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wabtecex10

1 WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION 2011 STOCK INCENTIVE PLAN (as amended and restated effective March 31, 2022) SECTION 1 Purpose; Definitions 1.1 Purpose. The purposes of the 2011 Stock Incentive Plan, as amended and restated effective  March 31, 2022 (the “Plan”), are to encourage eligible employees of Westinghouse Air  Brake Technologies Corporation (the “Corporation”) and its Subsidiaries to increase their  efforts to make the Corporation and each Subsidiary more successful, to provide an  additional inducement for such employees to remain with the Corporation or a Subsidiary,  to reward such employees by providing an opportunity to acquire shares of Common Stock  on favorable terms and to provide a means through which the Corporation may attract able  persons to enter the employ of the Corporation or one of its Subsidiaries. 1.2 Certain Definitions. In addition to terms defined herein in a place where they are used, the  following terms are defined as set forth below: (a) “Award” means a stock  option, a stock appreciation right, restricted stock,  restricted  stock  units, performance units or other stock-based award granted under  the Plan. (b) “Base Price” shall have the meaning set forth in Section 5.3. (c) “Common Stock” shall mean the Common Stock, par value $0.01 per share, of the  Corporation. (d) “Fair Market Value” with respect to a share of the Common Stock shall mean the  mean between the following prices, as applicable, for the date as of which Fair  Market Value is to be determined as quoted in such reliable publication as the  Committee, in its sole discretion, may determine to rely upon: (i) if the Common  Stock is listed on the New York Stock Exchange, the highest and lowest sales prices  per share of the Common Stock as quoted in the NYSE-Composite Transactions  listing for such date, (ii) if the Common Stock is not listed on such exchange, the  highest and lowest sales prices per share of Common Stock for such date on (or on  any composite index including) the NASDAQ Exchange or the principal United  States of America securities exchange registered under the Securities Exchange Act  of 1934, as amended (the “1934 Act”) on which the Common Stock is listed. If  there are no such sale price quotations for the date as of which Fair Market Value  is to be determined but there are such sale price quotations within a reasonable  period both before and after such date, then Fair Market Value shall be determined  by taking a weighted average of the means between the highest and lowest sales  prices per share of the Common Stock as so quoted on the nearest date before and  the nearest date after the date as of which Fair Market Value is to be determined.  The average should be weighted inversely by the respective numbers of trading  

 

2 days between the selling dates and the date as of which Fair Market Value is to be  determined. If there are no such sale price quotations on or within a reasonable  period both before and after the date as of which Fair Market Value is to be  determined, then Fair Market Value of the Common Stock shall be the weighted  average of the means between such bona fide bid and asked prices on the nearest  trading date before and the nearest trading date after the date as of which Fair  Market Value is to be determined, if both such dates are within a reasonable period.  The average is to be determined in the manner described above in this definition. If  the Fair Market Value of the Common Stock cannot be determined on the basis  previously set forth in this definition on the date as of which Fair Market Value is  to be determined, the Committee shall in good faith and in conformance with the  requirements of Section 409A of the Code, to the extent applicable to an Award,  determine the Fair Market Value of the Common Stock on such date. Fair Market  Value shall be determined without regard to any restriction other than a restriction  which, by its terms, will never lapse. (e) “Free-Standing SARs” shall have the meaning set forth in Section 5.2.   (f) “Participant” means an eligible employee selected by the Committee who has  received an Award under the Plan and any transferee or transferees of such  employee to the extent the transfer is permitted under the Plan. (g) “Performance Goals” means the performance goals, if any, established by the  Committee in connection with the grant of restricted stock, restricted stock units,  performance units or other Awards. In the case of Qualified Performance-Based  Awards, the “Performance Goals” means such performance goals based on one or  more of the following: (i) cash flow; (ii) earnings per share; (iii) earnings or income  measures (including EBIT and EBITDA)); (iv) return measures (including return  on assets, capital, invested capital, equity, sales, or revenue); (v) total shareholder  return; (vi) share price performance; (vii) revenue; (viii) profit margin; (ix)  customer metrics (including customer satisfaction, customer retention, or customer  profitability);  (x)  productivity;  (xi)  expense  targets;  (xii)  market  share;  (xiii)   cost  control  measures; (xiv) balance sheet metrics; (xv) strategic initiatives; (xvi)  implementation, completion or attainment of measurable objectives with respect to  recruitment or retention of personnel, employee satisfaction or diversity; (xvii)  successful completion of, or achievement of milestones or objectives related to,  financing or capital raising transactions, strategic acquisitions or divestitures, joint  ventures, partnerships, collaborations, or other transactions; (xviii) debt levels or  reduction or debt ratios; (xix) operating efficiency; (xx) working capital targets;  (xxi) quantifiable, objective measures of individual performance relevant to the  particular individual’s job responsibilities; (xxii) environmental missions  improvement; (xxiii) innovation as measured by a percentage of sales from new  products; (xxiv) safety performance; (xxv) number of accounts; or (xvi) any  combination of the forgoing business criteria; provided, however, that such  business criteria shall include any derivations of business criteria listed above (e.g.,  income shall include pre-tax income, net income, or operating income). Any  

 

3 business criteria that are financial metrics may be determined in accordance with  United States Generally Accepted Accounting Principles (“GAAP”) or may be  adjusted when established (or to the extent permitted under Section 162(m), at any  time thereafter) to include or exclude any items otherwise includable or excludable  under GAAP. Performance Goals may, in the discretion of the Committee, be  established on a Company-wide basis, or with respect to one or more business units,  divisions, subsidiaries or business segments, as applicable. Performance Goals may  be absolute or relative (to the performance of one or more comparable companies  or indices or based on year- over-year growth). (h) “Qualified Performance-Based Award” means an Award intended to qualify for the  Section 162(m) Exemption, as provided in Section 12. (i) “Subsidiary” means any corporation, partnership, joint venture, limited liability  company or other entity in an unbroken chain of entities beginning with the  Corporation if each of the entities other than the last entity in the unbroken chain  owns an equity interest possessing at least fifty percent (50%) or more of the total  combined voting power of all classes of stock in one of the other entities in the  chain. (j) “Tandem SARs” shall have the meaning set forth in Section 5.2. SECTION 2 Administration 2.1 Committee. The Plan shall be administered by a Committee (the “Committee”) appointed  by the Board of Directors of the Corporation (the “Board”) and consisting of not less than  two members of the Board, who, at the time of their appointment to the Committee and at  all times during their service as members of the Committee, are (a) “Non-Employee  Directors” as then defined under Rule 16b-3 under the 1934 Act, or any successor rule, (b)  “outside directors” under Section 162(m)(4)(C) of the Internal Revenue Code of 1986 as  amended (the “Code”) or any successor provision, and (c) independent directors under the  applicable rules of any applicable stock exchange, if the Common Stock is subject to such  rules. The Committee shall have plenary authority to interpret the Plan and prescribe such  rules, regulations and procedures in connection with the operations of the Plan as it shall  deem to be necessary and advisable for the administration of the Plan consistent with the  purposes of the Plan. Without limitation of the foregoing, the Committee shall have the  authority, subject to the terms and conditions of the Plan: (a) to select the employees to whom Awards may be made; (b) to determine whether and to what extent incentive stock options, nonstatutory stock  options, stock appreciation rights, restricted stock, restricted stock units,  performance units, other Awards of or based upon Common Stock, or any  combination thereof, are to be granted hereunder; 

 

4 (c) to determine the number of shares of Common Stock to be covered by each Award  made hereunder; (d) to determine the terms and conditions of each Award made hereunder, based on  such factors as the Committee shall determine; (e) subject to Section 2.5, to modify, amend or adjust the terms and conditions of any  Award; (f) to adopt, alter and repeal such administrative rules, guidelines and practices  governing the Plan as it shall from time to time deem advisable; (g) to interpret the terms and provisions of the Plan and any Award under the Plan (and  any agreement under Section 2.5 relating thereto); (h) subject to Section 2.5, to accelerate the vesting or lapse of restrictions on any  outstanding Award, other than a Qualified Performance-Based Award, based in  each case on such considerations as the Committee in its sole discretion determines; (i) to decide all other matters that must be determined in connection with an Award; (j) to determine whether, to what extent and under what circumstances cash, shares of  Common Stock and other property and other amounts payable with respect to an  Award under this Plan shall be deferred either automatically or at the election of  the employee; (k) to establish any “blackout” period that the Committee in its sole discretion deems  necessary or advisable; and (l) to otherwise administer the Plan. In determining any Award to be made to any eligible employee, the Committee shall  consider the position and the responsibilities of the employee being considered, the nature  and value to the Corporation or a Subsidiary of his or her services, his or her present and/or  potential contribution to the success of the Corporation or a Subsidiary and such other  factors as the Committee may deem relevant. The Committee may, except to the extent  prohibited by applicable law or the listing standards of the stock exchange which is the  principal market for the Common Stock, allocate all or any portion of its responsibilities  and powers to any one or more of its members and may delegate all or any part of its  responsibilities and powers to any officers of the Corporation or committee of officers of  the Corporation selected by it, except with respect to Awards (including Qualified  Performance- Based Awards) to any covered employees as defined in Section 162(m)(3)  of the Code (“Covered Employees”) or persons subject to Section 16 of the 1934 Act. 2.2 Committee Action. The Committee shall keep records of action taken at its meetings. A  majority of the Committee shall constitute a quorum at any meeting and the acts of a  majority of the members present at any meeting at which a quorum is present, or acts  approved in writing by all members of the Committee, shall be the acts of the Committee. 

