SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934

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FREIGHTCAR AMERICA, INC.

(Name of Registrant as Specified in Its Charter)

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FREIGHTCAR AMERICA, INC.
Two North Riverside Plaza, Suite 1250
Chicago, Illinois 60606

April 8, 2009

Dear FreightCar America Stockholder:

     You are cordially invited to attend the annual meeting of stockholders of FreightCar America, Inc. to be held at 10:00 a.m. (local time) on Wednesday, May 13, 2009 at the University Club of Chicago, 76 East Monroe Street, Chicago, Illinois 60603.

     The purpose of the meeting is to consider and vote upon proposals to (i) elect three directors who have been nominated for election as Class I directors to three-year terms, (ii) ratify the appointment of our independent registered public accounting firm for 2009 and (iii) transact such other business as may properly come before the meeting.

     Whether or not you plan to attend the meeting and regardless of the number of shares you own, it is important that your shares be represented at the meeting. After reading the enclosed proxy statement, please promptly mark, sign, date and return the enclosed proxy card in the prepaid envelope to assure that your shares will be represented.

     The board of directors and management appreciate your continued confidence in FreightCar America and look forward to seeing you at the annual meeting.

FREIGHTCAR AMERICA, INC.
Two North Riverside Plaza, Suite 1250
Chicago, Illinois 60606

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on May 13, 2009

April 8, 2009

Dear FreightCar America Stockholder:

     We are notifying you that the annual meeting of stockholders of FreightCar America, Inc. will be held at 10:00 a.m. (local time) on Wednesday, May 13, 2009 at the University Club of Chicago, 76 East Monroe Street, Chicago, Illinois 60603, for the following purposes:

	1.		To elect three directors as Class I directors, each for a term of three years.
	2.		To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2009.
	3.		To transact other business properly coming before the meeting.

     Each of these matters is described in further detail in the enclosed proxy statement. We also have enclosed a copy of our 2008 Annual Report. We are initially mailing this notice of annual meeting, the proxy statement and the enclosed proxy card to our stockholders on or about April 8, 2009.

     Only stockholders of record at the close of business on March 31, 2009 are entitled to vote at the meeting and any postponements or adjournments of the meeting. A complete list of these stockholders will be available at our principal executive offices prior to the meeting.

     Whether or not you plan to attend the meeting, please complete the enclosed proxy card and return it in the envelope provided as promptly as possible. You can withdraw your proxy at any time before it is voted.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 13, 2009:

Our Proxy Statement and Annual Report on Form 10-K for the year ended
December 31, 2008 are available at
www.railproxy.info

Table of Contents

ABOUT THE MEETING			1
What is the purpose of the annual meeting?			1
What are our voting recommendations?			1
Who is entitled to vote?			1
What constitutes a quorum?			1
How do I vote?			2
Can I revoke my proxy or change my vote after I return my proxy card?			2
What vote is required to approve each matter that comes before the meeting?			2
What happens if additional proposals are presented at the meeting?			2
Who will bear the costs of soliciting votes for the meeting?			2
PROPOSALS TO BE VOTED ON			2
Proposal 1 — Election of Class I Directors			2
Proposal 2 — Ratification of the Appointment of Independent Registered Public Accounting Firm			3
BOARD OF DIRECTORS			3
Board Structure and Composition			3
Nominees for election at this meeting for terms expiring in 2012:			4
Directors whose terms continue until 2010:			4
Independent Directors			5
Director Attendance at Annual Meetings			5
Committees of the Board of Directors			5
Code of Business Conduct and Ethics			7
Criteria for Nominating Directors			7
Director Compensation			7
STOCK OWNERSHIP			8
Security Ownership of Certain Beneficial Owners and Management			8
Section 16(a) Beneficial Ownership Reporting Compliance			10
COMPENSATION DISCUSSION AND ANALYSIS			10
Introduction			10
Compensation Committee’s Processes and Procedures for Consideration and Determination of Executive Compensation			10
Compensation Philosophy and Objectives			12
Elements of Executive Compensation			13
EXECUTIVE COMPENSATION			22
Executive Officers			22
Summary Compensation Table			23
Supplemental Narrative to Summary Compensation Table			25
Employment Agreements for NEOs as of December 31, 2008			25
2005 Long Term Incentive Plan			27
Annual Cash Incentive Program			28
Grants of Plan-Based Awards for the Year Ended December 31, 2008			28
Outstanding Equity Awards at 2008 Fiscal Year-End			29
Option Exercises and Stock Vested for the Year Ended December 31, 2008			30
Pension Benefits at December 31, 2008			30
Nonqualified Deferred Compensation for the Year Ended December 31, 2008			31
Potential Payments upon Termination or Change in Control			32
Compensation Committee Report			36
2008 DIRECTOR COMPENSATION TABLE			36

FEES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND AUDIT COMMITTEE REPORT			38
Fees Billed by Independent Registered Public Accounting Firm			38
Report of the Audit Committee			39
2010 ANNUAL MEETING OF STOCKHOLDERS			40
“HOUSEHOLDING” OF PROXY MATERIALS			40

FREIGHTCAR AMERICA, INC.

Two North Riverside Plaza, Suite 1250
Chicago, Illinois 60606

PROXY STATEMENT

     The board of directors of FreightCar America, Inc. is asking for your proxy for use at the annual meeting of our stockholders to be held at 10:00 a.m. (local time) on Wednesday, May 13, 2009 at the University Club of Chicago, 76 East Monroe Street, Chicago, Illinois 60603, and at any postponements or adjournments of the meeting. We are initially mailing this proxy statement and the enclosed proxy card to our stockholders on or about April 8, 2009.

ABOUT THE MEETING

What is the purpose of the annual meeting?

     At our annual meeting, stockholders will act upon the matters outlined in the accompanying notice of annual meeting, including (i) the election of three directors who have been nominated for election as Class I directors to three-year terms, (ii) the ratification of the appointment of our independent registered public accounting firm and (iii) any other business properly coming before the meeting.

What are our voting recommendations?

     Our board of directors recommends that you vote your shares “FOR ALL,” with respect to the election of each of the nominees named below under “Proposal 1 — Election of Class I Directors,” and “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm discussed below under “Proposal 2 — Ratification of the Appointment of Independent Registered Public Accounting Firm.”

Who is entitled to vote?

     Only stockholders of record at the close of business on the record date, March 31, 2009, are entitled to receive notice of the annual meeting and to vote the shares of common stock that they held on the record date at the meeting and any postponements or adjournments of the meeting. Each outstanding share of common stock entitles its holder to cast one vote, without cumulation, on each matter to be voted on.

What constitutes a quorum?

     If a majority of the shares outstanding on the record date are present at the annual meeting, either in person or by proxy, we will have a quorum at the meeting permitting the conduct of business at the meeting. As of the record date, we had 11,920,496 shares of common stock outstanding and entitled to vote. Any shares represented by proxies that are marked to abstain from voting on a proposal will be counted as present for purposes of determining whether we have a quorum. If a broker, bank, custodian, nominee or other record holder of our common stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular matter, the shares held by that record holder (referred to as “broker non-votes”) will also be counted as present in determining whether we have a quorum.

How do I vote?

     You may vote in person at the annual meeting or you may vote by proxy. You may vote by proxy by completing, signing, dating and mailing or faxing the enclosed proxy card. If you vote by proxy, the individuals named on the proxy card as proxy holders will vote your shares in the manner you indicate. If you sign and return the proxy card without indicating your instructions, your shares will be voted:

	•		“FOR ALL” with respect to the election of the three nominees named below under “Proposal 1 — Election of Class I Directors” to three-year terms; and
	•		“FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2009 discussed below under “Proposal 2 — Ratification of the Appointment of Independent Registered Public Accounting Firm.”

Can I revoke my proxy or change my vote after I return my proxy card?

     Yes. Even after you have submitted your proxy, you may revoke your proxy or change your vote at any time before the proxy is voted at the annual meeting by delivering to our Secretary a written notice of revocation or a properly signed proxy bearing a later date, or by attending the annual meeting and voting in person. Attendance at the meeting will not cause your previously granted proxy to be revoked unless you specifically so request or you vote in person at the meeting.

What vote is required to approve each matter that comes before the meeting?

     Director nominees must receive the affirmative vote of a plurality of the votes cast at the meeting in person or by proxy by stockholders entitled to vote thereon, meaning that the three nominees for Class I director with the most votes will be elected. The ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of a majority of the votes represented at the meeting in person or by proxy. Broker non-votes will not be counted for purposes of determining whether an item has received the requisite number of votes for approval. Abstentions will have the effect of a vote against the ratification of the appointment of our independent registered public accounting firm but will not be taken into account in determining the outcome of the election of directors. However, each of our directors and director candidates has offered a contingent resignation that may be accepted by the board of directors in its discretion if a majority of the votes are not cast “FOR” such director in an uncontested election.

What happens if additional proposals are presented at the meeting?

     If you vote by proxy, your proxy grants the persons named as proxy holders the discretion to vote your shares on any additional matters properly presented for a vote at the meeting.

Who will bear the costs of soliciting votes for the meeting?

     Certain directors, officers and employees, who will not receive any additional compensation for such activities, may solicit proxies by personal interview, mail, telephone or electronic communication. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to our stockholders. We will bear all costs of solicitation, including a base fee of $7,500 and reasonable out-of-pocket expenses to be paid to the proxy solicitation firm of Georgeson Inc.

PROPOSALS TO BE VOTED ON

Proposal 1 — Election of Class I Directors

     Our certificate of incorporation provides for a classified board of directors consisting of three classes of the same or nearly the same number of directors. The number of members of our board of directors is currently fixed at

seven directors. The term of office of each current Class I director is scheduled to expire at our annual meeting of stockholders to be held this year. Currently, three of our directors, James D. Cirar, S. Carl Soderstrom, Jr., and Robert N. Tidball, are Class I directors. At the recommendation of our nominating and corporate governance committee, our board of directors has determined to nominate Messrs. Cirar, Soderstrom and Tidball for election to three-year terms as Class I directors at our annual meeting this year.

     Each nominee elected by our stockholders as a Class I director at our annual meeting this year will be elected to a term to expire at the annual meeting of stockholders in 2012.

     Information about the director nominees, the continuing directors and our board of directors is contained in the section of this proxy statement entitled “Board of Directors—Board Structure and Composition.”

     In the event a nominee is not available to serve for any reason when the election occurs, it is intended that the proxies will be voted for the election of the other nominees and may be voted for any substitute nominee. Our board of directors has no reason to believe that any of the nominees will not be a candidate or, if elected, will be unable or unwilling to serve as a director.

     Our board of directors recommends that you vote “FOR ALL” with respect to the election of James D. Cirar, S. Carl Soderstrom, Jr., and Robert N. Tidball as Class I directors.

Proposal 2 — Ratification of the Appointment of Independent Registered Public Accounting Firm

     Deloitte & Touche LLP audited our financial statements for our fiscal year ended December 31, 2008, and has been selected by the audit committee of our board of directors to audit our financial statements for the fiscal year ending December 31, 2009. A representative of Deloitte & Touche LLP is expected to attend our annual meeting, where he or she will have the opportunity to make a statement, if he or she desires, and will be available to respond to appropriate questions.

     Stockholder ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm is not required by our by-laws or otherwise. However, we are submitting the appointment of Deloitte & Touche LLP to our stockholders for ratification as a matter of good corporate practice. If our stockholders fail to ratify the appointment, our audit committee will review its future selection of independent registered public accounting firms. Even if the appointment is ratified, the audit committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of our company and our stockholders.

     For information regarding audit and other fees billed by Deloitte & Touche LLP for services rendered with respect to fiscal years 2008 and 2007, see the section of this proxy statement entitled “Fees of Independent Registered Public Accounting Firm and Audit Committee Report—Fees Billed by Independent Registered Public Accounting Firm.”

     Our board of directors recommends that you vote “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm.

