 	 	DELAWARE CHARTER & GUARANTEE COMPANY, TRUSTEE FBO JAMES D. CIRAR IRA ROLLOVER
				
	 [Illegible]
	 	 	 	By	 	/s/ James D. Cirar
	 	 	 	 	 	 	 	 	 Name: James D. Cirar

	 	 	 	 	 	 	 	 	 Title:

				
	 	 	 	 	Address:	 	4855 Cedar Hill Dr.
	 	 	 	 	 	 	 	 	 	 	 Rochester, MI 48306

	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 /s/ Camillo Santomero
	 	 	 	/s/ Denise Santomero
	 	 	 	 	 	 	 DENISE SANTOMERO

				
	 	 	 	 	Address:	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ Robert P. Frisch
	 	 	 	 	 	 	 ROBERT P. FRISCH

				
	 	 	 	 	Address:	 	29 Quarry Lane
	 	 	 	 	 	 	 	 	 	 	 Bedford, NY 10506

	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ Edward L. Thomas
	 	 	 	 	 	 	 EDWARD L. THOMAS

				
	 	 	 	 	Address:	 	5 Columbus Ave.
	 	 	 	 	 	 	 	 	 	 	 Greenwich, CT 06830

	 	 	 	 	 	 	 	 	 	 	 

  

 -9- 

											
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ Edward J. Whalen
	 	 	 	 	 	 	 EDWARD J. WHALEN

				
	 	 	 	 	Address:	 	6516 N. Spokane Ave.
	 	 	 	 	 	 	 	 	 	 	 Chicago, IL 60646

	 	 	 	 	 	 	 	 	 	 	 
			
	 Attest:
	 	 	 	HOFFMAN INVESTMENT COMPANY
				
	 [Illegible]
	 	 	 	By	 	/s/ Arnold S. Hoffman
	 	 	 	 	 	 	 	 	 Name: Arnold S. Hoffman

	 	 	 	 	 	 	 	 	 Title: Managing Partner

				
	 	 	 	 	Address:	 	1464 Huntar Rd.
	 	 	 	 	 	 	 	 	 	 	 Rydal, PA 19046

	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ Gregory S. Young
	 	 	 	 	 	 	 GREGORY S. YOUNG

				
	 	 	 	 	Address:	 	22050 Regnant Rd.
	 	 	 	 	 	 	 	 	 	 	 Cupertino, CA 95014

	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ W. John Plunkard
	 	 	 	 	 	 	 W. JOHN PLUNKARD

				
	 	 	 	 	Address:	 	1740 Banyan Drive
	 	 	 	 	 	 	 	 	 	 	 Johnstown, PA 15904

	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ Bruce E. Rueppel, Jr.
	 	 	 	 	 	 	 BRUCE E. RUEPPEL, JR.

				
	 	 	 	 	Address:	 	429 Hobart Ave.
	 	 	 	 	 	 	 	 	 	 	 San Mateo, CA 94402

	 	 	 	 	 	 	 	 	 	 	 

  

 -10- 

											
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ Jon Schneider
	 	 	 	 	 	 	 JON SCHNEIDER

				
	 	 	 	 	Address:	 	71 Cranberry St.
	 	 	 	 	 	 	 	 	 	 	 Brooklyn, NY 11201

	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ Maximo J. Blandon
	 	 	 	 	 	 	 MAXIMO J. BLANDON

				
	 	 	 	 	Address:	 	c/o MSDW
	 	 	 	 	 	 	 	 	 	 	 1585 Broadway LB

	 	 	 	 	 	 	 	 	 	 	 c/o MKG Pouch

	 	 	 	 	 	 	 	 	 	 	 New York, NY 10036-8293

			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ Kelly L. Bodway
	 	 	 	 	 	 	 KELLY L. BODWAY

				
	 	 	 	 	Address:	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/ Mark L. Saylor
	 	 	 	 	 	 	 MARK L. SAYLOR

				
	 	 	 	 	Address:	 	160 Saylor Lane
	 	 	 	 	 	 	 	 	 	 	 Davidsville, PA 15928

	 	 	 	 	 	 	 	 	 	 	 
			
	 Attest:
	 	 	 	US BANCORP TRUST AND FINANCIAL SERVICES COMPANY FBO FRANK C. BERNATT IRA
				
	 [Illegible]
	 	 	 	By	 	/s/    Nicholas E. Debics, Jr.
	 	 	 	 	 	 	 	 	 Name: Nicholas E. Debics, Jr.