 

5 2.3 Committee Discretion. Any determination made by the Committee or by an appropriately  delegated officer pursuant to delegated authority under the provisions of the Plan with  respect to any Award shall be made in the sole discretion of the Committee or such officer  at the time of the Award or, unless in contravention of any express term of the Plan, at any  time thereafter. All decisions made by the Committee or any appropriately delegated  officer pursuant to the provisions of the Plan shall be final and binding on all persons,  including the Corporation and the employees eligible under the Plan. No member of the  Committee shall be liable for any action or determination made in good faith with respect  to the Plan, any Award or Award agreement. 2.4 Cancellation; Suspension; Clawback. Any or all outstanding Awards to a Participant may,  at any time between the date of grant and the third anniversary of any exercise, payment or  vesting of such Awards, in the Committee’s sole discretion and subject to such terms and  conditions established by the Committee, be cancelled, suspended, or required to be repaid  to the Corporation if, to the extent permitted by applicable law, the Participant (whether  during or after termination of employment with the Corporation and its Subsidiaries) (i)  engages in the operation or management of a business (whether as owner, partner, officer,  director, employee or otherwise) which is in competition with the Corporation or any of its  Subsidiaries, (ii) induces or attempts to induce any customer, supplier, licensee or other  individual, corporation or other business organization having a business relationship with  the Corporation or any of its Subsidiaries to cease doing business with the Corporation or  any of its Subsidiaries or in any way interferes with the relationship between any such  customer, supplier, licensee or other person and the Corporation or any of its Subsidiaries,  (iii) solicits any employee of the Corporation or any of its Subsidiaries to leave the  employment thereof or in any way interferes with the relationship of such employee with  the Corporation or any of its Subsidiaries, or (iv) makes any statements or comments, orally  or in writing, of a defamatory or disparaging nature regarding the Corporation or any of its  Subsidiaries (including but not limited to regarding any of their respective businesses,  officers, directors, personnel, products or policies), provided, however, that this sentence  shall not apply following the occurrence of a Section 11 Event (as defined in Section 11)  unless the agreement under Section 2.5 specifically so provides. Whether a Participant has  engaged in any such activities shall also be determined, in its sole discretion, by the  Committee, and any such determination by the Committee shall be final and binding. In  addition, Awards shall be subject to the requirements of (i) Section 954 of the Dodd-Frank  Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously  awarded compensation) and any implementing rules and regulations thereunder, (ii) similar  rules under the laws of any other jurisdiction, (iii) any compensation recovery policies  adopted by the Company to implement any such requirements or (iv) any other  compensation recovery policies as may be adopted from time to time by the Company, all  to the extent determined by the Committee in its discretion to be applicable to a Participant. 2.5 Agreements. The terms and conditions of each Award shall be set forth in a written (or  electronic) agreement, which shall be delivered to the Participant receiving such Award  upon, or as promptly as is reasonably practicable following, the making of such Award.  The effectiveness of an Award shall be subject to the agreement being signed by the  Corporation and the Participant receiving the Award unless otherwise provided in the  agreement. Unless otherwise provided in the agreement, each agreement or amendment  

 

6 thereto shall be executed on behalf of the Corporation by the Chief Executive Officer (if  other than the President), the President or any Vice President and by the Participant. The  agreement confirming a stock option shall specify whether the stock option is an incentive  stock option or a nonstatutory stock option. The provisions of such agreements need not be  identical. Without the consent of the Participant, upon notice to the Participant thereof, the  Committee may amend any Award to the Participant and the corresponding agreement in  any respect not materially adverse to the Participant. All other amendments to the  agreement shall be in writing (including electronic amendments) and executed on behalf  of the Corporation and by the Participant. Any reference in the Plan to the agreement under  Section 2.5 shall include any amendment to such agreement. 2.6 Minimum Vesting Requirements.  Notwithstanding any other provision of the Plan to the  contrary, share-settled Awards granted under the Plan shall vest no earlier than the first  anniversary of the date the Award is granted, excluding, for this purpose, any (i) substitute  awards, and (ii) shares delivered in lieu of fully vested cash compensation; provided, that,  the Board may grant share-settled Awards without regard to the foregoing minimum  vesting requirement with respect to a maximum of five percent (5%) of the available share  reserve authorized for issuance under the Plan pursuant to Section 4.1 (subject to  adjustment under Section 4.5); and, provided further, for the avoidance of doubt, that the  foregoing restriction does not apply to the Committee’s discretion to provide for  accelerated exercisability or vesting of any Award, including in cases of retirement, death,  disability or a Section 11 Event, in the terms of the Award or otherwise. SECTION 3 Eligibility Those employees of the Corporation or any Subsidiary (including, but not limited to, Covered  Employees) who share responsibility for the management, growth or protection of the business of  the Corporation or any Subsidiary shall be eligible to receive Awards as described herein;  provided, however, that incentive stock options may be granted only to employees of the  Corporation and Subsidiaries which are its subsidiaries within the meaning of Section 424(f) of  the Code. SECTION 4 Shares Subject to the Plan 4.1 Number of Shares. Subject to adjustment as provided in Section 4.5, the maximum  aggregate number of shares of the Common Stock for which Awards may be made under  the Plan shall be (i) 3,800,000 shares (after giving effect to the 2-for-1 stock split in the  form of a stock dividend in June 2013), plus (ii) any shares which remained available for  grant under the Corporation’s 2000 Stock Incentive Plan as of the original effective date of  this Plan (also after giving effect to the 2-for-1 stock split in the form of a stock dividend  in June 2013), plus (iii) effective as of May 10, 2017, an additional 1,000,000 shares, plus  (iv) effective as of May 15, 2020 upon stockholder approval, an additional 5,300,000  

 

7 shares. The maximum number of shares of Common Stock that may be granted pursuant  to options intended to be incentive stock options shall be 5,300,000 shares. 4.2 Individual Limits. Subject to adjustment under Section 4.5, the maximum number of each  type of Award (other than cash-based performance units) granted to any Participant in any  calendar year shall not exceed the following number of shares of Common Stock: (i)  options and stock appreciation rights: 600,000 shares; and (ii) all Awards of restricted  stock, restricted stock units, share-based performance units and other stock-based awards  that are intended to be Qualified Performance-Based Awards: 600,000 shares. The  maximum amount of cash-based performance unit Awards intended to be Qualified  Performance-Based Awards granted to any Participant in any calendar year shall not  exceed the following: (x) any cash-based performance unit Award with a performance  period that is the Company’s fiscal year or other 12-month (or shorter) performance period  as specified  under  the  terms  of  the  Award  as  approved  by  the  Committee  (an   “annual  incentive  award”):  $5,000,000; and (y) all other cash-based performance unit  Awards: $5,000,000. 4.3 Share Counting. (a) To the extent that any Award is forfeited, or any option and the Tandem SAR (if  any) or any Free- Standing SAR terminates, expires or lapses without being  exercised, or any Award is settled for cash, the shares of Common Stock subject to  such Awards shall again be available for Awards under the Plan under Section 4.1.  However, shares of Common Stock subject to such Awards shall continue to be  counted for purposes of Section 4.2 or Section 9, as applicable. (b) If the exercise price of any option and/or the tax withholding obligations relating to  any Awards are satisfied by delivering shares (either actually or through attestation)  or withholding shares relating to such Award, the gross number of shares subject  to the Award shall nonetheless be deemed to have been granted for purposes of  Sections 4.1 and 4.2 and any shares which are delivered will not be added to the  aggregate number of shares under Section 4.1 for which Awards may be made  under the Plan. Shares of Common Stock that the Company may repurchase from  time to time with proceeds from the exercise of options or otherwise shall not be  added to the aggregate number of shares under Section 4.1 for which Awards may  be made under the Plan. (c) If a Tandem SAR is granted, each share of Common Stock subject to both the  Tandem SAR and related stock option shall be counted as only one share of  Common Stock for purposes of Sections 4.1 and 4.2. (d) Each share of Common Stock subject to a stock option (with or without a Tandem  SAR) or a Free- Standing SAR shall be counted as one share of Common Stock for  purposes of Sections 4.1 and 4.2. (e) All shares of Common Stock covered by a stock appreciation right, to the extent it  is exercised and shares of Common Stock are actually issued upon exercise of the  

