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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	o		Soliciting Material Pursuant Section 240.14a-12

FREIGHTCAR AMERICA, INC.

(Exact 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 10, 2008

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 14, 2008 at the Union League Club of Chicago, 65 West Jackson Boulevard, Chicago, Illinois 60604.

     The purpose of the meeting is to consider and vote upon proposals to (i) elect two directors who have been nominated for election as Class III directors to three-year terms, (ii) approve an amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan that, among other things, increases the number of shares authorized to be issued under the plan from 659,616 to 1,659,616, (iii) ratify the appointment of our independent registered public accounting firm for 2008 and (iv) 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.

Sincerely,

/s/ Thomas M. Fitzpatrick

THOMAS M. FITZPATRICK
Chairman of the Board

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

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on May 14, 2008

April 10, 2008

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 14, 2008 at the Union League Club of Chicago, 65 West Jackson Boulevard, Chicago, Illinois 60604, for the following purposes:

	1.		To elect two directors as Class III directors, each for a term of three years.
	2.		To approve an amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan that, among other things, increases the number of shares authorized to be issued under the plan from 659,616 to 1,659,616.
	3.		To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2008.
	4.		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 2007 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 10, 2008.

     Only stockholders of record at the close of business on March 31, 2008 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.

By order of the Board of Directors,

/s/ Laurence M. Trusdell

LAURENCE M. TRUSDELL
General Counsel and Corporate Secretary

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			3
Proposal 1 — Election of Class III Directors			3
Proposal 2 — Approval of an Amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan			3
Proposal 3 — Ratification of the Appointment of Independent Registered Public Accounting Firm			6
BOARD OF DIRECTORS			7
Board Structure and Composition			7
Nominees for election at this meeting for terms expiring in 2011:			8
Directors whose terms continue until 2009:			8
Directors whose terms continue until 2010:			8
Independent Directors			8
Director Attendance at Annual Meetings			9
Committees of the Board of Directors			9
Code of Business Conduct and Ethics			10
Criteria for Nominating Directors			10
Director Compensation			11
STOCK OWNERSHIP			11
Security Ownership of Certain Beneficial Owners and Management			11
Section 16(a) Beneficial Ownership Reporting Compliance			13
COMPENSATION DISCUSSION AND ANALYSIS			13
Introduction			13
Compensation Committee’s Processes and Procedures for Consideration and Determination of Executive Compensation			14
Compensation Philosophy and Objectives			15
Components of Executive Compensation			16
EXECUTIVE COMPENSATION			23
Executive Officers			23
Summary Compensation Table			24
Supplemental Narrative			26
Employment Agreements for NEOs as of December 31, 2007			27
2005 Long Term Incentive Plan			28
Salaried Bonus Plan			28
Grants of Plan-Based Awards for the Year Ended December 31, 2007			29
Outstanding Equity Awards at December 31, 2007			30
Option Exercises and Stock Vested for the Year Ended December 31, 2007			31
Pension Benefits at December 31, 2007			31
Nonqualified Deferred Compensation for the Year Ended December 31, 2007			32
Potential Payments Upon Termination or Change in Control			32

Compensation Committee Report			38
DIRECTOR COMPENSATION FOR YEAR ENDED DECEMBER 31, 2007			39
EQUITY COMPENSATION PLANS			41
FEES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND AUDIT COMMITTEE REPORT			41
Fees Billed by Independent Registered Public Accounting Firm			41
Report of the Audit Committee			42
2009 ANNUAL MEETING OF STOCKHOLDERS			43
“HOUSEHOLDING” OF PROXY MATERIALS			43
APPENDIX I — FREIGHTCAR AMERICA, INC. AMENDED 2005 LONG TERM INCENTIVE PLAN			44

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 14, 2008 at the Union League Club of Chicago, 65 West Jackson Boulevard, Chicago, Illinois 60604, 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 10, 2008.

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 two directors who have been nominated for election as Class III directors to three-year terms, (ii) the approval of an amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan that, among other things, increases the number of shares authorized to be issued under the plan from 659,616 to 1,659,616, (iii) the ratification of the appointment of our independent registered public accounting firm and (iv) 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 III Directors,” “FOR” the approval of an amendment to our 2005 Long Term Incentive Plan discussed below under “Proposal 2 – Approval of an Amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan,” and “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm discussed below under “Proposal 3 – 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, 2008, 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 11,854,846 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”:

	•		the election of the two nominees named below under “Proposal 1 – Election of Class III Directors” to three-year terms;
	•		the approval of an amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan that, among other things, increases the number of shares authorized to be issued under the plan discussed below under “Proposal 2 – Approval of an Amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan”; and
	•		the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2008 discussed below under “Proposal 3 – 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 two nominees for Class III director with the most votes will be elected. The approval of the amendment to our 2005 Long Term Incentive Plan and the ratification of the appointment of our independent registered public accounting firm require 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 approval of the amendment to our 2005 Long Term Incentive Plan and 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 to be paid to the proxy solicitation firm of Georgeson Inc.

PROPOSALS TO BE VOTED ON

Proposal 1 – Election of Class III 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 III director is scheduled to expire at our annual meeting of stockholders to be held this year. Currently, two of our directors, Thomas M. Fitzpatrick and Thomas A. Madden, are Class III directors. At the recommendation of our nominating and corporate governance committee, our board of directors has determined to nominate Messrs. Fitzpatrick and Madden for election to three-year terms as Class III directors at our annual meeting this year.

     Each nominee elected by our stockholders as a Class III director at our annual meeting this year will be elected to a term to expire at the annual meeting of stockholders in 2011.

     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 nominee 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 Thomas M. Fitzpatrick and Thomas A. Madden as Class III directors.

Proposal 2 – Approval of an Amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan

     On March 28, 2008, the board of directors approved an amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan (the “Incentive Plan”) that, among other things: (i) increases the number of shares authorized for issuance under the Incentive Plan from 659,616 to 1,659,616; (ii) adds additional performance measures that may be used in connection with awards designed to qualify for the performance-based compensation exception to the tax deductibility limitation of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”); and (iii) made administrative and technical changes to various provisions of the Incentive Plan in order to maintain compliance with Sections 162(m) and 409A of the Code. Our stockholders are being asked to approve this amendment, described more fully below.

     Purposes of the Incentive Plan. The Incentive Plan is intended to provide incentives to attract, retain and motivate our and our subsidiaries’ and affiliates’ employees, consultants and directors, to provide for competitive compensation opportunities, to encourage long-term service, to recognize individual contributions and reward achievement of performance goals and to promote the creation of long-term value for our stockholders by aligning the interests of such persons with those of our stockholders.

     Purpose of the Amendment. The amendment increases the number of shares authorized for issuance under the Incentive Plan from 659,616 to 1,659,616. It also makes a proportional adjustment to the maximum number of shares with respect to which awards may be granted in any year to any one participant in the Incentive Plan. As of March 31, 2008, 34,102 shares were available for future awards under the Incentive Plan. Stockholder approval of the amendment would increase the number of shares available from 34,102 to 1,034,102. We do not anticipate granting any new awards under the Incentive Plan between the record date and the date of the 2008 annual meeting. As of the record date, we had 255,069 stock options outstanding, with a weighted average exercise price of $28.73 and a weighted average remaining term of 9.1 years, and 124,278 shares of restricted stock outstanding.