BOARD OF DIRECTORS

Board Structure and Composition

     Our certificate of incorporation provides for a classified board of directors consisting of three classes of the same or nearly the same number of directors. The number of members of our board of directors is currently fixed at seven directors:

•

James D. Cirar, S. Carl Soderstrom, Jr., and Robert N. Tidball serve in Class I. Their terms will expire on the date of the upcoming annual meeting of stockholders to be held on May 13, 2009.

	•		William D. Gehl and Christian B. Ragot serve in Class II. Their terms will expire on the date of the annual meeting of stockholders to be held in 2010.
	•		Thomas M. Fitzpatrick and Thomas A. Madden serve in Class III. Their terms will expire on the date of the annual meeting of stockholders to be held in 2011.

     Upon the expiration of the term of each class of directors, directors of that class generally may be re-elected for a three-year term at the annual meeting of stockholders in the year in which their term expires. A director elected by the board of directors is designated upon his or her election as a Class I, Class II or Class III director, and serves a term that expires at the next annual meeting of stockholders after such director’s election. A director elected by the stockholders at an annual meeting of stockholders to succeed a director elected during the preceding year by the board of directors joins the same class as the replacement director whom he or she succeeds and serves a term that expires at the next annual meeting of stockholders at which the terms of the other directors of that director’s class are or would be scheduled to expire. Each of our directors has signed a contingent resignation letter providing that if a majority of the votes of the shares in an uncontested election in which such director is a nominee are designated to be “withheld” from, or are voted “against,” the director’s election, and the board of directors accepts the contingent resignation letter following such election, the director’s resignation will be effective upon the board’s acceptance of the resignation.

     Our certificate of incorporation provides that the authorized number of directors may be changed only by resolution of the board of directors. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the total number of directors. Our certificate of incorporation also provides that our board of directors may fill any vacancy created by the resignation of a director or an increase in the size of the board of directors.

Nominees for election at this meeting for terms expiring in 2012:

     James D. Cirar, 62, has served as a director since June 1999 and is the chairman of our strategy and growth committee. Mr. Cirar is a private investor. He was a director of Transportation Technologies Industries, Inc. (“TTII”) and President and CEO of TTII’s foundry group from January 2000 until the company was acquired by Accuride Corporation in 2005. Mr. Cirar was Chairman of two of our subsidiaries, Johnstown America Corporation and Freight Car Services, Inc., from September 1998 to June 1999. From September 1995 to August 1998, he was the President and CEO of Johnstown America Corporation.

     S. Carl Soderstrom, Jr., 55, has served as a director since April 2005 and is the chairman of our audit committee. Mr. Soderstrom was employed by ArvinMeritor, Inc. and its predecessor companies from 1986 to 2004 and served as Senior Vice President and Chief Financial Officer of ArvinMeritor, Inc. from July 2001 to December 2004. Mr. Soderstrom is a member of the board of directors of Lydall, Inc.

     Robert N. Tidball, 70, has served as a director since April 2005 and is the chairman of our nominating and corporate governance committee. From 1989 to January 2001, Mr. Tidball was the President, CEO and a director of PLM International, Inc.

Directors whose terms continue until 2010:

     William D. Gehl, 62, has served as a director since May 2007. He has served as Chairman and Chief Executive Officer of Gehl Company since April 2003. Prior to that time, he served as President and Chief Executive Officer of Gehl Company since November 1992 and as Chairman of Gehl Company since April 1996. Mr. Gehl is a member of the boards of directors of Gehl Company, ASTEC Industries, Inc., Mason Wells, Inc., The Oilgear Company and Westbury Bank.

     Christian B. Ragot, 51, has served as a director since January 29, 2007 and as our President and Chief Executive Officer since April 30, 2007. He served as our Chief Operating Officer from January 29 to April 30, 2007. Mr. Ragot was President of Terex Utilities and Roadbuilding at Terex Corporation from 2004 to 2007. Previously, Mr. Ragot held various senior executive leadership positions, including President of Terex Utilities,

President of American Crane, Senior Vice-President, Sales and Aftermarket Services, and other senior-level positions, at Terex Corporation. Prior to joining Terex Corporation in 1999, Mr. Ragot was Vice President and General Manager of the Air Compressor Group, Europe of Ingersoll-Rand Company, and held various other managerial and senior-level positions during his 15 years at Ingersoll-Rand Company. He is also a member of the board of directors of Columbus McKinnon Corporation.

Directors whose terms continue until 2011:

     Thomas M. Fitzpatrick, 56, has served as a director since December 2005 and as the Chairman of the Board of Directors since March 2007. Mr. Fitzpatrick is the managing partner of Sharp & Fitzpatrick LLP, the predecessor of which he founded in 1987. Mr. Fitzpatrick has also served as the managing director of Harper Laboratories LLC since 2005. Between 1986 and 2004, Mr. Fitzpatrick was the managing partner of 2200 Ventures LLC and its predecessors.

     Thomas A. Madden, 55, has served as a director since December 2005 and is the chairman of our compensation committee. Mr. Madden served as the Executive Vice President and Chief Financial Officer of Ingram Micro Inc. from July 2001 to April 2005. From October 1997 to July 2001, Mr. Madden served as the Senior Vice President and Chief Financial Officer of ArvinMeritor, Inc. Mr. Madden is a member of the boards of directors of Champion Enterprises, Inc., Mindspeed Technologies, Inc. and Intcomex, Inc.

Independent Directors

     The board of directors has determined that six of our seven current directors, Messrs. Cirar, Fitzpatrick, Gehl, Madden, Soderstrom and Tidball, are “independent directors” as defined in Rule 4200 of the Nasdaq Marketplace Rules and as defined in applicable rules by the Securities and Exchange Commission (the “SEC”). Rule 4350 of the Nasdaq Marketplace Rules requires that a majority of our board of directors be composed of independent directors and that certain of our committees be composed solely of independent directors.

     Our independent directors hold meetings in executive session, at which only independent directors are present. Stockholders and third parties may communicate directly with our independent directors by writing to our independent directors at FreightCar America, Inc., Two North Riverside Plaza, Suite 1250, Chicago, Illinois 60606, Attention: Chairman of the Board of Directors.

Director Attendance at Annual Meetings

     Directors are encouraged to attend all annual and special meetings of our stockholders. During 2008, the board of directors held 11 meetings. Each of our directors attended at least 75% of all the meetings of the board and those committees on which he served during 2008. All of our directors attended the 2008 annual meeting of stockholders.

Committees of the Board of Directors

     Our board of directors has four standing committees: an audit committee, a compensation committee, a nominating and corporate governance committee and a strategy and growth committee. Stockholders and third parties may communicate with our board of directors by writing to our board of directors at FreightCar America, Inc., Two North Riverside Plaza, Suite 1250, Chicago, Illinois 60606, Attention: Chairman of the Board of Directors.

     Audit Committee. Our audit committee consists of Messrs. Gehl, Madden, Soderstrom and Tidball. Mr. Soderstrom serves as the chairman. The audit committee oversees our financial reporting processes and reviews and recommends to the board internal accounting and financial controls, accounting principles and auditing practices to be employed in the preparation and review of our financial statements. The audit committee makes recommendations to the board concerning the engagement of independent registered public accountants to audit our annual financial statements and the scope of and plans for the audit to be undertaken by such accountants. The audit committee pre-approves the audit services and permissible non-audit services to be performed by such accountants

and may take appropriate actions to ensure the independence of such accountants. The audit committee is also responsible for approving related-party transactions. Our board of directors has determined that Messrs. Gehl, Madden, Soderstrom and Tidball meet the independence requirements under the Sarbanes-Oxley Act of 2002, the rules of the Nasdaq Global Market (“Nasdaq”) and the rules and regulations of the SEC. Each of Messrs. Gehl, Madden, Soderstrom and Tidball has been determined to be an audit committee financial expert, as that term is defined under the SEC rules implementing Section 407 of the Sarbanes-Oxley Act of 2002, and each is “independent” as defined in the applicable listing standards for audit committee members.

     The audit committee operates under a written charter, a copy of which is available on our website, www.freightcaramerica.com. The audit committee has established and regularly monitors procedures for the receipt, retention and treatment of complaints received regarding accounting, internal accounting controls or auditing matters. The audit committee met 13 times during 2008.

     Compensation Committee. Our compensation committee consists of Messrs. Gehl, Madden and Tidball. Mr. Madden serves as the chairman. The purpose of our compensation committee is to: (a) oversee our compensation and employee benefit plans and practices; (b) produce annually a report on executive compensation for inclusion in our proxy statement, in accordance with all applicable rules and regulations; and (c) oversee regular succession planning and professional development for the Chief Executive Officer and other senior executive officers. Our board of directors has determined that Messrs. Gehl, Madden and Tidball meet the independence requirements under the Sarbanes-Oxley Act of 2002, the rules of Nasdaq and the rules and regulations of the SEC. In addition, each of Messrs. Gehl, Madden and Tidball is an “outside director,” as that term is defined in Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and a “non-employee” director within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

     The compensation committee operates under a written charter, a copy of which is available on our website, www.freightcaramerica.com. The compensation committee met 11 times and took action by written consent once during 2008.

     Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Messrs. Fitzpatrick, Soderstrom and Tidball. Mr. Tidball serves as the chairman. The purpose of our nominating and corporate governance committee is to: (a) identify individuals qualified to become board members, consistent with criteria approved by the board; (b) recommend to the board nominees for the board; (c) recommend to the board nominees for each committee of the board; (d) recommend to the board and review annually the Corporate Governance Guidelines and the Code of Business Conduct and Ethics; (e) review annually the independence qualifications of the board members and nominees; (f) oversee our directors’ and officers’ liability insurance program, including selection, scope and administration; and (g) review potential conflicts of interest and violations of the Code of Business Conduct and Ethics. Our board of directors has determined that Messrs. Fitzpatrick, Soderstrom and Tidball meet the independence requirements under the Sarbanes-Oxley Act of 2002, the rules of Nasdaq and the rules and regulations of the SEC.

     The nominating and corporate governance committee operates under a written charter, a copy of which is available on our website, www.freightcaramerica.com. The nominating and corporate governance committee met five times during 2008.

     Strategy and Growth Committee. Our strategy and growth committee consists of Messrs. Cirar, Ragot and Tidball. Mr. Cirar serves as the chairman. The strategy and growth committee provides guidance to management in its development of our corporate strategy and provides recommendations to the board of directors with respect to its review and approval of the corporate strategy.

     The strategy and growth committee operates under a written charter, a copy of which is available on our website, www.freightcaramerica.com. The strategy and growth committee met five times during 2008.

Code of Business Conduct and Ethics

     We have established a Code of Business Conduct and Ethics that applies to our officers, directors and employees, including our Chief Executive Officer and Chief Financial Officer. A copy of the Code of Business Conduct and Ethics is available on our website, www.freightcaramerica.com.

     We intend to disclose any amendments to or waivers from our Code of Business Conduct and Ethics applicable to any of our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions on our website at www.freightcaramerica.com.

Criteria for Nominating Directors

     The nominating and corporate governance committee of our board of directors considers candidates to fill new directorships created by expansion and vacancies that may occur and makes recommendations to the board of directors with respect to such candidates. The nominating and corporate governance committee considers all relevant qualifications of candidates for board membership, including factors such as industry knowledge and experience, international, public company, academic or regulatory experience, financial expertise, diversity, current employment and other board memberships, and whether the candidate will be independent under the listing standards of Nasdaq. In the case of incumbent directors whose terms of office are set to expire, the nominating and corporate governance committee will also review each director’s overall service to us during his or her term and any relationships and transactions that might impair such director’s independence.

     In 2008, the nominating and corporate governance committee paid a fee to a third party to assist in the process of identifying or evaluating potential director candidates. The third party’s services included research to identify potential candidates and collection of biographical information about potential candidates. In the future, we may pay a fee to a third party to identify or evaluate potential director nominees if the need arises.

