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As filed with the Securities and Exchange Commission on August 20, 1999.
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MOTIVEPOWER INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Pennsylvania 82-046101
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
Two Gateway Center, 14th Floor
Pittsburgh, PA 15222
(Address of Principal Executive Offices)
MOTIVEPOWER INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
and
MOTIVEPOWER INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
FOR MICHAEL A. WOLF
and
MOTIVEPOWER INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(Full Title of the Plans)
Jeannette Fisher-Garber
Vice President, Secretary and General Counsel
MotivePower Industries, Inc.
Two Gateway Center, 14th Floor
Pittsburgh, PA 15222
(412) 201-1101
(Name, Address and Telephone Number of Agent for Service)
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Proposed
Proposed Maximum Amount
Title of Amount Maximum Aggregate of
Securities To Be Offering Price Offering Registra-
to be Registered Registered Per Share Price tion Fee
===================================================================================================================
<S> <C> <C> <C> <C>
Shares of Common Stock, 700,000 shares $14.44 (1) $10,108,000 (1) $2,811
$0.01 par value
Preferred Stock Purchase Rights 700,000 rights (2) (2) (2)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
Pursuant to Rule 457(h) and 457(c), the Proposed Maximum Offering Price
Per Share is based upon the reported average of the high and low prices
for the Registrant's common stock on the New York Stock Exchange on
August 18, 1999.
(2) The Preferred Stock Purchase Rights are evidenced by certificates for
shares of MotivePower Common Stock and automatically trade with
MotivePower Common Stock. Value attributable to such Preferred Stock
Purchase Rights, if any, is reflected in the market price of the
MotivePower Common Stock.
<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
*Information required by Part I to be contained in the Section 10(a) prospectus
is omitted from the Registration Statement in accordance with Rule 428 under the
Securities Act of 1933 and the Note to Part I of Form S-8.
REOFFER PROSPECTUS
Up to 700,000 Shares
MOTIVEPOWER INDUSTRIES, INC.
Common Stock
This Prospectus relates to up to 700,000 shares of our common stock
which the people identified under "Selling Shareholders" may offer and sell from
time to time in one or more types of transactions (which may include block
transactions) on the New York Stock Exchange, where our common stock is listed
for trading under the symbol "MPO," in other markets where our common stock is
traded, in negotiated transactions, through put or call options transactions,
through short sales transactions, or in a combination of such methods of sale.
They will sell the common stock at prices to which the parties agree. The
selling shareholders may or may not use brokers and dealers in these
transactions. The respective selling shareholders will pay any brokerage fees or
commissions relating to sales by them. See "Method of Sale."
We may issue these shares of common stock to the selling shareholders
under the terms of either the MotivePower Industries, Inc. Deferred Compensation
Plan, the MotivePower Industries, Inc. Deferred Compensation Plan for Michael A.
Wolf or the MotivePower Industries, Inc. Deferred Compensation Plan for
Non-Employee Directors (the "Plans").
We will not receive any of the proceeds from any sales by the selling
shareholders. We will pay all of the expenses associated with the registration
of the common stock and this Prospectus.
On August 18, 1999, the last reported sale price of the common stock on
the New York Stock Exchange was $13.63 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 OF THIS PROSPECTUS FOR A
DISCUSSION OF CERTAIN RISKS AND OTHER FACTORS THAT YOU SHOULD CONSIDER BEFORE
PURCHASING OUR COMMON STOCK.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, and they have not
determined if this Prospectus is truthful and complete. Any representation to
the contrary is a criminal offense.
-----------
The date of this Prospectus is August 20, 1999.
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We have not authorized anyone to give any information or to make any
representation which is not contained in this Prospectus or in a document
incorporated by reference into this Prospectus. If anyone gives any information
or makes any representation which is not contained in, or incorporated into this
Prospectus, you must not rely upon it as having been authorized by us or by
anyone acting on our behalf. This Prospectus is not an offer to sell, or a
solicitation of an offer to buy, our securities by any person in any
jurisdiction in which it is unlawful for that person to make such an offer or
solicitation. No matter when you receive this Prospectus or purchase securities
to which it relates, you must not assume it is correct at any time after its
date.
TABLE OF CONTENTS
<TABLE>
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Heading: Page Number
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<S> <C>
The Company ....................................................................................................... 2
Proposed Merger ................................................................................................... 2
Risk Factors ...................................................................................................... 3
Selling Shareholders .............................................................................................. 9
Use of Proceeds ................................................................................................... 9
Method of Sale .................................................................................................... 9
Where You Can Find More Information ...............................................................................10
Legal Matters .....................................................................................................11
Experts ...........................................................................................................11
Annex I - Selling Shareholders ....................................................................................12
</TABLE>
THE COMPANY
MotivePower is a leader in the manufacturing and distribution of
products for rail and other power-related industries, and also provides a
variety of related contract services. MotivePower provides products and services
to freight and passenger railroads, including every Class I railroad in North
America, metropolitan transit and commuter rail authorities, original equipment
manufacturers, industrial power-related markets and other customers
internationally. MotivePower has its headquarters in Pittsburgh, Pennsylvania
and other strategically located facilities in the United States, Canada and
Mexico.
MotivePower was incorporated in Delaware in 1994 and became a
Pennsylvania corporation through its merger into a wholly-owned subsidiary in
April 1999.
MotivePower's principal executive offices are located at Two Gateway
Center, 14th Floor, Pittsburgh, Pennsylvania 15222, telephone number (412)
201-1101.
PROPOSED MERGER
The Boards of Directors of MotivePower and Westinghouse Air Brake
Company have approved a merger agreement which provides for a combination of the
two companies. If the merger is completed, holders of WABCO common stock will
receive, for each WABCO share, 1.3 shares of MotivePower common stock.
MotivePower shareholders will continue to own their existing shares after the
merger.
The Boards of Directors of MotivePower and WABCO have asked the
shareholders to approve and adopt the merger agreement and the merger at special
meetings of the companies scheduled to be held on August 23, 1999. The merger
cannot be completed unless the shareholders of both companies approve it.
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RISK FACTORS
TERMINATION FEES AND RECIPROCAL STOCK OPTION AGREEMENTS COULD DETER ALTERNATIVE
TRANSACTIONS BY MAKING THEM MORE DIFFICULT OR EXPENSIVE.
MotivePower or WABCO must pay to the other a termination fee of $15
million plus up to $2 million in expenses if the merger agreement proposed to be
entered into by the parties terminates under specified circumstances.
MotivePower and WABCO have also entered into reciprocal stock option agreements
which provide MotivePower and WABCO the right to acquire up to 19% of the
other's outstanding common stock under specified conditions, with the profit
either party can derive from the option limited to $15 million. The termination
fees and the stock option agreements could deter either MotivePower or WABCO
from entering into an alternative transaction by making an alternative
transaction more difficult or expensive. Among other effects, the stock option
agreements could prevent an alternative business combination with WABCO or
MotivePower from being accounted for as a "pooling of interests." The stock
option agreements may therefore discourage proposals for alternative business
combinations with WABCO or MotivePower, even if a third party were prepared to
offer shareholders of WABCO or MotivePower consideration with a higher market
value than the value of the MotivePower stock to be exchanged for WABCO stock in
the merger.
THE COMBINED COMPANY MAY NOT BE ABLE TO REALIZE THE COST SAVINGS AND OTHER
SYNERGIES OF THE MERGER OR SUCCESSFULLY INTEGRATE THE OPERATIONS OF MOTIVEPOWER
AND WABCO.
The merger involves the integration of two companies that have
previously operated independently. WABCO and MotivePower expect to realize
significant cost savings and other synergies from the merger, but the combined
company may not be able to achieve these synergies or cost savings. Further, the
costs of achieving these synergies may be significantly greater than we
anticipate. MotivePower and WABCO estimate that the direct costs of the merger
will be approximately $20-25 million. MotivePower and WABCO also estimate that
MotivePower will incur integration-related expenses, including severance, of
approximately $35-40 million. These expenses may impact the combined company
going forward. In addition, if these costs and expenses are higher than
estimated, the merger benefits may be reduced. MotivePower and WABCO will also
need to integrate numerous systems, including management information,
purchasing, accounting and finance, sales, billing and payroll, which will
require substantial attention from management. MotivePower and WABCO do not
expect that they will complete their systems integration before the end of 1999.
Diversion of management attention to and difficulties associated with
integrating MotivePower and WABCO could harm the operating results of the
combined company and impact the value of its common stock.
THE COMBINED COMPANY'S ABILITY TO EXPAND ITS INTERNATIONAL OPERATIONS MAY BE
LIMITED BY THE NEED TO OBTAIN ADDITIONAL REGULATORY APPROVALS IN FOREIGN
JURISDICTIONS AND THE NEED TO MEET LOCAL EQUIPMENT REQUIREMENTS.
MotivePower and WABCO conduct international operations through a
variety of wholly-owned subsidiaries, majority-owned subsidiaries and equity
interests located in the United States, Canada, Mexico, Europe, Australia and
Asia. MotivePower and WABCO are also exploring the possibility of expansion into
other international markets. The combined company's ability to expand sales of
its products internationally, in particular its locomotive and freight braking
products, is limited by the necessity of obtaining regulatory approval in new
jurisdictions. For example, local regulatory approval is required in order to
market WABCO's brake shoes in India. The combined company's international growth
strategy can also be hampered by the additional expense of modifying products to
comply with local railroad equipment requirements.
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THE COMBINED COMPANY'S FINANCIAL PERFORMANCE ON A U.S. DOLLAR-DENOMINATED BASIS
MAY BE SIGNIFICANTLY AFFECTED BY FLUCTUATIONS IN CURRENCY EXCHANGE RATES.
The combined company's international operations also pose risks due to
currency exchange rates. The combined company's financial performance is
reported on a U.S. dollar-denominated basis. However, MotivePower's and WABCO's
international operations are generally conducted in the currencies of the
countries in which such operations are located. Fluctuations in currency
exchange rates can negatively impact the combined company's financial results.
FLUCTUATIONS IN CUSTOMER ORDERS IN THE RAILWAY INDUSTRY DUE TO ECONOMIC
CONDITIONS AND ALTERNATE FORMS OF TRANSPORTATION CAN REDUCE THE COMBINED
COMPANY'S REVENUES AND HARM ITS FINANCIAL RESULTS.
The railway industry has historically been subject to significant
fluctuations due to overall economic conditions and the level of use of
alternate methods of transportation. In economic downturns, railroads may defer
some expenditures in order to conserve cash in the short term and reductions in
freight traffic may reduce demand for the combined company's products. This
could reduce the combined company's revenues without a corresponding decrease in
its fixed costs. This can negatively impact the combined company's financial
results. We cannot assure you that the economic conditions will remain favorable
or that there will not be significant fluctuations adversely affecting the
industry as a whole and, as a result, the combined company.
CYCLICALITY IN THE PASSENGER TRANSIT INDUSTRY CAN REDUCE THE COMBINED COMPANY'S
REVENUES AND HARM ITS FINANCIAL RESULTS.
Although many industries tend to be cyclical, the passenger transit
railway industry is particularly so. New passenger transit car orders vary from
year to year and are influenced greatly by major replacement programs and by the
construction or expansion of transit systems by transit authorities. Although
the combined company's revenues may be reduced at any time due to lack of orders
from the passenger transit industry, its fixed costs which are necessary to be
prepared for busy periods may stay the same. This can negatively impact the
combined company's financial results.
BECAUSE A MATERIAL PORTION OF THE COMBINED COMPANY'S FUTURE NET SALES WILL
DERIVE FROM GOVERNMENTAL OR OTHER PUBLIC ENTITIES, AND NOT PRIVATE COMPANIES, IT
CAN BE NEGATIVELY AFFECTED BY CHANGES IN POLITICAL, ECONOMIC OR SIMILAR
CONDITIONS.
A substantial portion of WABCO's net sales have been, and WABCO and
MotivePower expect that a substantial portion of the combined company's future
net sales may be, derived from contracts with metropolitan transit and commuter
rail authorities and Amtrak. To the extent that future funding for proposed
public projects is curtailed or withdrawn altogether as a result of changes in
political, economic, fiscal or other conditions beyond the combined company's
control, these projects may be delayed or canceled, resulting in a potential
loss of new business.
INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS MAY REQUIRE THE COMBINED COMPANY TO
USE ITS CASH TO PAY FOR LEGAL FEES AND SETTLEMENTS OR JUDGMENTS.
The combined company may be the subject of intellectual infringement
claims by third parties. Any infringement claims, even if meritless, will be
costly and time-consuming to defend. GE Harris Railway Electronics, LLC and GE
Harris Railway Electronic Services, LLC have brought suit against WABCO for
alleged patent infringement and unfair competition related to a communications
system installed in one of WABCO's products. These GE Harris entities are
seeking to prohibit WABCO from future infringement and are seeking an
unspecified amount of money damages to recover, in part, royalties. WABCO is
defending, and the combined company will continue to defend, these claims.
However, if the combined company is not successful, it may require the combined
company to use its cash to pay for legal fees and settlements or judgments.
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YEAR 2000 ISSUES MAY NEGATIVELY AFFECT THE COMBINED COMPANY'S OPERATIONS AND THE
COMBINED COMPANY'S SUPPLIERS OR CUSTOMERS IN A MANNER WHICH COULD IMPACT THE
COMBINED COMPANY'S BUSINESS.
The Year 2000 problem is the result of computer programs using two
digits rather than four to define the applicable year. Any of MotivePower's and
WABCO's computer programs that use two digits rather than four digits to specify
the year will be unable to interpret dates beyond December 31, 1999. This
problem could result in a system failure or miscalculations causing disruptions
of operations. The three major areas that could be critically affected are
financial and information system applications, manufacturing operations and
third-party relationships with vendors and with customers. MotivePower and WABCO
have developed plans to address this exposure. MotivePower and WABCO have
assessed financial and operational systems and manufacturing equipment,
developed and continue to develop detailed plans and have commenced conversion
efforts. Each of MotivePower and WABCO believes that its present remediation and
replacement programs will adequately address the Year 2000 problems with respect
to their internal systems in all material respects. However, the combined
company may experience minor disruptions with respect to the remediation and
replacement programs that are currently operating. In addition, MotivePower's
and WABCO's vendors, suppliers and other service providers may not successfully
resolve their own Year 2000 problems in a manner which avoids significant impact
to MotivePower and WABCO. MotivePower and WABCO have received written assurances
from some of their suppliers and customers and other providers acknowledging the
Year 2000 problems and stating their present intention to be compliant.
MotivePower and WABCO have not received assurances from all of their suppliers
and other providers and one or more key suppliers and other providers could fail
to become compliant in time to avoid a disruption to the combined company's
business.
A Year 2000 failure of the combined company's systems, or those of key
suppliers or other providers, could cause disruptions of its business. These
disruptions could include a slowdown or shutdown of production, an inability to
invoice or collect from customers, an inability to receive critical supplies or
a reduction in customer orders. Any one or more of these could harm the combined
company's financial results.
MotivePower's and WABCO's products are generally sold with a limited
warranty for defects. MotivePower and WABCO have reviewed their products
currently in use by their customers or being sold and do not believe that there
will be material increases in warranty or liability claims arising out of Year
2000 non-compliance. However, a material increase in such claims could require
the combined company to apply substantial amounts of money or time to correct
any defects.
FOLLOWING THE MERGER THE COMBINED COMPANY WILL HAVE SUBSTANTIAL LEVERAGE AND
SERVICING DEBT WILL REQUIRE A SUBSTANTIAL PORTION OF THE COMBINED COMPANY'S CASH
FLOWS.
Following the merger, MotivePower's leverage will increase as a result
of the assumption of WABCO's indebtedness. On a pro forma basis, after giving
effect to the merger, total indebtedness of the combined company as of December
31, 1998 would have been $573.6 million resulting in pro forma total
capitalization of the combined company of approximately 80% debt and 20% equity,
exclusive of the effect of any prepayment premiums, costs of refinancing or
costs of the merger, compared with actual company total indebtedness of $105.8
million and total capitalization of 37% debt and 63% equity as of December 31,
1998. The additional indebtedness will require the combined company to dedicate
a substantial portion of its future cash flow to the payment of principal and
interest on this indebtedness, thereby reducing funds available for capital
expenditures and future business opportunities. The combined company may choose
to refinance a significant portion of WABCO's and MotivePower's outstanding
long-term debt. In addition, management has plans to reduce indebtedness, but we
cannot be certain that we will be successful in either refinancing or reducing
the indebtedness of the combined company. The high level of debt may
-- limit the combined company's ability to fund future working
capital, capital expenditures, research and development costs
and other general corporate requirements,
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-- increase the combined company's vulnerability to adverse
economic and industry conditions,
-- limit the combined company's flexibility in planning for, or
reacting to, changes in the combined company's business and
the industry,
-- place the combined company at a competitive disadvantage
compared to its competitors that have less debt, and
-- limit the combined company's ability to borrow additional
funds.
