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Definition of Director Independence

The following definition of "Director Independence" was adopted by the Board on July 27, 2007:

The New York Stock Exchange listing rules define "Independent Director" as a director who has no material relationship with the Company that may interfere with the exercise of the director's independent judgment.  To assist the Board in making determinations of director independence for all purposes, including under the securities laws and regulations applicable to the Company, the New York Stock Exchange listing rules and the Company's Corporate Governance Guidelines, the Board hereby adopts the following standards:

  1. In general, the guiding principle of WABCO is that the only money or perquisites received, directly or indirectly, by independent directors or their immediate family members from the Company is the remuneration directly related to the director's service as a director of the Company.
  2. Without limiting the foregoing, a director shall not qualify as "independent" if any of the following are true.
    1. The director or an immediate family member is, or within the past three years was, an officer or employee of the Company.
    2. The director or an immediate family member is, or within the past three years has been, affiliated with or employed by the Company's auditor or any other entity that, within the past three years, acted as the Company's auditor.
    3. The director is, or within the past three years has been, part of an "interlocking directorate," which means: (x) an officer of the Company serves or served on the compensation committee of another company that concurrently employs or employed the director or an immediate family member; (y) an officer of the Company served as a director of another company at the same time that one of the officers of the other company was on the Compensation, Nominating and Governance Committee of the Company; or (z) an officer of the Company serves or served on the compensation committee of another company at the same time that one of the officers of the other company serves or served on the Compensation, Nominating and Governance Committee of the Company.
    4. The director or an immediate family member has received any compensation from the Company during any of the past three years other than compensation and benefits, including deferred compensation and pension benefits, directly related to such director's Board service.
    5. The director is a current partner in, or a significant stockholder, officer or employee or the director's immediate family member is a current executive officer, of any company to which the Company made, or from which the Company received, payments (other than those arising solely from such entity's investments in the Company's securities) in any of the last three fiscal years that exceeded the greater of $1 million or 2% of the Company's or such other business's consolidated gross revenue.
    6. The director or an immediate family member is a director or officer of a tax-exempt organization to which the Company's contributions exceeded the greater of $1 million or 2% of such organization's consolidated gross revenue in any of the last three fiscal years (other than matching employee contributions through the Company's matching gifts program, if applicable).


For purposes of clauses (i) and (iii) above, employment of a family member in a non-officer position does not preclude the Board from determining that a director is independent.  For purposes of clause (ii) above, employment of a director or an immediate family member by, or affiliation with, the Company's auditor within the last three years (but not currently) does not preclude the Board from determining that a director is independent unless the director or immediate family member personally worked on the Company's audit within that time.

For purposes of interpreting these standards, the Board has adopted the following definitions:

"Company" means WABCO and/or any of its subsidiaries.

"immediate family member" means the director's spouse, parents, step-parents, children, step-children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law and anyone (other than a tenant or employees) who shares his or her home.

"officer" has the meaning specified in Rule 16a-1(f) of the Securities Exchange Act of 1934, or any successor rule, or, for any entity that is not an "issuer" as defined in the Rule, a person who performs functions similar to an "officer" as defined in such Rule.

"significant stockholder" of any entity means a person who is the direct or indirect beneficial owner of more than 10% of the equity interests of the entity.