	 	 	 	 	 	 	 	 	 Title: Vice President

				
	 	 	 	 	Address:	 	216 Franklin St.
	 	 	 	 	 	 	 	 	 	 	 Johnstown, PA 15902-0520

	 	 	 	 	 	 	 	 	 	 	 

  

 -11- 

											
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/    Mark J. Duray
	 	 	 	 	 	 	 MARK J. DURAY

				
	 	 	 	 	Address:	 	418 Old Farm Lane
	 	 	 	 	 	 	 	 	 	 	 Johnstown, PA 15904

	 	 	 	 	 	 	 	 	 	 	 
			
	 Witness:
	 	 	 	 
			
	 [Illegible]
	 	 	 	/s/    Kenneth Bridges
	 	 	 	 	 	 	 KENNETH BRIDGES

				
	 	 	 	 	Address:	 	12711 S. Maple Road
	 	 	 	 	 	 	 	 	 	 	 Covington, IN 47932

	 	 	 	 	 	 	 	 	 	 	 
			
	 Attest:
	 	 	 	TRANSPORTATION INVESTMENT PARTNERS L.L.C.
				
	 [Illegible]
	 	 	 	 	 	/s/    Transportation Investment Partners L.L.C.
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

  

 -12- 

  
 INDIVIDUAL INVESTORS

  
 JOHN E .CARROLL, JR.* 
 JAMES D. CIRAR* 
 DENISE SANTOMERO 
 ROBERT P. FRISCH 
 EDWARD L. THOMAS 
 EDWARD J. WHALEN 
 HOFFMAN INVESTMENT COMPANY 
 GREGORY S. YOUNG 
 W. JOHN PLUNKARD 
 BRUCE E. RUEPPEL, JR. 
 JON SCHNEIDER 
 MAXIMO J. BLANDON 
 KELLY L. BODWAY 
 MARK L. SAYLOR 
 FRANK C. BERNATT* 
 MARK J. DURAY 
 KENNETH BRIDGES 
  

	*	These individuals may have invested through an IRA account. 

  
 EXHIBIT “A” 
  

 -13-Employment Agreement for John E. Carroll, Jr.

  
 Exhibit 10.1 
  
 EMPLOYMENT AGREEMENT FOR JOHN E. CARROLL, JR. 
  
 THIS AGREEMENT (the “Agreement”) is made effective as of December
17, 2004 (the “Effective Date”), between FreightCar America, Inc. (formerly known as JAC Holdings International, Inc.), a Delaware corporation (the “Company”), and John E. Carroll, Jr. (the “Executive”). 
  
 WHEREAS, the Company and its subsidiaries are engaged in the business of
designing, manufacturing and selling railroad freight cars (such business hereinafter referred to as the “Business”); and 
  
 WHEREAS, the Executive, as a result of training, expertise and personal application over the years, has acquired and will continue to acquire considerable
and unique expertise and knowledge which are of substantial value to the Company in the conduct, management and operation of its Business; and 
  
 WHEREAS, the Board of Directors of the Company (the “Board”) considers it desirable to prepare for and make an initial public offering of the
common stock of the Company (an “IPO”); and 
  
 WHEREAS,
the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management, including the Executive, to the successful completion of an IPO and to
their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control; and 
  
 WHEREAS, the parties hereto desire to substitute and replace this Agreement for the Employment Agreement between the parties hereto dated June 2, 2002
(the “Prior Employment Agreement”); 
  
 NOW THEREFORE,
in consideration of the continued employment of the Executive by the Company and the benefits to be derived by the Executive hereunder, and of the Executive’s agreement to continued employment by the Company as provided herein, the parties
mutually agree as follows: 
  
 1. Employment; Prior Employment
Agreement. The Company hereby agrees to continue to employ the Executive, and the Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein. On the Effective Date, this Agreement shall replace the
Prior Employment Agreement. 
  