     Our by-laws provide that nominations for the election of directors at our annual meeting may be made by our board of directors or any stockholder entitled to vote for the election of directors generally who complies with the procedures set forth in the by-laws and who is a stockholder of record at the time notice is delivered to us. Any stockholder entitled to vote in the election of directors generally may nominate a person for election to the board of directors at our annual meeting only if timely notice of such stockholder’s intent to make such nomination has been given in writing to our Secretary at our offices at Two North Riverside Plaza, Suite 1250, Chicago, Illinois 60606. Any recommendations received from stockholders will be evaluated by the nominating and corporate governance committee in the same manner that potential director nominees suggested by board members, management or other parties are evaluated.

     To be timely, a stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Company not less than 90 nor more than 120 days prior to the first anniversary of the previous year’s annual meeting; provided, however, that in the event less than 30 days’ notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made.

     We have not received director candidate recommendations from any of our stockholders for the annual meeting of stockholders to be held on May 13, 2009.

Director Compensation

     We currently compensate each of our independent directors with an annual retainer of $30,000 and an annual restricted stock award of $45,000. In addition, the non-executive Chairman of the Board of Directors receives annual compensation of $65,000, the chairman of the audit committee receives annual compensation of $15,000 and the chairman of any other committee receives annual compensation of $5,000. Also, independent directors are paid $1,000 for board meeting attendance and $1,000 for committee meeting attendance. In addition, we have adopted

customary expense reimbursement and related policies for all directors and reimburse directors for expenses incurred in connection with attendance at board or committee meetings.

STOCK OWNERSHIP

Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth certain information regarding the beneficial ownership of our common stock as of December 31, 2008 (except as indicated below) by:

	•		all persons known by us to own beneficially 5% or more of our outstanding common stock;
	•		each of our directors and director nominees;
	•		each of the named executive officers listed in the “Executive Compensation—Summary Compensation Table” section of this proxy statement; and
	•		all of our directors, director nominees and executive officers as a group.

Unless otherwise indicated, each stockholder listed below has sole voting and investment power with respect to the shares of common stock beneficially owned by such stockholder.

		Number of
		Shares
		Beneficially				Approximate
Name of Beneficial Owner		Owned (1)				Percent of Class(1)
Barclays Global Investors, NA. and certain of its affiliates 400 Howard Street San Francisco, California 94105			624,878	(2)			5.25	%
Heartland Advisors, Inc. and certain of its affiliates 789 N. Water Street Milwaukee, Wisconsin 53202			783,550	(3)			6.60	%
Newland Capital Management, LLC and certain of its affiliates 350 Madison Avenue New York, New York 10017			660,278	(4)			5.60	%
Rutabaga Capital Management 64 Broad Street 3rd Floor Boston, Massachusetts 02109			728,037	(5)			6.12	%
DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS:
James D. Cirar			3,039				*
S. Carl Soderstrom, Jr.			3,039				*
Robert N. Tidball			3,039				*
Thomas M. Fitzpatrick			2,655				*
William D. Gehl			2,177				*

		Number of
		Shares
		Beneficially				Approximate
Name of Beneficial Owner		Owned (1)				Percent of Class(1)
Thomas A. Madden			2,655				*
Charles J. Magolske			9,488				*
Nicholas J. Matthews			17,324				*
Christian B. Ragot			80,704				*
Laurence M. Trusdell			13,430				*
Kevin P. Bagby (6)			15,110				*
Edward J. Whalen (7)			2,180				*
All directors, director nominees and executive officers as a group (13 persons)			155,650				1.3	%

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of our common stock to file with the SEC reports regarding their ownership and changes in ownership of our common stock. Based solely on our review of the reports furnished to us, we believe that all of our directors and executive officers have complied with all Section 16(a) filing requirements for 2008.

COMPENSATION DISCUSSION AND ANALYSIS

     The following sections discuss the material factors involved in the Company’s decisions regarding the compensation of the Company’s Named Executive Officers (as defined in the section of this proxy statement entitled “Executive Compensation—Summary Compensation Table”) (the “NEOs”) during 2008. The specific amounts paid or payable to the NEOs are disclosed in the tables and narrative in the section of this proxy statement entitled “Executive Compensation.” The following discussion cross-references those specific tabular and narrative disclosures where appropriate.

Introduction

     The compensation committee is comprised of at least three directors, each of whom must be determined by the board of directors to meet the independence requirements of the SEC, Nasdaq and any other applicable governmental or regulatory authorities, each as in effect from time to time. Members of the compensation committee also must qualify as “non-employee directors” within the meaning of Rule 16b-3(b)(3) under the Exchange Act, and “outside directors” within the meaning of Code Section 162(m) and must satisfy any other necessary standards of independence under the federal securities and tax laws, as amended from time to time.

     If a compensation committee chairperson is not designated by the board of directors, members of the compensation committee designate a chairperson by majority vote.

     The compensation committee meets quarterly or more frequently as circumstances require. A majority of the members of the compensation committee constitutes a quorum.

     In accordance with the committee’s charter, the compensation committee chairperson determines the agenda for each meeting. Materials related to agenda items are provided to the compensation committee members sufficiently in advance of the meeting where necessary to allow the members to prepare for discussion of the items at the meeting. The compensation committee maintains written minutes of its meetings, which are maintained with our books and records. The compensation committee reports its activities regularly and directly to the board of directors and makes recommendations that the compensation committee deems advisable.

     The compensation committee may request that any of our directors, officers or employees or any other persons whose advice and counsel are sought by the compensation committee attend any meeting of the compensation committee to provide such pertinent information as it reasonably requests. Our Chief Executive Officer (“CEO”) may not be present during deliberations or voting concerning his own compensation.

Compensation Committee’s Processes and Procedures for Consideration and Determination of Executive Compensation

     General Authorities and Responsibilities

     The compensation committee reviews the Compensation Discussion and Analysis (the “CD&A”) section of our proxy statement and recommends to the board of directors that the CD&A be included in our proxy statement. The compensation committee issues an annual report on executive compensation for inclusion in our proxy statement and reports to the board of directors its plan for succession of the CEO and other senior executives in the

event that any of such officers retires, is disabled or is otherwise unable to fulfill his or her duties. The compensation committee has the authority to conduct or authorize investigations into any matter within its scope of responsibilities, and retain, at our expense, such independent counsel, compensation consultant or other consultants and advisors as it deems necessary. In 2008, the compensation committee engaged an independent compensation consulting firm, Hewitt Associates LLC. The compensation committee has the sole authority to retain and terminate an independent compensation consultant to be used to assist in its evaluation of director and/or senior management compensation and has the sole authority to terminate the consultant and approve the consultant’s fees and other retention terms. The compensation committee also has the authority to obtain advice and assistance from internal or external legal, accounting or other advisors as it deems appropriate or necessary. The compensation committee reviews and assesses at least annually the adequacy of the compensation committee charter and recommends any proposed changes to the board of directors for approval. The compensation committee also annually reviews its own performance.

     Executive and Director Compensation

     The compensation committee, consulting with its independent compensation consultant and with management as necessary, reviews and recommends for approval by the board of directors our general policies relating to senior management compensation and oversees the development and implementation of such compensation programs. The compensation committee, consulting with its independent compensation consultant and with management, as necessary, reviews and approves, or recommends for ratification by the board of directors, senior management compensation, including, to the extent applicable, (a) salary, bonus and incentive compensation levels, (b) deferred compensation, (c) executive perquisites, (d) equity compensation (including awards to induce employment), (e) employment agreements, severance arrangements and change in control agreements/provisions, in each case as, when and if appropriate, and (f) other forms of senior management compensation. The compensation committee meets without the presence of senior management when approving or deliberating on CEO compensation but may, in its discretion, invite the CEO to be present during the approval of, or deliberations with respect to, other senior management compensation.

     The compensation committee periodically reviews and approves corporate goals and objectives relevant to senior management compensation, evaluates the CEO’s performance in light of those goals and objectives, as a committee or together with the independent members of the board of directors, and recommends for ratification by the board of directors the CEO’s compensation levels taking into account this evaluation. The compensation committee periodically reviews and makes recommendations to the board of directors with respect to director compensation for non-employee members of the board of directors and its committees. The compensation committee may adopt policies regarding the adjustment or recovery of incentive awards or payments if the relevant performance measures upon which such incentive awards or payments were based are restated or otherwise adjusted in a manner that would reduce the size of an award or payment. The compensation committee may consider the accounting and tax treatment to the Company and to senior management of each particular element of compensation.

     Oversight of Benefit Plans

     The compensation committee oversees, periodically reviews and makes recommendations to the board of directors with respect to employee benefit plans, including all pension and profit sharing plans, stock incentive plans, stock purchase plans, bonus plans, deferred compensation plans and similar programs. The compensation committee has the power and authority to oversee these plans, establish guidelines, interpret plan documents, select participants, approve grants and awards, and exercise such other power and authority as may be permitted or required under such plans. The compensation committee may also undertake such additional activities within the scope of its primary function as the board of directors or the compensation committee may from time to time determine or as may otherwise be required by law, the board of directors or our charter or by-laws.

     Compensation Committee Interlocks and Insider Participation

     None of the members of our compensation committee at any time has been one of our officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers who serve on our board of directors or compensation committee.

Compensation Philosophy and Objectives

     Philosophy

     The compensation committee has adopted, and periodically reviews, an executive compensation philosophy statement. This statement sets forth the Company’s values and beliefs regarding the nature of its executive compensation strategy and programs.

     The purpose of our philosophy is twofold: to serve as a link between the interests of the Company’s shareholders and its compensation arrangements, and to serve as a framework for program design and assessment.

     The application of these values and beliefs reflects and takes into account a broad business context. Business judgment is brought to bear to determine the appropriate application of these values and beliefs in each circumstance. Moreover, the application of these values and beliefs solely in a mechanistic fashion is neither appropriate nor desirable.

     In periodically reviewing the executive compensation philosophy statement, the compensation committee will revise it as necessary to ensure that it is properly linked to the Company’s business strategies and to reflect changes to the Company’s business operations and goals as well as external market conditions.

     Objectives

     Our compensation program is designed to attract, motivate and retain the highly talented individuals that FreightCar America needs to drive business success. The program reflects the following principles:

	•		FreightCar America employees should act in the interests of FreightCar America stockholders. We believe that FreightCar America employees should act in the long-term interests of FreightCar America stockholders and the best way to encourage them to do so is through an equity stake in the Company. We pay a substantial portion of total compensation in the form of stock options and/or restricted stock. The Company’s goal is to have compensation programs that encourage each employee to think and act like an owner of the business. Our industry is cyclical. Executives must manage this cycle by diversifying our product offerings, maintaining low costs and other measures.
	•		Compensation should be related to performance. The Company’s compensation program endeavors to reinforce the Company’s business and financial objectives. Employee compensation will vary based on objectively determinable measures of Company performance. When the Company performs well based on financial measures, employees will receive greater incentive compensation. When the Company does not meet objectives, incentive awards will be reduced. An employee’s individual compensation also will vary based on the performance of such person’s team or function, as well as his or her individual performance, contribution and overall value to the business. Employees demonstrating sustained high performance will be rewarded more than those in similar positions with lower performance.
	•		Incentive compensation should be a greater part of total compensation for employees with more senior positions. The proportion of an individual’s total compensation that varies based on individual, function/team and Company performance objectives should increase as the individual’s business responsibilities increase.
	•		Other goals. The Company’s compensation program is designed to balance short- and long-term financial objectives. It also is designed to be competitive with a group of manufacturing-based companies. When the compensation committee determines compensation levels for executive officers, it reviews compensation survey data from independent sources in an attempt to ensure that our total compensation program is competitive and fair. The compensation committee looks at compensation data from companies in our industry as well as from companies in a broad cross-

section of industries, and targets overall compensation levels competitive with our industry comparison group.