 

8 right, shall be counted for purposes of Sections 4.1 and 4.2, regardless of the  number of shares used to settle the stock appreciation right upon exercise. (f) Awards granted in assumption of or in substitution for an award of a company or  business acquired by the Company or a Subsidiary or with which the Company or  a Subsidiary combines (“substitute awards”) shall not be counted against the  number of shares reserved under the Plan. 4.4 Common Stock. To the extent that the Corporation has such shares of Common Stock  available to it and can issue such shares without violating any law or regulation, the  Corporation will reserve Common Stock for issuance with respect to an Award payable in  Common Stock. The shares of Common Stock which may be issued under the Plan may  be either authorized but unissued shares or shares previously issued and thereafter acquired  by the Corporation or partly each, as shall be determined from time to time by the Board. 4.5 Adjustment and Substitution of Shares. In the event of a merger, consolidation, acquisition  of shares, stock rights offering, liquidation, separation, spinoff, disaffiliation of a  Subsidiary from the Corporation, extraordinary dividend of cash or other property, or  similar event affecting the Corporation or any of its Subsidiaries (each, a “Corporate  Transaction”), the Committee or the Board shall make such substitutions or adjustments as  it deems appropriate and equitable to prevent the dilution or enlargement of the rights of  Participants to (A) the aggregate number and kind of shares of Common Stock reserved for  issuance and delivery under the Plan, (B) the various maximum limitations set forth in  Sections 4.1 and 4.2 upon certain types of Awards and upon the Awards to individuals, (C)  the number and kind of shares of Common Stock subject to outstanding Awards; and (D)  the exercise price of outstanding Awards. In the event of a stock dividend, stock split,  reverse stock split, reorganization, share combination, or recapitalization or similar event  affecting the capital structure of the Corporation (each, a “Share Change”), the Committee  or the Board shall make such substitutions or adjustments as it deems appropriate and  equitable to prevent the dilution or enlargement of the rights of Participants to (A) the  aggregate number and kind of shares of Common Stock reserved for issuance and delivery  under the Plan, (B) the various maximum limitations set forth in Sections 4.1 and 4.2 upon  certain types of Awards and upon the Awards to individuals, (C) the number and kind of  shares of Common Stock subject to outstanding Awards; and (D) the exercise price of  outstanding Awards. In the case of Corporate Transactions, such adjustments may include,  without limitation, (1) the cancellation of outstanding Awards in exchange for payments  of cash, property or a combination thereof having an aggregate value equal to the value of  such Awards, as determined by the Committee or the Board in its sole discretion (it being  understood that in the case of a Corporate Transaction with respect to which shareholders  of Common Stock receive consideration other than publicly-traded equity securities of the  ultimate surviving entity, any such determination by the Committee that the value of an  option or stock appreciation right shall for this purpose be deemed to equal the excess, if  any, of the value of the consideration being paid for each share pursuant to such Corporate  Transaction over the exercise price of such option or stock appreciation right shall  conclusively be deemed valid); (2) the substitution of other property (including, without  limitation, cash or other securities of the Corporation and securities of entities other than  the Corporation) for the shares subject to outstanding Awards; and (3) in connection with  

 

9 any disaffiliation of a Subsidiary, arranging for the assumption of Awards, or replacement  of Awards with new Awards based on other property or other securities (including, without  limitation, other securities of the Corporation and securities of entities other than the  Corporation), by the affected Subsidiary, or by the entity that controls such Subsidiary  following such disaffiliation (as well as any corresponding adjustments to Awards that  remain based upon Corporation securities). The Committee shall adjust the Performance  Goals applicable to any Awards to reflect any unusual or non-recurring events and other  extraordinary items, impact of charges for restructurings, discontinued operations, and the  cumulative effects of accounting or tax changes, each as defined by generally accepted  accounting principles or as identified in the Corporation’s financial statements, notes to the  financial statements, management’s discussion and analysis or other of the Corporation’s  SEC filings, provided that in the case of Performance Goals applicable to any Qualified  Performance-Based Awards, such adjustment does not violate Section 162(m) of the Code  or cause such Awards not to qualify for the Section 162(m) Exemption, as defined in  Section 12.1. No adjustment or substitution provided in this Section 4.5 shall require the  Corporation or any other entity to issue or sell a fraction of a share or other security. Except  as provided in this Section 4.5, a Participant shall not have any rights with respect to any  Corporate Transaction or Share Change. 4.6 Section 409A; Section 162(m); Incentive Stock Options. Notwithstanding the foregoing:  (i) any adjustments made pursuant to Section 4.5 to Awards that are considered “deferred  compensation” within the meaning of Section 409A of the Code shall be made in  compliance with the requirements of Section 409A of the Code; (ii) any adjustments made  pursuant to Section 4.5 to Awards that are not considered “deferred compensation” subject  to Section 409A of the Code shall be made in such a manner as to ensure that after such  adjustment, the Awards either (A) continue not to be subject to Section 409A of the Code  or (B) comply with the requirements of Section 409A of the Code; and (iii) in any event,  neither the Committee nor the Board shall have the authority to make any adjustments  pursuant to Section 4.5 to the extent the existence of such authority would cause an Award  that is not intended to be subject to Section 409A of the Code at the grant date of the Award  to be subject thereto. If any such adjustment or substitution provided for in Section 4.5  requires the approval of shareholders in order to enable the Corporation to grant incentive  stock options or to comply with Section 162(m) of the Code, then no such adjustment or  substitution shall be made without the required shareholder approval. Notwithstanding the  foregoing, in the case of incentive stock options, if the effect of any such adjustment or  substitution would be to cause the option to fail to continue to qualify as an incentive stock  option or to cause a modification, extension or renewal of such option within the meaning  of Section 424 of the Code, the Committee may determine that such adjustment or  substitution not be made but rather shall use reasonable efforts to effect such other  adjustment of each then outstanding incentive stock option as the Committee, in its sole  discretion, shall deem equitable and which will not result in any disqualification,  modification, extension or renewal (within  the  meaning  of Section 424 of the Code) of  such incentive stock option. 

 

10 SECTION 5 Grant of Stock Options and Stock Appreciation Rights 5.1 Types of Options; Limit on Incentive Stock Options. The Committee shall have authority,  in its sole discretion, to grant “incentive stock options” pursuant to Section 422 of the Code,  to grant “nonstatutory stock options” (i.e., stock options which do not qualify under  Sections 422 or 423 of the Code) or to grant both types of stock options (but not in tandem).  Notwithstanding any other provision contained in the Plan or in any agreement under  Section 2.5, but subject to the possible exercise of the Committee’s discretion contemplated  in the last sentence of this Section 5.1, the aggregate Fair Market Value on the date of grant  of the shares with respect to which such incentive stock options are exercisable for the first  time by a Participant during any calendar year under all plans of the corporation employing  such Participant, any parent or subsidiary corporation of such corporation and any  predecessor corporation of any such corporation shall not exceed $100,000. If the date on  which one or more incentive stock options could first be exercised would be accelerated  pursuant to any provision of the Plan or any agreement under Section 2.5 and the  acceleration of such exercise date would result in a violation of the $100,000 restriction set  forth in the preceding sentence, then, notwithstanding any such provision, but subject to  the provisions of the next succeeding sentence, the exercise dates of such incentive stock  options shall be accelerated only to the extent, if any, that does not result in a violation of  such restriction and, in such event, the exercise dates of the incentive stock options with  the lowest option prices shall be accelerated to the earliest such dates. The Committee may,  in its sole discretion, authorize the acceleration of the exercise date of one or more incentive  stock options even if such acceleration would violate the $100,000 restriction set forth in  the second sentence of this Section 5.1 and even if one or more such incentive stock options  are thereby converted in whole or in part to nonstatutory stock options. 5.2 Types and Nature of Stock Appreciation Rights. Stock appreciation rights may be tandem  stock appreciation rights which are granted in conjunction with incentive stock options or  nonstatutory stock options (“Tandem SARs”), or stock appreciation rights which are not  granted in conjunction with options (“Free-Standing SARs”). Upon the exercise of a stock  appreciation right, the Participant shall be entitled to receive an amount in cash, shares of  Common Stock, or both, in value equal to the product of (i) the excess of the Fair Market  Value of one share of Common Stock on the date of exercise of the stock appreciation right  over, in the case of a Tandem SAR, the exercise price of the related option, or in the case  of a Free-Standing SAR, the Base Price per share (the “Spread”), multiplied by (ii) the  number of shares of Common Stock in respect of which the stock appreciation right has  been exercised. Notwithstanding the foregoing, the Committee at the time it grants a stock  appreciation right may provide that the Spread covered by such stock appreciation right  may not exceed a lower specified amount. The applicable agreement under Section 2.5  governing the stock appreciation rights shall specify whether such payment is to be made  in cash or Common Stock or both, or shall reserve to the Committee or the Participant the  right to make that determination prior to or upon the exercise of the stock appreciation  right. Tandem SARs may be granted at the grant date of the related stock options or, in the  case of a related nonstatutory stock option, also at a later date. At the time a Tandem SAR  is granted, the Committee may limit the exercise period for such Tandem SAR, before and  after which period no Tandem SAR shall attach to the underlying stock option. In no event  