 2. Employment, Position and
Duties. The Company hereby agrees to employ the Executive, and the Executive hereby agrees to serve the Company as its President and Chief Executive Officer and as an officer of such of the Company’s subsidiaries (if any) as shall be
reasonably requested by the Company, and the Executive shall have such responsibilities, duties and authority as are customarily associated with such offices. The Executive shall report to the Company’s Board of Directors. The terms of
Executive’s employment shall be as set forth herein. The Executive shall devote substantially all of his time to the performance of his duties 

  

 
hereunder. The Executive shall devote his best efforts to the successful completion of the IPO, including participation in the “road show” leading
up to the IPO. 
  
 3. Term. The employment of the Executive
by the Company pursuant to this Agreement will commence as of December 17, 2004 (the “Effective Date”) and shall terminate on December 31, 2006; provided, however, that this Agreement, shall remain in effect from year to year thereafter
unless, not less than ninety (90) days prior to the then termination of the term of this Agreement, either the Executive or the Company shall deliver to the other written notice of his or its intention not to continue in effect this Agreement, in
which case this Agreement shall terminate as of December 31 of the year in which such notice is given (the “Term”). 
  
 4. Place of Performance. In connection with the Executive’s employment by the Company, the Executive shall be based at the Company’s
offices in Johnstown, PA or Chicago, IL, as the Executive shall elect, except for required travel on the Company’s business. 
  
 5. Compensation and Related Matters. As compensation and consideration for the performance by the Executive of the Executive’s duties,
responsibilities and covenants pursuant to this Agreement, the Company will pay the Executive and the Executive agrees to accept in full payment for such performance the amounts and benefits set forth below: 
  
 (a) Salary. Commencing on the execution of this
Agreement, the Company shall pay to the Executive an annual base salary at the rate of $550,000 per year, such salary to be paid in substantially equal installments no less frequently than monthly. Such annual base salary may be increased from time
to time at the discretion of the Boards of Directors of the Company. 
  
 (b) Bonus. For the period from the Effective Date through the date of the termination of this Agreement, the Executive shall receive a bonus (the “Bonus”) equal to one percent (1%) of the
Company’s operating earnings before taxes, interest, depreciation and amortization (“EBITDA”) for each calendar year ending in such period. The Bonus shall be payable within ninety (90) days following the end of each calendar year
during the Term or the date of termination of this Agreement, as applicable, each such payment to be made with respect to the period (each a “Measuring Period”) (i) from the beginning of the applicable calendar year, to (ii) the earlier of
(A) the end of such calendar year during the Term or (B) the date of termination of this Agreement. The calculation of any portion of the Bonus payable by the Company hereunder shall be based upon the EBITDA of Holdings earned during the applicable
Measuring Period. 
  
 (c) Retention Bonus.
The Company shall pay the Executive a lump sum cash bonus of (i) $250,000 if the Executive remains continuously employed with the Company until April 1, 2005, and if the Company is listed on the NASDAQ National Market System on that date, and (ii)
$250,000 if the Executive satisfies the terms of clause (i) and remains continuously employed with the Company until the earlier of October 1, 2005 or completion of a follow-on offering of the Company’s common stock; provided, however, that if
a Change in Control (as defined below) occurs before the earlier of October 1, 2005 or completion of a follow-on offering of the Company’s common stock, the 

  

 - 2 - 

 
Company will pay the Executive the $250,000 lump sum cash bonus under this clause (ii) upon the Change in Control. 
  