     The amendment also adds additional performance measures that may be used in connection with awards designed to qualify for the performance-based compensation exception to the tax deductibility limitation of Section

162(m) of the Code. The full list of these performance measures is provided below under “Summary Description of the Incentive Plan.” Further, the amendment addresses new Internal Revenue Service guidance regarding Section 162(m) by providing that awards under the Incentive Plan intended to qualify as “performance-based compensation” under Section 162(m) may not, with respect to certain participants, vest solely as a result of termination of employment without cause or for good reason, or voluntary retirement. The amendment also provides that awards made under the Incentive Plan are intended to be exempt from or comply with Section 409A of the Code and that the Incentive Plan will be construed and interpreted in accordance with that intent.

     Summary Description of the Incentive Plan. The following description of the Incentive Plan, as it is proposed to be amended, is a summary and is qualified by reference to the full text of the Incentive Plan as it is proposed to be amended, which is attached as Appendix I to this proxy statement.

Eligibility and Administration.    Our and our subsidiaries’ and affiliates’ employees, consultants and non-employee directors are eligible to be granted awards under the Incentive Plan. The Incentive Plan is currently administered by our compensation committee (the “Committee”). The Committee determines which employees, consultants and directors receive awards and the types of awards to be received. The Committee also has authority to waive conditions relating to an award or accelerate the exercisability or vesting of awards.

Awards.    The Incentive Plan provides for the grant of stock options, share appreciation rights (“SARs”), restricted shares, restricted share units (“RSUs”), performance shares, performance units, dividend equivalents and other share-based awards. If the stockholders approve the amendment, an aggregate of 1,659,616 shares, which represents 14% of the number of shares outstanding as of March 31, 2008, may be issued under the Incentive Plan. In addition, during any one calendar year, (1) the maximum number of shares with respect to which stock options and SARs may be granted to a participant under the Incentive Plan will be 800,000 shares and (2) the maximum number of shares that may be granted to a participant under the Incentive Plan with respect to restricted shares, RSUs, performance shares and performance units intended to qualify as “performance-based compensation” under Section 162(m) of the Code, will be 800,000 shares. Shares issued under the Incentive Plan will be either authorized but unissued shares or treasury shares.

     Stock Options.  Both incentive stock options, which are intended to qualify for special tax treatment under the Code, and nonqualified stock options, which are not intended to qualify for special tax treatment under the Code, may be granted under the Incentive Plan. The Committee is authorized to set the terms of an option, including exercise price and the time and method of exercise, but is prohibited from repricing options without stockholder approval.

     Share Appreciation Rights.   An SAR entitles the holder to receive an amount equal to the difference between the fair market value of a specified number of shares on the exercise date and the exercise price of the SAR set by the Committee as of the date of grant. The Committee is authorized to set the terms of the SARs, including the time and method of exercise, but is prohibited from repricing SARs without stockholder approval.

     Restricted Shares and RSUs.  Awards of restricted shares are subject to restrictions on transferability and such other restrictions, if any, as the Committee may impose on the date of grant or thereafter. Such restrictions will lapse under circumstances as the Committee may determine, such as completion of a specified period of continued employment or upon the achievement of performance criteria. Except as otherwise determined by the Committee, eligible participants, consultants and directors who are granted restricted shares will have all of the rights of a stockholder, including the right to vote and to receive dividends. Restricted shares are forfeited upon the termination of a participant’s employment during the applicable restriction period.

     An RSU entitles the holder to receive shares of common stock or cash at the end of a specified deferral period. RSUs may also be subject to such restrictions as the Committee may impose. Such restrictions will lapse under circumstances as the Committee may determine, such as completion of a specified period of continued employment or upon the achievement of performance criteria. Except as

otherwise determined by the Committee, RSUs subject to restriction are forfeited upon the termination of a participant’s employment during any applicable restriction period.

     Performance Shares and Performance Units.  Performance shares and performance units provide for future issuance of shares and payment of cash, respectively, to the recipient upon the attainment of performance goals established by the Committee. Except as otherwise determined by the Committee, performance shares and performance units will be forfeited upon the termination of a participant’s employment during any applicable performance period. Performance objectives may vary from person to person and will be based upon such criteria as the Committee may deem appropriate. Subject to special rules with respect to awards intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Committee may revise performance objectives if significant events occur during the performance period that the Committee expects will have a substantial effect on such objectives.

     Dividend Equivalents and Other Awards.    The Committee may also grant dividend equivalent rights under the Incentive Plan and it is authorized to grant such other awards that may be denominated in, valued in, or otherwise based on, shares, including unrestricted shares awarded purely as a bonus and not subject to any restrictions or conditions.

Performance Criteria.    If the Committee determines that an award of restricted shares, RSUs, performance shares, performance units or other share-based awards should qualify as “performance-based compensation” under Section 162(m) of the Code, the awards will be contingent upon the achievement of performance goals based on one or more of the following: earnings per share; revenues; earnings from operations; earnings growth; cash flow; return on assets; return on investment; return on capital; return on equity; economic value added; operating margin or operating expense; net income; share price or stockholder return; backlog; and objectives based on meeting specified market penetration, geographic expansion or cost targets, customer satisfaction goals, expense reduction, supervision of litigation and information technology needs, and the completion of acquisitions, divestitures or joint ventures.

Change in Control.    In the event of a change in control, as defined in the Incentive Plan, all outstanding awards granted under the Incentive Plan are immediately exercisable, all restrictions or limitations lapse and any performance criteria and other conditions to payment are deemed satisfied.

Capital Structure Changes.    If the Committee determines that a share dividend, recapitalization, share split, reverse split, reorganization, merger, consolidation, spin-off, repurchase, share exchange, or other similar corporate transaction affects the shares such that an adjustment is appropriate in order to prevent the dilution of the rights of participants, the Committee may make such changes as it deems appropriate.

Amendment and Termination.    The Incentive Plan may be amended, suspended or terminated by the board of directors. However, any amendment or alteration for which stockholder approval is required will not be effective until such stockholder approval has been obtained.

Restrictive Covenants.    The Incentive Plan provides that the Committee may include in any award agreement that, if the participant breaches the non-competition, non-solicitation, non-disclosure or other provisions of the award agreement, whether during or after employment, the participant will forfeit all awards granted under the Incentive Plan, including awards that have become vested and exercisable.

Effective Date and Term.    The Incentive Plan became effective on April 5, 2005 and will terminate as to future awards on April 5, 2015.

New Plan Benefits. Our executive officers and directors have an interest in approval of this amendment because it relates to the issuance of share-based awards for which executive officers and directors may be eligible. However, future awards under the Incentive Plan are discretionary and cannot be determined at this time.

U.S. Federal Income Tax Considerations.

Taxation of Nonqualified Stock Options. A nonqualified stock option is taxed when it is granted if the option has a readily ascertainable fair market value at that time as determined by an established market. If a nonqualified option does not have a readily ascertainable fair market value, the exercise of the option, and not the grant, is the taxable event. When the employee exercises the option, the employee recognizes ordinary income in the amount of the fair market value of the stock purchases minus any amount paid for the option. When the employee subsequently sells the stock, any gain or loss recognized is treated as a capital gain or loss. The employee’s holding period of the stock begins the day after the option is exercised.