 

11 shall the exercise period for a Tandem SAR exceed the exercise period for the related stock  option. A Tandem SAR shall be exercisable only at such time or times and to the extent  that the related option is exercisable in accordance with the provisions of this Section 5. A  Tandem SAR shall terminate or be forfeited upon the exercise or forfeiture of the related  stock option, and the related stock option shall terminate or be forfeited upon the exercise  or forfeiture of the Tandem SAR. Any Tandem SAR granted with a related incentive stock  option shall be exercisable only when the Fair Market Value of a share of Common Stock  exceeds the exercise price for a share of Common Stock under the related incentive stock  option. 5.3 Exercise Price and Base Price. (a) The exercise price per share of Common Stock subject to an option and any Tandem  SAR, and the base price per share for any Free-Standing SAR (the “Base Price”),  shall be determined by the Committee and set forth in the applicable agreement  under Section 2.5, and shall not be less than the Fair Market Value of a share of the  Common Stock on the applicable grant date, except that in the case of an incentive  stock option granted to a Participant who, immediately prior to such grant, owns  stock possessing more than ten percent (10%) of the total combined voting power  of all classes of stock of the Corporation or any Subsidiary which is a corporation  (a “Ten Percent Employee”), the exercise price shall not be less than one hundred  ten percent (110%) of the Fair Market Value on the date of grant. For purposes of  this Section 5.3, an individual (i) shall be considered as owning not only shares of  stock owned individually but also all shares of stock that are at the time owned,  directly or indirectly, by or for the spouse, ancestors, lineal descendants and  brothers and sisters (whether by the whole or half blood) of such individual and (ii)  shall be considered as owning proportionately any shares owned, directly or  indirectly, by or for any corporation, partnership, estate or trust in which such  individual is a shareholder, partner or beneficiary. (b) In no event may any option or stock appreciation right granted under this Plan, other  than pursuant to Section 4.5, be amended to decrease the exercise price or Base  Price thereof, be cancelled in conjunction with the grant of any new option or stock  appreciation right with a lower exercise price or Base Price, be cancelled or  repurchased for cash, property, or another Award at a time when the exercise price  or Base Price is greater than the Fair Market Value of the underlying Common  Stock, or otherwise be subject to any action that would be treated, for accounting  purposes, as a “repricing” of such option or stock appreciation right, unless such  amendment, cancellation, or action is approved by the Corporation’s shareholders. 5.4 Term; Vesting and Exercisability. The term of each option and each stock appreciation  right shall be fixed by the Committee, but shall not exceed ten years from the date of grant  (five years in the case of an incentive stock option granted to a Ten Percent Employee).  Except as otherwise provided herein, options and stock appreciation rights shall be  exercisable at such time or times and subject to such terms and conditions as shall be  determined by the Committee and may be exercisable commencing with the grant date. 

 

12 5.5 Method of Exercise. Subject to the provisions of this Section 5, options and stock  appreciation rights may be exercised, in whole or in part (unless otherwise specified by the  Committee in its sole discretion), at any time during the applicable term by giving written  notice of exercise to the Corporation specifying the number of shares of Common Stock as  to which the option or stock appreciation rights is being exercised. In the case of the  exercise of an option, such notice shall be accompanied by payment in full of the exercise  price in United States of America dollars by certified or bank check or wire of immediately  available funds. If approved by the Committee (at the time of grant in the case of an  incentive stock option or at any time in the case of a nonstatutory stock option), payment,  in full or in part, may also be made as follows: (a) Payment may be made in the form of unrestricted shares of Common Stock (by  delivery of such shares or by attestation) of the same class as the Common Stock  subject to the option already owned by the Participant (based on the Fair Market  Value of the Common Stock on the date the option is exercised); provided,  however, that any portion of the exercise price representing a fraction of a share  shall be paid in cash; (b) To the extent permitted by applicable law, payment may be made by delivering a  properly executed exercise notice to the Corporation, together with a copy of  irrevocable instructions to a broker to deliver promptly to the Corporation the  amount of sale or loan proceeds necessary to pay the exercise price, and, if  requested, the amount of any federal, state, local or foreign withholding taxes. To  facilitate the foregoing, the Corporation may, to the extent permitted by applicable  law, enter into agreements for coordinated procedures with one or more brokerage  firms. In the event the broker sells any shares on behalf of a Participant, the broker  shall be acting solely as the agent of the Participant, and the Corporation disclaims  any responsibility for the actions of the broker in making any such sales; (c) To the extent permitted by applicable law and if authorized by the Corporation,  payment may be made by a “net exercise” by the Corporation withholding shares  of Common Stock otherwise due to the Participant upon exercise; and/or (d) With such other instrument as approved by the Committee, including Corporation  loans, to the extent permitted by applicable law. 5.6 Delivery; Rights of Shareholders. No shares shall be delivered pursuant to the exercise of  an option until the exercise price for the option has been fully paid and applicable taxes  have been withheld. Unless otherwise specified by the Committee, the applicable  Participant shall have all of the rights of a shareholder of the Corporation holding Common  Stock with respect to the shares of Common Stock to be issued upon the exercise of the  option or stock appreciation right (including the right to vote the applicable shares and the  right to receive dividends), when the Participant (i) has given written notice of exercise in  accordance with the procedures established by the Committee, (ii) if requested, has given  the representation described in Section 10, and (iii) in the case of an option, has paid in full  the exercise price for such shares. 

 

13 5.7 Nontransferability of Options and Stock Appreciation Rights. Unless the Committee shall  otherwise determine in the case of nonstatutory stock options and stock appreciation rights  and limited to a transfer without the payment of value or consideration to the Participant,  (i) no option or stock appreciation right shall be transferable by a Participant other than by  will, or if the Participant dies intestate, by the laws of descent and distribution of the state  of domicile of the Participant at the time of death, and (ii) all stock options and stock  appreciation rights shall be exercisable during the lifetime of the Participant only by the  Participant (or the Participant’s guardian or legal representative). Any Tandem SAR shall  be transferable only when the related stock option is transferable and with the related stock  option. 5.8 Termination of Employment. Unless the Committee, in its sole discretion, shall otherwise  determine at the time of grant of the Award or, other than in the case of incentive stock  options, thereafter, but subject to the provisions of Section 5.1 in the case of incentive stock  options and Section 11.3: (a) If the employment of a Participant who is not disabled within the meaning of  Section 422(c)(6) of the Code (a “Disabled Participant”) is voluntarily terminated  with the consent of the Corporation or a Subsidiary or a Participant retires under  any retirement plan of the Corporation or a Subsidiary, any then outstanding  incentive stock option held by such Participant shall be exercisable by the  Participant (but only to the extent exercisable by the Participant immediately prior  to the termination of employment) at any time prior to the expiration date of such  incentive stock option or within three months after the date of termination of  employment, whichever is the shorter period; (b) If the employment of a Participant who is not a Disabled Participant is voluntarily  terminated with the consent of the Corporation or a Subsidiary or a Participant  retires under any retirement plan of the Corporation or a Subsidiary, any then  outstanding nonstatutory stock option or stock appreciation right held by such  Participant shall be exercisable by the Participant (but only to the extent exercisable  by the Participant immediately prior to the termination of employment) at any time  prior to the expiration date of such nonstatutory stock option or stock appreciation  right or within one year after the date of termination of employment, whichever is  the shorter period; (c) If the employment of a Participant who is a Disabled Participant is voluntarily  terminated with the consent of the Corporation or a Subsidiary, any then  outstanding stock option or stock appreciation right held by such Participant shall  be exercisable in full (whether or not so exercisable by the Participant immediately  prior to the termination of employment) by the Participant at any time prior to the  expiration date of such stock option or stock appreciation right or within one year  after the date of termination of employment, whichever is the shorter period; (d) Following the death of a Participant during employment, any outstanding stock  option or stock appreciation right held by the Participant at the time of death shall  be exercisable in full (whether or not so exercisable by the Participant immediately  