WABCO'S CURRENT CREDIT FACILITIES LIMIT ITS ABILITY TO TAKE CERTAIN ACTIONS
WHICH MAY REQUIRE ACCELERATED REPAYMENT OF INDEBTEDNESS AFTER THE MERGER AND
WILL LIMIT THE COMBINED COMPANY'S ABILITY TO ENTER INTO SOME TRANSACTIONS AND TO
INCUR ADDITIONAL INDEBTEDNESS AFTER THE MERGER.
Indebtedness under WABCO's current credit agreement is guaranteed by
all of WABCO's domestic subsidiaries and secured by substantially all of WABCO's
and its domestic subsidiaries' assets. WABCO's current credit agreement contains
covenants that, among other things, limit the payment of dividends and the
incurrence of additional debt and restricts mergers, acquisitions and sales of
assets or sales of the stock of WABCO's subsidiaries. WABCO is also required to
maintain specified financial ratios and meet other financial tests. Although
WABCO and MotivePower believe that the combined company will be able to maintain
compliance with the financial tests contained in WABCO's current credit
agreement, there can be no assurance that it will be able to do so. The
restrictions imposed by these covenants may adversely affect the combined
company's ability to make acquisitions or take advantage of favorable business
opportunities.
WABCO believes that the proposed merger with MotivePower will
constitute an event of default under WABCO's credit agreement but not directly
under either of its indentures. WABCO anticipates receiving a waiver or
renegotiating its credit agreement prior to the merger. However, WABCO may not
receive this waiver or renegotiate the credit agreement on favorable terms. If
WABCO does not receive a waiver or successfully renegotiate the credit agreement
prior to the merger, a portion of WABCO's indebtedness would be payable.
The indentures under which WABCO's 9 3/8% Notes due 2005 were issued
also contain covenants that, among other things, limit the ability of WABCO and
some of its subsidiaries to:
-- incur indebtedness,
-- pay dividends on and redeem capital stock,
-- create restrictions on investments in unrestricted
subsidiaries,
-- make distributions from some subsidiaries,
-- use proceeds from the sale of assets and subsidiary stock,
-- enter into transactions with affiliates,
-- create liens and
-- enter into sale/leaseback transactions.
WABCO's requirement to meet the foregoing covenants impacts the manner
in which it operates its business and will limit the manner in which the
combined company operates after the merger. It could limit the combined
company's ability to spend money on capital projects, research and development
costs, or similar items.
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It could also make the combined company unable to complete acquisitions or to
take advantage of favorable business opportunities. Further, the combined
company's failure to meet any of the foregoing covenants could trigger defaults
under the WABCO credit facilities. The documents for the WABCO credit facilities
are cross-defaulted, so that defaults in one document would trigger defaults in
others and could cause the related indebtedness to become payable.
WABCO IS CURRENTLY INVOLVED IN ASBESTOS LITIGATION WHICH COULD, UNDER CERTAIN
CIRCUMSTANCES, REQUIRE THE COMBINED COMPANY TO USE SUBSTANTIAL AMOUNTS OF CASH
FOR LEGAL FEES AND SETTLEMENTS OR JUDGMENTS.
WABCO and Railroad Friction Products Corporation and Vapor Corporation,
each wholly-owned subsidiaries of WABCO, are defendants in asbestos bodily
injury actions pending in various state and federal jurisdictions. WABCO
believes that pursuant to the asset purchase agreement by which it acquired the
North American operations of the railway products group of American Standard,
Inc., American Standard remains liable for all asbestos claims filed against
WABCO. Although WABCO believes that American Standard is willing and able to
fulfill its indemnity obligation, there can be no assurance that American
Standard will not dispute or become unable to perform its obligations. If this
occurs, the combined company would be required to use its cash to pay for legal
fees and settlements or judgments related to the asbestos claims.
With respect to asbestos claims against Railroad Friction Products
Corporation, WABCO believes that the American Standard asset purchase agreement
requires American Standard to indemnify WABCO and Railroad Friction Products
Corporation for 50% of any liability and defense costs Railroad Friction
Products Corporation may incur with respect to asbestos claims. The remaining
costs are covered by insurance. American Standard's indemnity obligation with
respect to Railroad Friction Products Corporation claims expires in March 2000
in connection with claims that are initiated after that date. Again, although
WABCO believes that American Standard is willing and able to fulfill its
indemnity obligation with respect to Railroad Friction Products Corporation
asbestos claims, there can be no assurance that American Standard will not
dispute or become unable to perform its obligations. In addition, claims may be
made after American Standard's indemnification obligations expire and/or the
coverage afforded by insurance may at some time in the future be exhausted or
unavailable. If this occurs, the combined company would be required to use its
cash to pay for legal fees and settlements or judgments related to the asbestos
claims.
Finally, WABCO believes that Mark IV Industries, Inc., the former owner
of Vapor is obligated to indemnify WABCO and Vapor for asbestos claims against
Vapor. Although WABCO believes that Mark IV is willing and able to fulfill its
indemnity obligation with respect to Vapor asbestos claims, there can be no
assurance that Mark IV will not dispute or become unable to perform its
obligations. If this occurs, the combined company would be required to use its
cash to pay for legal fees and settlements or judgments related to the asbestos
claims.
MOTIVEPOWER'S ANTI-TAKEOVER DEFENSE PROVISIONS MAY DETER POTENTIAL ACQUIRORS AND
MAY DEPRESS ITS STOCK PRICE.
MotivePower's articles of incorporation and bylaws contain provisions
that could have the effect of making it more difficult for a third party to
acquire, or of discouraging a third party from attempting to acquire, control of
MotivePower. These provisions allow MotivePower to issue preferred stock with
rights senior to those of its common stock and impose various procedural and
other requirements that could make it more difficult for MotivePower
shareholders to effect some corporate actions.
In addition, under MotivePower's shareholder rights plan, holders of
MotivePower common stock are entitled to one preferred share purchase right for
each outstanding share of common stock they hold, exercisable under specified
circumstances involving a potential change of control. The preferred share
purchase rights have the anti-takeover effect of causing substantial dilution to
a person or group that attempts to acquire MotivePower on terms not approved by
the MotivePower Board. The foregoing provisions could reduce the premium that
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potential acquirors might be willing to pay in an acquisition or that investors
might be willing to pay in the future for shares of MotivePower common stock.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
We have made forward-looking statements in this document and in the
documents which are incorporated by reference that are subject to risks and
uncertainties. For those statements, we claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. You should understand that the following important factors,
in addition to those discussed elsewhere in this document and in the documents
which are incorporated by reference, could affect the future results of
MotivePower and WABCO, and of the combined company after the closing, and could
cause those results or other outcomes to differ materially from those expressed
in our forward-looking statements:
Economic and Industry Conditions
-- materially adverse changes in economic or industry conditions
generally or in the markets served by our companies, including
North America, South America, Europe, Australia and Asia
-- demand for services in the freight and passenger rail industry
-- consolidations in the rail industry
-- demand for our products and services
-- continued outsourcing by our customers
-- demand for freight cars, locomotives, passenger transit cars
and buses
-- industry demand for faster and more efficient braking
equipment
-- fluctuations in interest rates
Operating Factors
-- supply disruptions
-- technical difficulties
-- changes in operating conditions and costs
-- successful introduction of new products
-- labor relations
-- completion and integration of additional acquisitions
-- the development and use of new technology
-- year 2000 disruptions
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Competitive Factors
-- the actions of competitors
Political/Governmental Factors
-- political stability in relevant areas of the world
-- future regulation/deregulation of our customers and/or the
rail industry
-- governmental funding for some of our customers
-- political developments and laws and regulations, such as
forced divestiture of assets, restrictions on production,
imports or exports, price controls, tax increases and
retroactive tax claims, expropriation of property,
cancellation of contract rights, and environmental regulations
Transaction or Commercial Factors
-- the outcome of negotiations with partners, governments,
suppliers, customers or others
-- our ability to integrate the businesses of MotivePower and
WABCO successfully after the merger.
SELLING SHAREHOLDERS
The table attached as Annex I hereto sets forth, as of the date of this
Prospectus or a subsequent date if amended or supplemented, (a) the name of each
selling shareholder and his or her relationship to MotivePower during the past
three years; (b) the number of shares of common stock each selling shareholder
beneficially owns (assuming that all options and restricted shares which they
have previously been granted are fully vested and free from restrictions on
transfer); (c) the number of shares of common stock offered pursuant to this
Prospectus by each selling shareholder; and (d) the amount and percentage of the
common stock outstanding to be held by such selling shareholder after giving
effect to the offering of the common stock covered by this Prospectus, except
that such information is not provided for non-affiliates of MotivePower who
beneficially hold less than the lesser of 1,000 shares of common stock issued
under the Plans or 1% of the shares of common stock issuable under the Plans. In
accordance with applicable SEC rules, these unnamed shareholders may sell up to
that number of shares under this prospectus. The information contained in Annex
I may be amended or supplemented from time to time.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of common stock
by selling shareholders covered by this Prospectus.
METHOD OF SALE
This Prospectus relates to the possible offer and sale from time to
time by the selling shareholders of their shares of common stock which they may
receive under the terms of the Plans. We have registered their shares for resale
to provide them with freely tradeable securities. However, registration of their
shares does not necessarily mean that they will offer or sell any of their
shares. We will not receive any proceeds from the offering or sale of their
shares.
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The selling shareholders may offer and sell the shares of common stock
to which this Prospectus relates from time to time in one or more types of
transactions (which may include block transactions) on the New York Stock
exchange, where our common stock is listed for trading under the symbol "MPO,"
in other markets where our common stock is traded, in negotiated transactions,
through put or call options transactions, through short sales transactions, or
in a combination of such methods of sale. They will sell the common stock at
prices which are current when the sales take place or at other prices to which
the parties agree. The respective selling shareholders may use brokers or
dealers to sell the shares, and will pay any brokerage fees or commissions
relating to sales by them in amounts to be negotiated by them prior to sale. The
selling shareholders and any brokers or dealers participating in the sale of the
common stock may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), and any discounts and
commissions received by them and any profit realized by them on the resale of
the shares may be deemed to be underwriting discounts and commissions under the
Securities Act. Some shares may also be sold by other people or entities which
receive the shares from one or more of the selling shareholders by gift, by
operation of law (including the laws of descent and distribution) or by other
transfers or assignments.
Selling shareholders also may resell all or a portion of their shares
in open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of such Rule.
WHERE YOU CAN FIND MORE INFORMATION
MotivePower files annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or other information we file at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference rooms.
Our SEC filings are also available to the public from commercial document
retrieval services and at the web site maintained by the SEC at
http://www.sec.gov.
This prospectus is a part of a registration statement on Form S-8 filed
by MotivePower with the SEC. As allowed by SEC rules, this prospectus does not
contain all the information you can find in the registration statement or the
exhibits to the registration statement.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. When we file
documents in accordance with Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934 between the date of this prospectus and the time
we file a post-effective amendment to the registration statement reporting that
all the securities which are the subject of the registration statement have been
sold or deregistering any securities which have not been sold, those documents
we file will be incorporated into this prospectus and will be a part of it
beginning on the date those documents are filed. If any document which we file
changes anything said in this prospectus or in an earlier document which is
incorporated into this prospectus, the later document will modify or supersede
what is said in this prospectus or the earlier document.
This prospectus also incorporates by reference the documents set forth
below that we have previously filed with the SEC. These documents contain
important information about MotivePower.
10
<PAGE> 13
<TABLE>
<CAPTION>
REPORT PERIOD OR FILING DATE SEC FILE NO.
<S> <C> <C>
Annual Report on Form 10-K Fiscal Year ended December 31, 1998 001-13225
Quarterly Report Form 10-Q Filed on May 14, 1999 001-13225
Quarterly Report Form 10-Q Filed on August 16, 1999 001-13225
Current Report on Form 8-K Filed on May 14, 1999 001-13225
Current Report on Form 8-K Filed on June 3, 1999 001-13225
Current Report on Form 8-K Filed on August 18, 1999 001-13225
The description of MotivePower common Filed on May 4, 1999 001-13225
stock set forth in the Registration
Statement on Form 8-A
The description of share purchase Filed on May 4, 1999 and amended 001-13225
rights set forth in the Registration on June 3, 1999
Statement on Form 8-A
Registration Statement on Form S-4 Filed on July 20, 1999 333-83221
</TABLE>
Documents incorporated by reference are available from us without
charge, excluding all exhibits unless we have specifically incorporated by
reference an exhibit in this prospectus. Shareholders may obtain documents
incorporated by reference in this prospectus by requesting them in writing or by
telephone from Two Gateway Center, 14th Floor, Pittsburgh, PA 15222, Tel: (412)
201-1101.
LEGAL MATTERS
The validity of the shares offered hereby will be passed upon for
MotivePower by Doepken Keevican & Weiss Professional Corporation, Pittsburgh,
Pennsylvania.
EXPERTS
The consolidated financial statements and the related financial
statement schedule incorporated in this prospectus by reference from the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The Westinghouse Air Brake Company consolidated financial statements
and schedules as of December 31, 1998 and 1997 and for the years ended December
31, 1998, 1997 and 1996 incorporated in this prospectus which is part of this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and have
been so incorporated in reliance upon the authority of said firm as experts in
giving said reports.
11
<PAGE> 14
ANNEX I
SELLING SHAREHOLDERS (1)
<TABLE>
<CAPTION>
Shares Beneficially Owned
After Offering: (2)
--------------------------------------------
Percentage
Shares Shares following
Relationships Beneficially Offered WABCO
Name to the Company Owned Hereby Number Percentage merger
- ------------------------- -------------------- -------------- ----------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
John C. Pope Chairman 917,628 259,006 658,622 2.4% 1.0%
Michael A. Wolf President, Chief 1,093,234 85,197 1,008,037 3.7% 1.5%
Executive Officer
and Director
David Bonvenuto Vice President, 24,165 1,007 23,158 (3) (3)
Controller and
Principal
Accounting Officer
Joseph S. Crawford, Jr. Executive Vice 307,669 11,858 295,811 1.1% (3)
President and
Chief Operating
Officer
William Fabrizio Senior Vice 191,109 5,440 185,669 (3) (3)
President and
Chief Financial
Officer
Jeannette Fisher-Garber Vice President, 60,790 3,866 56,924 (3) (3)
Secretary and
General Counsel
Thomas Lyons Vice President and 15,278 1,416 13,862 (3) (3)
Treasurer
Jeffrey Plut Vice President of 29,123 1,590 27,533 (3) (3)
Business
Development
Scott Wahlstrom Vice President, 31,932 1,501 30,431 (3) (3)
Human Resources
and Administration
Timothy Wesley Vice President, 25,482 1,646 23,836 (3) (3)
Investor Relations
Philip Brown President of Power 50,335 1,459 48,876 (3) (3)
Parts Co.
Paul Burton Vice President of 16,798 1,798 15,000 (3) (3)
Engine Systems Co.
</TABLE>
12
<PAGE> 15
<TABLE>
<CAPTION>
Shares Beneficially Owned
After Offering: (2)
--------------------------------------------
Percentage
Shares Shares following
Relationships Beneficially Offered WABCO
Name to the Company Owned Hereby Number Percentage merger
- ------------------------- -------------------- -------------- ----------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Jack Floyd President of Boise 61,856 3,685 58,171 (3) (3)
Locomotive Co.
Keith Hildum Director of 28,444 1,444 27,000 (3) (3)
Accounting
Robert Hurka Director of Tax 8,106 1,731 6,375 (3) (3)
Frank Larkin Vice President of 25,366 2,866 22,500 (3) (3)
Boise Locomotive Co.
William Lauro Vice President of 7,141 3,391 3,750 (3) (3)
Motor Coils
Manufacturing Co.
James Lindsay President of 118,882 6,382 112,500 (3) (3)
Engine Systems Co.
Brian Marty Vice President of 17,232 2,232 15,000 (3) (3)
Boise Locomotive Co.
Brian Moroney Vice President of 29,646 1,521 28,125 (3) (3)
Engine Systems Co.
Dennis Nott Vice President of 16,419 1,419 15,000 (3) (3)
Boise Locomotive Co.
Gerald Rowe President of MPI 38,845 1,345 37,500 (3) (3)
de Mexico
Gary Ryker President of Motor 39,750 2,250 37,500 (3) (3)
Coils
Manufacturing Co.
Louie Sanchez Vice President of 25,356 2,856 22,500 (3) (3)
MPI de Mexico
Robert Singleton Vice President of 17,063 2,063 15,000 (3) (3)
Engine Systems Co.
</TABLE>
13
<PAGE> 16
<TABLE>
<CAPTION>
Shares Beneficially Owned
After Offering: (2)
---------------------------------------------------
Percentage
Shares Shares following
Relationships Beneficially Offered WABCO
Name to the Company Owned Hereby Number Percentage merger
- ------------------ -------------------- -------------- ----------- ------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Richard Tamborski Vice President of 17,657 1,720 15,937 (3) (3)
Motor Coils
Manufacturing Co.
Alfredo Varas Vice President of 8,558 1,058 7,500 (3) (3)
MPI de Mexico
Carlos Vidaurreta Director General 33,321 3,321 30,000 (3) (3)
of MPI de Mexico
Mark Warner Vice President of 17,146 2,146 15,000 (3) (3)
Boise Locomotive Co.