Elements of Executive Compensation

     Total compensation for each NEO is comprised of base salary, annual cash incentive awards, long-term equity awards, retirement and post-employment benefits, including severance protection, and other benefits and perquisites. In 2008, the compensation committee approved changes to the annual cash incentive element of compensation, as described below under “Annual Incentive Awards.” The various elements of executive compensation reflect the following policies:

     Base Salary

•

Overview

•

Base salary is comprised of periodic, fixed payments made to each NEO.

•

Why this component is paid to NEOs and how it furthers the program objectives

•

Base salary is provided to each NEO in order to provide the NEO with a degree of financial certainty and to competitively compensate the NEO for rendering on-going services to the Company. Competitive base salaries further the compensation program’s objectives by allowing the Company to attract and retain talented employees by providing a fixed portion of compensation on which employees can rely.

•

How the amount of base salary is determined

	•		In general, the Company’s executive compensation philosophy is to target base salaries at a level that is slightly below the market median. The objective is to reward executives with upside for superior performance through our annual and long-term incentive programs. The annual base salary for each NEO is subject to review and possible adjustment on the NEO’s employment anniversary date. During 2008, pursuant to Mr. Ragot’s employment agreement, the compensation committee made a merit adjustment of 6.4% and a market adjustment of 10% to his base salary, increasing it to $640,000. The merit increase was based on the compensation committee’s assessment of his individual performance (including his leadership in transitioning the Company to new management, performing against business objectives, and recruiting new senior executives to the Company, among other considerations) and the market adjustment was intended to bring Mr. Ragot’s base compensation closer to the target base salary level of slightly below the market median. The compensation committee also made merit adjustments to the base salaries of Messrs. Bagby, Matthews, Trusdell and Whalen during 2008. These merit increases were based on the compensation committee’s assessment of each executive officer’s individual performance.
			With respect to other senior management employees and other management employees, the Company uses the results of the Economic Research Institute’s industry- and region-specific compensation database, and sets annual base salaries at plus or minus 25% of the midpoint, depending on an assessment of the individual’s sustained performance and the location of his or her position.

•

Relation of base salary to other components of compensation

•

The amount of each NEO’s base salary is the reference point for certain other elements of his compensation. For example, the potential annual incentive award for each NEO is based, in part, on the NEO’s base salary. In addition, base salary is one component of the formula for determining pension benefits under the Company’s Pension Plan (as defined below). Finally, NEO cash severance benefits are determined, in part, by base salary.

     Annual Incentive Awards

•

Overview

	•		In 2008, the compensation committee approved changes to the annual cash incentive element of our senior executives’ compensation. The new annual cash incentive program calls for the awarding of performance units under our 2005 Long Term Incentive Plan (the “LTIP”). At the end of 2007, we terminated our Salaried Bonus Plan, under which we paid annual incentive bonuses in previous years.
	•		The primary purposes of the annual cash incentive program are to incentivize employees to achieve certain pre-determined business results over the fiscal year that are linked to shareholder value creation and to competitively reward employees for successfully achieving results.
	•		Participants in the annual cash incentive program generally must be employed by the Company on the payment date to receive an award. Participants who are not employed by the Company on the payment date may receive a partial bonus award in certain circumstances at the discretion of the President/CEO and subject to confirmation by the compensation committee.
	•		Under the annual cash incentive program, each of the NEOs is eligible to receive a grant of performance units that determines his level of incentive compensation. Each of the NEOs may earn an annual cash incentive award based on the level of achievement with respect to the following performance metrics: (i) a corporate-wide performance goal, namely Return on Net Assets (“RONA”); (ii) function/team performance goals; and (iii) individual performance goals. These performance metrics are weighted 50%, 25% and 25%, respectively.
			Prior to 2008, the annual cash incentive element of compensation was based only on RONA. The new annual incentive program is designed to provide a link to goals and objectives in addition to RONA. Function/team and individual goals are highly specific and are limited to four to six such goals per participant.
			The CEO’s target cash incentive award during 2008 was 80% of annual base salary. Each other NEO’s target cash incentive award during 2008 was 40% of annual base salary. An NEO can receive 0% to 150% of the target cash incentive award, depending on whether the threshold, target, target-plus or stretch goal is attained with respect to each performance metric. The target-plus goal applies only to the RONA metric.
			The threshold goal for each performance metric must be achieved for the NEO to receive any award with respect to that metric. The attainment of threshold, target, target-plus and stretch goals results in increasing levels of award payments, as indicated in the following table:

		Percentage of Target Cash Incentive Award Payable
		upon Goal Achievement
Performance Metric		Threshold				Target				Target-Plus				Stretch
Corporate-Wide (RONA)			25.00	%			50.00	%			62.50	%			75.00	%
Function/Team			12.50	%			25.00	%			25.00	%			37.50	%
Individual			12.50	%			25.00	%			25.00	%			37.50	%
Total			50.00	%			100.00	%			112.50	%			150.00	%

•

Corporate-Wide (RONA) Performance Metric. The Company uses RONA because, for our type of business and asset base, it is an effective metric for measuring how efficiently the Company’s assets are being managed to generate earnings and returns. The goals ensure that incentive awards based on RONA are paid only when returns surpass the Company’s financial

			objectives. If these objectives are not surpassed, no incentive awards based on RONA are paid. The RONA goal for 2008 is described below.
			RONA is defined as Operating Income divided by Average Net Assets. “Operating Income” is defined as earnings computed under generally accepted accounting principles, after accrual for current year’s salaried bonus expenses and before interest, taxes and other income and expenses excluded from operating income by generally accepted accounting principles. “Average Net Assets” is the sum of average annual (computed on a monthly basis) receivables, inventory and property, plant and equipment net of accumulated depreciation, goodwill and other intangible assets less payables.
	•		Function/Team Performance Metric. Function/team performance metrics and related performance goals represent specific objectives of the NEO’s department or organizational unit. The CEO develops such metrics and related performance goals (including threshold, target and stretch performance goals) for both himself and for each of the other NEOs and submits them to the compensation committee for its consideration and adoption. The 2008 function/team performance metrics for each NEO are summarized below. Where possible, targets are identified below. Where targets are not identified below, the performance metric had significant qualitative components and/or represented competitively sensitive information. With respect to performance metrics that are not disclosed below for competitive reasons, the Company believes that the specific metrics were difficult or very difficult to achieve given the challenging business environment the Company faced in 2008.

•

Mr. Ragot

•

Financial objectives

	•		Net income ($8.55 million)
	•		Operating income ($6.83 million)
	•		Working capital ($14.18 million)
	•		Inventory ($30.00 million — $40.00 million)

	•		Margin improvement
	•		Strategic initiatives
	•		Enterprise Resource Planning (ERP) launch
	•		Organization development

•

Mr. Trusdell

	•		Organization budget
	•		Outside fees
	•		Inside/outside fee variance
	•		Services delivered

•

Mr. Magolske

	•		Strategic initiatives
	•		Organization budget
	•		Initiative return
	•		Long-term opportunity development

•

Mr. Matthews

	•		Production schedule
	•		Organization budget
	•		Cost improvement
	•		Equipment utilization

•

Individual Performance Metric. Individual performance metrics and related performance goals represent specific personal objectives related to the NEO’s job responsibilities and ability to contribute to overall Company goals. The CEO develops such metrics and related performance goals (including threshold, target and stretch performance goals) for both himself and for each of the other NEOs and submits them to the compensation committee for its consideration and adoption. The 2008 individual performance metrics for each NEO are

summarized below. Targets are not identified below because the individual performance metrics had significant qualitative components and/or represented competitively sensitive information. With respect to performance metrics that are not disclosed below for competitive reasons, the Company believes that the specific metrics were difficult or very difficult to achieve given the challenging business environment the Company faced in 2008.

•

Mr. Ragot

	•		Strategic plan
	•		Investment return
	•		Investor relations/governance
	•		Internal communications
	•		Industry and customer assimilation
	•		Workers’ compensation impact

•

Mr. Trusdell

	•		Reduced-cost sources
	•		Organization development
	•		Board support
	•		Client satisfaction

•

Mr. Magolske

	•		Strategic plan
	•		New partnerships
	•		Initiative integration

•

Mr. Matthews

	•		Aftermarket development
	•		Organization development
	•		Variable cost initiatives
	•		Site safety

•

Performance measures and goals are linked to the Company’s business plan and individual roles and responsibilities. Performance goals for senior executives will include a mix of corporate-wide, team and individual measures as described above. These performance goals will be recalibrated each year based on that year’s budget, business plan, goals and other relevant considerations.

•

Why this element is paid to executives and how it furthers the program’s objectives

•

Annual incentive award opportunities are provided to incentivize the NEOs to achieve performance goals that support the Company’s business plan and create stockholder value. The performance unit arrangement furthers the goals of the compensation program by tying a significant amount of compensation to objectively determinable Company, function/team and individual measures of performance. The annual cash incentive award program, consistent with the Company’s executive compensation philosophy, is designed to have an upside that rewards superior performance.

•

How the amount is determined

•

Annual cash incentive awards for each NEO and other eligible salaried employees are based on the following formula:

Total

Target

Percentage

Award

of Target

(Performance

Award

Bonus

Units)

X

Earned

X

$

100

=

Award $

•

2008 Annual Incentive Awards

•

For 2008, the Company achieved a RONA of 18.72% versus a goal of 11.62%. As a consequence, the Company’s RONA was at the target-plus goal level (62.50%). Each of Messrs. Ragot, Trusdell, Magolske and Matthews therefore earned 62.50% of his target award

			based on RONA. Most NEOs achieved a mix of target and/or stretch awards regarding the team/function and individual performance metrics, which earns 62.50% on the metrics-oriented award portion. The compensation committee approved the payment of an annual incentive award to each NEO in the amount disclosed in the column entitled “Non-Equity Incentive Plan Compensation” of the Summary Compensation Table.
	•		The CEO, subject to confirmation by the compensation committee, may change the target awards applicable to NEOs and other senior management employees at any time prior to the final determination of bonus awards for any year if, in his judgment, such changes are desirable in the interest of equitable treatment of one or more NEOs, other senior management employees, or the Company as a result of extraordinary or nonrecurring events, changes in applicable accounting rules or principles, changes in our method of accounting, changes in applicable law, changes due to consolidation, acquisitions, reorganization or unusual circumstances or any other changes of a similar nature to any of the foregoing. The CEO does not have the authority to make any such changes to his own target awards. The compensation committee did not approve or confirm any such discretionary changes to the 2008 goals of NEOs or other senior management employees at any time during or after the 2008 fiscal year.

•

Relation of annual incentives to other components of compensation

•

Cash severance benefits are determined, in part, by reference to an NEO’s annual incentive award opportunity. In addition, actual incentive award payments are one component of the formula for determining pension benefits under the Company’s Pension Plan.

     Long-Term Awards

     Long-term awards are those awards that are designed to provide incentives to the Company’s executives over a period of time in excess of one year. The Company has made long-term awards in the form of equity awards only. On January 13, 2008, the compensation committee approved the grant of stock options and restricted shares of the Company’s common stock to all executive officers and certain other salaried employees. The value of the stock options and restricted shares granted to each eligible employee was targeted to equate approximately to the median market practices of the Company’s manufacturing-based compensation group. The target split of equity instruments will be determined each year by the compensation committee.

     The primary purpose of the long-term award program is to align employee and shareholder interests through equity instruments that incentivize employees to increase shareholder value, competitively reward employees for increasing shareholder value and achieving pre-determined business goals and retain employees who are critical to shareholder value creation.

     At the Company’s 2008 Annual Meeting, our stockholders approved an amendment to the LTIP that increased the number of shares authorized for issuance under the LTIP from 659,616 to 1,659,616.