 (d) Expenses. The Executive shall be entitled to
receive prompt reimbursement for all reasonable travel and entertainment expenses or other out-of-pocket business expenses incurred by the Executive during the Term in fulfilling the Executive’s duties and responsibilities hereunder, including
all expenses of travel and living expenses while away from home on business or at the request of and in the service of the Company, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established
by the Company. 
  
 (e) Other Benefits.
The Executive shall be entitled to participate in or receive benefits under any employee benefit plan, arrangement or perquisite made available by the Company at any time during his employment hereunder to its executive employees (collectively the
“Benefit Plans”), including without limitation each retirement, thrift and profit sharing plan, group life insurance and accident plan, medical and dental insurance plans, and disability plan, subject to and on a basis consistent with the
terms, conditions and overall administration of such plans, arrangements and perquisites; provided, however, that changes may be made to a plan in which executives of the Company participate, including termination of any such plan,
arrangement or perquisite, if such changes do not result in a proportionately greater reduction in the rights of or benefits to the Executive as compared with any other executive of the Company or is required by law or a technical change.

  
 (f) Vacations. During his employment
hereunder, the Executive shall be entitled to paid vacation in each calendar year, determined in accordance with the Company’s vacation policy. The Executive shall also be entitled to all paid holidays and personal days given by the Company to
its executive employees. 
  
 (g) Car.
During his employment hereunder, the Company shall provide for the Executive a car for his use in Johnstown, PA consistent with the type of car provided to other executives of the Company. 
  
 (h) Country Club. During his employment hereunder,
the Company shall pay membership and basic dues for the Executive at the Sunnehanna Country Club. 
  
 Any payments or benefits payable to the Executive under this Section 5 in respect of any year during which the Executive is employed by the Company for
less than the entire such year shall, unless otherwise provided herein (including without limitation the Bonus payable to the Executive hereunder) or in the applicable plan or arrangement, be prorated in accordance with the number of days in such
year during which he is so employed. 
  
 6. Termination.
The Company may terminate the Executive’s employment hereunder under the following circumstances: 
  
 (a) Death. The Executive’s employment hereunder shall terminate upon his death. 
  

 - 3 - 

 (b) Disability. If, in the written opinion of a qualified physician selected by
the Company, the Executive shall become unable to perform his duties hereunder with reasonable accommodation due to physical or mental illness that continues for three months, the Company may terminate the Executive’s employment hereunder.

  
 (c) Cause. The Company may terminate
the Executive’s employment hereunder for Cause. For purposes of this Agreement, the Company shall have “Cause” to terminate the Executive’s employment hereunder upon (x) the willful and continuous neglect or refusal to perform
the Executive’s duties or responsibilities, or the willful taking of actions (or willful failures to take actions) which materially harm the Company in any manner or impair the Executive’s ability to perform his duties or responsibilities
which in each case continues after being brought to the attention of the Executive (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness); (y) any act by the Executive which constitutes gross
negligence or willful misconduct in the performance of his duties hereunder, or the arrest, indictment and/or conviction of the Executive for any felony or a misdemeanor involving property of the Company or (z) a material breach by the Executive of
his obligations hereunder. 
  
 7. Compensation Upon
Termination, Death or During Disability. 
  
 (a) Death. If the Executive’s employment is terminated by his death, the Company shall within ninety days following the date of the Executive’s death, (i) pay any salary due to the Executive through the date of his death
and any unreimbursed expenses and (ii) pay to the Executive’s legal representative any death benefits provided under any Benefit Plan in accordance with their terms, and the Company shall, thereafter, have no further obligations to the
Executive under this Agreement. 
  