Ronald Witt Vice President of 19,300 4,300 15,000 (3) (3)
Power Parts Co.
Lynn Young Consultant 62,359 2,359 60,000 (3) (3)
(formerly President
of Motor Coils
Manufacturing Co.)
</TABLE>
- ---------
(1) Assumes that all options held by the listed individuals are fully
vested and exercisable and that all restricted shares held are freely
transferable without restriction. Shares deemed beneficially owned by
virtue of these assumptions are treated as outstanding for purposes of
determining beneficial ownership by such individual.
(2) Assumes the sale of all securities offered hereby irrespective of
whether there is any present intention to do so.
(3) Less than 1%.
14
<PAGE> 17
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed with the Securities and
Exchange Commission by MotivePower Industries, Inc., a Pennsylvania corporation
("MotivePower" or the "Company"), are incorporated herein by reference and shall
be deemed to be a part hereof:
(a) The description of common stock of the Company contained
in the Registration Statement on Form 8-A filed by the Company with the
Securities and Exchange Commission (the "Commission") on May 4, 1999
(SEC File No. 001-13225);
(b) The description of the share purchase rights of the
Company contained in the Registration Statements on Form 8-A filed with
the Commission on May 4, 1999 and the amendment thereto on Form 8-A/A
filed with the Commission on June 3, 1999 (SEC File No. 001-13225);
(c) The Company's Annual Report on Form 10-K for the year
ended December 31, 1998 (SEC File No. 001-13225);
(d) The Company's Quarterly Report on Form 10-Q for the three
months ended March 31, 1999 (SEC File No. 001-13225);
(e) The Company's Quarterly Report on Form 10-Q for the three
months ended June 30, 1999 (SEC File No. 001-13225);
(f) The Company's Current Reports on Form 8-K dated May 14,
1999, June 3, 1999 and August 18, 1999 (SEC File No. 001-13225); and
(g) The Company's Registration Statement on Form S-4 filed
July 20, 1999 (SEC File No. 333-83221).
All documents filed by MotivePower pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, are deemed to be incorporated
by reference into this Registration Statement and to be a part hereof from the
respective dates of filing of such documents (such documents, and the documents
enumerated in paragraphs (a) through (g) above, being hereinafter referred to as
"Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this registration Statement to the
extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such first statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
Not applicable.
15
<PAGE> 18
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Item 6. Indemnification of Directors and Officers
MotivePower's charter and by-laws provide for indemnification of
MotivePower's directors and officers for liabilities and expenses that they may
incur in such capacities. The MotivePower charter provides that, to the fullest
extent permitted by Pennsylvania law, no director will be personally liable to
the corporation for or with respect to any acts or omissions in the performance
of his or her duties. Pennsylvania law permits a corporation to eliminate the
personal liability of its directors for monetary damages for any action taken or
failure to take any action unless: (1) such directors have breached or failed to
perform their duties; and (2) the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness. MotivePower has adopted such a
provision in its charter. However, a Pennsylvania corporation is not empowered
to eliminate personal liability where the responsibility or liability of a
director is pursuant to any criminal statute or is for the payment of taxes
pursuant to any federal, state or local law. Reference is made to MotivePower's
charter incorporated by reference as set forth below as Exhibit 4.1 hereto, and
by-laws set forth below as Exhibit 4.2 hereto.
MotivePower also maintains directors and officers liability insurance
which provides for coverage against loss arising from claims made against
directors and officers in their capacity as such.
MotivePower has agreed to indemnify, to the extent provided under the
charter and by-laws of Westinghouse Air Brake Company ("WABCO") in effect on
June 2, 1999, the individuals who on or before the closing were officers or
directors of WABCO or its subsidiaries with respect to all acts or omissions
before the closing by these individuals in these capacities. MotivePower has
also agreed to provide, for six years after the closing, a directors' and
officers' liability insurance and indemnification policy that provides WABCO's
officers and directors in office immediately prior to the closing coverage
substantially equivalent to WABCO's policy in effect on June 2, 1999.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors or officers, the Company is aware
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in that Act and is
therefore unenforceable. Under certain circumstances, the Company might be
required to submit to a court the question of whether indemnification is
permissible before it could indemnify directors or officers for such
liabilities.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No. Description of Exhibit
----------- ----------------------
4.1 Articles of Incorporation (incorporated by reference
to Appendix B to MotivePower's Definitive Proxy
Statement filed on March 19, 1999).
4.2 By-laws of MotivePower (incorporated by reference to
Exhibit 2 to MotivePower's Registration Statement on
Form 8-A filed on May 4, 1999).
16
<PAGE> 19
4.3 Rights Agreement, dated as of January 19, 1996
between MotivePower and Chase Mellon Shareholder
Services, L.L.C., as Rights Agent (incorporated by
reference to Exhibit 1 to MotivePower's Report on
Form 8-K filed on January 31, 1996).
4.4 First Amendment to the Rights Agreement, dated April
5, 1996 (incorporated by reference to Exhibit 2 to
MotivePower's Amendment No. 1 on Form 8-A/A filed on
April 25, 1996).
4.5 Second Amendment to the Rights Agreement, dated June
20, 1996 (incorporated by reference to Exhibit 3 to
MotivePower's Amendment No. 2 on Form 8-A/A filed on
July 3, 1996).
4.6 Third Amendment to the Rights Agreement, dated July
25, 1996 (incorporated by reference to Exhibit 4 to
MotivePower's Registration Statement on Form 8-A
filed on August 1, 1997).
4.7 Fourth Amendment to the Rights Agreement, dated
August 22, 1997 (incorporated by reference to Exhibit
1 to MotivePower's Amendment No. 1 on Form 8-A/A
filed on October 23, 1997).
4.8 Fifth Amendment to the Rights Agreement, dated June
2, 1999 (incorporated by reference to Exhibit 1 to
MotivePower's Amendment No. 1 on Form 8-A/A filed on
June 3, 1999).
*4.9 MotivePower Industries, Inc. Deferred Compensation
Plan, as amended.
*4.10 MotivePower Industries, Inc. Deferred Compensation
Plan for Michael A. Wolf.
*4.11 MotivePower Industries, Inc. Deferred Compensation
Plan for Non-Employee Directors, as amended.
*5.1 Opinion of Doepken Keevican & Weiss, as to the
legality of the securities being registered.
*23.1 Consent of Deloitte & Touche LLP.
*23.2 Consent of Arthur Andersen LLP.
*23.3 Consent of Doepken Keevican & Weiss (included in
Exhibit 5.1 to this Registration Statement).
*24.1 Powers of Attorney.
- ----------
* Filed herewith. Exhibits incorporated by reference herein have previously been
filed by the Company with the Securities and Exchange Commission (SEC File No.
001-13225).
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
17
<PAGE> 20
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
this Registration Statement or any material change to
such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of a
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by a Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
18
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement on Form S-8 to be signed on its behalf of the
undersigned, thereunto duly authorized, in the City of Pittsburgh, State of
Pennsylvania, on this 18th day of August, 1999.
MOTIVEPOWER INDUSTRIES, INC.
By: /s/ Scott E. Wahlstrom
------------------------------------
Scott E. Wahlstrom
Vice President, Human Resources
and Administration
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on August 19, 1999.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ John C. Pope* Non-Executive Chairman August 19, 1999
- ----------------------------------- and Director
John C. Pope
/s/ Michael A. Wolf* President and Chief Executive August 19, 1999
- ----------------------------------- Officer and Director (Principal
Michael A. Wolf Executive Officer)
/s/ William F. Fabrizio* Senior Vice President and Chief August 19, 1999
- ----------------------------------- Financial Officer (Principal
William F. Fabrizio Financial Officer)
/s/ David L. Bonvenuto* Vice President, Controller and August 19, 1999
- ----------------------------------- Principal Accounting Officer
David L. Bonvenuto
/s/ Gilbert E. Carmichael* Vice Chairman and Director August 19, 1999
- -----------------------------------
Gilbert E. Carmichael
/s/ Ernesto Fernandez Hurtado* Director August 19, 1999
- -----------------------------------
Ernesto Fernandez Hurtado
/s/ Lee B. Foster II* Director August 19, 1999
- -----------------------------------
Lee B. Foster II
/s/ James P. Miscoll* Director August 19, 1999
- -----------------------------------
James P. Miscoll
/s/ Nicholas J. Stanley* Director August 19, 1999
- -----------------------------------
Nicholas J. Stanley
* By: /s/ William F. Fabrizio Attorney-in-Fact August 19, 1999
--------------------------
William F. Fabrizio
</TABLE>
19
<PAGE> 1
EXHIBIT 4.9
MotivePower Industries, Inc.
DEFERRED COMPENSATION PLAN
ARTICLE I
PURPOSE AND BACKGROUND
The purpose of this Deferred Compensation Plan (the "Plan") is to
provide current tax planning opportunities as well as supplemental funds for the
retirement or death of employees of MotivePower Industries, Inc. ("Company") and
its subsidiaries and affiliated corporations and business entities. The Plan
shall be in addition to existing deferred compensation plans and arrangements
maintained by the Company. It is intended that the Plan will aid in retaining
and attracting employees of exceptional ability by providing them with these
benefits. The Plan was originally adopted effective as of April 23, 1994
("Effective Date") and has been amended and restated in the form of this
document effective as of February 10, 1997.
References are to the Plan unless otherwise indicated.
ARTICLE II
DEFINITIONS
For the purposes of the Plan, the following terms have the meanings
indicated, unless the context clearly indicates otherwise:
2.1 Account. "Account" means the Account as maintained by the Employer
in accordance with Article IV with respect to any Compensation deferred pursuant
to the Plan. A Participant's Account shall be utilized solely as a device for
the determination and measurement of the amounts to be paid to the Participant
pursuant to the Plan. Separate subaccounts shall be maintained to properly
reflect the Participant's balance and earnings thereon. A Participant's Account
shall not constitute or be treated as a trust fund of any kind.
2.2 Administrative Committee. "Administrative Committee" means the
committee appointed to administer the Plan as provided by Section 7.2.
2.3 Beneficiary. "Beneficiary" means the person, persons or entity
entitled under Article VI to receive any Plan Benefits payable after a
Participant's death.
2.4 Cause. "Cause" means a Participant's:
(i) Conviction of any criminal violation involving dishonesty,
fraud or breach of trust;
(ii) Willful engagement in any misconduct in the performance
of duties that materially injures the Employer, monetarily or
otherwise;
(iii) Performance of any act which, if known to any customers,
clients or stockholders of any entity included in those comprising the
Employer would materially and adversely affect the Employer's business;
or
<PAGE> 2
(iv) Willful and substantial nonperformance of assigned duties
(other than that resulting from the Participant's incapacity due to
physical or mental illness) which has continued after the Board of
Directors of an entity included in those comprising the Employer and
which employs the Participant has given written notice of the
nonperformance to Participant, which notice specifically identifies the
manner in which the Board of Directors believes that the Participant
has not substantially performed duties and which indicates the Board of
Directors' intention to terminate Participant's employment because of
the nonperformance. For purposes of clauses (ii) and (iv) of this
Section, no act or omission on the Participant's part shall be deemed
"willful" if committed or omitted in good faith and with a reasonable
belief that the action was in the best interest of the Employer.
2.5 Code. "Code" means the Internal Revenue Code of 1986, as amended.
2.6 Compensation. "Compensation" means the salary and bonuses payable
to a Participant during the calendar year and considered to be "wages" for
purposes of federal income tax withholding, increased by amounts deferred under
the Plan, salary reduction contributions under Code Section 401(k), or any other
deferral arrangements. For purposes of the Plan, the term "bonus" includes the
amount of the Company's financial obligation arising from a Participant's
exercise of SARs. Compensation does not include expense reimbursements, any form
of noncash Compensation or benefits, group life insurance premiums, or any other
payments or benefits other than salary and bonuses as described above.
2.7 Compensation Committee. "Compensation Committee" means the
Compensation Committee of the Company's Board of Directors.
2.8 Deferral Commitment. "Deferral Commitment" means an election to
defer Compensation made by a Participant pursuant to Article III and for which a
Participation Agreement has been submitted by the Participant to the
Administrative Committee.
2.9 Deferral Period. "Deferral Period" means the period over which a
Participant has elected to defer a portion of the Participant's Compensation.
Each calendar year shall be a separate Deferral Period, provided that the
Deferral Period may be modified pursuant to Section 3.4.
2.10 Determination Date. "Determination Date" means the last day of
each calender month.
2.11 Earnings Indices. "Earnings Indices" means the portfolios and
funds selected from time to time by the Administrative Committee and among which
a Participant may direct the investment of the Participant's Account (except for
any portion attributable to basic employer makeup contributions under Section
4.4(a) and except as may be restricted for any portion attributable to any
employer discretionary contribution under Section 4.5) for purposes of
calculating the Rate of Return.
2.12 Elective Deferred Compensation. "Elective Deferred Compensation"
means the amount of Compensation that a Participant elects to defer pursuant to
a Deferral Commitment.
2
<PAGE> 3
2.13 Employer. "Employer" means MotivePower Industries, Inc., any
successor to the business thereof, and any affiliated or subsidiary corporations
designated by the Compensation Committee.
2.14 ERISA. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
2.15 Financial Hardship. "Financial Hardship" means an unanticipated
emergency that is caused by an event beyond the control of the Participant that
would result in severe financial hardship if an early withdrawal from the Plan
were not permitted and to be determined by the Administrative Committee on the
basis of information supplied by the Participant.
2.16 Participant. "Participant" means any individual who is
participating or has participated in this Plan as provided in Article III.
2.17 Participation Agreement. "Participation Agreement" means the
agreement submitted by a Participant to the Administrative Committee prior to
the beginning of a Deferral Period, with respect to a Deferral Commitment made
for that Deferral Period.
2.18 Plan Benefit. "Plan Benefit" means the benefit payable to a
Participant as calculated in Article V.
2.19 Rate of Return. "Rate of Return" means the amount credited to a
Participant's Account under Section 4.6 to be determined by the Administrative
Committee based upon the net performance of the Earnings Indices selected by the
Participant as to any amount attributable to Elective Deferred Compensation and
employer matching makeup contributions, of the Company's stock fund as to any
amount attributable to basic employer makeup contributions under Section 4.4(a),
and in accordance with the investment rights and limitations specified in a
special Participation Agreement for any employer discretionary contribution
under Section 4.5.
2.20 SARs. "SARs" means stock appreciation rights provided by the
Employer to a Participant.
ARTICLE III
PARTICIPATION AND DEFERRAL COMMITMENTS
3.1 Eligibility and Participation.
(a) Eligibility. An employee of the Employer shall be eligible
to defer Compensation into this Plan if:
(i) The employee's base rate of pay exceeds one
hundred thousand dollars ($100,000) on September 1 of the
prior calendar year; or
(ii) The employee is selected by the Administrative
Committee and the employee is either a highly compensated
employee or a member of a select group of management of the
Employer; or
(iii) The employee's Compensation exceeds the limit
in Code Section 401(a)(17).
3
<PAGE> 4
(b) Participation. All employees with Compensation in excess
of the Code Section 401(a)(17) limit and any eligible employee who elects to
defer Compensation under the Plan or who has an Account balance under the Plan
shall be a Participant in the Plan. An eligible employee may elect to
participate in the Plan with respect to any Deferral Period by submitting a
Participation Agreement to the Administrative Committee by November 30 of the
calendar year immediately preceding the Deferral Period. With respect to amounts
earned commencing January 1 of any calendar year, the Administrative Committee,
at its sole discretion, may allow an eligible employee to submit a Participation
Agreement to the Administrative Committee by December 31 of the immediately
preceding calendar year.
(c) Part-Year Participation. In the event that an employee
first becomes eligible, or again becomes eligible following a period of
suspended eligibility, to defer Compensation during a calendar year, a
Participation Agreement must be submitted to the Administrative Committee no
later than thirty (30) days following notification to the employee of
eligibility to defer, and the Participation Agreement shall be effective only
with regard to Compensation earned or payable following the submission of the
Participation Agreement to the Administrative Committee.
3.2 Form of Deferral. A Participant may elect Deferral Commitments in
the Participation Agreement as follows:
(a) Salary Deferral Commitment. A salary Deferral Commitment
shall apply to the salary Compensation payable by the Employer to the
Participant during the Deferral Period. The amount to be deferred shall
be stated as a percentage or dollar amount.
(b) Bonus Deferral Commitment. A bonus Deferral Commitment
shall apply to the bonus Compensation payable by the Employer to the
Participant during the Deferral Period. If the bonus is cash payable
upon the exercise of SARs, the Deferral Commitment shall apply to SARs
that are exercised during the Deferral Period. The amount to be
deferred shall be stated as a percentage or dollar amount.
3.3 Limitations on Deferral Commitments. The following limitations
shall apply to Deferral Commitments:
(a) Minimum. The minimum salary deferral amount shall be one
hundred dollars ($100) for each pay period. There shall be no minimum
deferral amount for bonus Compensation in a bonus Deferral Commitment.