     Retention and Promotion Awards

     From time to time, the Company may grant retention awards or promotion awards to NEOs and other senior executives. During 2007 and 2008, the Company made the following awards:

•

Mr. Bagby’s retention award. On January 25, 2007, the Company entered into a retention agreement with Mr. Bagby in order to ensure his continued service while the Company transitioned to a new President and Chief Executive Officer. Pursuant to the agreement, the Company awarded Mr. Bagby 5,000 shares of restricted common stock of the Company, which vested on April 30, 2008. Mr. Bagby’s retention agreement also provided that if he received his retention bonus under that agreement and terminated his employment with the Company for any reason before December 31, 2008, his 2008 annual bonus would be pro rated for 2008. Mr. Bagby

			resigned from his employment with the Company effective November 3, 2008 and was paid a pro rated bonus for 2008 in accordance with the agreement.
	•		Mr. Whalen’s retention award. On January 25, 2007, the Company entered into a retention agreement with Mr. Whalen in order to ensure his continued service while the Company transitioned to a new President and Chief Executive Officer. Pursuant to the agreement, the Company awarded Mr. Whalen 7,000 shares of restricted common stock of the Company, which vested on April 30, 2008. Mr. Whalen’s retention agreement also provided that if he received his retention bonus under that agreement and terminated his employment with the Company for any reason before December 31, 2008, his 2008 annual bonus would be pro rated for 2008. Mr. Whalen resigned from his employment with the Company effective September 1, 2008 and was paid a pro rated bonus for 2008 in accordance with the agreement.

     Mr. Matthews’ Make-Whole Payment and Restricted Share Grant

     On January 10, 2008, the Company entered into an employment agreement with Mr. Matthews under which he agreed to serve as the Company’s Vice President, Operations. He was promoted to Senior Vice President, Operations on May 15, 2008. As an inducement to sign the employment agreement, the Company agreed to pay Mr. Matthews an amount equal to his foregone 2007 bonus from his previous employer, if any, up to a maximum of $178,500. Pursuant to this agreement, on April 30, 2008, the Company paid Mr. Matthews $165,900. On the date of the agreement, Mr. Matthews received a grant of 11,500 shares of restricted stock, vesting in five equal annual installments beginning on the first anniversary of the agreement. This restricted stock award would become fully vested upon a change in control of the Company.

     Mr. Trusdell’s Make-Whole Bonus Payment

     On April 30, 2008, the Company paid Mr. Trusdell $22,486.61 as a make-whole payment representing the difference between the 2007 annual bonus that he would have received from his former employer and the partial year 2007 bonus that he received from the Company based on the date he joined the Company, which was June 11, 2007.

     Stock Ownership Guidelines

     The board of directors has requested that the Company’s NEOs and certain other senior management employees meet minimum stock ownership requirements that are consistent with industry standards. Accordingly, the following minimum stock ownership requirements apply to corporate officers:

Chief Executive Officer:		40,000 shares
Chief Financial Officer and Other Corporate Officers:		10,000 shares

     In addition, stock ownership guidelines applicable to non-executive directors require that each non-executive director maintain Company stock holdings at least equal to the aggregate number of shares (including options or shares granted but not vested) that the Company has awarded to the non-executive director during the three-year period ending on any given date of determination. The director may reduce the amount of stock holdings by the number of shares the director has applied directly to the payments of taxes on such awards.

     Company stockholdings that count towards meeting ownership requirements include: (a) shares owned outright or in trust; and (b) restricted stock or restricted stock units, including shares or units that have been granted but are unvested. A covered individual hired by the Company or promoted into a position with ownership requirements (or higher ownership requirements), will have three years from date of hire or promotion to meet the applicable ownership requirements. Non-employee directors also will have three years to satisfy the requirements. The compensation committee reviews each covered individual’s compliance with the ownership requirements annually.

Retirement and Other Post-Employment Benefits

•

Overview

	•		The Company maintains tax-qualified 401(k) savings plans (the “401(k) Plans”) and a tax-qualified pension plan (the “Pension Plan”). All NEOs participate in the 401(k) Plans. Messrs. Bagby and Magolske participate in the Pension Plan.
	•		In addition, as described in more detail in the section below entitled “Potential Payments Upon Termination or Change in Control,” each of the NEOs is entitled to receive certain benefits in the event of a qualifying termination of employment or a change in control of the Company.

•

Why these elements are paid to executives and how they further the program’s objectives

	•		In general, the 401(k) Plans and the Pension Plan are designed to provide executives (and other eligible salaried employees) with financial security after their employment has terminated. The Company does not maintain an excess pension plan or non-qualified deferred compensation plan. Therefore, the retirement plan benefits for our NEOs are no greater than those for other salaried employees.
	•		In the event of certain qualifying terminations of employment, termination benefits provide our NEOs with additional financial security, which we believe is necessary to attract and retain talented executives. In addition, we provide NEOs (and certain other executives) with certain change in control benefits that we believe help minimize inherent conflicts of interest that may arise for executives in potential change in control transactions.

•

How the amount to be paid is determined

	•		The Company provides contributions under the 401(k) Plans ranging from 4% to 6% of eligible compensation. These contributions and any earnings thereon generally are held and invested under the plans until paid to participants upon termination of their employment. The Pension Plan benefits are calculated using formulas set forth in the section of this proxy entitled “Pension Benefits” and generally start when a participant reaches retirement age.
	•		The termination and change in control benefits for the NEOs are stated in their employment agreements and are described below in “Potential Payments upon Termination or Change in Control.” The Company has set termination and change in control severance benefits under each employment agreement to levels that we believe fall within the range of observed, competitive market practices, and that are summarized below:

	•		Mr. Ragot. Under his employment agreement, upon involuntary termination without “cause” or termination for “good reason” occurring either before or after a change in control, Mr. Ragot would be entitled to continuation of base salary for 24 months plus two annual payments, each equal to the greater of (i) the termination-year target bonus or (ii) prior-year bonus paid; plus the continuation of certain health benefits for a period of 24 months. In the case of non-renewal of Mr. Ragot’s employment agreement, the foregoing payments and benefits would be made for a period of 12 months.
	•		Mr. Bagby. Under his employment agreement, upon involuntary termination without “cause,” Mr. Bagby was entitled to continuation of base salary for 24 months plus the continuation of certain health benefits for a period of 24 months. Mr. Bagby voluntarily resigned from the Company effective November 3, 2008. Mr. Bagby was not entitled to any severance given the voluntary nature of his separation from the Company.
	•		Mr. Trusdell. Under his employment agreement, upon involuntary termination without “cause” or termination for “good reason,” Mr. Trusdell would be entitled to continuation of base salary for 12 months (or 24 months for a termination for “good reason” following a change in control), plus an amount equal to his current-year target bonus (or two times

			his current-year target bonus for a termination for “good reason” following a change in control). In addition, Mr. Trusdell would be entitled to continuation of certain health benefits for a period of 12 months (or 24 months for a termination for “good reason” following a change in control).
	•		Mr. Whalen. Under his employment agreement, upon involuntary termination without “cause” or termination for “good reason,” Mr. Whalen was entitled to (i) a lump sum payment equal to three times his base salary plus bonus, (ii) a pro rata bonus for the year of termination, (iii) continuation of welfare benefits for a period of three years at Company cost and (iv) following the continuation of welfare benefits noted in (iii), continued coverage under the Company’s health plan at the applicable COBRA rate until Mr. Whalen was eligible for Medicare. Mr. Whalen retired from the Company thus terminating his employment effective September 1, 2008. Mr. Whalen was not eligible to receive severance benefits given the voluntary nature of his separation from the Company.
	•		Other NEOs. Under their employment agreements, upon involuntary termination without “cause” or termination for “good reason,” each of the other NEOs would be entitled to continuation of base salary for 12 months, plus an amount equal to his current-year target bonus. In addition, the NEOs would be entitled to continuation of certain health benefits for a period of 12 months.
	•		In the event of a change in control, all outstanding stock awards under the LTIP would become fully vested.

     Perquisites and Other Benefits

     The NEOs participate in a number of benefit plans that are available generally to all employees of the Company, including group health insurance, dental insurance, vision insurance, life insurance, paid vacation, accidental death and dismemberment insurance and long-term disability insurance plans. These benefits provide financial security and peace of mind for employees and executives and are seen as a standard part of basic employee benefits within the industry.

     The Company provided NEOs with perquisites during 2008, the details of which are provided in footnote 7 to the Summary Compensation Table. These perquisites included reimbursement for health club memberships (Messrs. Trusdell and Matthews), payment of automobile allowance (Messrs. Ragot, Trusdell, Matthews and Magolske) and payment of moving and relocation costs (Mr. Matthews). Mr. Ragot was granted an annual payment of up to $9,000, plus a tax gross-up, in lieu of payments for the more costly country club membership and dues that he is entitled to under his employment agreement.

     Fiscal Year 2009 Chief Financial Officer Compensation

     Effective January 14, 2009 (the “Effective Date”), Christopher L. Nagel was named Vice President, Finance, Chief Financial Officer and Treasurer of the Company. Under his employment agreement, Mr. Nagel is entitled to receive an annual base salary of $350,000 and is eligible for annual cash incentive awards similar to those described above for the other NEOs. On the Effective Date, Mr. Nagel received a grant of 10,000 shares of restricted stock, vesting in three equal annual installments beginning on the first anniversary of the Effective Date. This restricted stock award would become fully vested upon a change in control. In addition, the Company agreed to pay Mr. Nagel moving and relocation costs, and an amount equal to his foregone 2008 bonus from his previous employer, if any, up to a maximum of $60,000. The other elements of his compensation are consistent with the benefits provided to the other NEOs as described above.

     Tax Treatment and Accounting

     Code Section 162(m) limits the deductibility for federal income tax purposes of certain compensation paid in any year by a publicly held corporation to its chief executive officer and its three other highest compensated officers other than its chief financial officer to $1 million per executive (the “$1 million cap”). The $1 million cap does not apply to “performance-based” compensation as defined under Code Section 162(m). Awards made under the LTIP may qualify as “performance-based” compensation for purposes of Code Section 162(m). The compensation committee will review and approve or recommend to the board of directors awards based on a number of factors, including preserving related federal income tax deductions, although the compensation committee retains the ability to approve awards that do not qualify as “performance-based” compensation. For example, the Company may decide to award restricted stock and other awards without performance conditions under certain circumstances.

     In addition, the Code has been amended to provide an excise tax under Section 409A with respect to various features of deferred compensation arrangements, mostly for compensation deferred on or after January 1, 2005. The Company has made the appropriate changes to our employment agreements to help ensure that there are no adverse effects on the Company or our executive officers as a result of these Code amendments. We do not expect these changes to have a tax or financial consequence on the Company.

     The Company has calculated and discussed with the compensation committee the accounting treatment and tax impact on the Company and the executives of each of its cash and equity compensation awards and agreements. As noted above, the Company has reconsidered its annual cash incentive program in light of Section 162(m) with a view to ensuring that bonuses to “covered employees,” as defined in that section, will be deductible in the future. The Company also calculates and monitors the Statement of Financial Accounting Standards No. 123 (revised 2004) (“SFAS 123(R)”) accounting expense related to equity compensation. To date, the SFAS 123(R) expense has not been a significant factor in setting or changing equity compensation grant practices.

     Timing of Awards

     The Company’s stock has been publicly traded since April 2005. During that time, the compensation committee has not timed the award of stock options or other equity-based compensation to coincide with the release of favorable or unfavorable material non-public information about the Company. It is the policy of the compensation committee not to time the award of stock options or other equity-based compensation to coincide with the release of favorable or unfavorable material non-public information about the Company in the future.

     Determination of Compensation

     In 2008, the compensation committee considered competitive market data in evaluating and setting executive officer compensation. In January 2008, the compensation committee reviewed competitive market data from Hewitt Associates for each executive officer position. Hewitt determined the market competitors from several published and private surveys, including data from both general industry and the manufacturing industry. The Company historically derived competitive market data from a broad-based general industry group and a manufacturing-based group. The compensation committee determined in 2008 that it would be appropriate to compare executive compensation primarily against a manufacturing-based group, since the companies within that group more closely resemble the Company.

