SCHEDULE 14A (RULE 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box:
NOTICE OF ANNUAL MEETING -- MAY 21, 2003 AND PROXY STATEMENT WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION 1001 Air Brake Avenue Wilmerding, Pennsylvania 15148 Dear Stockholder: We invite you to attend the annual meeting of stockholders of Westinghouse Air Brake Technologies Corporation, doing business as Wabtec, on May 21, 2003 at 11:00 a.m. in Pittsburgh, Pennsylvania. This booklet includes the formal notice of the meeting and the proxy statement. The proxy statement tells you more about the items we will vote on at the meeting. It also explains how the voting process works and gives personal information about our director candidates. Whether or not you plan to attend, please promptly complete, sign, date and return your proxy card in the enclosed envelope, or you may vote over the Internet or by telephone by following the instructions found on the proxy card. Regardless of the method used, please vote your shares in accordance with your wishes so that enough shares are represented to allow us to conduct the business of the annual meeting. Mailing your proxy(s) or voting over the Internet or by telephone does not affect your right to vote in person if you attend the annual meeting. Sincerely yours, Alvaro Garcia-Tunon Senior Vice President, Chief Financial Officer and Secretary April 18, 2003
NOTICE OF 2003 ANNUAL MEETING DATE, TIME AND PLACE - - May 21, 2003 - - 11:00 a.m. - - Omni William Penn William Penn Place Pittsburgh, Pennsylvania, 15219 PURPOSE - - Elect three directors for a term of three years - - Ratify appointment of independent accountants - - Conduct other business if properly raised PROCEDURES - - If you own stock directly, please complete the enclosed proxy card requested by the Board. - - Only stockholders of record on March 24, 2003 receive notice of and may vote at the meeting. YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE, AND RETURN YOUR PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE OR VOTE OVER THE INTERNET OR BY TELEPHONE. Alvaro Garcia-Tunon Senior Vice President, Chief Financial Officer and Secretary April 18, 2003
CONTENTS - --------------------------------------------------------------------------------
GENERAL - -------------------------------------------------------------------------------- We have sent you this booklet and proxy on or about April 18, 2003 because the Board of Directors of Westinghouse Air Brake Technologies Corporation, doing business as Wabtec, is soliciting your proxy to vote at the company's 2003 annual meeting of stockholders. WHO MAY VOTE Stockholders of Wabtec as reflected in our stock records at the close of business on March 24, 2003 may vote. You have one vote for each share of Wabtec common stock you own. HOW TO VOTE You may vote in person at the meeting or by proxy. Most shareholders of record have a choice of voting by proxy over the Internet, by telephone, or by using a traditional proxy card. Please check your proxy card or the information forwarded by your bank, stockbroker or other holder of record to see which options are available to you. We recommend you vote by proxy even if you plan to attend the meeting. You can always change your vote at the meeting. ELECTRONIC ACCESS TO PROXY MATERIALS AND ANNUAL REPORT This notice of Annual Meeting and Proxy Statement and the 2003 Annual Report are available on our Internet site at http//www.wabtec.com. If you are a shareholder of record and would like to view future proxy statements and annual reports over the Internet instead of receiving copies in the mail, follow the instructions provided when you vote over the Internet or by telephone, or check the appropriate box on the proxy card if mailing your proxy. If you hold your shares through a bank, stockbroker or other holder, check the information provided by that entity for instructions on how to view future proxy statements and annual reports and vote your shares over the Internet. Choosing to receive your proxy materials online saves us the cost of producing and mailing these materials to your home or office and gives you an automatic link to the proxy voting site. HOW A PROXY WORKS Giving us a proxy means you authorize us to vote your shares in accordance with your directions. If you do not make any selections, your shares will be voted in favor of our director candidates and ratification of the independent public accountants. You may receive more than one proxy or voting card depending on how you hold your shares. Shares registered in your name are generally covered by one card. If you hold shares through someone else, such as a stockbroker, you may get material from them asking how you want to vote. CHANGING YOUR VOTE You may revoke