Taxation of Incentive Stock Options.  A recipient of an incentive stock option (“ISO”) will not recognize regular taxable income upon either the issuance or exercise of the ISO. The optionee will recognize capital gain or loss on a disposition of the shares acquired upon exercise of an ISO, provided that the optionee does not dispose of those shares within two years from the date the ISO was issued or within one year from the date the shares were acquired by such optionee. If the optionee satisfies both of the foregoing holding periods, then the Company will not be allowed a deduction by reason of the issuance or exercise of an ISO. For regular federal income tax purposes, the maximum rate of tax applicable to capital gains is dependent on the length of time the shares have been held at the time of sale. If the shares have been held for more than one year, the current maximum regular federal tax rate applicable to the gain on the sale generally will be 15%. If the shares have been held for one year or less, the gain on the sale will be taxed at the maximum tax rate (currently 35%) applicable to other taxable income generally.

As a general rule, if the optionee disposes of the shares acquired through the exercise of an ISO before satisfying both holding period requirements (a “disqualifying disposition”), the gain recognized by the optionee on the disqualifying disposition will be taxed as ordinary income to the extent of the difference between (a) the lesser of the fair market value of the shares on the date of exercise or the amount received for the shares in the disqualifying disposition, and (b) the adjusted basis of the shares. The Company will be entitled to a deduction in the amount of this difference. The gain (if any) in excess of the amount recognized as ordinary income on a disqualifying disposition will be treated as a capital gain, with the maximum federal tax rate determined by reference to the length of time the optionee held the shares prior to the disposition, as discussed above.
 

The amount by which the fair market value of a share at the time of exercise exceeds the option exercise price will be included in the computation of such optionee’s “alternative minimum taxable income” in the year the optionee exercises the ISO. Currently, the maximum alternative minimum tax rate is 28%. If an optionee pays alternative minimum tax with respect to the exercise of an ISO, then the amount of such tax paid may be allowed as a credit against regular tax liability in subsequent years. The optionee’s basis in the shares for purposes of the alternative minimum tax will be adjusted when income from a disposition of the shares is included in alternative minimum taxable income.

     Our board of directors recommends that you vote “FOR” the approval of the amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan.

Proposal 3 – Ratification of the Appointment of Independent Registered Public Accounting Firm

     Deloitte & Touche LLP audited our financial statements for our fiscal year ended December 31, 2007, 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, 2008. 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 2007 and 2006, 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:

	•		Robert N. Tidball, S. Carl Soderstrom, Jr. and James D. Cirar serve in Class I. Their terms will expire on the date of the annual meeting of stockholders to be held in 2009.
	•		Christian B. Ragot and William D. Gehl 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 upcoming annual meeting of stockholders to be held on May 14, 2008.

     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 letter.

     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 2011:

     Thomas M. Fitzpatrick, 55, 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, 54, 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 board of directors of Champion Enterprises, Inc. and Mindspeed Technologies, Inc.

Directors whose terms continue until 2009:

     James D. Cirar, 61, has served as a director since June 1999 and is the chairman of our strategy and growth committee. Mr. Cirar is a private investor and Managing Director of TMB Industries. 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.

     Robert N. Tidball, 69, 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., after which he retired.

     S. Carl Soderstrom, Jr., 54, 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. and serves as a member of the audit committee and chairman of the corporate governance committee of Lydall, Inc.

Directors whose terms continue until 2010:

     Christian B. Ragot, 50, 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.

     William D. Gehl, 61, 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 board of directors of Gehl Company, ASTEC Industries, Inc., Mason Wells, Inc., The Oilgear Company and West Bend Savings Bank.

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 2007, the board of directors held 12 meetings and took action by written consent three times. Each of our directors attended at least 75% of all the meetings of the board and those committees on which he served during 2007. All of our directors attended the 2007 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. Soderstrom, Tidball, Madden and Gehl. 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. Soderstrom, Tidball, Madden and Gehl meet the independence requirements under the Sarbanes-Oxley Act of 2002, the Nasdaq Global Market (“Nasdaq”) and the rules and regulations of the SEC. Mr. Soderstrom is our audit committee financial expert, as that term is defined under the SEC rules implementing Section 407 of the Sarbanes-Oxley Act of 2002. Mr. Soderstrom 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 12 times during 2007.

     Compensation Committee. Our compensation committee consists of Messrs. Tidball, Madden and Gehl. 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. Tidball, Madden and Gehl meet the independence requirements under the Sarbanes-Oxley Act of 2002, Nasdaq and the rules and regulations of the SEC. In addition, each of Messrs. Tidball, Madden and Gehl is an “outside director,” as that term is defined in Section 162(m) of 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 13 times during 2007.

     Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Messrs. Soderstrom, Tidball and Fitzpatrick. 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 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. Soderstrom, Tidball and Fitzpatrick meet the independence requirements under the Sarbanes-Oxley Act of 2002, 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 four times and took action by written consent two times during 2007.

     Strategy and Growth Committee. Our strategy and growth committee consists of Messrs. Ragot, Cirar 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 six times during 2007.

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 the Nasdaq Global Market. In the case of incumbent directors whose terms of office are set to expire, the nominating and corporate governance committee will also review such director’s overall service to us during his or her term and any relationships and transactions that might impair such director’s independence.

     In 2007, 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. 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 ninety (90) nor more than one hundred twenty (120) days prior to the first anniversary of the previous year’s annual meeting; provided, however, that in the event less than thirty (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 tenth (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 14, 2008.

Director Compensation

     We currently compensate each of our independent directors with an annual stipend 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, 2007 (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 and Address		Owned (1)				Percent of Class(1)
Barclays Global Investors, NA. and certain of its affiliates			595,709	(2)			5.0	%
45 Fremont Street San Francisco, California 94105
Citadel Limited Partnership and certain of its affiliates			949,024	(3)			8.0	%
131 S. Dearborn Street 32nd Floor Chicago, Illinois 60603
Farallon Capital Partners, L.P. and certain of its affiliates			601,894	(4)			5.1	%
One Maritime Plaza Suite 2100 San Francisco, California 94111
FMR LLC and certain of its affiliates			895,250	(5)			7.6	%
82 Devonshire Street Boston, Massachusetts 02109
DIRECTORS, DIRECTOR NOMINEES AND EXECUTIVE OFFICERS:
James D. Cirar			1,852				*
S. Carl Soderstrom, Jr.			1,852				*
Robert N. Tidball			1,852				*
Christian B. Ragot (6)			40,000				*
William D. Gehl			990				*
Thomas M. Fitzpatrick			1,468				*
Thomas A. Madden			1,468				*
Kevin P. Bagby			17,110				*
Edward J. Whalen			9,180				*
Charles J. Magolske			8,813				*
Kenneth D. Bridges			1,833				*
All directors, director nominees and executive officers as a group (12 persons)			92,918				*

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 2007, except that Charles J. Magolske and Laurence M. Trusdell inadvertently were late in filing their initial Forms 3 stating their beneficial ownership of our equity securities.

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 2007. 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 must also 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 Section 162(m) of the Code 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 2007, 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 does not time its release of material non-public information for the purpose of affecting the value of executive compensation, or set the grant date of its stock option grants to executives to anticipate the release of material non-public information, except in extraordinary circumstances and with full disclosure to the Company’s stockholders and the public. The compensation committee adopts 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 option plans, share appreciation rights plans, incentive plans, stock bonus 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

     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 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 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 person’s performance, contribution and

			overall value to the business. Employees with 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 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. The Company’s compensation program also is designed to be competitive with our peer group companies (described below). 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. The compensation committee targets overall compensation levels competitive with our industry comparison group.