(b) Maximum. The maximum deferral amount shall be fifty
percent (50%) of salary Compensation in a salary Deferral Commitment
and one hundred percent (100%) of bonus Compensation in a bonus
Deferral Commitment.
(c) Changes in Minimum or Maximum. The Administrative
Committee may change the minimum or maximum deferral amounts from time
to time by giving written notice to all Participants. No such change
may affect a Deferral Commitment made prior to the Administrative
Committee's action.
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<PAGE> 5
3.4 Modification of Deferral Commitment. A Deferral commitment shall be
irrevocable except that the Administrative Committee may permit a Participant to
reduce the amount to be deferred, or waive the remainder of the Deferral
Commitment upon a finding that the Participant has suffered a Financial
Hardship.
ARTICLE IV
DEFERRED COMPENSATION ACCOUNTS
4.1 Accounts. For record keeping purposes only, an Account shall be
maintained for each Participant. Separate subaccounts shall be maintained to the
extent necessary to properly reflect the Participant's election of Earnings
Indices, basic employer makeup contributions and total vested or nonvested
Account balance.
4.2 Elective Deferred Compensation. A Participant's Elective Deferred
Compensation shall be credited to the Participant's Account at the same time as
the corresponding nondeferred portion of the Compensation becomes or would have
become payable. Any withholding of taxes or other amounts with respect to
deferred Compensation which is required by federal, state, or local law shall be
withheld from the Participant's nondeferred Compensation to the maximum extent
possible with any excess being withheld from the Participant's Account.
4.3 Allocation of Deferred Compensation. Each Participant shall direct
the allocation of the Participant's Account attributable to Elective Deferred
Compensation and employer matching makeup contributions among the Earning
Indices selected from time to time by the Administrative Committee. For any
period and Account portion for which the Administrative Committee designates the
Company's stock as a component of the Earning Indices, an allocation to the
Company's stock account will be subject to Section 4.3(b).
(a) A Participant's initial allocation shall be made in a
Participation Agreement. If a Participant has not made an allocation
election, the Participant's Account shall be allocated to a money
market or equivalent component of the Earnings Indices. A Participant
may change an allocation among Earning Indices on the first day of each
month, provided the Participant gives notice to the Administrative
Committee of the change at least twenty (20) days before the beginning
of the month.
(b) Except for basic employer makeup contributions, an
allocation to the Company's stock account will not become effective
until the Company could reasonably make an equivalent actual investment
in the Company's stock without any material disruption of the market
for its stock. This restriction applies whether or not the Company
actually causes an investment to be made in its stock upon an
allocation election to the Company's stock account. If the period of
time between when an allocation election would otherwise have become
effective without application of this Section 4.3(b) and the actual
effective date after application of this Section 4.3(b) exceeds thirty
(30) days, the portion of the Participant's Account which is to be
invested in the Company's stock account will be deemed to have been
allocated to a money market or equivalent component of the Earnings
Indices for that period. Determinations under this Section 4.3(b) shall
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<PAGE> 6
be made by the Administrative Committee. An allocation to the Company's
stock account resulting from a basic employer makeup contribution shall
be effective as provided in Section 4.4.
4.4 Makeup Contributions.
(a) A Participant shall receive a basic employer makeup
contribution equal to the lesser of (i) two percent (2%) of the
Participant's Compensation or (ii) a lesser percentage of the
Participant's Compensation as is provided from time to time for basic
employer contributions under the Company's 401(k) plan, less, in either
case, the basic employer contribution to the Company's 401(k) plan
required to be allocated and invested in the Company's stock for the
benefit of the Participant. This basic employer makeup contribution
shall be credited to the Company's stock account and the Participant
shall have no right to elect an investment alternative at any time with
respect to any basic employer makeup contribution or related earnings.
Participants are not required to defer any amounts into the Plan in
order to receive a basic employer makeup contribution under this
subsection.
(b) If a Participant defers compensation into the Company's
401(k) plan an amount equal to the limit as set forth in Code
Section 402(g), the Participant shall receive an additional employer
matching makeup contribution equal to fifty percent (50%) of the first
six percent (6%) of Compensation deferred into the Company's 401(k)
plan and this Plan, less the amount of the employer matching
contribution made by the Employer to the Company's 401(k) Plan for the
benefit of the Participant. This employer matching makeup contribution
shall be allocated as elected by the Participant.
The total amount of Employer contributions to a Participant under this
section and under the Company's 401(k) plan for any year may never exceed five
percent (5%) of Compensation. All employer makeup contributions under this
section shall be credited to the Participant's account no later than forty-five
(45) days after the end of the calendar year they would have been credited to
the Company's 401(k) plan if not for the limitations contained in the Code.
4.5 Employer Discretionary Contributions. Employer may make
discretionary contributions to the Participant's Account. Discretionary
contributions shall be credited at times and in amounts as the
Compensation Committee in its sole discretion shall determine. The amount of the
discretionary contributions shall be evidenced in a special Participation
Agreement approved by the Administrative Committee. The special Participation
Agreement shall include any rights and limitations on investment alternatives
applicable to any employer discretionary contribution.
4.6 Rate of Return. The Accounts shall be credited monthly with the
Rate of Return specified in Section 2.19.
4.7 Determination of Accounts. Each Participant's Account as of each
Determination Date shall consist of the balance of the Participant's Account as
of the immediately preceding Determination Date, plus the Participant's Elective
Deferred Compensation credited, any basic employer makeup contributions
credited, any employer matching
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<PAGE> 7
makeup contributions credited, any employer discretionary contributions credited
and the applicable Rate of Return, minus the amount of any distributions made,
since the immediately preceding Determination Date.
4.8 Vesting of Accounts. Each Participant shall be vested in the
amounts credited to that Participant's Account and earnings thereon as follows:
(a) Amounts Deferred. A Participant shall be one hundred
percent (100%) vested at all times in any Elective Deferred
Compensation elected to be deferred under this Plan and Rate of Return
thereon.
(b) Employer Makeup Contributions. Employer basic makeup
contributions and employer matching makeup contributions to the
Participant's account, and Rate of Return thereon, shall be vested to
the same extent that those types of contributions vest under the
Company's 401(k) plan. All Employer makeup contributions to this Plan
shall be forfeited if the Participant is terminated for Cause.
(c) Employer Discretionary Contributions. Employer
Discretionary Contributions and Rate of Return thereon shall be vested
as set forth in the special Participation Agreement.
4.9 Statement of Accounts. The Administrative Committee shall submit to
each Participant, within one hundred twenty (120) days after the close of each
calendar year, or at another time as determined by the Administrative Committee,
a statement setting forth the balance to the credit of the Participant's
Account.
ARTICLE V
PLAN BENEFITS
5.1 Distributions Prior to Termination of Employment. A Participant's
Account may be distributed to the Participant prior to termination of employment
with the Employer as follows:
(a) In-Service Withdrawals. A Participant may elect in a
Participation Agreement to withdraw all or any portion of the Elective
Deferred Compensation amount deferred by that Participation Agreement
as of a date specified in the election. The date shall not be sooner
than seven (7) years after the date the Deferral Period commences. The
amount withdrawn shall not exceed the amount of Compensation deferred,
without earnings and shall not include any employer basic or matching
makeup contribution. The election shall be made at the time the
Deferral Commitment is made and shall be irrevocable.
(b) Hardship Withdrawals. Upon a finding that a Participant
has suffered a Financial Hardship, the Administrative Committee may, in
its sole discretion, make distributions from the Participant's Account.
The amount of the withdrawal shall be limited to the amount reasonably
necessary to meet the Participant's needs resulting from the Financial
Hardship. If payment is made due to Financial Hardship under the Plan,
the Participant's deferrals under the Plan shall cease for a twelve
(12) month period. Any resumption of the Participant's deferrals under
the Plan after that twelve (12) month period shall be made only at the
election of the Participant in accordance with Article III herein.
7
<PAGE> 8
(c) Form of Payment and Time. Any distribution pursuant to
Section 5.1(a) or 5.1(b) shall be payable in a lump sum. The
distribution shall be paid in the case of an in-service withdrawal, as
provided in the Participation Agreement, and in case of a Financial
Hardship, within thirty (30) days after the Administrative Committee
approves the Financial Hardship
5.2 Distributions Following Termination of Employment. Upon a
Participant's termination of employment with the Employer for any reason (which
termination shall be for a period of at least five (5) days) the Employer shall
pay to the Participant or, in the case of death, the Participant's Beneficiary,
benefits equal to the vested balance in the Participant's Account.
5.3 Form of Benefit Payment Following Termination of Employment.
(a) Subject to Section 5.3(b), benefits shall be paid in the
form selected by the Participant in the Participation Agreement at the
time of the Deferral Commitment. Options include:
(i) A lump sum payment.
(ii) Equal annual installments of the Account and
Rate of Return amortized over a period of five (5), ten (10),
or fifteen (15) years. The Account shall be initially
amortized with an assumed Rate of Return of seven percent (7%)
unless the Participant selects, and the Administrative
Committee approves, an alternative assumed Rate of Return. The
Account shall be reamortized annually based upon the actual
Rate of Return for the Account for the immediately preceding
twelve (12) months.
(b) Small Account(s). Notwithstanding Section 5.3(a), if a
Participant's Account is less than fifty thousand dollars ($50,000) on
the date of termination, the benefit shall be paid in a lump sum.
5.4 Commencement of Deferral Payment.
(a) Subject to Section 5.4(b), benefits that are payable upon
a Participant's termination of employment with the Employer shall
commence as elected by the Participant in a Participation Agreement.
Options are:
(i) Payments to commence as soon as practical in the
calendar year following termination, but in no case more than
ninety (90) days after the beginning of the calendar year.
(ii) Payment to commence as soon as practical in the
calendar year following termination, but in no case more than
ninety (90) days after the beginning of the calendar year.
(iii) Payments to commence as soon as practical in
the calendar year following the later of the Participant's
termination or obtainment of an age selected by the
Participant, which shall not exceed age sixty-five (65). If a
Participant has selected this option and has an account
balance of less than fifty thousand dollars ($50,000) at
termination, the benefit shall commence as if the Participant
had selected payment under Section 5.4(a)(ii) above.
(b) Notwithstanding Section 5.4(a), a Participant who is a
"covered employee" as defined in Code Section 162(m)(3) shall receive
the first benefit payment as if the Participant had elected payment
under
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<PAGE> 9
Section 5.4(a)(ii), unless the Participant elects payment under Section
5.4(a)(iii) and the commencement date is after the date payable under
Section 5.4(a)(ii).
5.5 Timing of Election. As long as the election is made and filed with
the Administrative Committee at least twelve (12) full months prior to
termination of employment, a Participant may elect to change the form of benefit
payment (see Section 5.3) or the timing of benefit commencement (see Section
5.4). In no case may a Participant change an election in the twelve (12) months
preceding termination of employment.
5.6 Death Benefit. Upon the death of a Participant, the Employer shall
pay to the Participant's Beneficiary an amount equal to the remaining unpaid
balance of the Participant's Account in a lump sum.
5.7 Accelerated Distribution. Notwithstanding any other provision of
the Plan, at any time a Participant shall be entitled to receive, upon written
request to the Administrative Committee, a lump sum distribution equal to ninety
percent (90%) of the vested Account balance as of the Determination Date
immediately preceding the date on which the Administrative Committee receives
the written request. The remaining balance shall be forfeited by the
Participant. The amount payable under this section shall be paid in a lump sum
within thirty (30) days following the receipt of the notice by the
Administrative Committee from the Participant. If a Participant receives a
distribution under this Section, the Participant's Deferral Commitments for the
remaining portion of that calendar year shall be revoked and the Participant
shall not be permitted to make Deferral Commitments for a period of one (1) year
from the date of distribution.
5.8 Withholding for Taxes. To the extent required by the law in effect
at the time payments are made, the Employer shall withhold from the payments
made hereunder any taxes required to be withheld by the federal or any state or
local government, including any amount which the Employer determines is
reasonably necessary to pay any generation-skipping transfer tax which is or may
become due. A Beneficiary, however, may elect not to have withholding of federal
income tax pursuant to Code Section 3405(a)(2), or any successor provision
thereto.
5.9 Valuation and Settlement. The amount of a lump sum payment and the
initial amount of installments shall be based on the value of the Participant's
Account on the Determination Date immediately preceding the payment or
commencement of installment payments.
5.10 Payment to Guardian. The Administrative Committee may direct
payment to the duly appointed guardian, conservator, or other similar legal
representative of a Participant or Beneficiary to whom payment is due. In the
absence of a legal representative, the Administrative Committee may, in it sole
and absolute discretion, make payment to a person having the care and custody of
a minor, incompetent or person incapable of handling the disposition of property
upon proof satisfactory to the Administrative Committee of incompetency,
minority, or incapacity. The distribution shall completely discharge the
Administrative Committee from all liability with respect to the benefit.
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<PAGE> 10
ARTICLE VI
BENEFICIARY DESIGNATION
6.1 Beneficiary Designation. Subject to Section 6.3, each Participant
shall have the right, at any time, to designate one (1) or more persons or an
entity as Beneficiary (both primary as well as secondary) to whom benefits under
this Plan shall be paid in the event of Participant's death prior to complete
distribution of the Participant's Account. Each Beneficiary designation shall be
in a written form prescribed by the Administrative Committee and shall be
effective only when filed with the Administrative Committee during the
Participant's lifetime.
6.2 Changing Beneficiary. Subject to Section 6.3, any Beneficiary
designation may be changed by a Participant without the consent of the
previously named Beneficiary by the filing of a new designation with the
Administrative Committee. The filing of a new designation shall cancel all
designations previously filed.
6.3 Community Property. If the Participant resides in a community
property state, the following rules shall apply:
(a) If the Participant is married, the Participant's
designation of a Beneficiary other than the Participant's spouse shall
not be effective unless the spouse executes a written consent that
acknowledges the effect of the designation, or it is established the
consent cannot be obtained because the spouse cannot be located.
(b) If the Participant is married, the Participant's
Beneficiary designation may be changed by a Participant with the
consent of the Participant's spouse as provided for in Section 6.3(a)
by the filing of a new designation with the Administrative Committee.
(c) If the Participant's marital status changes after the
Participant has designated a Beneficiary, the following shall apply:
(i) If the Participant is married at the time of
death but was unmarried when the designation was made, the
designation shall be void unless the spouse has consented to
it in the manner prescribed in Section 6.3(a).
(ii) If the Participant is unmarried at the time of
death but was married when the designation was made:
a) The designation shall, be void if the
spouse was named as Beneficiary.
b) The designation shall remain valid if a
nonspouse Beneficiary was named.
(iii) If the Participant was married when the
designation was made and is married to a different spouse at
death, the designation shall be void unless the new spouse has
consented to it in the manner prescribed above.
6.4 No Beneficiary Designation. If any Participant fails to designate a
Beneficiary in the manner provided above, if the designation is void, or if the
Beneficiary designated by a Participant dies before the Participant or before
complete distribution of the Participant's benefits,
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<PAGE> 11
the Participant's Beneficiary shall be the person in the first of the following
classes in which there is a survivor:
(a) The Participant's spouse;
(b) The Participant's children in equal shares, except that if
any of the children predeceases the Participant but leaves issue
surviving, then the issue shall take by right of representation the
share the parent would have taken if living;
(c) The Participant's estate.
ARTICLE VII
ADMINISTRATION
7.1 Administrative Committee; Duties. This Plan shall be administered
by the Administrative Committee. The Administrative Committee shall consist of
at least three (3) individuals appointed by the Compensation Committee or the
Company's Chief Executive Officer. Subject to Section 9.1, the Administrative
Committee shall have the authority to amend (but not terminate) the Plan,
interpret and enforce all appropriate rules and regulations for the
administration of the Plan and decide or resolve any and all questions,
including interpretations of the Plan, as may arise in the administration. A
majority vote of the Administrative Committee members shall control any
decision. Members of the Administrative Committee may be Participants under this
Plan.
7.2 Agents. The Administrative Committee may, from time to time, employ
agents and delegate to them administrative duties as it sees fit, and may from
time to time consult with counsel who may be counsel to the Company.
7.3 Binding Effect of Decisions. The decision or action of the
Administrative Committee with respect to any question arising out of or in
connection, with the administration, interpretation and application of the Plan
and the rules and regulations promulgated hereunder shall be final, conclusive
and, binding upon all persons having any interest in the Plan.
7.4 Indemnity of Administrative Committee. The Company shall indemnify
and hold harmless the members of the Administrative Committee against any and
all claims, loss, damage, expense or liability arising from any action or
failure to act with respect to this Plan on account of the person's service on
the Administrative Committee, except in the case of gross negligence or willful
misconduct.
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ARTICLE VIII
CLAIMS PROCEDURE
8.1 Claim. The Administrative Committee shall establish rules and
procedures to be followed by Participants and Beneficiaries in (a) filing claims
for benefits, and (b) for furnishing and verifying proofs necessary to establish
the right to benefits in accordance with the Plan, consistent with the remainder
of this Article. The rules and procedures shall require that claims and proofs
be made in writing and directed to the Administrative Committee.