your proxy before it is voted by submitting a new proxy with a later date, by voting in person at the meeting or by notifying Wabtec's Secretary in writing. COMMON STOCK OUTSTANDING As of the close of business on March 24, 2003, 43,449,249 shares of Wabtec common stock were issued and outstanding. QUORUM AND VOTING INFORMATION In order to conduct the business of the meeting, we must have a quorum. This means at least a majority of the outstanding shares eligible to vote must be represented at the meeting, either in person or by proxy. You are considered a part of the quorum if you submit a properly signed proxy card, vote over the Internet or vote by telephone. If a quorum is present at the meeting, the three director candidates receiving the most votes will be elected to fill the three open seats on the Board. Ratification of the appointment of the independent public accountants requires the favorable vote of a majority of the shares present in person or by proxy. Approval of any other matter that properly comes before the Board requires the favorable vote of a majority of shares present in person or by proxy, unless the matter requires more than a majority vote under statute or our bylaws. Because the total shares voted "for," "against," or "abstain" are counted to determine the minimum votes required for approval, if you abstain from -1-
voting, it has the same legal effect as a vote against. If a broker limits the number of shares voted on the proposal on its proxy card or indicates that the shares represented by the proxy card are not being voted on the proposal, it is considered a broker non-vote. Broker non-votes are not counted as a vote or used to determine the favorable votes required to approve the proposal. COMMON STOCK OWNERSHIP - -------------------------------------------------------------------------------- DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP Under the proxy rules of the Securities and Exchange Commission, a person beneficially owns Wabtec common stock if the person has the power to vote or dispose of the shares, or if such power may be acquired, by exercising options or otherwise, within 60 days. The table below shows how much Wabtec common stock is beneficially owned as of February 28, 2003 by directors, nominees for director, the chief executive officer and the four other highest paid executive officers in 2002. Each person has sole voting power and sole dispositive power unless indicated otherwise.
OTHER OWNERS OF MORE THAN 5% The following table shows stockholders who are known to the company to be a beneficial owner of more than 5% of Wabtec's common stock as of December 31, 2002.
PROPOSAL 1 -- ELECT DIRECTORS - -------------------------------------------------------------------------------- Wabtec's Board of Directors currently has eight members and four vacant seats. The board is divided into three classes whose terms of office end in successive years. Robert J. Brooks resigned his position in the class of directors whose term expires in 2003. Mr. Brooks was then appointed by the Board to fill a vacancy in the class of directors whose term expires in 2004. Gregory T. H. Davies and Kim G. Davis, whose terms of office are expiring, have been nominated to serve for new terms ending in 2006. Michael W. D. Howell has been nominated to serve as a director for a term of office expiring in 2006 in the vacancy created by Mr. Brooks. The board may act at a future date to fill the three remaining vacancies or reduce the size of the board. The nominations were made by the Nominating Committee of the Board and approved by the Board. The Nominating Committee has the sole authority to make the nominations and met two times in 2002. The members of the Nominating Committee are Mr. Davies and Mr. Kassling. Your proxy will be voted FOR the election of these nominees unless you withhold authority to vote for any one or more of them. If any nominee is unable or unwilling to stand for election, your proxy authorizes us to vote for a replacement nominee if the board names one. Only votes for a candidate are counted in the election of directors. The three nominees who receive the most votes will be elected as directors. THE BOARD RECOMMENDS YOU VOTE FOR EACH OF THE FOLLOWING CANDIDATES. NOMINEES TO SERVE FOR A THREE-YEAR TERM EXPIRING IN 2006 - --------------------------------------------------------------------------------
CONTINUING DIRECTORS WITH A TERM EXPIRING IN 2005 - --------------------------------------------------------------------------------