 (b)
Disability. During any period that the Executive fails to perform his duties hereunder as a result of incapacity due to physical or mental illness, the Executive shall continue to receive his full base salary and other benefits at the rate
then in effect for such period (offset by any payments to the Executive received pursuant to disability benefit plans maintained by the Company) until his employment is terminated, and upon such termination, and the Company shall, thereafter, have
no further obligations to the Executive under this Agreement. 
  
 (c) Cause or By Executive Other than for Good Reason. If the Executive’s employment is terminated by the Company for Cause or by the Executive for other than Good Reason, the Company shall pay the
Executive his salary through the date of termination and any unreimbursed expenses, and the Company shall, thereafter, have no further obligations to the Executive under this Agreement. For purposes of this Agreement, “Good Reason” shall
mean, without the Executive’s express written consent, the occurrence of any of the following circumstances: (1) a Company Change in Control pursuant to which the buyer does not either assume this Agreement or otherwise agree to employ the
Executive at or after the acquisition date on terms substantially comparable in the aggregate to this Agreement, or (2) unless such circumstances are fully corrected within 60 days after written notice thereof (A) a permanent material diminution in
the Executive’s position, duties, responsibilities (including reporting responsibilities) or 

  

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authority or any substantive assumption of the Executive’s duties, responsibilities or authority by any member of the Board without the Executive’s
knowledge (except during periods when the Executive is unable to perform all or substantially all of the Executive’s duties and/or responsibilities on account of the Executive’s illness (either physical or mental) or other incapacity) or
(B) a failure by the Company to pay the Executive’s salary or bonus as provided herein or a material elimination or reduction of the Executive’s participation in any Benefit Plans generally available to employees at the Executive’s
level, except as otherwise permitted herein. 
  
 For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied: 
  
 (i) any Person is or becomes the Beneficial Owner, directly
or indirectly, of securities of the Company (not including any securities beneficially owned by such Person that were acquired directly from the Company or its affiliates) representing 20% or more of the combined voting power of the Company’s
then outstanding securities; or 
  
 (ii) the
shareholders of the Company approve a merger or consolidation of the Company with any other corporation, other than (A) a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of
the Company, at least 65% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person acquires more than 50% of the combined voting power of the Company’s then outstanding securities; or 
  
 (c) the shareholders of the Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all the Company’s assets. 
  
 For purposes of this Agreement, “Beneficial Owner” shall have the meaning defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). For purposes of this Agreement, “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 (A) the
Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such
securities, or (D) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. 
  

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 (d) Breach By Company or By Executive for Good Reason. If (A) in breach of this
Agreement, the Company shall terminate the Executive’s employment or (B) the Executive shall terminate his employment for Good Reason, then the Company shall provide the following payments and benefits: 
  
 (i) the Company shall pay the Executive his full Base Salary
through the date of termination at the rate in effect at the time notice of termination is given and all other unpaid amounts, if any, to which the Executive is entitled as of the date of termination including (A) any expenses owed pursuant to
Section 5(d) (which amounts shall be paid in a lump sum within 10 days of such date of termination), (B) any unpaid accrued vacation, and (C) amounts under any compensation or benefit plan or program of the Company, at the time such payments are
payable to the Executive under the terms of such plan in light of the circumstances in which such termination occurred; 
  
 (ii) in lieu of any further Base Salary payments to the Executive for periods subsequent to the date of termination, the Company shall pay
to the Executive within ten days of the date of termination, a lump sum amount equal to the product of (A) the sum of (1) the Executive’s annual Base Salary rate in effect as of the date notice of termination is given and (2) the greatest of
(I) the Executive’s guaranteed annual bonus (if any) with respect to the fiscal year in which the date of termination occurs, (II) the target annual bonus which may become payable to the Executive with respect to the fiscal year in which the
date of termination occurs, (III) the annual bonus payments made to the Executive with respect to the fiscal year immediately prior to the fiscal year in which the date of termination occurs and (IV) the average of the annual bonus payments made to
the Executive with respect to the three fiscal years immediately prior to the fiscal year in which the date of termination occurs (or such shorter period as the Executive has been employed by the Company) multiplied by (B) the number three; and