     The surveys used to develop the competitive market data for the Company for 2008 included the following: the Hewitt TCM Cash Compensation Survey (sample size: 389 organizations); the Mercer Benchmark Database (sample size: 2,486 organizations); and the Watson-Wyatt Industry Report of Top Management Compensation (sample size: 2,567 organizations). While the financial profile, organizational structure and size of organizations in the Company’s industry differ significantly, the Company used the information in these surveys to review its executive compensation versus these organizations for comparison purposes. Compensation data derived from these sources is size-adjusted through regression analysis to reflect the Company’s average revenue size over time relative to the revenues of the companies in the comparison group.

     In general, the Company’s objective is to provide base compensation slightly below the market median, and annual and long-term incentive compensation at the market median with upside for superior performance. Under

Mr. Ragot’s compensation package, his 2008 base compensation was at approximately the 82^nd percentile of the comparison group, and total compensation was at approximately the 94^th percentile of the comparison group. The compensation packages for other NEOs place their base salaries in a percentile range from the 90^th percentile to the 120^th percentile of the comparison group. Total compensation for other NEOs is in the same percentile range. NEOs at the higher percentile ranges are those with the longest tenures and industry experience.

     Fiscal Year 2009 Compensation Decisions

     The compensation committee made several decisions that relate to fiscal year 2009 compensation. These decisions are summarized below:

	•		Base compensation. The compensation committee approved a decision that, in light of market and industry conditions, Mr. Ragot, all employees who report directly to Mr. Ragot and all other salaried personnel of the Company would forego base compensation increases in 2009. Should market and industry conditions markedly improve during the year, this decision may be revisited.
	•		Long-term incentive compensation. The compensation committee approved a decision that, in light of market and industry conditions, Mr. Ragot and all employees who report directly to Mr. Ragot would forego equity grants in 2009. Long-term incentive compensation equity granted in the form of stock options and restricted shares on January 13, 2008 will continue to vest per the originally disclosed schedule.
	•		Annual incentive compensation. The compensation committee approved an increase in the target cash incentive award in 2009 for Mr. Ragot and all employees who report directly to Mr. Ragot. Mr. Ragot’s target cash incentive is increased to 100% of annual base salary from its previous level of 80%. The target cash incentive for all of the employees who report directly to Mr. Ragot is increased to 50% from its previous level of 40%. The decision was approved in light of competitive market data and the actions for 2009 discussed above. The compensation committee reserves the right to reevaluate this decision prior to the approval of the annual cash incentive award program for 2010.

EXECUTIVE COMPENSATION

Executive Officers

     The following table sets forth certain information concerning each of our executive officers:

Name		Age				Position(s)
Christian B. Ragot			51			President, Chief Executive Officer and Director
Theodore W. Baun			36			Senior Vice President, Marketing and Sales
Charles J. Magolske			49			Vice President, Business Development and Strategy
Nicholas J. Matthews			35			Senior Vice President, Operations
Christopher L. Nagel			46			Vice President, Finance, Chief Financial Officer and Treasurer
Laurence M. Trusdell			62			General Counsel and Corporate Secretary

     Christian B. Ragot, 51, has been our President and Chief Executive Officer since April 30, 2007. He also served as Chief Operating Officer from January 29 to April 29, 2007. Mr. Ragot has served as a director since January 29, 2007. Mr. Ragot was President of Terex Utilities and Roadbuilding at Terex Corporation from 2004 to 2007. Previously, Mr. Ragot held various senior executive leadership positions, including President of Terex Utilities, President of American Crane, Senior Vice-President, Sales and Aftermarket Services, and other senior-level positions at Terex Corporation. Prior to joining Terex Corporation in 1999, Mr. Ragot was Vice President and General Manager of the Air Compressor Group, Europe of Ingersoll-Rand Company, and held various other managerial and senior-level positions during his 15 years at Ingersoll-Rand Company. He is also a member of the board of directors of Columbus McKinnon Corporation.

     Theodore W. Baun, 36, has been our Senior Vice President, Marketing and Sales since September 1, 2008. Mr. Baun first joined us in 1994 and has held roles of increasing responsibility in operations, marketing and sales. From 2003 to 2005, he was Director of Sales at Mitsui Rail Capital, after which he returned to FreightCar America. He has been the leader of our sales team since November 2007.

     Charles J. Magolske, 49, has been our Vice President, Business Development and Strategy since May 2007. He also served as Managing Director of our international business activities from 2003 until April 2007. Prior to joining us, Mr. Magolske served Trinity Industries in several business segments as Vice President, Marketing in 2001 and 2002. From 1991 until 2001, Mr. Magolske served in several leadership roles at Thrall Railcar Manufacturing Company in international operations, business development and supply chain organizations. Prior to joining Thrall, Mr. Magolske served in various positions with FMC Corporation.

     Nicholas J. Matthews, 35, has served as our Senior Vice President, Operations since May 15, 2008. Mr. Matthews previously served as our Vice President, Operations from January 10, 2008 to May 15, 2008. He joined FreightCar America from Trinity Industries, Inc., where he spent fourteen years serving in various technical and operations positions of expanding leadership scope. Most recently, he served as Trinity’s Senior Vice President—Operations for Trinity’s freight car business. Mr. Matthews also served Trinity as Senior Vice President—Component Sales and Distribution, and Vice President and General Manager of the boxcar business. Earlier in his career, he held roles in business planning, manufacturing engineering, quality assurance and site operations leadership.

     Christopher L. Nagel, 46, has served as our Vice President, Finance, Chief Financial Officer and Treasurer since January 14, 2009. Prior to joining us, Mr. Nagel was Chief Financial Officer of The Wallick Companies from September 2007 to December 2008. Prior to joining The Wallick Companies, Mr. Nagel spent nine years in various senior leadership positions at The Scotts Miracle-Gro Company, serving as its Executive Vice President, North American Consumer Business from September 2006 to July 2007 and its Executive Vice President and Chief Financial Officer from January 2003 to September 2006. Mr. Nagel was Senior Vice President, North America and Corporate Finance of Scotts from 2001 to 2003 and Vice President and Corporate Controller of Scotts from 1998 to 2001.

     Laurence M. Trusdell, 62, has served as our General Counsel and Corporate Secretary since June 2007. Prior to joining us, Mr. Trusdell was Vice President, Law and Corporate Secretary of W.W. Grainger, Inc., having joined Grainger as Associate General Counsel in 2004. He was an independent legal consultant in 2003-2004 and Vice President—General Counsel and Secretary of Videojet Technologies Inc. from 1997 to 2003. He previously served in the North American legal group of The General Electric Company p.l.c. of London, England and practiced corporate law at the Chicago law firm of Mayer, Brown & Platt.

Summary Compensation Table

     The following table sets forth information regarding 2008 compensation for each of the Company’s 2008 Named Executive Officers (“NEOs”); 2007 and 2006 compensation is presented for such executives who were also Named Executive Officers in 2007 and 2006. In accordance with SEC guidance, 2006 compensation is not presented for Messrs. Ragot and Magolske and 2007 and 2006 compensation is not presented for Messrs. Trusdell and Matthews because they were not NEOs in those years. Salary includes amounts deferred at the officer’s election.

Summary Compensation Table

																						Non-Equity				Change in
														Stock				Option				Incentive Plan				Pension				All Other
Name and Principal						Salary(1)				Bonus(2)				Awards(3)				Awards(4)				Compensation(5)				Value(6)				Compensation(7)				Total
Position		Year				($)				($)				($)				($)				($)				($)				($)				($)
Christian B. Ragot			2008				632,500				—				867,186				312,155				695,750				—				54,302				2,561,893
President and Chief Executive Officer			2007				497,436				320,000				683,837				—				640,000				—				96,291				2,237,564
Kevin P. Bagby			2008				267,023				—				73,583				62,717				—				—				140,536				543,859
Former Vice			2007				295,417				—				202,367				215,032				177,250				19,968				55,960				965,994
President, Finance,			2006				258,000				—				—				215,036				154,800				22,975				39,147				689,958
Chief Financial Officer and Treasurer (8)
Edward J. Whalen			2008				206,667				—				194,810				94,080				—				—				102,200				597,757
Former Senior Vice			2007				300,000				—				283,305				322,557				180,000				43,592				9,072				1,138,526
President,			2006				290,000				—				—				322,552				174,000				71,341				8,170				866,063
Marketing and Sales
Laurence M. Trusdell			2008				274,783				22,487				135,634				62,463				123,653				—				21,622				640,642
General Counsel and Corporate Secretary
Charles J. Magolske			2008				228,800				—				132,908				49,433				102,960				12,695				21,828				548,624
Vice President,			2007				211,400				—				146,915				—				126,840				9,004				30,965				525,124
Business Development and Strategy
Nicholas J. Matthews			2008				243,742				165,900				84,503				46,827				134,058				—				48,198				723,228
Senior Vice President, Operations

All Other Compensation for 2008

		Health Club
		Membership and								Transportation and												Pro Rata
		Country Club				Moving and				Travel-Related				401(k)				Vacation Payment at				Termination				Total All Other
		Duesa				Relocationb				Paymentsc				Contributiond				Terminatione				Bonusf				Compensation
Name		($)				($)				($)				($)				($)				($)				($)
Mr. Ragot			—				—				44,619				9,683				—				—				54,302
Mr. Bagby			—				—				—				9,200				11,176				120,160				140,536
Mr. Whalen			—				—				—				9,200				—				93,000				102,200
Mr. Trusdell			495				—				10,192				10,935				—				—				21,622
Mr. Magolske			—				—				12,628				9,200				—				—				21,828
Mr. Matthews			424				24,005				9,969				13,800				—				—				48,198

Supplemental Narrative to Summary Compensation Table

     A substantial portion of the total compensation reported in the Summary Compensation Table above is paid to the NEOs pursuant to the terms of their employment agreements or other compensation plans maintained by the Company.

Employment Agreements for NEOs as of December 31, 2008

     Christian B. Ragot. On January 3, 2007, the Company entered into an employment agreement with Mr. Ragot under which he served as the Company’s Chief Operating Officer from January 29, 2007 to April 30, 2007 and began serving as President and Chief Executive Officer on April 30, 2007. Mr. Ragot has served as a member

of the Company’s Board of Directors since January 29, 2007. Mr. Ragot’s employment agreement term commenced on January 29, 2007 and will expire on January 15, 2010, except that the agreement will remain in effect from year to year thereafter unless either party gives notice of its intention not to continue the agreement at least 90 days before the end of the then-current term, in which case the agreement will terminate as of December 31 of the year in which notice is given.

     Under the employment agreement, the Company paid Mr. Ragot an initial annual base salary of $500,000, which was increased to $550,000 on April 30, 2007 and to its current level of $640,000 on February 1, 2008. Mr. Ragot’s base salary is subject to annual review by the compensation committee. Mr. Ragot is eligible for an annual cash incentive award based on performance and calculated as a percentage of his base salary.

     The Company provides Mr. Ragot with the use of an automobile with lease payments of no more than $750 per month plus auto insurance and maintenance expenses throughout the term of his employment. Mr. Ragot was granted an annual payment of up to $9,000, plus a tax gross-up, in lieu of payment for the more costly country club membership and dues that he is entitled to under his employment agreement. Mr. Ragot is entitled to participate in any employee benefit plan made available by the Company to its executive employees at any time during his employment. Mr. Ragot is also entitled to certain termination and change-in-control benefits under the employment agreement (these termination and change-in-control benefits are described in the section of the proxy statement entitled “Executive Compensation—Potential Payments upon Termination or Change in Control”).