 

14 prior to the death of the Participant) by the person entitled to do so under the will  of the Participant, or, if the Participant shall fail to make testamentary disposition  of the stock option or stock appreciation right or shall die intestate, by the legal  representative of the Participant at any time prior to the expiration date of such  stock option or stock appreciation right or within one year after the date of death,  whichever is the shorter period; (e) Following the death of a Participant after termination of employment during a  period when a stock option or stock appreciation right is exercisable, any  outstanding stock option or stock appreciation right held by the Participant at the  time of death shall be exercisable by such person entitled to do so under the will of  the Participant or by such legal representative (but only to the extent the stock  option or stock appreciation right was exercisable by the Participant immediately  prior to the death of the Participant) at any time prior to the expiration date of such  stock option or stock appreciation right or within one year after the date of death,  whichever is the shorter period; and (f) Unless the exercise period of a stock option or stock appreciation right following  termination of employment has been extended as provided in Section 11.4, if the  employment of a Participant terminates for any reason other than voluntary  termination with the consent of the Corporation or a Subsidiary, retirement under  any retirement plan of the Corporation or a Subsidiary or death, all outstanding  stock options and stock appreciation rights held by the Participant at the time of  such termination of employment shall automatically terminate. Whether termination of employment is a voluntary termination with the consent of the  Corporation or a Subsidiary and whether a Participant is a Disabled Participant shall be  determined in each case, in its sole discretion, by the Committee (or, in the case of  Participants who are not (i) Covered Employees as of the end of the Corporation’s  immediately preceding fiscal year or (ii) the Chief Executive Officer of the Corporation,  by such Chief Executive Officer, in his sole discretion) and any such determination by the  Committee or such Chief Executive Officer shall be final and binding. Without limitation  of the foregoing, a termination of employment by the Participant shall not be a voluntary  termination with the consent of the Corporation unless the Committee or, if applicable,  such Chief Executive Officer, in its or his sole discretion, specifically consents to the  termination of employment in writing. 5.9 Other Terms and Conditions. Subject to the foregoing provisions of this Section 5 and the  other provisions of the Plan, any stock option or stock appreciation right granted under the  Plan may be exercised at such times and in such amounts and be subject to such restrictions  and other terms and conditions, if any, as shall be determined, in its sole discretion, by the  Committee and set forth in the agreement under Section 2.5. 

 

15 SECTION 6 Restricted Stock 6.1 Restricted Stock Awards; Certificates. Shares of restricted stock are actual shares of  Common Stock issued to a Participant, and shall be evidenced in such manner as the  Committee may deem appropriate, including book- entry registration or issuance of one or  more stock certificates. Any certificate issued in respect of shares of restricted stock shall  be registered in the name of the applicable Participant and, unless held by or on behalf of  the Corporation in escrow or custody until the restrictions lapse or the shares are forfeited,  shall bear an appropriate conspicuous legend referring to the terms, conditions, and  restrictions applicable to such Award, substantially in the following form: “The transferability of this certificate and the shares of stock represented hereby  are subject to the terms and conditions (including forfeiture) of the Westinghouse  Air Brake Technologies Corporation 2011 Stock Incentive Plan and a  corresponding agreement. Copies of such Plan and agreement are on file at the  offices of Westinghouse Air Brake Technologies Corporation, 1001 Air Brake  Avenue, Wilmerding, PA 15148.” The Committee may require that the certificates evidencing such shares be held in escrow  or custody by or on behalf of the Corporation until the restrictions thereon shall have lapsed  or the shares are forfeited and that, as a condition of any Award of restricted stock, the  applicable Participant deliver to the Corporation a stock power, endorsed in blank, relating  to the Common Stock covered by such Award. 6.2 Terms and Conditions. Shares of restricted stock shall be subject to the following terms  and conditions: (a) The Committee shall, prior to or at the time of grant, condition the vesting of an  Award of restricted stock upon (i) the continued service of the applicable  Participant, (ii) the attainment of Performance Goals, or (iii) the attainment of  Performance Goals and the continued service of the applicable Participant. The  Committee shall establish at the time the restricted stock is granted the performance  periods during which any Performance Goals specified by the Committee with  respect to the restricted stock Award are to be measured. In the event that the  Committee conditions the vesting of an Award of restricted stock upon the  attainment of Performance Goals or the attainment of Performance Goals and the  continued service of the applicable Participant, the Committee may, prior to or at  the time of grant, designate an Award of restricted stock as a Qualified  Performance-Based Award. The conditions for vesting and the other provisions of  restricted stock Awards (including without limitation any applicable Performance  Goals) need not be the same with respect to each recipient, and shall be established  by the Committee in its sole discretion. Except in the case of a Qualified  Performance-Based Award, the Committee at any time after the date of grant, in its  sole discretion, may modify or waive any of the conditions applicable to an Award  of restricted stock. 

 

16 (b) Subject to the provisions of the Plan (including Section 6.3) and the applicable  agreement under Section 2.5, during the period, if any, set by the Committee,  commencing with the date of such restricted stock Award for which such vesting  restrictions apply (the “Restriction Period”), and until the expiration of the  Restriction Period, the Participant shall not be permitted to sell, assign, transfer,  pledge or otherwise encumber shares of such restricted stock. A restricted stock  Award may vest in part on a pro rata basis prior to the expiration of any Restriction  Period. (c) Except as provided in this Section 6 and in the applicable agreement under Section  2.5, the applicable Participant shall have, with respect to the shares of restricted  stock, all of the rights of a shareholder of the Corporation holding the Common  Stock that is the subject of the restricted stock, including, if applicable, the right to  vote the shares and the right to receive any cash dividends. If so determined by the  Committee and set forth in the applicable agreement under Section 2.5 and subject  to Section 15.4, cash dividends on the Common Stock that is the subject of the  restricted stock Award may be (i) automatically deferred and reinvested in  additional restricted stock, and held subject to the same vesting and forfeiture  conditions of the underlying restricted stock, or (ii) held by the Corporation in cash  (without any payment of interest thereon) subject to the same vesting and forfeiture  conditions of the restricted stock with respect to which the dividends are payable.  Unless otherwise determined by the Committee and set forth in the applicable  agreement under Section 2.5, any Common Stock or other securities payable with  respect to any restricted stock as a result of or pursuant to Section 4.5, shall be held  subject to the same vesting and forfeiture conditions of the underlying restricted  stock. (d) As soon as practicable after the applicable Restriction Period has ended, the  Committee shall determine and certify (in writing in the case of Qualified  Performance-Based Awards) whether and the extent to which the service period  and/or the Performance Goals were met for the applicable restricted stock. If the  vesting condition or conditions applicable to the restricted stock are not satisfied by  the time the Restriction Period has expired, such restricted stock shall be forfeited.  If and when the Restriction Period expires without a prior forfeiture of the shares  of restricted stock (i) if legended certificates have been issued, unlegended  certificates for such shares shall be delivered to the Participant upon surrender of  the legended certificates, (ii) if legended certificates have not yet been issued,  unlegended certificates (and any related blank stock powers previously executed by  the Participant) shall be delivered to the Participant, and (iii) any cash dividends  held by the Corporation pursuant to Section 6.2(c) shall be delivered to the  Participant. 6.3 Permitted Transfers. Neither this Section 6 nor any other provision of the Plan shall  preclude a Participant from transferring or assigning restricted stock, without the payment  of value or consideration to the Participant, to (i) the trustee of a trust that is revocable by  such Participant alone, both at the time of the transfer or assignment and at all times  thereafter prior to such Participant’s death or (ii) the trustee of any other trust to the extent  