common stock annually. In addition, all non-employee directors as of January 25, 2000 received a one time initial grant of 5,000 stock options (priced at $12.75 with a vesting period of three years), received 5,000 stock options on December 5, 2000 (priced at $9.535 with a vesting period of three years) and will receive 2,000 stock options each January 2 during their term of service on the Board. Such grants will be priced at the average of the high and low stock price on the day granted, with a vesting period of three years. These grants commenced in January 2002. Newly elected directors are eligible to receive 5,000 stock options upon their initial election to the Board. THE BOARD AND COMMITTEES The Board met five times during 2002. All directors attended at least 75% of all meetings of the Board and the Committees on which they served in 2002. The Board committees that help the Board fulfill its duties include the Nominating Committee, the Audit Committee and the Compensation Committee. THE AUDIT COMMITTEE The Audit Committee acts under a written charter which was amended and restated by the Board of Directors on February 20, 2002. The Audit Committee provides assistance to the Board in fulfilling their oversight responsibility to stockholders, potential stockholders, the investment community and others relating to Wabtec's financial statements and the financial reporting process, the systems of internal accounting and financial controls, the internal audit function, the annual independent audit of Wabtec's financial statements, and the legal compliance and ethics programs as established by management and the Board. The Audit Committee met six times in 2002. The Audit Committee members are Mr. Davis, Mr. Fernandez and Mr. Miscoll. The Board of Directors, in its business judgment, has concluded that all Audit Committee members are independent as defined by the New York Stock Exchange listing standards. AUDIT COMMITTEE REPORT The audit committee is responsible for reviewing the Company's financial reporting process on behalf of the Board of Directors. Management of the Company has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. In the performance of our oversight function, we meet with management periodically to consider the adequacy of the Company's internal controls and the objectivity of its financial reporting. We meet privately with the independent public accountants, who have unrestricted access to the audit committee. Specifically, we have reviewed and discussed with management and the independent public accountants the Company's consolidated financial statements as of and for the fiscal year ended December 31, 2002. We have also discussed with the independent public accountants the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as currently in effect. Furthermore, we have received and reviewed the written disclosures and the letter from the independent public accountants required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as currently in effect, and have discussed with the independent public accountants their independence. Based on the review and discussions referred to above, we recommended to the Board of Directors that the audited financial statements referred to above be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002 to be filed with the Securities and Exchange Commission. As part of the ongoing oversight process, the Audit Committee has been closely monitoring the significant regulatory activities of the SEC and the NYSE during the 2002 fiscal year. In order to ensure compliance with all of the new and pending rules and regulations, the Audit Committee has sought and received the advice of legal counsel and the advice of its independent public accountants. The Audit Committee has reviewed its existing charter, policies and procedures and is positioning itself to timely adopt and implement considered and functional policies and procedures, and to update its charter accordingly. Respectfully submitted, James P. Miscoll, Chairman Kim G. Davis Emilio A. Fernandez -6-
THE COMPENSATION COMMITTEE The Compensation Committee participates in establishing the salary and bonus levels of Wabtec officers, reviews management organization and development and major employee benefit programs and establishes and administers executive compensation programs. The Compensation Committee members are: Mr. Davis, Mr. Fernandez, Mr. Foster, and Mr. Napier. The committee met four times in 2002. SUMMARY COMPENSATION TABLE - -------------------------------------------------------------------------------- This table shows the compensation for Wabtec's Chief Executive Officer and the four other most highly paid executive officers in 2002.
OPTION GRANTS IN 2002 - --------------------------------------------------------------------------------
EQUITY COMPENSATION PLAN INFORMATION This table provides aggregate information as of December 31, 2002 concerning equity awards under Wabtec's compensation plans and arrangements.