     Charles J. Magolske. Mr. Magolske’s employment agreement, dated as of May 1, 2007, provides for his employment as the Company’s Vice President, Business Development and Strategy for an initial term of three years, which term automatically extends for one-year periods until terminated prior to the end of the term by either party upon 90 days’ notice. Upon a “Change in Control” (as defined in his employment agreement), the agreement automatically will be extended to at least the second anniversary of such Change in Control. Under the employment agreement, Mr. Magolske’s initial annual base salary was $220,000, which was increased to its current level of $228,800 on December 1, 2007. Mr. Magolske’s base salary is subject to annual review by the compensation committee. Mr. Magolske also is entitled under the agreement to participate in all management incentive plans, and to receive all benefits under any employee benefit plan or arrangement, vacation policy, or perquisite made available to executive employees. Mr. Magolske is entitled to certain termination and change-in-control benefits under the employment agreement (these termination and change-in-control benefits are described in the section of the proxy statement entitled “Executive Compensation—Potential Payments upon Termination or Change in Control”).

     Nicholas J. Matthews. Under his employment agreement effective January 10, 2008, Mr. Matthews agreed to serve as the Company’s Vice President, Operations. He was promoted to Senior Vice President, Operations on May 15, 2008. Under the employment agreement, Mr. Matthews’ initial annual base salary was $250,000, which was increased to its current level of $257,500 on December 15, 2008. Mr. Matthews’ base salary is subject to annual review by the compensation committee.

     As an inducement to sign the employment agreement, the Company agreed to pay Mr. Matthews an amount equal to his foregone 2007 bonus from his previous employer, if any, up to a maximum of $178,500. Pursuant to this agreement, on April 30, 2008, the Company paid Mr. Matthews $165,900. On the effective date of the agreement, Mr. Matthews received a grant of 11,500 shares of restricted stock. The restricted stock award vests in five equal annual installments beginning on the first anniversary of the agreement and would become fully vested upon a “Change in Control” (as defined in his employment agreement). The agreement provides for his employment for an initial term of three years, which term automatically extends for one-year periods until terminated prior to the end of the term by either party upon 90 days’ notice. In 2008, the Company reimbursed Mr. Matthews’s reasonable moving expenses incurred in relocating to Chicago, Illinois. The Company provides Mr. Matthews with the use of an automobile with lease payments of no more than $500 per month plus auto insurance and maintenance expenses throughout the term of his employment.

     Upon a Change in Control, Mr. Matthews’s agreement automatically will be extended to at least the second anniversary of such Change in Control. Mr. Matthews also is entitled under the agreement to participate in all management incentive plans, and to receive all benefits under any employee benefit plan or arrangement, vacation policy, or perquisite made available to executive employees. Mr. Matthews is entitled to certain termination and change-in-control benefits under the employment agreement (these termination and change-in-control benefits are

described in the section of the proxy statement entitled “Executive Compensation—Potential Payments upon Termination or Change in Control”).

     Laurence M. Trusdell. Under his employment agreement effective June 11, 2007, Mr. Trusdell agreed to serve as the Company’s General Counsel and Corporate Secretary. Under the employment agreement, Mr. Trusdell’s initial annual base salary was $270,000, which was increased to its current level of $278,200 on June 1, 2008. Mr. Trusdell’s base salary is subject to annual review by the compensation committee.

     Upon a “Change in Control” (as defined in his employment agreement), Mr. Trusdell’s agreement automatically will be extended to at least the second anniversary of such Change in Control. Mr. Trusdell also is entitled under the agreement to participate in all management incentive plans, and to receive all benefits under any employee benefit plan or arrangement, vacation policy, or perquisite made available to executive employees. Mr. Trusdell is entitled to certain termination and change-in-control benefits under the employment agreement (these termination and change-in-control benefits are described in the section of the proxy statement entitled “Executive Compensation—Potential Payments upon Termination or Change in Control”).

     Kevin P. Bagby. Mr. Bagby’s employment agreement, dated as of November 22, 2004, as amended, provided for his employment as the Company’s Vice President, Finance, Chief Financial Officer and Treasurer, without any employment term, as an “at will” employee. Mr. Bagby’s annual base salary was subject to annual review by the compensation committee. Mr. Bagby’s annual base salary was $315,000 during 2007 and $322,875 during 2008. Mr. Bagby also was entitled to participate in the Company’s Salaried Bonus Plan during 2007 and was eligible for a cash incentive award during 2008. The agreement terminated with Mr. Bagby’s resignation from the Company effective November 3, 2008.

     On January 25, 2007, the Company entered into a retention agreement with Mr. Bagby in order to ensure his continued service while the Company transitioned to a new President and Chief Executive Officer. Pursuant to the agreement, the Company awarded Mr. Bagby 5,000 shares of restricted common stock of the Company, which vested on April 30, 2008. Mr. Bagby’s retention agreement also provided that if he received his retention bonus under that agreement and terminated his employment with the Company for any reason before December 31, 2008, his 2008 annual bonus would be pro rated for 2008.

     Edward J. Whalen. Mr. Whalen’s employment agreement, dated as of December 20, 2004, provided for his employment as the Company’s Senior Vice President, Marketing and Sales for an initial term of three years. At the conclusion of the initial three-year period, it automatically extended for one-year periods. Mr. Whalen’s annual base salary was $300,000 in 2007 and it was increased to $310,000 in 2008. Mr. Whalen also was entitled under the agreement to participate in all management incentive plans, and to receive all benefits under any employee benefit plan, arrangement or perquisite made available to executive employees. The agreement terminated with Mr. Whalen’s retirement on September 1, 2008.

     On January 25, 2007, the Company entered into a retention agreement with Mr. Whalen in order to ensure his continued service while the Company transitioned to a new President and Chief Executive Officer. Pursuant to the agreement, the Company awarded Mr. Whalen 7,000 shares of restricted common stock of the Company, which vested on April 30, 2008. Mr. Whalen’s retention agreement also provided that if he received his retention bonus under that agreement and terminated his employment with the Company for any reason before December 31, 2008, his 2008 annual bonus would be pro rated for 2008.

2005 Long Term Incentive Plan

     The Company adopted the LTIP in April 2005, effective upon the closing of our initial public offering on April 11, 2005. Under the LTIP, the Company may grant to NEOs and other eligible employees cash incentive awards, stock options, share appreciation rights, restricted shares, restricted share units, performance shares, performance units, dividend equivalents and other share-based awards.

Annual Cash Incentive Program

     In 2008, the compensation committee approved a new annual cash incentive program to replace the Salaried Bonus Plan. Under the new program, each of the NEOs is eligible to receive a grant of performance units based on the level of achievement with respect to the following performance metrics: (i) a corporate-wide performance goal, RONA; (ii) function/team performance goals; and (iii) individual performance goals. These performance metrics are weighted 50%, 25% and 25%, respectively. The new incentive program is designed to provide a link to the Company’s goals and objectives in addition to RONA. The number of performance units granted determines the NEO’s cash incentive award. In 2008, the CEO’s target cash incentive award was 80% of annual base salary and each other NEO’s target cash incentive award was 40% of annual base salary. Under the new program, the NEOs can receive 0% to 150% of the target cash incentive award.

Grants of Plan-Based Awards for the Year Ended December 31, 2008

																All Other				All Other
																Stock				Option								Grant
				Estimated Future Payouts Under												Awards:				Awards:				Exercise				Date Fair
				Non-Equity Incentive Plan												Number of				Number of				or Base				Value of
				Awards1												Shares or				Securities				Price of				Stock and
				Thres-								Max-				Units of				Underlying				Option				Option
		Grant		hold				Target				imum				Stock2				Options3				Awards				Awards4
Name		Date		($)				($)				($)				(#)				(#)				($/Sh)				($)
Christian B. Ragot		1/1/08			126,500				506,000				759,000				—				—				—				—
		1/13/08			—				—				—				12,450				79,060				30.47				1,356,533
Kevin P. Bagby		1/1/08			26,702				106,809				160,214				—				—				—				—
		1/13/08			—				—				—				4,260				27,020				30.47				463,769
Edward J. Whalen		1/1/08			20,667				82,667				124,000				—				—				—				—
		1/13/08			—				—				—				2,180				13,840				30.47				237,487
Laurence M. Trusdell		1/1/08			27,478				109,913				164,870				—				—				—				—
		1/13/08			—				—				—				2,500				15,820				30.47				271,710
Charles J. Magolske		1/1/08			22,880				91,520				137,280				—				—				—				—
		1/13/08			—				—				—				1,980				12,520				30.47				215,078
Nicholas J. Matthews		1/10/08			24,374				97,497				146,245				—				—				—				—
		1/10/08			—				—				—				11,500				—				—				345,920
		1/13/08			—				—				—				1,870				11,860				30.47				203,569

     Supplemental Narrative to Grants of Plan-Based Awards Table

     Awards of restricted stock are made by the compensation committee under the LTIP. An NEO who is granted a restricted stock award receives certain shareholder rights with respect to the unvested stock, including the rights to vote and receive dividends. Awards vest in three annual installments of equal size beginning on the first anniversary of the award date, provided that the NEO is continuously employed by the Company until each respective vesting date. Unvested restricted stock would become fully vested upon a Change in Control (as defined

in the LTIP). If the NEO’s employment with the Company terminates, all unvested shares are forfeited and the NEO forfeits his shareholder rights with respect to the forfeited shares.

     Awards of stock options are also made by the compensation committee under the LTIP. The exercise price for the options is based on the closing price of the Company’s stock on the last trading day preceding the award date. The options are non-qualified options for federal income tax purposes. As with restricted stock awards, stock option awards vest in three annual installments of equal size beginning on the first anniversary of the award date, provided that the NEO is continuously employed by the Company until each respective vesting date. Options expire on the tenth anniversary of the award date. Unvested option awards would become fully vested upon a Change in Control (as defined in the LTIP). If the NEO’s employment with the Company terminates prior to the final vesting of the award, all unexercised options are forfeited unless the termination is due to the NEO’s death, disability or retirement, in which case vested options may be exercised until the earlier of the first anniversary of the termination date or the option expiration date.

Outstanding Equity Awards at 2008 Fiscal Year-End

Option Awards																		Stock Awards
		Number of				Number of												Number of
		Securities				Securities												Shares or				Market Value
		Underlying				Underlying												Units of				of Shares or
		Unexercised				Unexercised				Option								Stock That				Units of Stock
		Options				Options				Exercise				Option				Have Not				That Have Not
		(#)				(#)				Price				Expiration				Vested				Vested
Name		Exercisable				Unexercisable1				($)				Date				(#)				($)2
Christian B. Ragot			—				79,060	(a)		$	30.47				1/13/2018				—				—
			—				—				—				—				12,450	(a)		$	227,463
			—				—				—				—				26,667	(b)		$	487,206
Laurence M. Trusdell			—				15,820	(a)		$	30.47				1/13/2018				—				—
			—				—				—				—				2,500	(a)		$	45,675
			—				—				—				—				4,333	(c)		$	75,164
Charles J. Magolske			—				12,520	(a)		$	30.47				1/13/2018				—				—
			—				—				—				—				1,980	(a)		$	36,174
			—				—				—				—				3,334	(d)		$	60,912
Nicholas J. Matthews			—				11,860	(a)		$	30.47				1/13/2018				—				—
			—				—				—				—				11,500	(e)		$	210,105
			—				—				—				—				1,870	(a)		$	34,164

Option Exercises and Stock Vested for the Year Ended December 31, 2008

		Option Awards								Stock Awards
		Number of
		Shares								Number of
		Acquired on								Shares
		Exercise				Value Realized				Acquired on				Value Realized
Name		(#)				on Exercise ($)				Vesting (#)				on Vesting ($)
Christian B. Ragot			—				—				13,333				487,188
Kevin P. Bagby			21,987				151,381				5,000				194,750
Edward J. Whalen			32,981				615,755				7,000				272,650
Laurence M. Trusdell			—				—				2,167				89,714
Charles J. Magolske			—				—				3,499				125,059
Nicholas J. Matthews			—				—				—				—

Pension Benefits at December 31, 2008

								Present Value of
				Number of Years				Accumulated				Payments During Last
Name		Plan		Credited Service2				Benefit3				Fiscal Year
(a)		Name1		(#)				($)				($)
Christian B. Ragot 4		—			—				—				—
Kevin P. Bagby 5		JAC Nonrepresented Salaried Pension Plan			3.9			$	0				—
Edward J. Whalen 5		JAC Nonrepresented Salaried Pension Plan			16.7				393,846				3,204
Laurence M. Trusdell 4		—			—				—				—
Charles J. Magolske 5		JAC Nonrepresented Salaried Pension Plan			7.0				70,060				—
Nicholas J. Matthews 4		—			—				—				—

     Supplemental Narrative to Pension Benefits Table

     The Company maintains the Johnstown America Corporation Salaried Pension Plan (the “Pension Plan”) for the benefit of its eligible salaried employees. The Pension Plan is a tax-qualified defined benefit pension plan. Benefits provided under the Pension Plan are limited by Code Sections 415 and 401(a)(17). Code Section 415 limits the benefit amount payable from the plan based on the pensioner’s service, pay, and a dollar amount cap that is indexed. Code Section 401(a)(17) limits the pensionable earnings that may be used to determine the pension benefit amount. All salaried employees of Johnstown America Corporation and JAC Operations, Inc. hired prior to January 1, 2005 who are not members of any collective bargaining unit and who have attained age 21 and completed at least one year of service with the Company are eligible to participate in the Pension Plan. A participant must complete at least five years of service with the Company to be vested under the Pension Plan. Eligibility for normal retirement is at age 65.