 

17 approved in advance by the Committee, in its sole discretion, in writing. A transfer or  assignment of restricted stock from such trustee to any person other than such Participant  shall be permitted only to the extent approved in advance by the Committee, in its sole  discretion, in writing, and restricted stock held by such trustee shall be subject to all of the  conditions and restrictions set forth in the Plan and in the applicable agreement under  Section 2.5 as if such trustee were a party to such agreement. SECTION 7 Restricted Stock Units 7.1 Restricted Stock Unit Awards. Restricted stock units are Awards denominated in shares of  Common Stock that will be settled, subject to the terms and conditions of the restricted  stock units and at the sole discretion of the Committee, in an amount in cash, shares of  Common Stock, or both, based upon the Fair Market Value of a specified number of shares  of Common Stock. 7.2 Terms and Conditions. Restricted stock units shall be subject to the following terms and  conditions: (a) The Committee shall, prior to or at the time of grant, condition the vesting of  restricted stock units upon (i) the continued service of the applicable Participant,  (ii) the attainment of Performance Goals or (iii) the attainment of Performance  Goals and the continued service of the applicable Participant. In the event that the  Committee conditions the vesting of restricted stock units upon the attainment of  Performance Goals or the attainment of Performance Goals and the continued  service of the applicable Participant, the Committee may, prior to or at the time of  grant, designate the restricted stock units as a Qualified Performance-Based Award.  The Committee shall determine the performance period(s) during which any  Performance Goals are to be achieved. The conditions for grant or vesting and the  other provisions of restricted stock units (including without limitation any  applicable Performance Goals) need not be the same with respect to each recipient.  An Award of restricted stock units shall be settled as and when the restricted stock  units vest, as determined and certified (in writing in the case of Qualified  Performance-Based Awards) by the Committee, or at a later time specified by the  Committee or in accordance with an election of the Participant, if the Committee  so permits. Except in the case of a Qualified Performance-Based Award, the  Committee at any time after the date of grant, in its sole discretion, may modify or  waive any of the conditions applicable to an Award of restricted stock units. (b) Subject to the provisions of the Plan and the applicable agreement under Section  2.5, during the period, if any, set by the Committee, commencing with the date of  grant of such restricted stock units for which such vesting restrictions apply (the  “Units Restriction Period”), and until the expiration of the Units Restriction Period,  the Participant shall not be permitted to sell, assign, transfer, pledge or otherwise  encumber restricted stock units. A restricted stock unit may vest in part prior to the  expiration of any Units Restriction Period. 

 

18 (c) Participants granted restricted stock units shall not be entitled to any dividends  payable on the Common Stock unless the agreement under Section 2.5 for restricted  stock units specifies to what extent and on what terms and conditions the applicable  Participant shall be entitled to receive current or deferred payments of cash,  Common Stock or other property corresponding to the dividends payable on the  Common Stock (subject to Section 15.4 below). Restricted stock units shall not  have any voting rights, and holders of restricted stock units shall not be  shareholders of the Corporation unless and until shares of Common Stock are  issued by the Corporation (in book-entry form or otherwise). SECTION 8 Performance Units Performance units may be granted hereunder to eligible employees, for no cash consideration or  for such minimum consideration as may be required by applicable law, either alone or in addition  to other Awards granted under the Plan. Performance units may be share-based or cash-based,  including annual incentive awards. The Committee shall establish at the time the performance unit  is granted the performance period(s) during which any Performance Goals specified by the  Committee with respect to the Award are to be measured. The Performance Goals to be achieved  during any performance period(s) and the length of the performance period(s) shall be determined  by the Committee upon the grant of each performance unit. The Committee may, in connection  with the grant of performance units, designate them as Qualified Performance-Based Awards. The  conditions for grant or vesting and the other provisions of performance units (including without  limitation any applicable Performance Goals) need not be the same with respect to each  Participant. Performance units may be paid in cash, shares of Common Stock, other property or  any combination thereof, in the sole discretion of the Committee as set forth in the applicable  agreement under Section 2.5. Performance units shall not have any voting rights, and holders of  performance units shall not be shareholders of the Corporation unless and until shares of Common  Stock are issued by the Corporation (in book-entry form or otherwise). The Performance Goals to  be achieved for each performance period, whether the Performance Goals have been achieved, and  the amount of the Award to be distributed shall be conclusively determined and certified (in writing  in the case of Qualified Performance-Based Awards) by the Committee. Performance units may  be paid in a lump sum or in installments following the close of the performance period(s). The  Participant shall not be permitted to sell, assign, transfer, pledge or otherwise encumber  performance units. Except in the case of a Qualified Performance- Based Award, the Committee  at any time after the grant of performance units, in its sole discretion, may modify or waive any of  the conditions applicable to an Award of performance units. SECTION 9 Other Stock-Based Awards The Committee may award Common Stock and other Awards that are valued in whole or in part  by reference to, or are otherwise based upon, Common Stock, including but not limited to,  unrestricted stock or dividend equivalents. Any such Award shall be subject to such terms and  conditions as established by the Committee, and may include Qualified Performance-Based  Awards. 

 

19 SECTION 10 Issuance of Shares The Committee may require each person purchasing or receiving shares of Common Stock  pursuant to an Award to represent to and agree with the Corporation in writing that such person is  acquiring the shares without a view to the distribution thereof. The certificates for such shares may  include any legend which the Committee deems appropriate to reflect any restrictions on transfer.  The obligation of the Corporation to issue shares of Common Stock under the Plan shall be subject  to (i) the effectiveness of a registration statement under the Securities Act of 1933, as amended,  with respect to such shares, if deemed necessary or appropriate by counsel for the Corporation, (ii)  the condition that the shares shall have been listed (or authorized for listing upon official notice of  issuance) upon each stock exchange, if any, on which the shares of Common Stock may then be  listed, (iii) all other applicable laws, regulations, rules and orders which may then be in effect and  (iv) obtaining any other consent, approval, or permit from any state or federal governmental agency  which the Committee shall, in its sole discretion, determine to be necessary or advisable. SECTION 11 Additional Rights in Certain Events 11.1 Definitions. For purposes of this Section 11, the following terms shall have the following meanings: (1) The term “Person” shall be used as that term is used in Sections 13(d) and 14(d) of  the 1934 Act as in effect on the effective date of the Plan. (2) “Beneficial Ownership” shall be determined as provided in Rule 13d-3 under the  1934 Act as in effect on the effective date of the Plan. (3) A specified percentage of “Voting Power” of a company shall mean such number  of the Voting Shares as shall enable the holders thereof to cast such percentage of  all the votes which could be cast in an annual election of directors (without  consideration of the rights of any class of stock other than the common stock of the  company to elect directors by a separate class vote); and “Voting Shares” shall  mean all securities of a company entitling the holders thereof to vote in an annual  election of directors (without consideration of the rights of any class of stock other  than the common stock of the company to elect directors by a separate class vote). (4) “Continuing Directors” shall mean a director of the Corporation who either (a) was  a director of the Corporation on the effective date of the Plan or (b) is an individual  whose election, or nomination for election, as a director of the Corporation was  approved by a vote of at least two-thirds of the directors then still in office who  were Continuing Directors (other than an individual whose initial assumption of  office is in connection with an actual or threatened election contest relating to the  election of directors of the Corporation which would be subject to Rule 14a-11  under the 1934 Act, or any successor rule). 