  
 (iii) the Company shall at its own cost
continue the participation of the Executive for a period of three years, in all medical, life and other employee welfare benefit plans and programs in which the Executive was entitled to participate immediately prior to the date of termination
provided that the Executive’s continued participation is provided under the general terms and provisions of such plans and programs as in effect on the date of such Termination. In the event that the Executive’s participation in any such
plan or program is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plans and programs from which his continued
participation is barred. The Company shall continue to make available coverage under its medical insurance plan to (A) the Executive until the date the Executive is eligible for Medicare, and (B) the Executive’s spouse (determined as of the
Effective Date) until the date the Executive’s spouse is eligible for Medicare; provided that the Company shall pay the full cost of such coverage. 
  

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 (e) The obligations of the Company to make payments and provide benefits under this
Section 7 shall survive the termination of this Agreement. 
  
 8.
Covenant Not to Compete. The Executive acknowledges that, as a key management employee, the Executive will be involved, on a high level, in the development, implementation and management of the Company’ strategies and plans, including
those which involve the Company’ finances, research, marketing, planning, operations, industrial relations and acquisitions. By virtue of the Executive’s unique and sensitive position and special background, employment of the Executive by
a competitor of the Company represents a serious competitive danger to the Company, and the use of the Executive’s talent and knowledge and information about the Company’s business, strategies and plans can and would constitute a valuable
competitive advantage over the Company. In view of the foregoing, the Executive covenants and agrees that, if the Executive’s employment is terminated for any reason whatsoever, then, for a period of two years after the date of termination, the
Executive will not engage or be engaged, in any capacity, directly or indirectly, including but not limited to as an employee, agent, consultant, manager, executive, owner or stockholder (except as a passive investor holding less than a 5% equity
interest in any enterprise) in any business entity engaged in competition with any business conducted by the Company on the date of termination anywhere in North America. 
  
 The covenant not to compete contained in this Section 7 shall survive the termination of this Agreement. 
  
 If any court determines that the covenant not to compete contained in this
Section 7, or any part hereof, is 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. 
  
 9. Confidentiality. The Executive recognizes that he will have access to confidential information, trade secrets, proprietary methods and other data which are the property of and integral to the operations and
success of the Company and therefore agrees to be bound by the provisions of this Section 9, which both the Company and the Executive agree and acknowledge to be reasonable and to be necessary to the Company. In recognition of this fact, the
Executive agrees that the Executive will not disclose any such trade secrets or confidential or proprietary information (except (i) information which becomes publicly available without violation of this Agreement, (ii) information which the
Executive did not know and could not have known was confidential and was disclosed to the Executive in violation of any other person’s confidentiality obligations and (iii) disclosure required in connection with any legal process (after giving
the Company the opportunity to dispute such requirement)) to any person, firm, corporation, association or other entity, for any reason or purpose whatsoever, nor shall the Executive make use of any such information for the benefit of any person,
firm, corporation or other entity, except the Company. The Executive’s obligation to keep all of such information confidential shall be in effect without limitation as to time. 
  

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 10. Miscellaneous. 
  
 (a) Representations of the Executive. The Executive represents and warrants to the Company that this
Agreement when executed by the Executive will not conflict with any other agreement or obligation of the Executive and that the Executive is not bound by any agreement with any third party which would prohibit the Executive from his involvement with
the Company or result in any liability to the Executive or to the Company. 
  
 (b) Binding Agreement. This Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate. 
  