8.2 Review of Claim. The Administrative Committee shall review all
claims for benefits. Upon receipt by the Administrative Committee of a claim, it
shall determine all facts which are necessary to determine the right, if any, of
the claimant to benefits under the provisions of the Plan and the amount thereof
as herein provided within ninety (90) days of receipt of a claim. If prior to
the expiration of the initial ninety (90) day period, the Administrative
Committee determines additional time is needed to come to a determination on the
claim, the Administrative Committee shall provide written notice to the
Participant, Beneficiary or other claimant of the need for the extension, not to
exceed a total of one hundred eighty (180) days from the date the application
was received.
8.3 Notice of Denial of Claim. In the event that any Participant,
Beneficiary or other claimant claims to be entitled to a benefit under the Plan,
and the Administrative Committee determines that the claim should be denied in
whole or in part, the Administrative Committee shall, in writing, notify the
claimant that the claim has been denied, in whole or in part, setting forth the
specific reasons for the denial. The notification shall be written in a manner
reasonably expected to be understood by the claimant and shall refer to the
specific sections of the Plan relied on, shall describe any additional material
or information necessary for the claimant to perfect the claim and an
explanation of why the material or information is necessary, and where
appropriate, shall include an explanation of how the claimant can obtain
reconsideration of the denial.
8.4 Reconsideration of Denied Claim.
(a) Within sixty (60) days after receipt of the notice of the
denial of a claim, the claimant or duly authorized representative may
request, by mailing or delivery of a written notice to the
Administrative Committee, a reconsideration by the Administrative
Committee of the decision denying the claim. If the claimant or duly
authorized representative fails to request a reconsideration within the
sixty (60) day period, it shall be conclusively determined for all
purposes of the Plan that the denial of the claim by the Administrative
Committee is correct. If the claimant or duly authorized representative
requests a reconsideration within the sixty (60) day period, the
claimant or dully authorized representative shall have thirty (30) days
after filing a request for reconsideration to submit additional written
material in support of the claim, review pertinent documents, and
submit issues and comments in writing.
(b) After the reconsideration request, the Administrative
Committee shall determine within sixty (60) days of receipt of the
claimant's request for reconsideration whether the denial of the claim
was
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correct and shall notify the claimant in writing of its determination.
The written notice of decision shall be in writing and shall include
specific reasons for the decision, written in a manner calculated to be
understood by the claimant, as well as specific references to the
pertinent Plan provisions on which the decision is based. In the event
of special circumstances determined by the Administrative Committee,
the time for the Administrative Committee to make a decision may be
extended by an additional sixty (60) days upon written notice to the
claimant prior to the commencement of the extension.
8.5 Employer to Supply Information. To enable the Administrative
Committee to perform its functions, the Employer shall supply full and timely
information to the Administrative Committee of all matters relating to the
retirement, death or other cause for termination of employment of all
Participants, and the other pertinent facts as the Administrative Committee may
require.
ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
9.1 Amendment. The Administrative Committee may at any time amend the
Plan by written instrument, notice of which is given to all Participants and to
any Beneficiaries to whom a benefit is due, subject to the following:
(a) Preservation of Account Balance. No amendment shall reduce
the amount accrued in any Account to the date the notice of the
amendment is given.
(b) Changes in Earnings Rate. No amendment shall reduce the
Rate of Return to be credited after the date of the amendment to the
amount already accrued in any Account and any Deferred Compensation
credited to the Account under Deferral Commitments already in effect on
that date.
9.2 Employer's Right to Terminate. The Compensation Committee may at
any time partially or completely terminate the Plan if, in its judgment, the
tax, accounting or other effects of the continuance of the Plan, or potential
payments thereunder would not be in the best interests of the Employer.
(a) Partial Termination. The Compensation Committee may
partially terminate the Plan by instructing the Administrative
Committee not to accept any additional Deferral Commitments. If a
partial termination occurs, the Plan shall continue to operate and be
effective with regard to Deferral Commitments entered into prior to the
effective date of the partial termination.
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<PAGE> 14
(b) Complete Termination. The Compensation Committee may
completely terminate the Plan by instructing the Administrative
Committee not to accept any additional Deferral Commitments, and by
terminating all ongoing Deferral Commitments. If a complete termination
occurs, the Plan shall cease to operate and the Employer shall pay out
each Account. Payment shall be made in substantially equal annual
installments over the following period, based on the Account balance:
<TABLE>
<CAPTION>
Account Balance Payout Period
--------------- -------------
<S> <C>
Less than $100,000 Lump Sum
$100,000 but less than $500,000 3 Years
More than $500,000 5 Years
</TABLE>
Payments shall commence within sixty (60) days after the Compensation
Committee terminates the Plan and the unpaid Account balance shall continue to
be credited with the applicable Rate of Return.
ARTICLE X
MISCELLANEOUS
10.1 Unfunded Plan. The Plan is an unfunded plan maintained primarily
to provide deferred compensation benefits for a "select group of management or
highly-compensated employees" within the meaning of Sections 201, 301 and 401 of
ERISA , and therefore is exempt from the provisions of Parts 2, 3 and 4 of Title
I of ERISA.
10.2 Unsecured General Creditor. Participants and Beneficiaries shall
be unsecured general creditors, with no secured or preferential right to any
assets of the Employer or any other party for payment of benefits under the
Plan. Any life insurance policies, annuity contracts or other property purchased
by the Employer in connection with the Plan shall remain its general, unpledged
and unrestricted assets. The Employer's obligation under the Plan shall be an
unfunded and unsecured promise to pay money in the future.
10.3 Trust Fund. At its discretion, the Employer may establish one (1)
or more trusts, with any trustees as the Administrative Committee may approve,
for the purpose of providing for the payment of benefits owed under the Plan.
Although any such trust shall be irrevocable, its assets shall be held for
payment of all the Company's general creditors in the event of insolvency or
bankruptcy. To the extent any benefits provided under the Plan are paid from a
trust, the Employer shall have no further obligation to pay them. If not paid
from a trust, the benefits shall remain the obligation of the Employer.
10.4 Nonassignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of
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<PAGE> 15
actual receipt the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are, expressly declared to be unassignable
and nontransferable. No part of the amounts payable shall, prior to actual
payment, be subject to seizure or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant or any other
person, nor be transferable by operation of law in the event of a Participant's
or any other person's bankruptcy or insolvency.
10.5 Not a Contract of Employment. This Plan shall not constitute a
contract of employment between the Employer and the Participant. Nothing in this
Plan shall give a Participant the right to be retained in the service of the
Employer or to interfere with the right of the Employer to discipline or
discharge a Participant at any time.
10.6 Protective Provisions. A Participant will cooperate with the
Employer by furnishing any and all information requested by Employer in order to
facilitate the payment of benefits hereunder, and by taking any physical
examinations as the Employer may deem necessary and taking other action as may
be requested by the Employer.
10.7 Governing Law. The provisions of this Plan shall be construed and
interpreted according to the laws of the Commonwealth of Pennsylvania, except as
that law is preempted by ERISA or by other federal law.
10.8 Validity. In case any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts hereof, but the Plan shall be construed and enforced as if the
illegal and invalid provision had never been inserted herein.
10.9 Notice. Any notice required or permitted under the Plan shall be
sufficient if in writing and hand delivered or sent by registered or certified
mail. The notice shall be deemed as given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification. Mailed notice to the Administrative Committee
shall be directed to the Company's address. Mailed notice to a Participant or
Beneficiary shall be directed to the individuals last known address in the
Employer's records.
10.10 Successors. The provisions of the Plan shall bind and inure to
the benefit of the Employer and its successors and assigns. The term successors
as used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise, acquire all or
substantially all of the business and assets of the Employer, and successors of
any such corporation or other business entity.
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<PAGE> 1
EXHIBIT 4.10
MOTIVEPOWER INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
FOR MICHAEL A. WOLF
----------------------------
ARTICLE I
PURPOSE AND BACKGROUND
The purpose of this Deferred Compensation Plan (the "Plan") is
to provide current tax planning opportunities as well as supplemental funds for
the retirement or death of Michael A. Wolf, the President and CEO of MotivePower
Industries, Inc. ("Company"). The Plan shall be effective as of July 1, 1996
("Effective Date").
ARTICLE 11
DEFINITIONS
For the purposes of the Plan, the following terms shall have
the meanings indicated, unless the context clearly indicates otherwise.
2.1 ACCOUNT. "Account" means the Account as maintained by the
Employer in accordance with Article IV with respect to any deferral of
Compensation pursuant to the Plan. The Participant's Account shall be utilized
solely as a device for the determination and measurement of the amounts to be
paid to the Participant pursuant to the Plan. Separate subaccounts shall be
maintained to properly reflect the Participant's balance and earnings thereon.
The Participant's Account shall not constitute or be treated as a trust fund of
any kind.
2.2 ADMINISTRATIVE COMMITTEE. "Administrative Committee" means
the committee appointed to administer the employee benefit plans of the Company.
2.3 BENEFICIARY. "Beneficiary" means the person, persons or
entity entitled under Article VI to receive any Plan Benefits payable after the
Participant's death.
2.4 CAUSE. "Cause" is defined as provided in the Participant's
Employment Agreement.
2.5 CODE. "Code" means the Internal Revenue Code of 1986, as
amended.
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2.6 COMPENSATION. "Compensation" means the salary and all
bonuses payable to the Participant during the calendar year and considered to be
"wages" for purposes of federal income tax withholding, before reduction for
amounts deferred under the Plan, salary reduction contributions under Section
401 (k) of the Code, or any other deferral arrangements. For purposes of the
Plan, the term "bonus" includes cash payments made to the Participant upon the
exercise of SARS. Compensation does not include expense reimbursements, any form
of noncash Compensation or benefits, group life insurance premiums, or any other
payments or benefits other than salary or bonuses (as described above).
2.7 COMPENSATION COMMITTEE. "Compensation Committee" means the
Compensation Committee of the Employer's Board of Directors.
2.8 DEFERRAL COMMITMENT. "Deferral Commitment" means an
election to defer Compensation made by the Participant pursuant to Article III
and for which a separate Participation Agreement has been submitted by the
Participant to the Administrative Committee.
2.9 DEFERRAL PERIOD. "Deferral Period" means the period over
which the Participant has elected to defer a portion of his Compensation. Each
calendar year shall be a separate Deferral Period, provided that the Deferral
Period may be modified pursuant to Section 3.4. The initial Deferral Period
shall be from July 1, 1996 through December 31, 1996.
2.10 DETERMINATION DATE. "Determination Date" means the last
day of each calendar month.
2.11 EARNINGS INDEX. "Earnings Index" means a portfolio or
fund selected by the Participant to be used in calculating the Rate of Return.
The portfolio may include stocks, bonds and other types of securities that are
traded on a national securities exchange. Employer shall have no responsibility
for the Earnings Indices selected by the Participant.
2.12 ELECTIVE DEFERRED COMPENSATION. "Elective Deferred
Compensation" means the amount of Compensation that the Participant elects to
defer pursuant to a Deferral Commitment.
2.13 EMPLOYER. "Employer" means MK Rail Corporation or any
successor to the business thereof.
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2.14 ERISA. "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
2.15 FINANCIAL HARDSHIP. "Financial Hardship" means an
unanticipated emergency that is caused by an event beyond the control of the
Participant that would result in severe financial hardship if an early
withdrawal from the Plan were not permitted.
2.16 PARTICIPANT. "Participant" means Michael A. Wolf, the
President and CEO of the Employer.
2.17 PARTICIPATION AGREEMENT. "Participation Agreement" means
the agreement submitted by the Participant to the Administrative Committee prior
to the beginning of the Deferral Period, with respect to a Deferral Commitment
made for such Deferral Period.
2.18 PLAN BENEFIT. "Plan Benefit" means the benefit payable to
the Participant as calculated in Article V.
2.19 RATE OF RETURN. "Rate of Return" means the amount
credited to the Participant's Account under Section 4.6 to be determined by the
Administrative Committee based upon the net performance of the Earnings Indices
selected by the Participant. If the Employer elects, in its sole discretion, to
make investments that correspond to the Earnings Indices periodically elected by
the Participant, the Rate of Return shall be determined after subtracting any
transaction costs (e.g., commissions).
2.20 SARS. "SARs" means stock appreciation rights provided by
the Employer to the Participant.
ARTICLE III
PARTICIPATION AND DEFERRAL COMMITMENTS
3.1 ELIGIBILITY AND PARTICIPATION. Michael A. Wolf, the
President and CEO of the Employer, shall be the only Participant. His
participation begins as of July 1, 1996.
3.2 FORM OF DEFERRAL. The Participant may elect Deferral
Commitments in the Participation Agreement as follows:
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<PAGE> 4
(a) SALARY DEFERRAL COMMITMENT. A salary Deferral
Commitment shall apply to the salary payable by the Employer to the Participant
during the Deferral Period. The amount to be deferred shall be stated as a
percentage or dollar amount.
(b) BONUS DEFERRAL COMMITMENT. A bonus Deferral
Commitment shall apply to the bonus Compensation payable to the Participant
during the Deferral Period. If the bonus is cash payable upon the exercise of
SARs, the Deferral Commitment shall apply to SARs that are exercised during the
Deferral Period. The amount to be deferred shall be stated as a percentage or
dollar amount.
3.3 LIMITATIONS ON DEFERRAL COMMITMENTS. The following
limitations shall apply to Deferral Commitments:
(a) MINIMUM. The minimum salary deferral amount shall
be one hundred dollars ($100) for each pay period. There shall be no minimum
deferral amount for bonus in a bonus Deferral Commitment.
(b) MAXIMUM. The maximum deferral amount shall be
fifty percent (50%) of salary in a salary Deferral Commitment and one hundred
percent (100%) of bonus in a bonus Deferral Commitment.
3.4 MODIFICATION OF DEFERRAL COMMITMENT. A Deferral Commitment
shall be irrevocable except that the Administrative Committee may permit the
Participant to reduce the amount to be deferred, or waive the remainder of the
Deferral Commitment, upon a finding that the Participant has suffered a
Financial Hardship.
ARTICLE IV
DEFERRED COMPENSATION ACCOUNT
4.1 ACCOUNT. For record keeping purposes only, an Account
shall be maintained for the Participant. Separate subaccounts shall be
maintained to the extent necessary to properly reflect the Participant's
election of Earnings Indices and total vested or nonvested Account balance.
4.2 ELECTIVE DEFERRED COMPENSATION. The Participant's Elective
Deferred Compensation shall be credited to the Participant's Account as the
corresponding nondeferred portion of the Compensation
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<PAGE> 5
becomes or would have become payable. Any withholding of taxes or other amounts
with respect to deferred Compensation which is required by state, federal or
local law shall be withheld from the Participant's nondeferred Compensation to
the maximum extent possible with any excess being withheld from the
Participant's Account.
4.3 ALLOCATION OF ELECTIVE DEFERRED COMPENSATION. The
Participant shall allocate the Account among the Earning Indices. The initial
allocation shall be made in the Participation Agreement. If the Participant has
not made an allocation election, the Participant's Account shall be allocated to
a money market or equivalent Earnings Index. The Participant may change his
allocation among the Earning Indices as of the first day of each month by prior
notice to the Administrative Committee.
The Employer shall be under no obligation to make investments
that correspond to the Earnings Indices elected by the Participant, even though
the Participant's elections are used to determine the Rate of Return.
4.4 MAKEUP CONTRIBUTIONS.
(a) The Participant shall receive a makeup
contribution equal to two percent (2%) of the Participant's Compensation, less
the matching contribution to the 401 (k) plan required to be allocated to
Employer stock. The Participant is not required to defer any amounts into the
Plan in order to receive a makeup contribution under this subsection.
(b) If the Participant defers into the Employer's 401
(k) plan an amount equal to the limit as set forth in Section 402(g) of the
Code, the Participant shall receive an additional makeup contribution equal to
fifty percent (50%) of the first six percent (6%) deferred into the 401 (k) plan
and the Plan. This makeup amount shall be reduced by the matching contribution
to the 401 (k) plan which is directed by the Participant. This makeup
contribution shall be allocated as elected by the Participant.
The total Employer contribution under this Section may never
exceed five percent (5%) of Compensation. All makeups under this Section shall
be credited to the Participant's Account no later than forty-five (45) days
after the end of the calendar year they would have been credited to the
underlying qualified plans if not for the limitations contained in the Code.
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<PAGE> 6
4.5 EMPLOYER DISCRETIONARY CONTRIBUTIONS. The Employer may
make Discretionary Contributions to the Participant's Account. Discretionary
Contributions shall be credited at such times and in such amounts as the
Administrative Committee in its sole discretion shall determine. The amount of
the Discretionary Contributions shall be evident in a special Participation
Agreement approved by the Administrative Committee.
4.6 RATE OF RETURN. The Participant's Account shall be
credited monthly with the Rate of Return specified in Section 2.19.
4.7 DETERMINATION OF ACCOUNT. The Participant's Account as of
each Determination Date shall consist of the balance of the Participant's
Account as of the immediately preceding Determination Date, plus the
Participant's Elective Deferred Compensation credited, any makeup contributions
and the applicable Rate of Return, minus the amount of any distributions made
since the immediately preceding Determination Date.