Components 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. The various components 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

	•		The annual base salary for each NEO is subject to review and possible adjustment on the NEO’s employment anniversary date. During 2007, pursuant to Mr. Ragot’s employment agreement, Mr. Ragot’s base salary was increased to $550,000 in recognition of his promotion from Chief Operating Officer to Chief Executive Officer. The compensation committee made merit adjustments to Messrs. Bagby’s, Whalen’s and Bridges’ base salary during 2007. These merit increases were based on the compensation committee’s assessment of each executive officer’s individual performance. Mr. Bagby’s base salary was also subject to a market adjustment to bring Mr. Bagby’s base compensation closer to the Company’s target base salary level of slightly below market median. Finally, the compensation committee adjusted Mr. Magolske’s base salary in recognition of his promotion to Vice President, Business Development and Strategy.
			With respect to other senior management employees and other management employees, the Company uses the results of an annual study by the Economic Research Institute 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 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. Finally, NEO cash severance benefits are determined, in part, by base salary.

     Annual Incentive Awards

•

Overview

	•		Except for Mr. Carroll, each NEO is eligible to receive a cash incentive award under the Company’s Salaried Bonus Plan, which provides additional incentive compensation to participants based on the Company’s Return on Net Assets (“RONA”). RONA is defined as Operating Income divided by Average Net Assets. The Salaried Bonus Plan defines “Operating Income” for the Company 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. The Salaried Bonus Plan defines “Average Net Assets” as the sum of average annual (computed on a monthly basis) receivables, inventory and property, plant and equipments net of accumulated depreciation, less payables.
			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 RONA performance targets ensure that incentive awards are paid only when returns surpass the Company’s financial objectives. If these objectives are not surpassed, no incentive awards are paid. Each of threshold, target and stretch performance result in increasing levels of incentive award payments.
			Participants in the Salaried Bonus Plan typically must be actively employed by the Company on the payment date to receive a bonus award. Participants who are not actively employed by the Company on the payment date are entitled to receive a partial bonus award in certain circumstances. No annual incentive award is paid if the minimum performance goal is not achieved.

•

Why this component 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 Salaried Bonus Plan furthers the goals of the compensation program by tying a significant amount of compensation to objectively determinable Company performance.

•

How the amount is determined

•

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

Base

Bonus

Bonus

Bonus

Salary

X

Rate

X

Group %

=

Award $

			The Bonus Rate can range from 0% (if RONA is below a percentage specified in the Salaried Bonus Plan) to 150% (if RONA equals or exceeds the maximum percentage specified under the Salaried Bonus Plan). The Bonus payment percentages are not prorated within a RONA range.
			The Bonus Group percentage for the CEO is equal to 80% and for the other NEOs is equal to 40%.
			The Company’s Human Resources Department identifies the applicable Bonus Group designation for each position. Bonus Group designations may be changed from time to time

in connection with job promotions, demotions and other events determined by the Company’s Human Resources Department in consultation with the CEO.

•

2007 Annual Incentive Awards

	•		For 2007, the Company’s achieved RONA related to a Bonus Rate of 150% under the Salaried Bonus Plan. Based on this Bonus Rate, the Bonus Group % applicable to each NEO and each NEO’s base salary, 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 compensation committee modified Mr. Ragot’s annual incentive award payment to reflect a full year of service (Mr. Ragot was employed during 2007 for slightly more than 11 months, having delayed his start date at the Company’s request).
			The CEO may change, subject to confirmation by the compensation committee, the financial target(s) applicable to NEOs and other senior management employees under the Salaried Bonus Plan 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, change in applicable accounting rules or principles, changes in the Company’s method of accounting, changes in applicable law, changes due to consolidation, acquisitions, reorganization, unusual circumstances or any other changes of a similar nature to any of the foregoing. The compensation committee did not approve or confirm any changes to pre-set 2007 RONA goals at any time during or after the 2007 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 target 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. In 2007, as described in more detail below, we granted restricted shares of the Company’s common stock to certain NEOs.

     Retention/Promotion Awards

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

	•		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, vesting on April 30, 2008, provided he remains continuously employed by the Company until that date.
	•		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, vesting on April 30, 2008, provided he remains continuously employed by the Company until that date.
	•		Mr. Bridges’ retention award. On March 8, 2007, the Company entered into a retention agreement with Mr. Bridges 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 will award Mr.

			Bridges a retention bonus of $200,000 in cash, payable on April 30, 2008, provided he remains continuously employed by the Company until that date.
	•		Mr. Magolske’s promotion award. On May 1, 2007, the Company entered into an employment agreement with Mr. Magolske which sets forth certain terms and conditions relating to his employment with the Company. Under the terms of the Employment Agreement, Mr. Magolske was awarded 5,000 shares of restricted stock of the Company, vesting in three equal annual installments on each anniversary of the date of grant (May 1, 2007), provided he remains continuously employed by the Company on each anniversary date. The grant was made in recognition of Mr. Magolske’s promotion to Vice President, Business Development and Strategy.

     Mr. Ragot’s Signing Bonus and Restricted Share Grant

On January 3, 2007, the Company entered into an employment agreement with Mr. Ragot under which he agreed to serve as the Company’s Chief Operating Officer beginning on January 29, 2007 and President and Chief Executive Officer beginning on April 30, 2007. As an inducement to sign the employment agreement, the Company paid to Mr. Ragot a signing bonus in the amount of $320,000 (the “Signing Bonus”) and awarded to Mr. Ragot 40,000 shares of restricted stock, which vest in three equal annual installments beginning on January 29, 2008. This restricted stock award would become fully vested upon a change in control. The Signing Bonus was also paid, in part, to reimburse Mr. Ragot for the loss of an annual incentive bonus that otherwise would have been payable to him by his previous employer.

     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 RSUs, including shares that have been granted but are unvested. Covered individuals employed by the Company on the 2006 effective date of the ownership guidelines who do not comply with the ownership requirements will have three years to meet the applicable ownership requirements. 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. Carroll, Whalen, Magolske and Bagby participate in the Pension Plan.
	•		In addition, as described in more detail in the section of this proxy entitled “Potential Payments Upon Termination or Change in Control,” each NEO 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 component 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. Thus, the retirement plan benefits for our NEOs are no greater than those of 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 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 fixed by contract and are described in the section of this proxy entitled “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. Upon involuntary termination without “cause” occurring either before or after a change in control or voluntary termination for “good reason” occurring 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) current-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. Upon involuntary termination without “cause,” Mr. Bagby would be entitled to continuation of base salary for 24 months plus the continuation of certain health benefits for a period of 24 months.
	§		Mr. Whalen. Upon involuntary termination without “cause” or voluntary termination for “good reason,” Mr. Whalen would be entitled to a lump sum payment equal to three times the sum of Mr. Whalen’s base salary and bonus, plus the continuation of certain health benefits for a period of 36 months.
	§		Mr. Magolske. Upon involuntary termination without “cause” or voluntary termination for “good reason” following a change in control, Mr. Magolske would be entitled to continuation of base salary for 12 months, plus an amount equal to Mr. Magolske’s current-year target bonus. In addition, Mr. Magolske would be entitled to continuation of certain health benefits for a period of 12 months.
	§		Mr. Bridges. Mr. Bridges is not covered under any severance agreement.
	§		In the event of a change in control, all outstanding stock awards under the FreightCar America, Inc. 2005 Long Term Incentive Plan 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 the details of which are set forth in footnote 7 to the Summary Compensation Table. These perquisites included reimbursement for country club dues (Messrs. Bagby and Carroll), payment of automobile allowance (Messrs. Ragot and Magolske) and payment of moving and relocation costs (Messrs. Ragot and Bagby). In addition, Messrs. Bagby, Bridges and Carroll were entitled to use Company-rented housing and were reimbursed for the additional taxes imposed on them for using Company-rented housing. Because of the Company’s multiple locations, some of which are in relatively remote locations, and travel demands, the Company believes that the use of Company-rented housing is necessary to enable the NEOs to effectively perform their duties.