 

20 (5) “Section 11 Event” shall mean the date upon which any of the following events  occurs: (a) The Corporation acquires actual knowledge that any Person, other than the  Corporation, a Subsidiary, or any employee benefit plan(s) sponsored by  the Corporation or a Subsidiary, has acquired the Beneficial Ownership,  directly or indirectly, of securities of the Corporation entitling such Person  to 30% or more of the Voting Power of the Corporation; (b) At any time less than 51% of the members of the Board (excluding vacant  seats) shall be Continuing Directors; or (c) The consummation of a merger, consolidation, share exchange, division or  sale or other disposition of assets of the Corporation as a result of which the  stockholders of the Corporation immediately prior to such transaction shall  not hold, directly or indirectly, immediately following such transaction a  majority of the Voting Power of (i) in the case of a merger or consolidation,  the surviving or resulting corporation, (ii) in the case of a share exchange,  the acquiring corporation or (iii) in the case of a division or a sale or other  disposition of assets, each surviving, resulting or acquiring corporation  which, immediately following the transaction, holds more than 30% of the  consolidated assets of the Corporation immediately prior to the transaction; provided, however, that if securities beneficially owned by a Participant are included in  determining the Beneficial Ownership of a Person referred to in paragraph 6(a) above, then  no Section 11 Event with respect to such Participant shall be deemed to have occurred by  reason of such event. 11.2 Vesting Upon Section 11 Event if Awards Do Not Remain Outstanding. Subject to the  provisions of Section 5 in the case of incentive stock options and Section 11.5, unless the  agreement under Section 2.5 shall otherwise provide, notwithstanding any other provision  contained in the Plan, in the event that a Section 11 Event occurs and Awards do not remain  outstanding after the Section 11 Event (and are not assumed by, or converted to similar  awards with equivalent value as of the date of the Section 11 Event of, the surviving,  resulting, or acquiring corporation (or a parent or subsidiary of such corporation)), then all  outstanding stock options and stock appreciation rights shall become immediately vested  and fully exercisable, any restrictions applicable to restricted stock Awards shall lapse, and  all other Awards shall be considered to be earned and payable in full as of the date of the  Section 11 Event.  11.3 Vesting Upon Certain Terminations of Employment. Subject to the provisions of Section  5 in the case of incentive stock options and Section 11.5, unless the agreement under  Section 2.5 shall otherwise provide, notwithstanding any other provision contained in  the Plan, in the event that a Section 11 Event occurs and Awards remain outstanding  after the Section 11 Event (or are assumed by, or converted to similar awards with  equivalent value as of the date of the Section 11 Event of, the surviving, resulting, or  acquiring corporation (or a parent or subsidiary of such corporation)), and upon or within  

 

21 one year after the Section 11 Event (a) the Corporation or a Subsidiary (or their respective  successor) terminates a Participant’s employment without cause (as defined in the  agreement under Section 2.5) or (b) a Participant resigns from employment for good reason  (as defined in the agreement under Section 2.5), then the Participant’s outstanding stock  options and stock appreciation rights shall become immediately vested and fully  exercisable, any restrictions applicable to restricted stock Awards shall lapse, and other  Awards shall be considered to be earned and payable in full.   11.4 Extension of the Expiration Date of Stock Options and Stock Appreciation Rights. Subject  to the provisions of Section 5 in the case of incentive stock options and Section 11.5, unless  the agreement under Section 2.5 shall otherwise provide, notwithstanding any other  provision contained in the Plan, all stock options and stock appreciation rights held by a  Participant whose employment with the Corporation or a Subsidiary terminates within one  year of any Section 11 Event for any reason other than voluntary termination with the  consent of the Corporation or a Subsidiary, retirement under any retirement plan of the  Corporation or a Subsidiary or death shall be exercisable for a period of three years from  the date of such termination of employment, but in no event after the expiration date of the  stock option or stock appreciation right. 11.5 Code Section 409A. Notwithstanding the foregoing, if any Award is subject to Section  409A of the Code, this Section 11 shall be applicable only to the extent consistent with  Section 409A.  SECTION 12 Qualified Performance-Based Awards; Section 409A 12.1 Qualified Performance-Based Awards. (a) The provisions of this Plan are intended to ensure that all options and stock  appreciation rights granted hereunder to any Participant who is or may be a Covered  Employee in the tax year in which such option or stock appreciation right is  expected to be deductible to the Corporation qualify for the exemption from the  limitation on deductions imposed by Section 162(m) of the Code (the “Section  162(m) Exemption”), and all such Awards shall therefore be considered Qualified  Performance-Based Awards and this Plan shall be interpreted and operated  consistent with that intention. When granting any Award other than an option or  stock appreciation right, the Committee may designate such Award as a Qualified  Performance-Based Award, based upon a determination that (i) the recipient is or  may be a Covered Employee with respect to such Award, and (ii) the Committee  wishes such Award to qualify for the Section 162(m) Exemption, and the terms of  any such Award (and of the grant thereof) shall be consistent with such designation.  With respect to Qualified Performance-Based Awards, within 90 days after the  commencement of a performance period or, if earlier, by the expiration of 25% of  a performance period, the Committee will designate one or more performance  periods, determine the Participants for the performance periods and establish the  Performance Goals for the performance periods. 

 

22 (b) Each Qualified Performance-Based Award (other than an option or stock  appreciation right) shall be earned, vested and/or payable (as applicable) upon  certification in writing by the Committee of the achievement of one or more  Performance Goals, together with the satisfaction of any other conditions, such as  continued employment, as previously established by the Committee with respect to  such Award. Subject to the terms of any applicable Award agreement, the  Committee may, in its discretion, reduce (but not increase) the amount of a  settlement otherwise to be made in connection with a Qualified Performance- Based  Award. (c) Notwithstanding any provision in the Plan or in any agreement under Section 2.5,  to the extent that any such provision or action of the Committee would cause any  Qualified Performance-Based Award not to qualify for the Section 162(m)  Exemption, such provision or action shall be null and void as it relates to Covered  Employees, to the extent permitted by law and deemed advisable by the Committee. 12.2 Code Section 409A. It is the intention of the Corporation that no Award shall be “deferred  compensation” subject to Section 409A of the Code, unless and to the extent that the  Committee specifically determines otherwise as provided in the immediately following  sentence, and the Plan and the terms and conditions of all Awards shall be interpreted  accordingly. The terms and conditions governing any Awards that the Committee  determines will be subject to Section 409A of the Code, including any rules for elective or  mandatory deferral of the delivery of cash or shares of Common Stock pursuant thereto  and any rules regarding treatment of such Awards in the event of a Section 11 Event, shall  be set forth in the applicable agreement under Section 2.5, and shall comply in all respects  with Section 409A of the Code. SECTION 13 Effect of the Plan on the Rights of Employees and Employer Neither the adoption of the Plan nor any action of the Board or the Committee pursuant to the Plan  shall be deemed to give any employee any right to be granted any Award under the Plan. Nothing  in the Plan, in any Award under the Plan or in any agreement under Section 2.5 providing for any  Award under the Plan shall confer any right to any employee to continue in the employ of the  Corporation or any Subsidiary or interfere in any way with the rights of the Corporation or any  Subsidiary to terminate the employment of any employee at any time or adjust the compensation  of any employee at any time. SECTION 14 Amendment or Termination The right to amend the Plan at any time and from time to time and the right to terminate the Plan  are hereby specifically reserved to the Board; provided that no such amendment of the Plan shall,  without shareholder approval (a) increase the maximum aggregate number of shares of Common  Stock for which Awards may be made under Section 4.1 of the Plan, (b) increase the maximum  aggregate number of shares of Common Stock as to which incentive stock options may be granted  

 

23 under Section 4.1 of the Plan, (c) make any changes in the class of employees eligible to receive  Awards under the Plan, (d) change the maximum number of shares of Common Stock as to which  Awards may be made to any Participant under Section 4.2 of the Plan, or the maximum amount  that may be paid or distributed to any Participant pursuant to a grant of performance units or other  stock- based Awards made in any one calendar year under Section 8 or 9 of the Plan, respectively,  (e) change the exercise price or Base Price permitted under Section 5.3 of the Plan or the  restrictions regarding repricing under Section 5.3 of the Plan, (f) be made if shareholder approval  of the amendment is at the time required for Awards under the Plan to qualify for the exemption  from Section 16(b) of the 1934 Act provided by Rule 16b-3 or by the rules of any stock exchange  on which the Common Stock may then be listed or (g) be made to the extent such approval is  needed for Qualified Performance-Based Awards to qualify for the Section 162(m) Exemption.  No amendment or termination of the Plan shall, without the written consent of the holder of an  Award under the Plan, adversely affect the rights of such holder with respect thereto. SECTION 15 General Provisions 15.1 Additional Compensation Arrangements. Nothing contained in the Plan shall prevent the  Corporation or any Subsidiary from adopting other or additional compensation  arrangements for its employees. 15.2 Tax Withholding. No later than the date as of which an amount first becomes includible in  the gross income of a Participant for federal, state, local or foreign income or employment  or other tax purposes with respect to any Award under the Plan, such Participant shall pay  to the Corporation (or, if applicable, a Subsidiary), or make arrangements satisfactory to  the Corporation (or, if applicable, a Subsidiary) regarding the payment of, any federal,  state, local or foreign taxes of any kind required by law to be withheld with respect to such  amount. Unless otherwise determined by the Committee, withholding obligations may be  settled with Common Stock, including Common Stock that is part of the Award that gives  rise to the withholding requirement, having a Fair Market Value on the date of withholding  equal to the maximum amount required to be withheld for tax purposes, all in accordance  with such procedures as the Committee establishes, and provided that any fractional share  amount must be paid in cash or withheld from compensation otherwise due to the  Participant. The obligations of the Corporation under the Plan shall be conditional on such  payment or arrangements, and the Corporation and its Subsidiaries shall, to the extent  permitted by law, have the right to deduct any such taxes from any payment otherwise due  to such Participant. The Committee may establish such procedures as it deems appropriate,  including making irrevocable elections, for the settlement of withholding obligations with  Common Stock. 15.3 Limitation of Liability. The grant of any Award shall not: (a) give a Participant any rights except as expressly set forth in the Plan or in the  agreement under Section 2.5; 