4.8 VESTING OF ACCOUNT. The Participant shall be vested in the
amounts credited to the Participant's Account and earnings thereon as follows:
(a) Amounts Deferred. The Participant shall be one
hundred percent (100%) vested at all times in the amount of Compensation elected
to be deferred under the Plan and Rate of Return thereon.
(b) EMPLOYER MAKEUPS. The Employer makeups
contributed to the Participant's Account, and Rate of Return thereon, shall be
vested to the same extent that contribution in the underlying qualified plans
are vested.
(c) EMPLOYER DISCRETIONARY CONTRIBUTIONS. The
Employer Discretionary Contributions and Rate of Return thereon shall be vested
as set forth in the special Participation Agreement.
4.9 STATEMENT OF ACCOUNT. The Administrative Committee shall
submit to the Participant, within one hundred twenty (120) days after the close
of each calendar year, or at such other time as determined by the Administrative
Committee, a statement setting forth the balance to the credit of the
Participant's Account.
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<PAGE> 7
ARTICLE V
PLAN BENEFITS
5.1 DISTRIBUTIONS PRIOR TO TERMINATION OF EMPLOYMENT. The
Participant's Account may be distributed to the Participant prior to termination
of employment with the Employer as follows:
(a) EARLY WITHDRAWALS. The Participant may elect in a
Participation Agreement to withdraw all or any portion of the amount deferred by
that Participation Agreement as of a date specified in the election. Such date
shall not be sooner than seven (7) years after the date the Deferral Period
commences. The amount withdrawn shall not exceed the amount of Compensation
deferred, without earnings, and shall not include any makeup contribution. Such
election shall be made at the time the Deferral Commitment is made and shall be
irrevocable.
(b) HARDSHIP WITHDRAWALS. Upon a finding that the
Participant has suffered a Financial Hardship, the Administrative Committee may,
in its sole discretion, make distributions from the Participant's Account. The
amount of such a withdrawal shall be limited to the amount reasonably necessary
to meet the Participant'.s needs resulting from the Financial Hardship. If
payment is made due to Financial Hardship under the Plan, the Participant's
deferrals under the Plan shall cease for a twelve (12) month period. Any
resumption of the Participant's deferrals under the Plan after such twelve (12)
month period shall be made only at the election of the Participant in accordance
with Article III herein.
(c) FORM OF PAYMENT AND TIME. Any distribution
pursuant to Sections 5.1(a) or 5.1 (b) shall be payable in a lump sum. The
distribution shall be paid in the case of a partial withdrawal, as provided in
the Participation Agreement, and in case of a Financial Hardship, within thirty
(30) days after the Administrative Committee approves the Financial Hardship.
5.2 DISTRIBUTIONS FOLLOWING TERMINATION OF EMPLOYMENT. Upon
the Participant's termination of employment with the Employer for any reason
(which termination shall be for a period of at least five (5) days), the
Employer shall pay the Participant or, in the case of death, the Participant's
Beneficiary, benefits equal to the vested balance in the Participant's Account.
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<PAGE> 8
5.3 FORM OF BENEFIT PAYMENT FOLLOWING TERMINATION OF
EMPLOYMENT.
(a) Subject to Section 5.3(b), benefits shall be paid
in the form selected by the Participant in the Participation Agreement. Options
include:
(i) A lump sum payment.
(ii) Equal annual installments of the
Account and Rate of Return amortized over a period of five (5), ten (10), or
fifteen (15) years. The Account shall be amortized with an assumed Rate of
Return of seven percent (7%) unless the Participant selects, and the
Administrative Committee approves, an alternative assumed Rate of Return. The
Account shall be reamortized annually based upon the actual Rate of Return.
(b) SMALL ACCOUNT(S). Notwithstanding Section 5.3(a),
if the Participant's Account is less than fifty thousand dollars ($50,000) on
the date of termination, the benefit shall be paid in a lump sum.
5.4 COMMENCEMENT OF DEFERRAL PAYMENT.
(a) Subject to Section 5.4(b), benefits that are
payable upon the Participant's termination of employment with the Employer shall
commence as elected by the Participant in the Participation Agreement. Options
are:
(i) Payments to commence as soon as
practical after termination but in no case more than sixty (60) days after
termination.
(ii) Payment to commence as soon as
practical in the calendar year following termination but in no case more than
ninety (90) days after the beginning of the calendar year.
(iii) Payments to commence as soon as
practical in the calendar year following the later of the Participant's
termination or attainment of an age selected by the Participant which shall not
exceed age sixty-five (65). If the Participant has selected this option and has
an Account balance less than fifty thousand dollars ($50,000) at termination,
the benefit shall commence as if the Participant had selected Section 5.4(a)(ii)
above.
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<PAGE> 9
(b) Notwithstanding Section 5.4(a), if the
Participant is a "covered employee" as defined in Section 162(m)(3) of the Code,
the Participant shall receive his first benefit payment as if the Participant
had elected option Section 5.4(a)(ii) above, unless the Participant has elected
Section 5.4(a)(iii) above and such commencement date is after the date payable
under Section 5.4(a)(ii).
5.5 DEATH BENEFIT. Upon the death of the Participant, the
Employer shall pay to the Participant's Beneficiary an amount equal to the
remaining unpaid balance of the Participant's Account in a lump sum.
5.6 ACCELERATED DISTRIBUTION. Notwithstanding any other
provision of the Plan, at any time the Participant shall be entitled to receive,
upon written request to the Administrative Committee, a lump sum distribution
equal to ninety percent (90%) of the vested Account balance as of the
Determination Date immediately preceding the date on which the Administrative
Committee receives the written request. The remaining balance shall be forfeited
by the Participant. The amount payable under this Section shall be paid in a
lump sum within thirty (30) days following the receipt of the notice by the
Administrative Committee from the Participant.
If the Participant receives a distribution under this Section, his
Deferral Commitments for the remaining portion of that calendar year shall be
revoked and he shall not be permitted to make Deferral Commitments for the next
succeeding calendar year.
5.7 WITHHOLDING FOR TAXES. To the extent required by the law
in effect at the time payments are made, the Employer shall withhold from the
payments made hereunder any taxes required to be withheld by federal, state or
local government, including any amount which the Employer determines is
reasonably necessary to pay any generation-skipping transfer tax which is or may
become due. A Beneficiary, however, may elect not to have withholding of federal
income tax pursuant to Section 3405(a)(2) of the Code, or any successor
provision thereto.
5.8 VALUATION AND SETTLEMENT. The amount of a lump sum payment
and the initial amount of installments shall be based on the value of the
Participant's Account on the Determination Date immediately preceding the
payment or commencement of installment payments.
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5.9 PAYMENT TO GUARDIAN. The Administrative Committee may
direct payment to the duly appointed guardian, conservators or other similar
legal representative of the Participant or Beneficiary to whom payment is due.
In the absence of such a legal representative, the Administrative Committee may,
in it sole and absolute discretion, make payment to a person having the care and
custody of a minor, incompetent or person incapable of handling the disposition
of property upon proof satisfactory to the Administrative Committee of
incompetency, minority, or incapacity. Such distribution shall completely
discharge the Administrative Committee from all liability with respect to such
benefit.
ARTICLE VI
BENEFICIARY DESIGNATION
6.1 BENEFICIARY DESIGNATION. Subject to Section 6.3, the
Participant shall have the right, at any time, to designate one (1) or more
persons or an entity as Beneficiary (both primary as well as secondary) to whom
benefits under the Plan shall be paid in the event of the Participant's death
prior to complete distribution of the Participant's Account. Each Beneficiary
designation shall be in a written form prescribed by the Administrative
Committee and shall be effective only when filed with the Administrative
Committee during the Participant's lifetime.
6.2 CHANGING BENEFICIARY. Subject to Section 6.3, any
Beneficiary designation may be changed by the Participant without the consent of
the previously named Beneficiary by the filing of a new designation with the
Administrative Committee. The filing of a new designation shall cancel all
designations previously filed.
6.3 COMMUNITY PROPERTY. If the Participant resides in a
community property state, the following rules shall apply:
(a) If the Participant is married, the designation of
a Beneficiary other than the Participant's spouse use shall not be effective
unless the spouse executes a written consent that acknowledges the effect of the
designation, or it is established the consent cannot be obtained because the
spouse cannot be located.
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(b) If the Participant is married, the Participant's
Beneficiary designation may be changed with the consent of the Participant's
spouse as provided for in Section 6.3(a) by the filing of a new designation with
the Administrative Committee.
(c) If the Participant's marital status changes after
the Participant has designated a Beneficiary, the following shall apply:
(i) If the Participant is married at the
time of death but was unmarried when the designation was made, the designation
shall be void unless the spouse has consented to it in the manner prescribed in
Section 6.3(a).
(ii) If the Participant is unmarried at the
time of death but was married when the designation was made:
a) The designation shall be void if
the spouse was named as Beneficiary.
b) The designation shall remain
valid if a nonspouse Beneficiary was named.
(iii) If the Participant was married when
the designation was made and is married to a different spouse at death, the
designation shall be void unless the new spouse has consented to it in the
manner prescribed above.
6.4 NO BENEFICIARY DESIGNATION. If the Participant fails to
designate a Beneficiary in the manner provided above, if the designation is
void, or if the Beneficiary designated by the Participant dies before the
Participant or before complete distribution of the Participant's benefits, the
Participant's Beneficiary shall be the person in the first of the following
classes in which there is a survivor:
(a) The Participant's spouse;
(b) The Participant's children in equal shares,
except that if any of the children predeceases the Participant but leaves issue
surviving, then such issue shall take by right of representation the share the
parent would have taken if living;
(c) The Participant's estate.
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ARTICLE VII
ADMINISTRATION
7.1 COMMITTEE; DUTIES. The Plan shall be administered by the
Administrative Committee. The Administrative Committee shall consist of at least
three (3) individuals appointed by the Compensation Committee. The
Administrative Committee shall have the authority to amend (but not terminate)
the Plan (subject to Section 9.1), interpret and enforce all appropriate rules
and regulations for the administration of the Plan and decide or resolve any and
all questions, including interpretations of the Plan, as may arise in such
administration. A majority vote of the Administrative Committee members shall
control any decision.
7.2 AGENTS. The Administrative Committee may, from time to
time, employ agents and delegate to them such administrative duties as it sees
fit, and may from time to time consult with counsel who may be counsel to the
Company.
7.3 BINDING EFFECT OF DECISIONS. The decision or action of the
Administrative Committee with respect to any question arising out of or in
connection with the administration, interpretation and application of the Plan
and the rules and regulations promulgated hereunder shall be final, conclusive
and binding upon all persons having any interest in the Plan.
7.4 INDEMNITY OF ADMINISTRATIVE COMMITTEE. The Company shall
indemnify and hold harmless the members of the Administrative Committee against
any and all claims, loss, damage, expense or liability arising from any action
or failure to act with respect to the Plan on account of such person's service
on the Administrative Committee, except in the case of gross negligence or
willful misconduct.
ARTICLE VIII
CLAIMS PROCEDURE
8.1 CLAIM. The Administrative Committee shall establish rules
and procedures to be followed by the Participant and Beneficiaries in (a) filing
claims for benefits, and (b) for furnishing and verifying proofs necessary to
establish the right to benefits in accordance with the Plan, consistent with the
remainder of this Article. Such rules and procedures shall require that claims
and proofs be made in writing and directed to the Administrative Committee.
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8.2 REVIEW OF CLAIM. The Administrative Committee shall review
all claims for benefits. Upon receipt by the Administrative Committee of such a
claim, it shall determine all facts which are necessary to establish the right
of the claimant to benefits under the provisions of the Plan and the amount
thereof as herein provided within ninety (90) days of receipt of such claim. If
prior to the expiration of the initial ninety (90) day period, the
Administrative Committee determines additional time is needed to come to a
determination on the claim, the Administrative Committee shall provide written
notice to the Participant, Beneficiary or other claimant of the need for the
extension, not to exceed a total of one hundred eighty (180) days from the date
the application was received.
8.3 NOTICE OF DENIAL OF CLAIM. In the event that the
Participant, Beneficiary or other claimant claims to be entitled to a benefit
under the Plan, and the Administrative Committee determines that such claim
should be denied in whole or in part, the Administrative Committee shall, in
writing, notify such claimant that the claim has been denied, in whole or in
part, setting forth the specific reasons for such denial. Such notification
shall be written in a manner reasonably expected to be understood by such
claimant and shall refer to the specific sections of the Plan relied on, shall
describe any additional material or information necessary for the claimant to
perfect the claim and an explanation of why such material or information is
necessary, and where appropriate, shall include an explanation of how the
claimant can obtain reconsideration of such denial.
8.4 RECONSIDERATION OF DENIED CLAIM.
(a) Within sixty (60) days after receipt of the notice
of the denial of a claim, such claimant or duly authorized representative may
request, by mailing or delivery of such written notice to the Administrative
Committee, a reconsideration by the Administrative Committee of the decision
denying the claim. If the claimant or duly authorized representative fails to
request such a reconsideration within such sixty (60) day period, it shall be
conclusively determined for all purposes of the Plan that the denial of such
claim by the Administrative Committee is correct. If such claimant or duly
authorized representative requests a reconsideration within such sixty (60) day
period, the claimant or duly authorized representative shall have thirty (30)
days after filing a request for reconsideration to submit additional written
material in support of the claim, review pertinent documents, and submit issues
and comments in writing.
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(b) After such reconsideration request, the
Administrative Committee shall determine within sixty (60) days of receipt of
the claimant's request for reconsideration whether such denial of the claim was
correct and shall notify such claimant in writing of its determination. The
written notice of decision shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be understood by the
claimant, as well as specific references to the pertinent Plan provisions on
which the decision is based. In the event of special circumstances determined by
the Administrative Committee, the time for the Administrative Committee to make
a decision may be extended by an additional sixty (60) days upon written notice
to the claimant prior to the commencement of the extension.
8.5 ARBITRATION. Any decision of the Administrative Committee
may be appealed to arbitration, pursuant to the arbitration procedure provided
for in the Participant's Employment Agreement.
8.6 EMPLOYER TO SUPPLY INFORMATION. To enable the
Administrative Committee to perform its functions, the Employer shall supply
full and timely information to the Administrative Committee and to the
Participant of all matters relating to the retirement, death or other cause for
termination of employment of the Participant, and such other pertinent facts as
the Administrative Committee or the Participant may require.
ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
9.1 AMENDMENT. The Administrative Committee may at any time
amend the Plan by written instrument with the Participant's written consent and
the written consent of any Beneficiaries to whom a benefit is due, subject to
the following:
(a) PRESERVATION OF ACCOUNT BALANCE. No amendment
shall reduce the amount accrued in the Participant's Account to the date such
notice of the amendment is given.
(b) CHANGES IN EARNINGS RATE. No amendment shall
reduce the Rate of Return to be credited after the date of the amendment to the
amount already accrued in the Account and any Deferred Compensation credited to
the Account under Deferral Commitments already in effect on that date.
9.2 TERMINATION. The Compensation Committee may at any time
partially or completely terminate the Plan with the Participant's written
consent, if, in the Compensation Committee's judgment, the tax,
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<PAGE> 15
accounting or other effects of the continuance of the Plan, or potential
payments thereunder would not be in the best interests of the Employer and the
Participant.
(a) PARTIAL TERMINATION. With the Participant's
written consent, the Compensation Committee may partially terminate the Plan by
instructing the Administrative Committee not to accept any additional Deferral
Commitments. If such a partial termination occurs, the Plan shall continue to
operate and be effective with regard to Deferral Commitments entered into prior
to the effective date of such partial termination.
(b) COMPLETE TERMINATION. With the Participant's
written consent, the Compensation Committee may completely terminate the Plan by
instructing the Administrative Committee not to accept any additional Deferral
Commitments, and by terminating all ongoing Deferral Commitments. If such a
complete termination occurs, the Plan shall cease to operate and the Employer
shall pay out the Account. Payment shall be made in substantially equal annual
installments over the following period, based on the Account balance:
<TABLE>
<CAPTION>
Account Balance Payout Period
--------------- -------------
<S> <C>
Less than $100,000 Lump Sum
$100,000 but less than $500,000 3 Years
More than $500,000 5 Years
</TABLE>
Payments shall commence within sixty (60) days after the
Compensation Committee terminates the Plan and earnings shall continue to be
credited on the unpaid Account balance.
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ARTICLE X
MISCELLANEOUS
10.1 UNFUNDED PLAN. The Plan is an unfunded plan maintained
primarily to provide deferred compensation benefits for a select group of
"management or highly compensated employees" within the meaning of Sections 201,
301 and 401 of ERISA, and therefore is exempt from the provisions of Parts 2, 3
and 4 of Title I of ERISA.
10.2 UNSECURED GENERAL CREDITOR. The Participant and his
Beneficiaries shall be unsecured general creditors, with no secured or
preferential right to any assets of the Employer or any other party for payment
of benefits under the Plan. Any life insurance policies, annuity contracts or
other property purchased by the Employer in connection with the Plan shall
remain its general, unpledged and unrestricted assets. The Employer's obligation
under the Plan shall be an unfunded and unsecured promise to pay money in the
future.