     Mr. Carroll’s Compensation

     In October 2006, the Company and Mr. Carroll agreed to continue his employment as President and CEO until April 30, 2007, with the additional responsibility of assisting Mr. Ragot in a successful transition into the Company, with the ultimate goal of Mr. Ragot becoming the Company’s President and CEO on April 30, 2007. Until April 30, 2007, the Company paid Mr. Carroll an annual base salary of $550,000 (pro-rated for his period of employment). The Company paid Mr. Carroll a bonus equal to $500,000 (under the terms Mr. Carroll’s employment agreement, the Company was obligated to pay Mr. Carroll an annual bonus equal to the greater of (i) $500,000 or (ii) 1% of the Company’s EBITDA for the four months ending April 30, 2007). In recognition of his service to the Company and his forfeiture of non-vested stock options, the Company also made a $1,500,000 severance payment to Mr. Carroll on April 30, 2007, and agreed to make Mr. Carroll and his spouse eligible for lifetime coverage under the Company’s medical insurance plan. Mr. Carroll agreed to make himself reasonably available for consultation with Mr. Ragot for 60 days after April 30, 2007, without additional compensation, and to not compete with the Company anywhere in North America for two years after April 30, 2007.

     Tax Treatment and Accounting

     Section 162(m) of the Code 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 Section 162(m) or to compensation paid pursuant to certain plans that existed prior to a corporation becoming publicly held. It is intended that awards made under the Company’s 2005 Long Term Incentive Plan not be currently subject to the $1 million cap due to the private-to-public transition rules under Section 162(m). Once the transition rules are no longer available, it is intended that awards made under the Company’s 2005 Long Term Incentive Plan will qualify as “performance-based” compensation for purposes of Section 162(m). We believe we can continue to preserve related federal income tax deductions, although individual exceptions may occur. For example, the Company may decide to award restricted stock without performance conditions under certain circumstances.

     In addition, the Code was recently 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 will be making 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 management incentive plan in light of Section 162(m) and has taken steps to ensure 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 compensation committee did not award stock options in 2007. 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.

     Benchmarking

     In prior years (including fiscal year 2006), the compensation committee has considered competitive market data in evaluating and setting executive officer compensation. Except for Mr. Ragot’s compensation, the compensation committee did not consider such data in setting executive officer compensation for 2007. In September 2006, the compensation committee asked Hewitt Associates to provide competitive market data for the Chief Executive Officer position to develop an offer package for Mr. Ragot. Hewitt developed the market benchmarks from several published and private surveys including data from both general industry and the manufacturing industry. The data was calibrated to reflect an organization with approximately $930 million in revenue. Hewitt prepared a report for the compensation committee analyzing the base salary, annual actual bonus, total cash compensation, long-term incentives, total direct compensation and target bonus levels for the Chief Executive Officer position at the 25^th, 50^th and 75^th percentiles of the benchmark group. The Company and Mr. Ragot agreed to a compensation package under which Mr. Ragot’s 2007 total compensation was less than the 50^th percentile of the benchmark group.

     Fiscal Year 2008 Compensation Decisions

     The compensation committee made several important compensation decisions that relate to fiscal year 2008 compensation. These decisions are summarized below:

	§		Change in benchmark peer group. The Company historically derived benchmark data from a broad-based general industry peer group and a manufacturing-based peer group. The compensation committee determined that it would be appropriate to primarily benchmark executive compensation against the manufacturing-based peer group as the companies within that group more closely resemble the Company. Data for this peer group was derived from multiple survey sources. 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 peer group’s revenues.
	§		Base compensation. The compensation committee approved a merit increase and a market-adjustment increase in Mr. Ragot’s base compensation of 7% and 10%, respectively, effective February 1, 2008. The market-adjustment increase was deemed appropriate to bring Mr. Ragot’s base compensation closer to the Company’s target base pay level of slightly below market median.
	§		Annual incentive compensation. The Company historically covered NEOs and all other eligible salaried employees under the Salaried Bonus Plan. The Salaried Bonus Plan provides for the payment of an annual bonus based upon the achievement of pre-determined RONA performance goals. The Company decided to terminate the Salaried Bonus Plan at the conclusion of 2007. Starting in 2008, the Company implemented a performance unit arrangement under the 2005 Long Term Incentive Plan. Under the performance unit arrangement, each NEO may earn an annual incentive award based on the level of achievement relating to the following performance metrics: (i) corporate wide performance goal (RONA); (ii) team performance goals; and (iii) individual performance goals. These performance metrics are weighted 50%, 25% and 25%, respectively. The NEO’s target annual incentive award

			opportunity (expressed as a percentage of compensation) under the performance unit arrangement is the same as under the Salaried Bonus Plan.
	§		Long-term incentive compensation. 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 peer group.

EXECUTIVE COMPENSATION

Executive Officers

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

Name		Age				Position(s)
Christian B. Ragot			50			President, Chief Executive Officer and Director
Edward J. Whalen			59			Senior Vice President, Marketing and Sales
Kevin P. Bagby			56			Vice President, Finance, Chief Financial Officer and Treasurer
Kenneth D. Bridges			68			Senior Vice President, Operations
Charles J. Magolske			48			Vice President, Business Development and Strategy
Laurence M. Trusdell			61			General Counsel and Corporate Secretary
John E. Carroll, Jr.			66			Former President, Chief Executive Officer and Director

     Christian B. Ragot, 50, 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.

     Edward J. Whalen, 59, has served as our Senior Vice President, Marketing and Sales since December 2004. He also served as Senior Vice President, Marketing and Sales for our subsidiaries from 1991 to December 2004. Prior to joining us in 1991, Mr. Whalen was President of Pullman Leasing Company. Prior to serving as President of Pullman Leasing Company, Mr. Whalen served in various finance positions for Pullman Leasing Company, including Vice President of Finance and Treasurer. Mr. Whalen originally joined Pullman, Inc., the parent of Pullman Leasing Company, in 1972.

     Kevin P. Bagby, 56, joined us in November 2004 as Vice President, Finance, Chief Financial Officer, Treasurer and Secretary. Prior to joining us, Mr. Bagby served as Vice President and Chief Financial Officer of Stoneridge, Inc., a company that designs and manufactures highly engineered electrical and electronic components, modules and systems for certain agricultural and vehicle markets, from 1995 until September 2004. From 1990 to 1995, Mr. Bagby served in various senior positions at Kelsey-Hayes Company. Prior to his employment at Kelsey-Hayes Company, Mr. Bagby served in various positions at General Tire, Abex Corporation and Lozier Corporation.

     Kenneth D. Bridges, 68, has served as our Senior Vice President, Operations since December 2004. He joined the Freight Car Services, Inc. subsidiary of FreightCar America in Danville, Illinois as Vice President of Operations in February 1997.  In November 1997, the Danville facility produced its first new railcar.  In December 2004, he was given the additional responsibility for a new production facility in Roanoke, Virginia.  Prior to joining FreightCar America, Mr. Bridges served with General Motors Corporation for 36 years in various management positions in the production departments of four assembly plants.

     Charles J. Magolske, 48, 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.

     Laurence M. Trusdell, 61, 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.