 (c) Notice. Notices, demands and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when delivered, if delivered personally, or (unless otherwise specified) mailed by United States certified or registered mail, return receipt requested, postage prepaid, and when received if
delivered otherwise, addressed as follows: 
  
 If to the
Executive: 
  
 John E. Carroll, Jr. 
 1040 North Lake Shore Drive 
 Apt. 32D

 Chicago, IL 60611 
  
 If to the Company: 
  
 c/o FreightCar America, Inc. 
 Two North
Riverside Plaza 
 Chicago, IL 60606 
 Attention: Chairman of the Board 
  
 or to such other address as any
party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 
  
 (d) Amendments, Waivers, Governing Law, Validity, Counterparts and Entire Agreement. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and such officers of the Company as maybe specifically designated by the Board. No waiver by either party hereto (the
Company on one hand, and the Executive, 

  

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on the other hand) at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws
of the State of Illinois without regard to its conflicts of law principles. The invalidity or enforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. This Agreement sets forth
the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements (including without limitation the Prior Employment Agreement), promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto; and any prior agreement of the parties hereto respect of the subject matter contained herein (including without limitation the
Prior Agreement) is hereby terminated and canceled. 
  
 (e) Injunctive Relief. The Executive agrees that in addition to any other remedy provided at law or in equity or in this Agreement, the Company shall be entitled to a temporary restraining order and both preliminary and permanent
injunctions restraining Executive from violating any provision of Sections 8 and 9 of this Agreement. 
  
 (f) Consent to Jurisdiction and Forum; Legal Fees and Costs. The Company and the Executive hereby expressly and irrevocably agree
that any action, whether at law or in equity, arising out of or based upon this Agreement or the Executive’s employment by the Company shall only be brought in a federal or state court located in Chicago, Illinois. The Executive hereby
irrevocably consents to personal jurisdiction in such court and to accept service of process in accordance with the provisions of such court. In connection with any dispute arising out of or based upon this Agreement or the Executive’s
employment by the Company, each party (the Company on one hand, and the Executive on the other hand) shall be responsible for its, their or his own legal fees and expenses and all court costs shall be shared equally by the Company on one hand, and
the Executive, on the other hand, unless the court apportions such legal fees or court costs in a different manner. 
  
 (g) Withholding. All payments made to the Executive pursuant to this Agreement shall be subject to applicable withholding taxes, if
any, and any amount so withheld shall be deemed to have been paid to the Executive for purposes of amounts due to the Executive under this Agreement. 
  
 (h) Removal from any Boards and Positions. If the Executive’s employment is terminated for any reason under this Agreement, he
shall be deemed to resign (i) if a member, from the Board or board of directors of any affiliate or any other board to which he has been appointed or nominated by or on behalf of the Company and (ii) from any position with the Company or any
affiliate, including, but not limited to, as an officer of the Company or any of its affiliates. 
  

 - 9 - 

 (i) Insurance; Indemnification. During the Term and through at least the fifth
anniversary of the Executive’s termination of employment from the Company, the Company agrees to maintain the Executive as an insured party on all directors’ and officers’ insurance maintained by the Company for the benefit of its
directors and officers on at least the same basis as all other covered individuals and provide the Executive with at least the same corporate indemnification as its officers. 
  
 (j) Voluntary Agreement. The Executive and the Company represent and agree that each has reviewed all
aspects of this Agreement, has carefully read and fully understands all provisions of this Agreement, and is voluntarily entering into this Agreement. Each party represents and agrees that such party has had the opportunity to review any and all
aspects of this Agreement, with the legal, tax and other advisor and advisors of such party’s choice before executing this Agreement, and have been fully advised as to same. This Agreement has been fully and freely negotiated by the parties
hereto, shall be considered as having been drafted jointly by the parties hereto, and shall be interpreted and construed as if so drafted, without construction in favor of or against any party on account of its or his participation in the drafting
hereof. 
  
 IN WITNESS WHEREOF, the parties have executed this
Agreement on the date and year first above written. 
  

									
	FREIGHTCAR AMERICA, INC.	 	 	 	 
					
	By:	 	 /s/ Camillo M. Santomero
	 	 	 	 	 	 /s/ John E. Carroll, Jr.

	 	 	    Chairman of the Board
	 	 	 	 	 	        John E. Carroll, Jr.

  

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