     Subject to the Code limits noted above, the Pension Plan’s normal retirement payment and benefit formula is the maximum of (a), (b) and (c), minus (d) and (e), as follows:

(a)		1.35% times average monthly earnings (defined as: the highest 60 consecutive months of earnings out of the last 120 months divided by 60) times years of service. Earnings are defined as the participant’s W-2 pay plus Code Section 401(k) and Code Section 125 deferrals, minus bonus, overtime, expense reimbursements, moving expenses, salary gross-up payments, and imputed income. Service is determined as elapsed time measured on years and months since last hiring date, and includes service with Bethlehem Steel Corporation. For active participants who had 25 years of service on November 1, 1991, an extra month of service is credited for every month of service earned between November 1, 1991 and October 31, 1994.
(b)		($40.00 times years of service before May 2005) plus ($50.00 times years of service after April 2005).
(c)		1.05 times (1.60% of average monthly earnings times years of service) minus (0.475% of Social Security covered compensation times years of service (maximum 35 years)). Covered compensation offset begins at age 62.
(d)		Accrued monthly benefit from Bethlehem Steel Corporation pension plans for service prior to October 28, 1991.
(e)		Accrued monthly benefit from Transportation Technologies pension plans for service prior to June 4, 1999.

     The Pension Plan also provides a special payment for early and normal retirees with at least 10 years of service with the Company (and replaces the first three monthly pension benefit payments) as follows: nine weeks of base pay plus remaining unused vacation in the year of retirement.

     Eligibility for early unreduced retirement is at age 62 and 15 years of service, or at any age with 30 years of service. A participant can take early reduced retirement after age 60 with 15 years of service, subject to a reduction for early commencement of 16.18% at age 60 and 8.55% at age 61.

     The normal form of benefit is a life annuity. If the participant is married and receives payments in the form of a joint and survivor annuity, or otherwise elects another form of benefit under the Pension Plan, the amount of monthly benefits payable to the participant would be reduced to reflect the actuarially increased cost of providing such other benefit forms.

Nonqualified Deferred Compensation for the Year Ended December 31, 2008

The Company does not make available a non-qualified deferred compensation plan for its NEOs or other employees.

Potential Payments upon Termination or Change in Control

     This section describes and quantifies potential payments that may be made to each NEO at, following, or in connection with the resignation, severance, retirement, or other termination of the NEO or a change of control of the Company. These benefits are in addition to benefits generally available to salaried employees.

     The potential payments described below are estimates only. As such, the potential payments do not necessarily reflect the actual amounts that would be paid to each NEO, which would be known only at the time the NEO becomes eligible for payment due to a termination of employment or change in control. The following tables reflect potential amounts that could be payable to each NEO if a change in control or the indicated termination of employment occurred at December 31, 2008.

     Mr. Bagby terminated his employment with the Company effective November 3, 2008 and was not eligible to receive severance benefits given his voluntary separation from the Company other than the pro rata 2008 annual bonus described in footnote 7 to the Summary Compensation Table. Mr. Whalen retired from the Company thus terminating his employment effective September 1, 2008 and was not eligible to receive severance benefits given his voluntary separation from the Company other than the pro rata 2008 annual bonus described in footnote 7 to the Summary Compensation Table.

     Mr. Ragot

     If the Company terminates Mr. Ragot’s employment without Cause (as defined in the employment agreement) or Mr. Ragot terminates his employment for Good Reason (as defined in the employment agreement), or if the Company fails to renew Mr. Ragot’s employment agreement, then the Company will provide the following payments and benefits to Mr. Ragot: (i) base salary for 24 months (or 12 months in the case of a non-renewal of the employment agreement) following the date of termination; (ii) two payments to Mr. Ragot (one in the case of a non-renewal of the employment agreement), each equal to the greater of (a) Mr. Ragot’s “target” bonus for the year of termination or (b) the bonus paid to Mr. Ragot for the year prior to the year of termination, with the first payment made on the first March 15 following the termination of Mr. Ragot’s employment and the second payment made on the second March 15 following the termination of Mr. Ragot’s employment; and (iii) continued participation in the Company’s group health benefit plan by Mr. Ragot and such members of his family who participated in the group health plan at the time of his employment’s termination, for a period of 24 months (or 12 months in the case of a non-renewal of the employment agreement), at the same costs and coverage levels as applicable to active employees of the Company.

     Mr. Ragot has agreed to keep confidential certain information during the term of the agreement and thereafter, and has agreed to certain non-solicitation and non-compete restrictions that apply for two years following termination of his employment (except that if Mr. Ragot’s employment agreement were not renewed by the Company, then such non-solicitation and non-compete restrictions would not apply).

     Under the terms of the LTIP and his restricted stock and stock option agreements, Mr. Ragot’s unvested restricted stock and stock options would become fully vested upon a “Change in Control” (as defined under the LTIP).

     Summarized below are the potential payments and benefits payable by the Company to Mr. Ragot at, following, or in connection with the indicated termination of employment or change in control as of December 31, 2008:

POTENTIAL PAYMENTS AND BENEFITS UPON TERMINATION OR CHANGE IN CONTROL — MR. RAGOT

Executive Benefits						Change in				Change in
and Payments Upon						Control —				Control —				Termination				Company’s
Change in Control or		Change in				Termination				Termination				without Cause				Non-
Termination of		Control — No				without				for Good				or for Good				renewal of the
Employment		Termination1				Cause1				Reason1				Reason2				Agreement3				Death				Disability
Compensation:
Base Salary			—			$	1,280,000			$	1,280,000			$	1,280,000			$	640,000				—				—
Incentive Compensation			—			$	1,391,500			$	1,391,500			$	1,391,500			$	695,750				—				—
Restricted Stock and Stock Options: Unvested and Accelerated 1		$	714,668			$	714,668			$	714,668				—				—				—				—
Benefits and Perquisites:
Continuing benefits4			—			$	25,275			$	25,275			$	25,275			$	12,638				—				—
Total:		$	714,668			$	3,411,443			$	3,411,443			$	2,696,775			$	1,348,388				—				—

     Messrs. Magolske, Matthews and Trusdell

     Each of our employment agreements with Messrs. Magolske, Matthews and Trusdell provides for employment for an initial term of three years, which automatically extends for one-year periods until terminated prior to the end of the term by either party upon 90 days’ notice. Upon a “Change in Control” (as defined in each employment agreement), the agreement will automatically be extended to at least the second anniversary of such Change in Control.

     If the Company terminates the employment of any of Messrs. Magolske, Matthews or Trusdell without Cause, or if any of them terminates his employment for Good Reason (each as defined in his employment agreement), then the Company will provide the following payments and benefits to him: (i) base salary for 12 months following the date of termination (or 24 months for Mr. Trusdell for a termination for Good Reason following a Change in Control); (ii) one payment equal to his “target” bonus for the year of termination (or one payment equal to two times his “target” bonus for the year of termination for Mr. Trusdell for a termination for Good Reason following a Change in Control); and (iii) continued participation in the Company’s group health benefit plan by him, and such members of his family who participated in the group health plan at the time of his termination, for a period of 12 months (or 24 months for Mr. Trusdell for a termination for Good Reason following a Change in Control) at the same costs and coverage levels as applicable to active employees of the Company.

     Each of Messrs. Magolske, Matthews and Trusdell has agreed to keep confidential certain information during the term of the agreement and thereafter, and has agreed to certain non-solicitation and non-disparagement restrictions that apply for one year following termination of employment.

     Under the terms of the LTIP and the restricted stock and stock option agreements of Messrs. Magolske, Matthews and Trusdell, unvested restricted stock and stock options would become fully vested upon a Change in Control (as defined under the LTIP).

     Summarized below are the potential payments and benefits payable by the Company to Messrs. Magolske, Matthews and Trusdell, respectively, at, following, or in connection with the indicated termination of employment or change in control as of December 31, 2008:

POTENTIAL PAYMENTS AND BENEFITS UPON TERMINATION OR CHANGE IN CONTROL — MR. MAGOLSKE

						Change in				Change in
Executive Benefits and						Control —				Control —				Termination
Payments Upon Change in		Change in				Termination				Termination				without Cause
Control or Termination of		Control — No				without				for Good				or for Good
Employment		Termination1				Cause1				Reason1				Reason2				Death				Disability
Compensation:
Base Salary			—			$	228,800			$	228,800			$	228,800				—				—
Incentive Compensation			—			$	91,520			$	91,520			$	91,520				—				—
Restricted Stock and Stock Options: Unvested and Accelerated 1		$	97,087			$	97,087			$	97,087				—				—				—
Benefits and Perquisites:
Continuing Benefits3			—			$	12,638			$	12,638			$	12,638				—				—
Total:		$	97,087			$	430,045			$	430,045			$	332,958				—				—

POTENTIAL PAYMENTS AND BENEFITS UPON TERMINATION OR CHANGE IN CONTROL — MR. MATTHEWS

						Change in				Change in
Executive Benefits and						Control —				Control —				Termination
Payments Upon Change in		Change in				Termination				Termination				without Cause
Control or Termination of		Control — No				without				for Good				or for Good
Employment		Termination1				Cause1				Reason1				Reason2				Death				Disability
Compensation:
Base Salary			—			$	257,500			$	257,500			$	257,500				—				—
Incentive Compensation			—			$	103,000			$	103,000			$	103,000				—				—
Restricted Stock and Stock Options: Unvested and Accelerated 1		$	244,270			$	244,270			$	244,270				—				—				—
Benefits and Perquisites:
Continuing Benefits3			—			$	12,638			$	12,638			$	12,638				—				—
Total:		$	244,270			$	617,408			$	617,408			$	373,138				—				—

POTENTIAL PAYMENTS AND BENEFITS UPON TERMINATION OR CHANGE IN CONTROL — MR. TRUSDELL

						Change in				Change in
Executive Benefits and						Control —				Control —				Termination
Payments Upon Change in		Change in				Termination				Termination				without Cause
Control or Termination of		Control — No				without				for Good				or for Good
Employment		Termination1				Cause1				Reason1				Reason2				Death				Disability
Compensation:
Base Salary			—			$	278,200			$	556,400			$	278,200				—				—
Incentive Compensation			—			$	111,280			$	222,560			$	111,280				—				—
Restricted Stock and Stock Options: Unvested and Accelerated 1		$	124,839			$	124,839			$	124,839				—				—				—
Benefits and Perquisites:
Continuing Benefits3			—			$	12,638			$	25,275			$	12,638				—				—
Total:		$	124,839			$	526,957			$	929,074			$	402,118				—				—