LONG-TERM INCENTIVES. The committee may grant long-term incentives to employees by granting stock options and making restricted share awards under the 2000 Stock Incentive Plan. The committee views stock options and restricted share awards as incentives to enable Wabtec to hire and retain executives and to provide executives with incentives related to the Company's stock price so they have interests similar to your interests as Wabtec common stockholders. Our decision to grant stock options or award restricted shares is based upon an individual's job level, among other factors. OTHER. Executive officers also may participate in Wabtec's 401(k) Plan. Wabtec provides certain other personal benefits to certain employees, including executive officers, that are not significant in total. Respectfully submitted, James V. Napier, Chairman Emilio A. Fernandez Lee B. Foster Kim G. Davis -10-
STOCK PERFORMANCE GRAPH The graph below compares the cumulative total stockholder return, through December 31, 2002, of Wabtec's common stock, the S&P 500 and a peer group of manufacturing companies which we believe closely resemble us. The graph assumes that a person invested $100 on December 31, 1997 and that dividends are reinvested. COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN [LINE GRAPH]
PROPOSAL 2 -- RATIFY INDEPENDENT ACCOUNTANTS - -------------------------------------------------------------------------------- On May 30, 2002, we dismissed Arthur Andersen, LLP as Wabtec's independent public accountants, and, after a review of several possible candidates, appointed Ernst & Young, LLP to serve as Wabtec's independent public accountants for fiscal year 2002, in accordance with the recommendation of Wabtec's Board of Directors and its Audit Committee. The company dismissed Arthur Andersen, LLP as its auditor because it believed that the firm could no longer provide the necessary services on a global basis. Arthur Andersen's reports on Wabtec's financial statements for each of the fiscal years, ended December 31, 2000, and December 31, 2001, did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years, ended December 31, 2000, and December 31, 2001, and through the date of their dismissal, there were no disagreements with Arthur Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to Arthur Andersen's satisfaction would have caused them to make reference to the subject matter of the disagreement in connection with the audit reports of Wabtec's consolidated financial statements for such years. There were no reportable events as described under Item 304(a) (i) (v) of Regulation S-K. During each of the fiscal years, ended December 31, 2000 and December 31, 2001, and through the date hereof, Wabtec did not consult Ernst & Young with respect to the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, or any other matters or reportable events as set forth in Items 304 (a) (2) (i) and (ii) of Regulation S-K. We have provided both Arthur Andersen and Ernst & Young with a copy of this disclosure. On February 19, 2003, our Board of Directors approved the Audit Committee's recommendation that Ernst & Young be appointed to audit our financial statements for 2003. Although you are not required to ratify this appointment, we ask that you do. If you do not, we will reconsider our choice. A representative of Ernst & Young will be at the meeting to answer appropriate questions and make a statement if they desire. This proposal is adopted if a majority of the shares present in person or by proxy vote for the proposal. Because the total shares voted "for," "against," or "abstain" are counted to determine the minimum votes required for approval, if you abstain from voting, it has the same legal effect as if you vote against. If a broker limits the number of shares voted on the proposal on its proxy card or indicates that the shares represented by the proxy card are not being voted on the proposal, it is considered a broker non-vote. Broker non-votes are not counted as a vote or used to determine the favorable votes required to approve the proposal. THE BOARD RECOMMENDS YOU VOTE FOR THIS PROPOSAL. AUDIT FEES Wabtec was billed $450,886 in aggregate fees by the independent public accountants for the professional services rendered for the audit of Wabtec's financial statements for the year ended December 31, 2002, and the reviews of its financial statements included in its Forms 10-Q for the 2002 fiscal year. FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES The independent public accountants did not bill Wabtec for any financial information systems design and implementation fees for services rendered during 2002. ALL OTHER FEES In addition to the audit fees described above, the independent public accountants billed Wabtec approximately $161,845 for other audit and accounting-related services and $165,665 for tax outsourcing and compliance (which includes the review of annual tax returns) for the 2002 fiscal year. -12-