     John E. Carroll, Jr., 66, served as Chief Executive Officer from 1999 until April 30, 2007, on which date he resigned from the Company. Mr. Carroll served as our Chairman of the Board from 1999 until December 2004. Previously, Mr. Carroll was President of Thrall Car Manufacturing Company from 1990 to 1997. From 1989 to 1990, Mr. Carroll served as the President of Transcisco Rail Services Company. Mr. Carroll also served as Director of Planning and International Business Director at FMC Corporation from 1985 to 1989 and as Division President of the Marine & Rail Equipment Division of FMC Corporation (now a unit of the Greenbrier Companies) from 1977 to 1985.

Summary Compensation Table

     The following table shows the total compensation earned by the Company’s Chief Executive Officer, former Chief Executive Officer, Chief Financial Officer and the three most highly paid executive officers other than the Chief Executive Officer and Chief Financial Officer (each, an “NEO”) for services rendered in all capacities to the Company and its subsidiaries for the fiscal years ended December 31, 2007 and 2006.

Summary Compensation Table

																										Change in
																										Pension Value
																										and
																										Nonqualified
																						Non-Equity				Deferred
														Stock				Option				Incentive Plan				Compensation				All Other				Total
Name and Principal						Salary(1)				Bonus(2)				Awards(3)				Awards(4)				Compensation(5)				Earnings(6)				Compensation(7)				Compensation
Position		Year				($)				($)				($)				($)				($)				($)				($)				($)
Christian B. Ragot			2007			$	497,436			$	320,000			$	683,837				—			$	640,000				—			$	96,291			$	2,237,564
President, Chief Executive Officer and Director			2006				—				—				—				—				—				—				—				—
Kevin P. Bagby			2007			$	295,417				—			$	202,367			$	215,032			$	177,250			$	19,968			$	55,960			$	965,994
Vice President,Finance, Chief Financial Officer and Treasurer			2006			$	258,000				—				—			$	215,036			$	154,800			$	22,975			$	39,147			$	689,958
Edward J. Whalen			2007			$	300,000				—			$	283,305			$	322,557			$	180,000			$	43,592			$	9,072			$	1,138,526
Senior Vice President, Marketing and Sales			2006			$	290,000				—				—			$	322,552			$	174,000			$	71,341			$	8,170			$	866,063
Kenneth D. Bridges			2007			$	244,533				—			$	91,483				—			$	146,720				—			$	81,764			$	564,500
Senior Vice President, Operations			2006			$	197,200				—			$	134,178				—			$	118,320				—			$	69,682			$	519,380
Charles J. Magolske			2007			$	211,400				—			$	146,915				—			$	126,840			$	9,004			$	30,965			$	525,124
Vice President, Business Development and Strategy			2006				—				—				—				—				—				—				—				—
John E. Carroll, Jr.			2007			$	183,333				—				—			$	156,797				—			$	(22,481	)		$	2,048,037			$	2,365,686
Former President, Chief Executive Officer and Director			2006			$	550,000				—				—			$	537,588			$	2,045,033			$	65,350			$	35,802			$	3,233,773

Other Compensation Table

																		Automobile
																		Allowance
										Housing,								and Travel								Vacation				Severance
						Country Club				Utilities and				Moving and				-Related				401(k)				Payment at				Payment at				Total All Other
Name						Dues1				Tax Gross-Up2				Relocation3				Payments4				Contribution5				Termination6				Termination7				Compensation
Mr. Ragot			2007				—				—			$	68,524			$	16,467			$	11,300				—				—			$	96,291
			2006				—				—				—				—				—				—				—				—
Mr. Bagby			2007			$	12,128			$	12,506			$	24,041				—			$	7,285				—				—			$	55,960
			2006			$	11,947			$	19,910				—				—			$	7,290				—				—			$	39,147
Mr. Whalen			2007				—				—				—				—			$	9,072				—				—			$	9,072
			2006				—				—				—				—			$	8,170				—				—			$	8,170
Mr. Bridges			2007				—			$	68,590				—				—			$	13,174				—				—			$	81,764
			2006				—			$	53,115				—				—			$	16,567				—				—			$	69,682
Mr. Magolske			2007				—				—				—			$	21,965			$	9,000				—				—			$	30,965
			2006				—				—				—				—				—				—				—				—
Mr. Carroll			2007			$	1,939			$	11,714				—				—			$	9,000			$	25,384			$	2,000,000			$	2,048,037
			2006			$	7,921			$	19,081				—				—			$	8,800				—				—			$	35,802

Supplemental Narrative

     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. The Company does not maintain an employment agreement with Mr. Bridges.

Employment Agreements for NEOs as of December 31, 2007

     Christian B. Ragot. On January 3, 2007, the Company entered into an employment agreement with Mr. Ragot under which he has served as the Company’s Chief Operating Officer since January 29, 2007 and began serving as President and Chief Executive Officer on April 30, 2007. Mr. Ragot has served as a member of the 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 base salary of $500,000, which was increased to $550,000 on April 30, 2007. Mr. Ragot’s base salary is subject to annual review by the compensation committee. Mr. Ragot is eligible for an annual cash bonus based on performance and calculated as a percentage of his base salary. Initially, Mr. Ragot has the opportunity to receive a bonus payout of up to 120% of his base salary.

     To induce Mr. Ragot to sign the employment agreement, the Company agreed to pay Mr. Ragot a signing bonus of $320,000 (the “Signing Bonus”) and to award Mr. Ragot a grant of 40,000 shares of restricted stock (“Restricted Stock Award”). It was anticipated that as a result of Mr. Ragot terminating his employment with his former employer, the former employer would not pay Mr. Ragot an annual incentive bonus for the 2006 calendar year of $320,000 (“Foregone Bonus”) and a long-term incentive award that otherwise would have been payable on March 15, 2007 of $1,750,000 (“Foregone LTIP”). However, Mr. Ragot notified the chairman of the board’s compensation committee in writing that he had received the Foregone LTIP and the Company was not required to make that payment. Mr. Ragot’s Restricted Stock Award was made in accordance with and subject to the terms of the FreightCar America, Inc. 2005 Long Term Incentive Plan. The Restricted Stock Award vests in three equal annual installments beginning on January 29, 2008 and would become fully vested upon a change in control. The Signing Bonus was also paid, in part, to reimburse Mr. Ragot for the loss of the Foregone Bonus.

     The Company has reimbursed Mr. Ragot’s reasonable moving expenses in relocating to Chicago, Illinois. 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 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 entitled “Potential Payments Upon Termination or Change in Control”).

     Edward J. Whalen. Mr. Whalen’s employment agreement, dated as of December 20, 2004, provides for his employment as the Company’s Senior Vice President, Marketing and Sales for an initial term of three years, which automatically extends for one-year periods until terminated prior to the end of the current term by either party upon 90 days’ notice. Upon a “change in control,” as defined in the agreement, the agreement will automatically extend to until the later of the second anniversary of such change in control or, if such change in control was caused by stockholder approval of a merger or consolidation, the second anniversary of such merger or consolidation. The employment agreement provides that Mr. Whalen’s base salary is subject to annual review by the compensation committee. During 2007, Mr. Whalen’s annual base salary was $300,000. Mr. Whalen also is 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. Mr. Whalen is entitled under the agreement to paid vacation in each calendar year, in accordance with the Company’s vacation policy. Mr. Whalen is entitled to certain termination and change-in-control benefits under the employment agreement including a tax gross-up for any amount that we pay or distribute to him, whether under his employment agreement or otherwise, that is determined to be an “excess parachute payment” under the Code (these termination and change-in-control benefits are described in the section of the proxy entitled “Potential Payments Upon Termination or Change in Control”).