 

24 (b) create any fiduciary or other obligation of the Corporation or any Subsidiary to take  any action or provide to the Participant any assistance or dedicate or permit the use  of any assets of the Corporation or any Subsidiary that would permit the Participant  to be able to attain any Performance Goals associated with any Award; (c) create any trust, fiduciary or other duty or obligation of the Corporation or any  Subsidiary to engage in any particular business, continue to engage in any particular  business, engage in any particular business practices or sell any particular product  or products; or (d) create any obligation of the Corporation or any Subsidiary that shall be greater than  the obligation of the Corporation or that Subsidiary to any of their general  unsecured creditors. 15.4 Limitation on Dividend Reinvestment and Dividend Equivalents. Reinvestment of  dividends in additional restricted stock at the time of any dividend payment, and the  payment of shares with respect to dividends to Participants holding Awards of restricted  stock units, shall only be permissible if authorized by the Committee and if sufficient shares  of Common Stock are available under Section 4 for such reinvestment or payment (taking  into account then outstanding Awards). In the event that sufficient shares of Common  Stock are not available for such reinvestment or payment, such reinvestment or payment  shall be made in the form of a grant of restricted stock units equal in number to the shares  of Common Stock that would have been obtained by such payment or reinvestment, the  terms of which restricted stock units shall provide for settlement in cash and for dividend  equivalent reinvestment in further restricted stock units on the terms contemplated by this  Section 15.4. 15.5 Governing Law and Interpretation. To the extent not preempted by federal Law, the Plan  and all Awards made and actions taken thereunder shall be governed by and construed in  accordance with the laws of the Commonwealth of Pennsylvania, without reference to  principles of conflict of laws. The captions of this Plan are not part of the provisions hereof  and shall have no force or effect. 15.6 Dispute Resolution. Since Awards are granted in Western Pennsylvania, records relating  to the Plan and Awards are located in Western Pennsylvania, and the Plan and Awards are  administered in Western Pennsylvania, the Corporation and the Participant to whom an  Award is granted, for themselves and their heirs, representatives, successors and assigns  (collectively, the “Parties”) irrevocably submit to the exclusive and sole jurisdiction and  venue of the state courts of Allegheny County, Pennsylvania and the federal courts of the  Western District of Pennsylvania with respect to any and all disputes arising out of or  relating to the Plan, the subject matter of the Plan or any Awards under the Plan, including  but not limited to any disputes arising out of or relating to the interpretation and  enforceability of any Awards or the terms and conditions of the Plan. To achieve certainty  regarding the appropriate forum in which to prosecute and defend actions arising out of or  relating to the Plan, and to ensure consistency in application and interpretation of the  governing law under Section 15.5 of the Plan, the Parties agree that (a) sole and exclusive  appropriate venue for any such action shall be the Pennsylvania courts described in the  

 

25 immediately preceding sentence, and no other, (b) all claims with respect to any such action  shall be heard and determined exclusively in such Pennsylvania courts, and no other, (c)  such Pennsylvania courts shall have sole and exclusive jurisdiction over the Parties and  over the subject matter of any dispute relating hereto and (d) the Parties waive any and all  objections and defenses to bringing any such action before such Pennsylvania courts,  including but not limited to those relating to lack of personal jurisdiction, improper venue  or forum non conveniens. 15.7 Non-Transferability. Except as otherwise specifically provided in the Plan or by the  Committee and limited to a transfer without the payment of value or consideration to the  Participant, Awards under the Plan are not transferable except by will or by laws of descent  and distribution of the state of domicile of the Participant at the time of death. 15.8 Deferrals. The Committee shall be authorized to establish procedures pursuant to which  the payment of any Award may be deferred, provided that any such deferral is consistent  with all aspects of Section 409A of the Code. Subject to the provisions of this Plan and any  agreement under Section 2.5, the recipient of an Award (including, without limitation, any  deferred Award) may, if so determined by the Committee, be entitled to receive, currently  or on a deferred basis, interest or dividends, or interest or dividend equivalents, with respect  to the number of shares covered by the Award, as determined by the Committee, in its sole  discretion, and the Committee may provide that such amounts (if any) shall be deemed to  have been reinvested in additional shares or otherwise reinvested; provided, however, that  in no event shall interest, dividends or dividend equivalents be paid on any unearned  performance units or performance share units until such units have vested. 15.9 Integration. The Plan and any written agreements executed by Participants and the  Corporation under Section 2.5 contain all of the understandings and representations  between the parties and supersede any prior understandings and agreements entered into  between them regarding the subject matter within. There are no representations,  agreements, arrangements or understandings, oral or written, between the parties relating  to the subject matter of the Plan which are not fully expressed in the Plan and the written  agreements. 15.10 Foreign Employees and Foreign Law Considerations. The Committee may grant Awards  to eligible employees who are foreign nationals, who are located outside the United States  of America or who are not compensated from a payroll maintained in the United States of  America, or who are otherwise subject to (or could cause the Corporation to be subject to)  legal or regulatory provisions of countries or jurisdictions outside the United States of  America, on such terms and conditions different from those specified in the Plan as may,  in the judgment of the Committee, be necessary or desirable to foster and promote  achievement of the purposes of the Plan, and, in furtherance of such purposes, the  Committee may make such modifications, amendments, procedures, or subplans as may  be necessary or advisable to comply with such legal or regulatory provisions. 

 

26 SECTION 16 Effective Date and Duration of Plan The Plan was originally adopted by the Board effective as of March 28, 2011, and was  subsequently approved by the Company’s stockholders at the 2011 annual meetings of  stockholders and re-approved at the 2016, 2017, and 2020 annual meetings of stockholders. The  Plan was amended and restated effective as of March 31, 2022, which amendment and restatement  applies to Awards granted after the effective date of such amendment and restatement.  Awards  granted prior to the effective date of this amended and restated Plan shall be treated in accordance  with the terms of the Plan in effect prior to such effective date. No Award under the Plan may be  made subsequent to May 15, 2030.Exhibit 10.1

    

     

    

    AMENDMENT

    TO THE

    DONEGAL GROUP INC.

    2021 EMPLOYEE STOCK PURCHASE PLAN

     

    This Amendment is adopted this 21st day of July, 2022.

     

    WHEREAS, Donegal Group Inc. (the “Company”) maintains the Donegal Group Inc, Employee Stock Purchase Plan (the
        “Plan”) for the benefit of employees of Donegal Mutual Insurance Company; and

     

    WHEREAS, pursuant to Section 13 of the Plan, the Company has reserved the right to modify or amend the Plan; and

     

    WHEREAS, the Company desires to amend the Plan to reflect certain changes to the maximum number of shares that a
        participant may purchase under the Plan.

     

    NOW, THEREFORE, BE IT

     

    RESOLVED, that the Plan is hereby amended as follows:

     

    1.           Section 8 of the Plan is amended by the addition of the following paragraph at the end of Section 8:

     

    Section 1.          Purchase of Shares.

    

    

    At the end of each Subscription Period, this Plan shall be deemed to have granted to the participant an option for as many shares as he or she will be able to purchase with the
      amounts credited to his or her Plan Account during his or her participation in that Subscription Period. Notwithstanding the foregoing, no participant may purchase more than 3,000 shares of stock during any single Subscription Period. This number may
      be adjusted as permitted pursuant to Section 12 of the Plan.

    

    

    *          *          *          *

     

    IN WITNESS WHEREOF, Donegal Group Inc. has caused this Amendment to be executed as of the date first set forth above.

     

    	 	
            DONEGAL GROUP INC.

          
	 	 	 
	 	
            By:

          	
            /s/ Kevin G. Burke

          
	 	 	
            Kevin G. Burke

          
	 	 	
            President & Chief Executive Officer

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