10.3 TRUST FUND. At its discretion, the Employer may establish
one (1) or more trusts, with such trustees as the Compensation Committee may
approve, for the purpose of providing for the payment of benefits owed under the
Plan. Although such a trust shall be irrevocable, its assets shall be held for
payment of all the Companies general creditors in the event of insolvency or
bankruptcy. To the extent any benefits provided under the Plan are paid from any
such trust, the Employer shall have no further obligation to pay them. If not
paid from the trust, such benefits shall remain the obligation of the Employer.
10.4 NONASSIGNABILITY. Neither the Participant nor any other
person shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in
advance of actual receipt the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are, expressly declared to be
unassignable and nontransferable. No part of the amounts payable shall, prior to
actual payment, be subject to seizure or sequestration for the payment of any
debts, judgments, alimony or separate maintenance owed by the Participant or any
other person, nor be transferable by operation of law in the event of the
Participant's or any other person's bankruptcy or insolvency.
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<PAGE> 17
10.5 NOT A CONTRACT OF EMPLOYMENT. The Plan shall not
constitute a contract of employment between the Employer and the Participant.
Nothing in the Plan shall give the Participant the right to be retained in the
service of the Employer or to interfere with the right of the Employer to
discharge the Participant pursuant to the Participant's Employment Agreement.
10.6 PROTECTIVE PROVISIONS. The Participant will cooperate
with the Employer by furnishing any and all information requested by the
Employer in order to facilitate the payment of benefits hereunder, and by taking
such physical examinations as the Employer may deem necessary and taking such
other action as may be requested by the Employer.
10.7 GOVERNING LAW. The provisions of the Plan shall be
construed and interpreted according to the laws of the Commonwealth of
Pennsylvania, except as preempted by ERISA or other federal law.
10.8 VALIDITY. In case any provision of the Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts hereof, but the Plan shall be construed and enforced
as if such illegal and invalid provision had never been inserted herein.
10.9 NOTICE. Any notice required or permitted under the Plan
shall be sufficient if in writing and hand delivered or sent by registered or
certified mail. Such notice shall be deemed as given as of the date of delivery
or, if delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification. Mailed notice to the Administrative
Committee shall be directed to the Company's address. Mailed notice to the
Participant or Beneficiary shall be directed to the individual's last known
address in the Employer's records.
10.10 SUCCESSORS. The provisions of the Plan shall bind and
inure to the benefit of the Employer and its successors and assigns. The term
successors as used herein shall include any corporate or other business entity
which shall, whether by merger, consolidation, purchase or otherwise, acquire
all or substantially all of the business and assets of the Employer, and
successors of any such corporation or other business entity.
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<PAGE> 1
EXHIBIT 4.11
MotivePower Industries, Inc.
DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
PURPOSE AND BACKGROUND
The purpose of this Deferred Compensation Plan (the "Plan") is to
provide current tax planning opportunities as well as supplemental funds for the
retirement or death of non-employee members of the board of directors of
MotivePower Industries, Inc. ("Company") and its subsidiaries and affiliated
corporations and business entities. The Plan shall be in addition to existing
deferred compensation plans and arrangements maintained by the Company. It is
intended that the Plan will aid in attracting and retaining persons of
exceptional ability to serve as members of the Company's board of directors by
providing them with these benefits. The Plan was originally adopted effective as
of December , 1997 ("Effective Date").
References are to the Plan unless otherwise indicated.
ARTICLE II
DEFINITIONS
For the purposes of the Plan, the following terms have the meanings
indicated, unless the context clearly indicates otherwise:
2.1 Account. "Account" means the Account as maintained by the Company
in accordance with Article IV with respect to any Compensation deferred pursuant
to the Plan. A Participant's Account shall be utilized solely as a device for
the determination and measurement of the amounts to be paid to the Participant
pursuant to the Plan. Separate subaccounts shall be maintained to properly
reflect the Participant's balance and earnings thereon. A Participant's Account
shall not constitute or be treated as a trust fund of any kind.
2.2 Administrative Committee. "Administrative Committee" means the
committee appointed to administer the Plan as provided by Section 7.2.
2.3 Beneficiary. "Beneficiary" means the person, persons or entity
entitled under Article VI to receive any Plan Benefits payable after a
Participant's death.
2.4 Board. "Board" means the board of directors of the Company.
2.5 Code. "Code" means the Internal Revenue Code of 1986, as amended.
2.6 Company. "Company" means MotivePower Industries, Inc., any
successor to the business thereof, and any affiliated or subsidiary corporations
designated by the Compensation Committee.
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2.7 Company's Stock Fund. "Company's Stock Fund" means a hypothetical
fund consisting of MotivePower Industries, Inc. common stock.
2.8 Compensation. "Compensation" means any payments, including annual
fees and meeting fees payable to a Participant as a member of the Board or as a
member of a committee of the Board during the calendar year and considered to be
"earnings" for purposes of federal income taxation, increased by amounts
deferred under the Plan or any other deferral arrangements. Compensation does
not include expense reimbursements, any form of noncash Compensation or
benefits, group life insurance premiums, or any other payments or benefits other
than earnings as described above.
2.9 Compensation Committee. "Compensation Committee" means the
Compensation Committee of the Board.
2.10 Deferral Commitment. "Deferral Commitment" means an election to
defer Compensation made by a Participant pursuant to Article III and for which a
Participation Agreement has been submitted by the Participant to the
Administrative Committee.
2.11 Deferral Period. "Deferral Period" means the period over which a
Participant has elected to defer a portion of the Participant's Compensation.
Each calendar year shall be a separate Deferral Period, provided that the
Deferral Period may be modified pursuant to Section 3.4.
2.12 Determination Date. "Determination Date" means the last day of
each calender month.
2.13 Earnings Index. "Earnings Index" means the Company's Stock Fund or
the interim earnings rate provided for under Section 4.3 used to calculate the
Rate of Return.
2.14 Elective Deferred Compensation. "Elective Deferred Compensation"
means the amount of Compensation that a Participant elects to defer pursuant to
a Deferral Commitment.
2.15 ERISA. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
2.16 Financial Hardship. "Financial Hardship" means an unanticipated
emergency that is caused by an event beyond the control of the Participant that
would result in severe financial hardship if an early withdrawal from the Plan
were not permitted and to be determined by the Administrative Committee on the
basis of information supplied by the Participant.
2.17 Participant. "Participant" means any individual who is
participating, or has participated and has an Account balance, in this Plan as
provided in Article III.
2.18 Participation Agreement. "Participation Agreement" means the
agreement submitted by a Participant to the Administrative Committee prior to
the beginning of a Deferral Period, with respect to a Deferral Commitment made
for that Deferral Period.
2.19 Plan Benefit. "Plan Benefit" means the benefit payable to a
Participant as calculated in Article V.
2.20 Rate of Return. "Rate of Return" means the amount credited to a
Participant's Account under Section 4.5 to be determined by the Administrative
Committee based upon the net performance of the Earnings Index.
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<PAGE> 3
2.21 Termination of Service. "Termination of Service" means the point
in time in which an individual's service as a member of the Board ends for any
reason, including but not limited to removal, election defeat, voluntary or
involuntary termination, retirement, death or disability.
ARTICLE III
PARTICIPATION AND DEFERRAL COMMITMENTS
3.1 Eligibility and Participation.
(a) Eligibility. Each non-employee member of the Board shall
be eligible to defer Compensation into this Plan.
(b) Participation. An eligible individual may elect to
participate in the Plan with respect to any Deferral Period by submitting a
Participation Agreement to the Administrative Committee by November 30 of the
calendar year immediately preceding the Deferral Period. With respect to amounts
earned commencing January 1 of any calendar year, the Administrative Committee,
at its sole discretion, may allow an eligible individual to submit a
Participation Agreement to the Administrative Committee by December 31 of the
immediately preceding calendar year.
(c) Part-Year Participation. In the event that an individual
first becomes eligible, or again becomes eligible following a period of
suspended eligibility, to defer Compensation during a calendar year, a
Participation Agreement must be submitted to the Administrative Committee no
later than thirty (30) days following notification to the individual of
eligibility to defer, and the Participation Agreement shall be effective only
with regard to Compensation earned or payable following the submission of the
Participation Agreement to the Administrative Committee.
3.2 Form of Deferral. A Deferral Commitment shall apply to the
Compensation payable by the Company to the Participant during the Deferral
Period. The amount to be deferred shall be stated as a percentage or dollar
amount.
3.3 Limitations on Deferral Commitments. The following limitations
shall apply to Deferral Commitments:
(a) Minimum. There shall be no minimum deferral amount of
Compensation.
(b) Maximum. The maximum deferral amount shall be 100 percent
(100%) of Compensation.
(c) Changes in Minimum or Maximum. The Administrative
Committee may change the minimum or maximum deferral amounts from time
to time by giving written notice to all Participants. No such change
may affect a Deferral Commitment made prior to the Administrative
Committee's action.
3.4 Modification of Deferral Commitment. A Deferral Commitment shall be
irrevocable except that the Administrative Committee may permit a Participant to
reduce the amount to be deferred, or waive the remainder of the Deferral
Commitment upon a finding that the Participant has suffered a Financial
Hardship.
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<PAGE> 4
ARTICLE IV
DEFERRED COMPENSATION ACCOUNTS
4.1 Accounts. For record keeping purposes only, an Account shall be
maintained for each Participant.
4.2 Elective Deferred Compensation. Subject to Section 4.3, a
Participant's Elective Deferred Compensation shall be credited to the
Participant's Account at the same time as the corresponding nondeferred portion
of the Compensation becomes or would have become payable. Any withholding of
taxes or other amounts with respect to deferred Compensation which is required
by federal, state, or local law shall be withheld from the Participant's
nondeferred Compensation to the maximum extent possible with any excess being
withheld from the Participant's Account.
4.3 Allocation of Deferred Compensation. The Administrative Committee
shall direct the allocation of the Participant's Account and Elective Deferred
Compensation to the Earning Index.
An allocation to the Company's Stock Fund, however, will not become
effective until the Company could reasonably make an equivalent actual
investment in the Company's stock without any material disruption of the market
for its stock. This restriction applies whether or not the Company actually
causes an investment to be made in its stock upon an allocation to the Company's
Stock Fund. If the period of time between when an allocation would otherwise
have become effective without application of this Section 4.3 and the actual
effective date after application of this Section 4.3 exceeds thirty (30) days,
the portion of the Participant's Account which is to be invested in the
Company's Stock Fund will be deemed to have been invested at an interim earnings
rate equal to an annual rate of return, compounded monthly, of seven (7) percent
for that period. All determinations under this Section 4.3 shall be made by the
Administrative Committee.
4.4 Company Discretionary Contributions. The Company may make
discretionary contributions to the Participant's Account. Discretionary
contributions shall be credited at times and in amounts as the Compensation
Committee in its sole discretion shall determine. The amounts of any
discretionary contributions shall be evidenced in a special Participation
Agreement approved by the Administrative Committee.
4.5 Rate of Return. The Accounts shall be credited monthly with the
Rate of Return specified in Section 2.20.
4.6 Determination of Accounts. Each Participant's Account as of each
Determination Date shall consist of the balance of the Participant's Account as
of the immediately preceding Determination Date, plus the Participant's Elective
Deferred Compensation credited, any company discretionary contributions credited
and the applicable Rate of Return, minus the amount of any distributions made,
since the immediately preceding Determination Date.
4.7 Vesting of Accounts. Each Participant shall be 100% vested in all
amounts credited to that Participant's Account including any Company
discretionary contributions and earnings thereon.
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<PAGE> 5
4.8 Statement of Accounts. The Administrative Committee shall submit to
each Participant, within one hundred twenty (120) days after the close of each
calendar year, or at another time as determined by the Administrative Committee,
a statement setting forth the balance to the credit of the Participant's
Account.
ARTICLE V
PLAN BENEFITS
5.1 Distributions Prior to Termination of Service. A Participant's
Account may be distributed to the Participant prior to Termination of Service as
follows:
(a) In-Service Withdrawals. A Participant may elect in a
Participation Agreement to withdraw all or any portion of the Elective
Deferred Compensation amount deferred by that Participation Agreement
as of a date specified in the election. The date shall not be sooner
than seven (7) years after the date the Deferral Period commences. The
amount withdrawn shall not exceed the amount of Compensation deferred,
without earnings. The election shall be made at the time the Deferral
Commitment is made and shall be irrevocable.
(b) Hardship Withdrawals. Upon a finding that a Participant
has suffered a Financial Hardship, the Administrative Committee may, in
its sole discretion, make distributions from the Participant's Account.
The amount of the withdrawal shall be limited to the amount reasonably
necessary to meet the Participant's needs resulting from the Financial
Hardship. If payment is made due to Financial Hardship under the Plan,
the Participant's deferrals under the Plan shall cease for a twelve
(12) month period. Any resumption of the Participant's deferrals under
the Plan after that twelve (12) month period shall be made only at the
election of the Participant in accordance with Article III herein.
(c) Form of Payment and Time. Any distribution pursuant to
Section 5.1(a) or 5.1(b) shall be payable in a lump sum. The
distribution shall be paid in the case of an in-service withdrawal, as
provided in the Participation Agreement, and in case of a Financial
Hardship, within thirty (30) days after the Administrative Committee
approves the Financial Hardship
5.2 Distributions Following Termination of Service. Upon a
Participant's Termination of Service (which termination shall be for a period of
at least five (5) days) the Company shall pay to the Participant or, in the case
of death, the Participant's Beneficiary, benefits equal to the vested balance in
the Participant's Account.
5.3 Form of Benefit Payment Following Termination of Service.
(a) Subject to Section 5.3(b), benefits shall be paid in the
form selected by the Participant in the Participation Agreement at the
time of the Deferral Commitment. Options include:
(i) A lump sum payment.
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<PAGE> 6
(ii) Equal annual installments of the Account and
Rate of Return amortized over a period of five (5), ten (10),
or fifteen (15) years. The Account shall be initially
amortized with an assumed annual, monthly compounding, Rate of
Return of 7 percent (7%) unless the Participant selects, and
the Administrative Committee approves, an alternative assumed
Rate of Return. The Account shall be reamortized annually
based upon the actual annual Rate of Return for the Account
for the immediately preceding twelve (12) months.
(b) Small Account(s). Notwithstanding Section 5.3(a), if a
Participant's Account is less than fifty thousand dollars ($50,000) on
the date of Termination of Service, the benefit shall be paid in a lump
sum.
5.4 Commencement of Deferral Payment.
(a) Subject to Section 5.4(b), benefits that are payable upon
a Participant's Termination of Service shall commence as elected by the
Participant in a Participation Agreement. Options are:
(i) Payments to commence as soon as practical after
termination, but in no case more than sixty (60) days after
termination.
(ii) Payment to commence as soon as practical in the
calendar year following termination, but in no case more than
ninety (90) days after the beginning of the calendar year.
(iii) Payments to commence as soon as practical in
the calendar year following the later of the Participant's
termination or obtainment of an age selected by the
Participant, which shall not exceed age sixty-five (65). If a
Participant has selected this option and has an account
balance of less than fifty thousand dollars ($50,000) at
termination, the benefit shall commence as if the Participant
had selected payment under Section 5.4(a)(ii) above.
(b) Notwithstanding Section 5.4(a), a Participant who is a
"covered employee" as defined in Code Section 162(m)(3) shall receive
the first benefit payment as if the Participant had elected payment
under Section 5.4(a)(ii), unless the Participant elects payment under
Section 5.4(a)(iii) and the commencement date is after the date payable
under Section 5.4(a)(ii).
5.5 Timing of Election. As long as the election is made and filed with
the Administrative Committee at least twelve (12) full months prior to
Termination of Service a Participant may elect to change the form of benefit
payment (see Section 5.3) or the timing of benefit commencement (see Section
5.4). In no case may a Participant change an election in the twelve (12) months
preceding Termination of Service.
5.6 Death Benefit. Upon the death of a Participant, the Company shall
pay to the Participant's Beneficiary an amount equal to the remaining unpaid
balance of the Participant's Account in a lump sum.
5.7 Accelerated Distribution. Notwithstanding any other provision of
the Plan, a Participant shall be entitled to receive at any time, upon written
request to the Administrative Committee, a lump sum distribution equal to 90
percent (90%) of the Participant's vested Account balance as of the
Determination Date immediately preceding the date on which the Administrative
Committee receives the written request. The remaining balance shall be forfeited
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<PAGE> 7
by the Participant. The amount payable under this section shall be paid in a
lump sum within thirty (30) days following the receipt of the notice by the
Administrative Committee from the Participant. If a Participant receives a
distribution under this Section, the Participant's Deferral Commitments for the
remaining portion of that calendar year shall be revoked and the Participant
shall not be permitted to make Deferral Commitments for a period of one (1) year
from the date of distribution.
5.8 Withholding for Taxes. To the extent required by the law in effect
at the time payments are made, the Company shall withhold from the payments made
hereunder any taxes required to be withheld by the federal or any state or local
government, including any amount which the Company determines is reasonably
necessary to pay any generation-skipping transfer tax which is or may become
due.