     Kevin P. Bagby. Mr. Bagby’s employment agreement, dated as of November 22, 2004, as amended, provides 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 base salary is subject to annual review by the compensation committee. During 2007, Mr. Bagby’s annual base salary was $315,000. Mr. Bagby is also entitled

under the agreement to participate in the Company’s Salaried Bonus Plan. Mr. Bagby is entitled under the agreement to participate in and receive all benefits under the Company’s employee benefit plans. Mr. Bagby is further entitled under the agreement to three weeks of vacation per year, subject to increase in accordance with standard Company practice, in addition to housing reimbursement and a country club membership paid for by the Company.

     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 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 will automatically be extended to at least the second anniversary of such Change in Control. Under the employment agreement, Mr. Magolske’s initial base salary was $220,000, which was increased to $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 entitled “Potential Payments Upon Termination or Change in Control”).

2005 Long Term Incentive Plan

     The Company adopted the 2005 Long Term Incentive Plan in April 2005, effective upon the closing of our initial public offering on April 11, 2005. Under the Company’s 2005 Long Term Incentive Plan, the Company may grant to NEOs and other eligible employees stock options, share appreciation rights, restricted shares, restricted share units, performance shares, performance units, dividend equivalents and other share-based awards. (Further details of the Long Term Incentive Plan are provided in the section of this proxy statement entitled “Proposal 2 – Approval of an Amendment to the FreightCar America, Inc. 2005 Long Term Incentive Plan.”)

Salaried Bonus Plan

     When the Company acquired its freight car business from TTII in 1999, it assumed the Johnstown America Corporation Management Incentive Plan, which provides additional compensation to participants based on our achievement of certain financial objectives. In 2006, we replaced the Johnstown America Corporation Management Incentive Plan with the Salaried Bonus Plan. The Salaried Bonus Plan is intended to assist the Company in attracting and retaining highly qualified personnel, encourage and stimulate superior performance by such personnel on our behalf and recognize the level of an individual’s position to influence Company results. Bonus awards are based, in part, on the Company’s RONA and the financial targets determined by the CEO and the board of directors. The Salaried Bonus Plan is open to all salaried personnel selected by the CEO and confirmed by the compensation committee. Generally, participants in the Salaried Bonus Plan must be actively employed by the Company on the payment date to receive a bonus award. Participants are entitled to receive a partial bonus award in certain circumstances. As noted above, the Salaried Bonus Plan was terminated at the conclusion of 2007.

Grants of Plan-Based Awards for the Year Ended December 31, 2007

																												All Other				All Other
																												Stock				Option								Grant
				Estimated Future Payouts Under																								Awards:				Awards:				Exercise				Date Fair
				Non-Equity Incentive Plan												Estimated Future Payouts Under												Number of				Number of				or Base				Value of
				Awards1												Equity Incentive Plan Awards												Shares or				Securities				Price of				Stock and
				Thres-								Max-				Thres-								Max-				Units of				Underlying				Option				Option
				hold				Target				imum				hold				Target				imum				Stock2				Options				Awards				Awards3
Name		Grant Date		($)				($)				($)				(#)				(#)				(#)				(#)				(#)				($/Sh)				($)
Christian B. Ragot		1/3/07		$	99,487			$	397,949			$	596,923				—				—				—				—				—				—				—
		1/29/07			—				—				—				—				—				—				40,000				—				—			$	2,245,600
Kevin P. Bagby		1/1/07		$	29,542			$	118,167			$	177,250				—				—				—				—				—				—				—
		1/25/07			—				—				—				—				—				—				5,000				—				—			$	275,600
Edward J. Whalen		1/1/07		$	30,000			$	120,000			$	180,000				—				—				—				—				—				—				—
		1/25/07			—				—				—				—				—				—				7,000				—				—			$	385,840
Kenneth D. Bridges		1/1/07		$	24,453			$	97,813			$	146,720				—				—				—				—				—				—				—
Charles J. Magolske		1/1/07		$	21,140			$	84,560			$	126,840				—				—				—				—				—				—				—
		5/1/07			—				—				—				—				—				—				5,000				—				—			$	242,250
John E. Carroll, Jr.4		1/1/07			—				—				—				—				—				—				—				—				—				—

Outstanding Equity Awards at December 31, 2007

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
		(#)		(#)				Price				Expiration				Vested				Not Vested
Name		Exercisable		Unexercisable1				($)				Date				(#)				($)2
Christian B. Ragot		—			—				—				—				13,333			$	466,655
		—			—				—				—				13,333			$	466,655
		—			—				—				—				13,334			$	466,690
Kevin P. Bagby		—			21,987			$	19.00				4/11/15				—				—
		—			—				—				—				5,000			$	175,000
Edward J. Whalen		—			32,980			$	19.00				4/11/15				—				—
		—			—				—				—				7,000			$	245,000
Kenneth D. Bridges		—			—				—				—				1,834			$	64,190
Charles J. Magolske		—			—				—				—				1,834			$	64,190
		—			—				—				—				1,666			$	58,310
		—			—				—				—				1,667			$	58,345
																	1,667			$	58,345

Option Exercises and Stock Vested for the Year Ended December 31, 2007

		Option Awards
		Number of								Stock Awards
		Shares								Number of
		Acquired on								Shares
		Exercise				Value Realized				Acquired on				Value Realized
Name		(#)				on Exercise ($)				Vesting (#)1				on Vesting ($)
Christian B. Ragot			—				—				—				—
Kevin P. Bagby			21,988			$	667,116				—				—
Edward J. Whalen			32,981			$	977,033				—				—
Kenneth D. Bridges			—				—				1,833			$	89,178
Charles J. Magolske			—				—				1,833			$	89,178
John E. Carroll, Jr.			54,968			$	1,548,723				—				—

Pension Benefits at December 31, 2007

								Present Value of
				Number of Years				Accumulated				Payments During Last
Name		Plan		Credited Service2				Benefit3				Fiscal Year
(a)		Name1		(#)				($)				($)
Christian B. Ragot 5		—			—				—			—
Kevin P. Bagby 4		JAC Nonrepresented Salaried Pension Plan			3.2			$	64,061			—
Edward J. Whalen 4		JAC Nonrepresented Salaried Pension Plan			16.0			$	441,608			—
Kenneth D. Bridges 5		—			—				—			—
Charles J. Magolske 4		JAC Nonrepresented Salaried Pension Plan			6.0			$	57,366			—
John E. Carroll, Jr. 4		JAC Nonrepresented Salaried Pension Plan			8.7			$	269,139			—

     Supplemental Narrative

     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 Section 415 and Section 401(a)(17) of the 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. 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. 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 times years of service (defined as: highest 60 consecutive months of earnings out of last 120 months divided by 60). Earnings are defined as the participant’s W-2 pay plus Section 401(k) and 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 with 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 3 monthly pension benefit payments) as follows: 9 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. Mr. Carroll became eligible for normal retirement in February 2007.

     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, 2007

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 only be known 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, 2007.

     Mr. Carroll

     Mr. Carroll’s employment agreement with the Company terminated on December 31, 2006, and was replaced by a termination agreement providing for Mr. Carroll’s continued employment through April 30, 2007. Mr. Carroll terminated his employment with the Company effective May 1, 2007 and received the following payments and benefits due to his termination:

	•		Cash severance payment equal to $1,500,000; and
	•		Lifetime coverage under the Company’s medical insurance plan for both Mr. Carroll and his spouse.