OTHER INFORMATION - -------------------------------------------------------------------------------- We do not expect any business to come before the meeting other than the election of directors and the ratification of the independent public accountants. If other business is properly raised, your proxy authorizes its holder to vote according to their best judgment. EXPENSES OF SOLICITATION Wabtec pays the cost for proxy solicitation. In addition to mailing, officers and employees may solicit proxies in person, by telephone or telegraph. Wabtec will pay about $15,000 to Mellon Investor Services, LLC, for sending the proxy material and the 2002 Annual Report to stockholders. We will also reimburse other nominees, custodians or fiduciaries who forward these materials to stockholders for their expenses in doing so. STOCKHOLDER PROPOSALS FOR NEXT YEAR To be eligible for inclusion in next year's proxy for the 2004 annual meeting, the deadline for stockholder proposals is December 19, 2003. Additionally, our advance notice provision in our by-laws requires that for business to otherwise be properly brought before the annual meeting, notice must be submitted to us between December 19, 2003 and February 18, 2004. By order of the Board of Directors, Alvaro Garcia-Tunon Senior Vice President, Chief Financial Officer and Secretary -13-
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2. Please [ ] Mark Here ITEM (1) - Election of the following three Directors for a term for Address expiring in 2006: Change or 01 Gregory T. H. Davies, 02 Kim G. Davis and Comments 03 Michael W. D. Howell SEE REVERSE SIDE FOR all Nominees WITHHOLD AUTHORITY (except as to Vote for All Please mark shown below) Nominees your votes as indicated in [X] [ ] [ ] this example A vote FOR includes discretionary authority to vote for a substituted nominee if any of the nominees listed becomes unable ITEM (2) - The ratification of the appointment of Ernst to serve or for good cause will not serve. & Young, LLP as independent public accountants of the Company for the 2003 fiscal year. (To withhold authority to vote for one or more such nominees, write such nominees' name(s) on the line below.) FOR AGAINST ABSTAIN [ ] [ ] [ ] - ------------------------------------------------------------------ By checking the box to the right, I consent to [ ] future access of the Annual Report, Proxy Statements, prospectuses and other communications electronically via the Internet. I understand that the company may no longer distribute printed materials to me for any future shareholder meeting until such consent is revoked. I understand that I may revoke any consent at any time by contacting the Company's transfer agent, Mellon Investor Services LLC, Ridgefield Park, NJ and that costs normally associated with electronic access, such as usage and telephone charges will be my responsibility. Please disregard if you have previously provided your consent decision. Please date and sign exactly as your name appears hereon and return in the enclosed envelope. If acting as attorney, executor, administrator, guardian or trustee, please so indicate with your full title when signing. If a corporation, please sign in full corporate name, by duly authorized officer. If shares are held jointly, each stockholder named should sign. SIGNATURE SIGNATURE DATE ----------------------------------------- ------------------------------------------ -------- NOTE: PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. FOLD AND DETACH HERE VOTE BY INTERNET OR TELEPHONE OR MAIL 24 HOURS A DAY, 7 DAYS A WEEK INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 11 PM EASTERN TIME THE DAY PRIOR TO ANNUAL MEETING DAY. YOUR INTERNET OR TELEPHONE VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD. INTERNET TELEPHONE MAIL http://www.eproxy.com/wab 1-800-435-6710 Use the Internet to vote your proxy. Use any touch-tone telephone to Mark, sign and date Have your proxy card in hand when vote your proxy. Have your proxy your proxy card you access the web site. You will be OR card in hand when you call. You will OR and prompted to enter your control be prompted to enter your control return it in the number, located in the box below, to number, located in the box below, enclosed postage-paid create and submit an electronic and then follow the directions envelope. ballot. given. IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE, YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION VOTING INSTRUCTIONS FOR THE ANNUAL MEETING OF STOCKHOLDERS SOLICITED BY THE BOARD OF DIRECTORS OMNI WILLIAM PENN, PITTSBURGH, PENNSYLVANIA WEDNESDAY, MAY 21, 2003 - 11:00 A.M. (LOCAL TIME) The undersigned stockholder of WESTINGHOUSE AIR BRAKE TECHNOLOGIES CORPORATION (the "Company") does hereby appoint WILLIAM E. KASSLING, GREGORY T. H. DAVIES and ROBERT J. BROOKS, and each of them acting individually, with full power of substitution, as proxies of the undersigned to vote at the Annual Meeting of Stockholders of the Company, to be held May 21, 2003 (the "Annual Meeting"), and at all adjournments thereof, all the shares of Common Stock of the Company which the undersigned may be entitled to vote, on the matters set out on the reverse side of this proxy card and described in the Proxy Statement and, in their discretion, on any other business which may properly come before the Annual Meeting. The undersigned stockholder hereby revokes all previous proxies for the Annual Meeting and acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement, both dated April 18, 2003, and of the Annual Report to Stockholders for 2002. You are urged to promptly return this proxy card in the enclosed envelope whether or not you expect to attend the Annual Meeting in person so that your shares may be voted in accordance with your wishes and in order that the presence of a quorum may be assured at the Annual Meeting. The shares represented by this proxy card will be voted as directed by the stockholder. If this proxy card is executed but no direction is given, such shares will be voted "FOR" items 1 and 2. (Continued and to be signed on the reverse side) Address Change/Comments (Mark the corresponding box on the reverse side) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FOLD AND DETACH HERE