5.9 Valuation and Settlement. The amount of a lump sum payment and the
initial amount of installments shall be based on the value of the Participant's
Account on the Determination Date immediately preceding the payment or
commencement of installment payments.
5.10 Payment to Guardian. The Administrative Committee may direct
payment to the duly appointed guardian, conservator, or other similar legal
representative of a Participant or Beneficiary to whom payment is due. In the
absence of a legal representative, the Administrative Committee may, in it sole
and absolute discretion, make payment to a person having the care and custody of
a minor, incompetent or person incapable of handling the disposition of property
upon proof satisfactory to the Administrative Committee of incompetency,
minority, or incapacity. The distribution shall completely discharge the
Administrative Committee from all liability with respect to the benefit.
ARTICLE VI
BENEFICIARY DESIGNATION
6.1 Beneficiary Designation. Subject to Section 6.3, each Participant
shall have the right, at any time, to designate one (1) or more persons or an
entity as Beneficiary (both primary as well as secondary) to whom benefits under
this Plan shall be paid in the event of Participant's death prior to complete
distribution of the Participant's Account. Each Beneficiary designation shall be
in a written form prescribed by the Administrative Committee and shall be
effective only when filed with the Administrative Committee during the
Participant's lifetime.
6.2 Changing Beneficiary. Subject to Section 6.3, any Beneficiary
designation may be changed by a Participant without the consent of the
previously named Beneficiary by the filing of a new designation with the
Administrative Committee. The filing of a new designation shall cancel all
designations previously filed.
6.3 Community Property. If the Participant resides in a community
property state, the following rules shall apply:
(a) If the Participant is married, the Participant's
designation of a Beneficiary other than the Participant's spouse shall
not be effective unless the spouse executes a written consent that
acknowledges the
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<PAGE> 8
effect of the designation, or it is established the consent cannot be
obtained because the spouse cannot be located.
(b) If the Participant is married, the Participant's
Beneficiary designation may be changed by a Participant with the
consent of the Participant's spouse as provided for in Section 6.3(a)
by the filing of a new designation with the Administrative Committee.
(c) If the Participant's marital status changes after the
Participant has designated a Beneficiary, the following shall apply:
(i) If the Participant is married at the time of
death but was unmarried when the designation was made, the
designation shall be void unless the spouse has consented to
it in the manner prescribed in Section 6.3(a).
(ii) If the Participant is unmarried at the time of
death but was married when the designation was made:
a) The designation shall, be void if the
spouse was named as Beneficiary.
b) The designation shall remain valid if a
nonspouse Beneficiary was named.
(iii) If the Participant was married when the
designation was made and is married to a different spouse at
death, the designation shall be void unless the new spouse has
consented to it in the manner prescribed above.
6.4 No Beneficiary Designation. If any Participant fails to designate a
Beneficiary in the manner provided above, if the designation is void, or if the
Beneficiary designated by a Participant dies before the Participant or before
complete distribution of the Participant's benefits, the Participant's
Beneficiary shall be the person in the first of the following classes in which
there is a survivor:
(a) The Participant's spouse;
(b) The Participant's children in equal shares, except that if
any of the children predeceases the Participant but leaves issue
surviving, then the issue shall take by right of representation the
share the parent would have taken if living;
(c) The Participant's estate.
ARTICLE VII
ADMINISTRATION
7.1 Administrative Committee; Duties. This Plan shall be administered
by the Administrative Committee. The Administrative Committee shall consist of
at least three (3) individuals appointed by the Compensation Committee or the
Company's Chief Executive Officer. Subject to Section 9.1, the Administrative
Committee shall have the authority to amend (but not terminate) the Plan,
interpret and enforce all appropriate rules
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<PAGE> 9
and regulations for the administration of the Plan and decide or resolve any and
all legal or factual questions, including interpretations of the Plan, as may
arise in the administration. A majority vote of the Administrative Committee
members shall control any decision. Members of the Administrative Committee may
be Participants under this Plan.
7.2 Agents. The Administrative Committee may, from time to time, employ
agents and delegate to them administrative duties as it sees fit, and may from
time to time consult with counsel who may be counsel to the Company.
7.3 Binding Effect of Decisions. The decision or action of the
Administrative Committee with respect to any question arising out of or in
connection, with the administration, interpretation and application of the Plan
and the rules and regulations promulgated hereunder shall be final, conclusive
and, binding upon all persons having any interest in the Plan.
7.4 Indemnity of Administrative Committee. The Company shall indemnify
and hold harmless the members of the Administrative Committee against any and
all claims, loss, damage, expense or liability arising from any action or
failure to act with respect to this Plan on account of the person's service on
the Administrative Committee, except in the case of gross negligence or willful
misconduct.
ARTICLE VIII
CLAIMS PROCEDURE
8.1 Claim. The Administrative Committee shall establish rules and
procedures to be followed by Participants and Beneficiaries in (a) filing claims
for benefits, and (b) for furnishing and verifying proofs necessary to establish
the right to benefits in accordance with the Plan, consistent with the remainder
of this Article. The rules and procedures shall require that claims and proofs
be made in writing and directed to the Administrative Committee.
8.2 Review of Claim. The Administrative Committee shall review all
claims for benefits. Upon receipt by the Administrative Committee of a claim, it
shall determine all facts which are necessary to determine the right, if any, of
the claimant to benefits under the provisions of the Plan and the amount thereof
as herein provided within ninety (90) days of receipt of a claim. If prior to
the expiration of the initial ninety (90) day period, the Administrative
Committee determines additional time is needed to come to a determination on the
claim, the Administrative Committee shall provide written notice to the
Participant, Beneficiary or other claimant of the need for the extension, not to
exceed a total of one hundred eighty (180) days from the date the application
was received.
8.3 Notice of Denial of Claim. In the event that any Participant,
Beneficiary or other claimant claims to be entitled to a benefit under the Plan,
and the Administrative Committee determines that the claim should be denied in
whole or in part, the Administrative Committee shall, in writing, notify the
claimant that the claim has been denied, in whole or in part, setting forth the
specific reasons for the denial. The notification shall be written in a manner
reasonably expected to be understood by the claimant and shall refer to the
specific sections of the Plan relied on, shall describe any additional material
or information necessary for the claimant to perfect the
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<PAGE> 10
claim and an explanation of why the material or information is necessary, and
where appropriate, shall include an explanation of how the claimant can obtain
reconsideration of the denial.
8.4 Reconsideration of Denied Claim.
(a) Within sixty (60) days after receipt of the notice of the
denial of a claim, the claimant or duly authorized representative may
request, by mailing or delivery of a written notice to the
Administrative Committee, a reconsideration by the Administrative
Committee of the decision denying the claim. If the claimant or duly
authorized representative fails to request a reconsideration within the
sixty (60) day period, it shall be conclusively determined for all
purposes of the Plan that the denial of the claim by the Administrative
Committee is correct. If the claimant or duly authorized representative
requests a reconsideration within the sixty (60) day period the
claimant or dully authorized representative shall have thirty (30) days
after filing a request for reconsideration to submit additional written
material in support of the claim, review pertinent documents, and
submit issues and comments in writing.
(b) After the reconsideration request, the Administrative
Committee shall determine within sixty (60) days of receipt of the
claimant's request for reconsideration whether the denial of the claim
was correct and shall notify the claimant in writing of its
determination. The written notice of decision shall be in writing and
shall include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, as well as specific
references to the pertinent Plan provisions on which the decision is
based. In the event of special circumstances determined by the
Administrative Committee, the time for the Administrative Committee to
make a decision may be extended by an additional sixty (60) days upon
written notice to the claimant prior to the commencement of the
extension.
8.5 Company to Supply Information. To enable the Administrative
Committee to perform its functions, the Company shall supply full and timely
information to the Administrative Committee of all matters relating to the
retirement, death or other cause for Termination of Service of all Participants,
and the other pertinent facts as the Administrative Committee may require.
ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
9.1 Amendment. The Administrative Committee may at any time amend the
Plan by written instrument, notice of which is given to all Participants and to
any Beneficiaries to whom a benefit is due, subject to the following:
(a) Preservation of Account Balance. No amendment shall reduce
the amount accrued in any Account to the date the notice of the
amendment is given.
(b) Changes in Earnings Rate. No amendment shall reduce the
Rate of Return to be credited after the date of the amendment to the
amount already accrued in any Account and any Deferred Compensation
credited to the Account under Deferral Commitments already in effect on
that date.
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9.2 Company's Right to Terminate. The Compensation Committee may at any
time partially or completely terminate the Plan if, in its judgment, the tax,
accounting or other effects of the continuance of the Plan, or potential
payments thereunder would not be in the best interests of the Company.
(a) Partial Termination. The Compensation Committee may
partially terminate the Plan by instructing the Administrative
Committee not to accept any additional Deferral Commitments. If a
partial termination occurs, the Plan shall continue to operate and be
effective with regard to Deferral Commitments entered into prior to the
effective date of the partial termination.
(b) Complete Termination. The Compensation Committee may
completely terminate the Plan by instructing the Administrative
Committee not to accept any additional Deferral Commitments, and by
terminating all ongoing Deferral Commitments. If a complete termination
occurs, the Plan shall cease to operate and the Company shall pay out
each Account. Payment shall be made in substantially equal annual
installments over the following period, based on the Account balance:
<TABLE>
<CAPTION>
Account Balance Payout Period
--------------- -------------
<S> <C>
Less than $100,000 Lump Sum
$100,000 but less than $500,000 3 Years
More than $500,000 5 Years
</TABLE>
Payments shall commence within sixty (60) days after the Compensation
Committee terminates the Plan and the unpaid Account balance shall continue to
be credited with the applicable Rate of Return.
ARTICLE X
MISCELLANEOUS
10.1 Unfunded Plan. The Plan is an unfunded plan maintained primarily
to provide deferred compensation benefits to non-employees. It, therefore, is
generally not covered by ERISA.
10.2 Unsecured General Creditor. Participants and Beneficiaries shall
be unsecured general creditors, with no secured or preferential right to any
assets of the Company or any other party for payment of benefits under the Plan.
Any life insurance policies, annuity contracts or other property purchased by
the Company in connection with the Plan shall remain its general, unpledged and
unrestricted assets. The Company's obligation under the Plan shall be an
unfunded and unsecured promise to pay money in the future.
10.3 Trust Fund. At its discretion, the Company may establish one (1)
or more trusts, with any trustees as the Administrative Committee may approve,
for the purpose of providing for the payment of benefits owed under the Plan.
Although any such trust shall be irrevocable, its assets shall be held for
payment of all the Company's
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general creditors in the event of insolvency or bankruptcy. To the extent any
benefits provided under the Plan are paid from a trust, the Company shall have
no further obligation to pay them. If not paid from a trust, the benefits shall
remain the obligation of the Company.
10.4 Nonassignability. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt of the amounts, if any, payable hereunder, or any part thereof, which
are, and all rights to which are, expressly declared to be unassignable and
nontransferable. No part of the amounts payable shall, prior to actual payment,
be subject to seizure or sequestration for the payment of any debts, judgments,
alimony or separate maintenance owed by a Participant or any other person, nor
be transferable by operation of law in the event of a Participant's or any other
person's bankruptcy or insolvency.
10.5 Not a Contract of Employment or for Services. This Plan shall not
constitute a contract of employment or for services between the Company and the
Participant. Nothing in this Plan shall give a Participant the right to be
retained in the service of the Company or to interfere with the right of the
Company to remove a Participant at any time, subject to applicable corporate
law, articles of incorporation, bylaws and other documents which affect the
governance of the Company.
10.6 Protective Provisions. A Participant will cooperate with the
Company by furnishing any and all information requested by Company in order to
facilitate the payment of benefits hereunder, and by taking any physical
examinations as the Company may deem necessary and taking other action as may be
requested by the Company.
10.7 Governing Law. The provisions of this Plan shall be construed and
interpreted according to the laws of the Commonwealth of Pennsylvania.
10.8 Validity. In case any provision of the Plan shall be held illegal
or invalid for any reason, the illegality or invalidity shall not affect the
remaining parts hereof, but the Plan shall be construed and enforced as if the
illegal and invalid provision had never been inserted herein.
10.9 Notice. Any notice required or permitted under the Plan shall be
sufficient if in writing and hand delivered or sent by registered or certified
mail. The notice shall be deemed as given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the receipt
for registration or certification. Mailed notice to the Administrative Committee
shall be directed to the Company's address. Mailed notice to a Participant or
Beneficiary shall be directed to the individuals last known address in the
Company's records.
10.10 Successors. The provisions of the Plan shall bind and inure to
the benefit of the Company and its successors and assigns. The term successors
as used herein shall include any corporate or other business entity which shall,
whether by merger, consolidation, purchase or otherwise, acquire all or
substantially all of the business and assets of the Company, and successors of
any such corporation or other business entity.
12
<PAGE> 1
Exhibit 5.1
DOEPKEN KEEVICAN & WEISS
PROFESSIONAL CORPORATION
600 Grant Street
58th Floor
Pittsburgh, Pennsylvania 15219
Phone: 412-355-2600
Fax: 412-355-2609
August 18, 1999
MotivePower Industries, Inc.
Two Gateway Center, 14th Floor
Pittsburgh, PA 15222
Re: Registration Statement on Form S-8
----------------------------------
Gentlemen and Ladies:
We have acted as special counsel to MotivePower Industries, Inc. (the
"Company") in connection with the preparation of a Registration Statement on
Form S-8 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), relating to up to 700,000 shares of common stock of the
Company (the "Common Stock") issuable to employees and directors of the Company
under the MotivePower Industries, Inc. Deferred Compensation Plan, the
MotivePower Industries, Inc. Deferred Compensation Plan for Michael A. Wolf or
the MotivePower Industries, Inc. Deferred Compensation Plan for Non-Employee
Directors (the "Plans").
In connection with this opinion, we have examined, among other things:
(1) the Restated Certificate of Incorporation of the Company, as
amended to date;
(2) resolutions adopted by the board of directors of the Company
adopting the Plans; and
(3) the Plans, as currently in effect.
Based upon the foregoing and upon an examination of such other
documents, corporate proceedings, statutes, decisions and questions of law as we
considered necessary in order to enable us to furnish this opinion, and subject
to the assumptions set forth above, we are pleased to advise you that in our
opinion:
(a) The Company has been duly incorporated and is a validly
existing corporation under the laws of the Commonwealth of
Pennsylvania; and
(b) The shares of Common Stock being registered and issuable by
the Company pursuant to the provisions of the Plans have been
duly authorized, and are, or upon such issuance in accordance
with the provisions of the Plans, will be, validly issued,
fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement.
Yours truly,
/s/ Doepken Keevican & Weiss
Professional Corporation
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
MotivePower Industries, Inc. on Form S-8 of our reports dated February 11, 1999
(March 2, 1999 as to Note 18), appearing in the Annual Report on Form 10-K of
MotivePower Industries, Inc. for the year ended December 31, 1998 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
August 18, 1999
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
February 17, 1999 included in Westinghouse Air Brake Company's Form 10-K for the
year ended December 31, 1998 and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
Pittsburgh, Pennsylvania
August 19, 1999
<PAGE> 1
Exhibit 24.1
POWER OF ATTORNEY
KNOW BY ALL MEN BY THESE PRESENTS, that each of the undersigned, a
director or officer or both, of MotivePower Industries, Inc., a Pennsylvania
corporation (the "Company"), does hereby appoint Jeannette Fisher-Garber and
William F. Fabrizio, and each of them, with full power to act without the other,
such person's true and lawful attorneys-in-fact, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign Form S-8 Registration Statements, and any and all amendments
thereto (including post-effective amendments), relating to the registration of
shares to be issued in connection with (i) the MotivePower Industries, Inc.
Stock Incentive Plan, (ii) the MotivePower Industries, Inc. Stock Option Plan
for Non-Employee Directors, (iii) the MotivePower, Inc. (401(k)) Savings Plan,
and (iv) the MotivePower Industries, Inc. Deferred Compensation Plan and the
MotivePower Industries, Inc. Deferred Compensation Plan for Michael A. Wolf, and
to file the same, with exhibits and schedules thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact, and each of them, with full power and authority to do
and perform each and every act and thing necessary or desirable to be done in or
about the premises, as fully to all intents and purposes as he or she might or
could do in person, thereby ratifying and confirming all that said
attorneys-in-fact, or any of them, or their or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has subscribed these presents this
14th day of July, 1999.
/s/ John C. Pope
-----------------------------
John C. Pope
/s/ Michael A. Wolf
-----------------------------
Michael A. Wolf
/s/ William F. Fabrizio
-----------------------------
William F. Fabrizio
/s/ David L. Bonvenuto
-----------------------------
David L. Bonvenuto
/s/ Gilbert E. Carmichael
-----------------------------
Gilbert E. Carmichael
/s/ Ernesto Fernandez Hurtado
-----------------------------
Ernesto Fernandez Hurtado
/s/ Lee B. Foster II
-----------------------------
Lee B. Foster II
/s/ James P. Miscoll
-----------------------------
James P. Miscoll
/s/ Nicholas J. Stanley
-----------------------------
Nicholas J. Stanley