Mr. Carroll agreed to be subject to a non-compete agreement under which he has agreed not to compete with the Company anywhere in North America for a two-year period starting on April 30, 2007.

     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) following a Change in Control (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 FreightCar America, Inc. 2005 Long Term Incentive Plan and his restricted stock agreement, Mr. Ragot’s non-vested restricted shares would become fully vested upon a “Change in Control,” the Company’s termination of Mr. Ragot’s employment without “Cause” or termination by Mr. Ragot for “Good Reason” (each as defined under the 2005 Long Term Incentive Plan or Mr. Ragot’s restricted stock agreement, as applicable).

     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, 2007:

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

Executive Benefits						Change in				Change in								Company’s
and Payments Upon						Control –				Control –								Non–
Change in Control or		Change in				Termination				Termination								renewal of
Termination of		Control – No				without				for Good				Termination				the
Employment		Termination				Cause				Reason				without Cause				Agreement				Death				Disability
Compensation:
Base Salary			—			$	1,100,000			$	1,100,000			$	1,100,000			$	550,000				—				—
Incentive Compensation			—			$	1,280,000			$	1,280,000			$	1,280,000			$	640,000				—				—
Restricted Stock Unvested and Accelerated 1		$	1,400,000			$	1,400,000			$	1,400,000			$	1,400,000				—				—				—
Benefits and Perquisites:
Continuing benefits			—			$	25,601			$	25,601			$	25,601			$	12,801				—				—
Total:		$	1,400,000			$	3,805,601			$	3,805,601			$	3,805,601			$	1,202,801				—				—

     Mr. Whalen

     Mr. Whalen’s employment agreement, dated as of December 20, 2004, provides for his employment as the Company’s Senior Vice President, Marketing and Sales 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 his employment agreement), the agreement will automatically extend until the later of the second anniversary of such Change in Control or, if such Change in Control was caused by the stockholder approval of a merger or consolidation, the second anniversary of such merger or consolidation.

     In the event that the Company terminates Mr. Whalen’s employment in breach of Mr. Whalen’s agreement (generally, this would occur if the Company terminates Mr. Whalen’s employment without “Cause” as defined in his employment agreement) or Mr. Whalen terminates his employment for “Good Reason” (as defined in his employment agreement), the Company will: (a) pay him a lump sum equal to three times the sum of (1) his annual base salary then in effect and (2) his annual bonus (calculated as the greatest of (i) the guaranteed annual bonus (if any) with respect to the fiscal year in which termination occurs, (ii) the target annual bonus for the fiscal year in which termination occurs, (iii) the annual bonus for the fiscal year immediately prior to the fiscal year in which termination occurs, or (iv) the average of the annual bonus payments for the three fiscal years immediately prior to the fiscal year in which termination occurs); (b) pay a lump sum, in cash, a pro-rated bonus amount based on the target annual bonus set for the fiscal year of termination; and (c) continue his participation in the Company’s employee welfare benefit plans and programs for three years at no cost to Mr. Whalen.

     Unless the Company terminates Mr. Whalen’s employment for “Cause” (as defined in his employment agreement), the Company must continue to make available to Mr. Whalen after his termination of employment coverage under the Company’s medical insurance plan until he is eligible for Medicare, so long as he pays the full cost of the coverage at the then applicable COBRA rate.

     Mr. Whalen’s employment agreement also provides for a tax gross-up for any amount that we pay or distribute to him, whether under the employment agreement or otherwise, that is determined to be an “excess parachute payment” under the Code.

     The agreement requires Mr. Whalen to abide by perpetual restrictive covenants relating to non-disclosure of confidential information, as well as restrictive covenants relating to non-competition and non-solicitation for one or two years following termination of employment, depending on the basis for the termination.

     Under the terms of the FreightCar America, Inc. 2005 Long Term Incentive Plan and his stock option and restricted stock agreements, Mr. Whalen’s outstanding non-vested options and non-vested restricted shares would become fully vested upon a “Change in Control,” the Company’s termination of Mr. Whalen’s employment without

“Cause” or termination by Mr. Whalen for “Good Reason” (each as defined under the FreightCar America, Inc. 2005 Long Term Incentive Plan or Mr. Whalen’s stock option or restricted stock agreements, as applicable).

     Summarized below are the potential payments and benefits payable by the Company to Mr. Whalen at, following, or in connection with the indicated terminations of employment or change in control as of December 31, 2007:

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

										Change in
Executive Benefits and						Change in				Control –				Termination
Payments Upon Change in		Change in				Control –				Termination				without Cause
Control or Termination of		Control – No				Termination				for Good				or for Good
Employment		Termination1				without Cause2				Reason2				Reason2				Death				Disability
Compensation:
Base Salary			—			$	900,000			$	900,000			$	900,000				—				—
Incentive Compensation			—			$	720,000			$	720,000			$	720,000				—				—
Restricted Stock: Unvested and Accelerated 1		$	245,000			$	245,000			$	245,000			$	245,000				—				—
Stock Options: Unvested and Accelerated		$	527,680			$	527,680			$	527,680			$	527,680
Tax Gross-up Payments3			—				—				—				—				—				—
Benefits and Perquisites:
Continuing Benefits4			—			$	22,673			$	22,673			$	22,673				—				—
Total:		$	772,680			$	2,415,353			$	2,415,353			$	2,415,353				—				—

     Mr. Bagby

     Mr. Bagby’s employment agreement, dated November 22, 2004, as amended, provides for his employment as the Company’s Vice President, Finance, Chief Financial Officer, Treasurer and Secretary, without any employment term, as an “at will” employee. If we terminate Mr. Bagby’s employment agreement without “Cause”

(as defined in his employment agreement) at any time, he will be entitled to receive 24 months of his base salary and continuation of his employee benefits for a period of 24 months. Mr. Bagby’s employment agreement does not provide for any additional benefits upon a change in control or upon any termination of employment other than termination without “Cause,” including any voluntary termination, a termination of employment due to retirement, for Cause termination or termination due to death or disability.

     Under the terms of the FreightCar America, Inc. 2005 Long Term Incentive Plan and his stock option and restricted stock agreements, Mr. Bagby’s outstanding non-vested options and non-vested restricted shares would become fully vested upon a “Change in Control” or termination by the Company without “Cause” (as defined under the FreightCar America, Inc. 2005 Long Term Incentive Plan or Mr. Bagby’s stock option or restricted stock agreements, as applicable).

     Mr. Bagby 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 one year following his termination of employment.

     Summarized below are the potential payments and benefits payable by the Company to Mr. Bagby at, following, or in connection with the indicated termination of employment or change in control as of December 31, 2007:

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

						Change in				Chage in
Executive Benefits and						Control –				Control –
Payments Upon Change in		Change in				Termination				Termination				Termination
Control or Termination of		Control – No				without				for Good				without
Employment		Termination1				Cause2				Reason2				Cause2				Death				Disability
Compensation:
Base Salary1			—			$	630,000				—			$	630,000				—				—
Incentive Compensation			—				—				—				—				—				—
Restricted Stock: Unvested and Accelerated 2		$	175,000			$	175,000			$	175,000			$	175,000				—				—
Stock Options: Unvested and Accelerated		$	351,792			$	351,792			$	351,792			$	351,792
Benefits and Perquisites:
Continuing benefits1			—			$	50,733				—			$	50,733				—				—
Total:		$	526,792			$	1,207,525			$	526,792			$	1,207,525				—				—