AMERICAN RAILCAR INDUSTRIES, INC. 2005 EQUITY INCENTIVE PLAN STOCK APPRECIATION RIGHTS AGREEMENT
Exhibit(d)(3)
Name of SARs Holder:
Address of SARs Holder:
Grant Date: May , 2010
Total Number of SARs:
Exercise Price Per SAR: $
SAR Term/Expiration
Date: May , 2017
Pursuant to and in accordance with the American Railcar Industries, Inc. 2005 Equity Incentive
Plan, as amended from time to time (the “Plan”), this Stock Appreciation Rights Agreement (the
“Award Agreement” or “Agreement”) evidences the issuance to the person named above (the “SARs
Holder”) by American Railcar Industries, Inc. (the “Company”), effective as of the date set forth
above, of stock appreciation rights (the “SARs”). Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Plan.
1. Vesting Schedules.
The percentage of the Total Number of SARs (as it may be adjusted from time to time) shall
vest on the respective dates if the SARs Holder is employed by the Company on the date(s) indicated
below:
| Vesting Date | % of Total Number of SARs Vested | |||
May , 2011 |
33 | % | ||
May , 2012 |
66 | % | ||
May , 2013 |
100 | % | ||
2. Exercise. The SARs issued to the SARs Holder shall be exercisable by
delivery of an exercise notice in the form attached hereto as Exhibit A (the “Exercise
Notice”), which shall state the election to exercise the SARs, the number of SARs being exercised
(the “Exercised SARs”) and the SARs Holder’s agreement with respect to certain representations and
agreements. The SARs shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice. The SARs may be exercised only in accordance with the Plan
and the terms of this Agreement. Upon the exercise of any SARs, SARs Holder shall be paid by
the Company within three (3) business days of exercise, in cash, an amount equal to the excess, if
any, of (A) the aggregate Fair Market Value in respect of which the SARs are exercised, determined
as of the time of such exercise, over (B) the aggregate Exercise Price Per SAR of the SARs being
exercised. No payments shall be made pursuant to the exercise of any SARs unless the issuance and
exercise of the SARs complies with applicable laws, the Plan and this Award Agreement.
3. Adjustments. In accordance with Section 3(c) of the Plan, the total number of
SARs and the Exercise Price Per SAR shall be adjusted from time to time to reflect changes in the
Company’s capitalization and for certain other events as expressly set forth in the Plan.
4. No Rights as Stockholder. Neither the issuance of SARs nor any action
taken hereunder or thereunder or pursuant hereto or thereto shall be construed as (i) giving the
SARs Holder any equity or interest of any kind in the Company or in any assets of the Company or
any of its subsidiaries, or (ii) creating a trust of any kind or a fiduciary relationship of any
kind between the SARs Holder and the Company or any of its subsidiaries. The SARs Holder shall not
have, in respect of the SARs or otherwise, any right to acquire or receive shares of common stock
or other securities of the Company or any of its subsidiaries pursuant to the Plan or this Award
Agreement or otherwise, shall not have any right to any adjustment or change hereunder as a result
of any issuance of stock or other securities by the Company or any of its subsidiaries, and he or
she shall not be deemed for any purpose to be a shareholder of the Company or any of its
subsidiaries.
5. Termination. Any vested SARs shall be exercisable for ninety (90) days after the
SARs Holder’s employment with the Company (which for purposes of this Plan shall include employment
with the Company and its direct and indirect consolidated subsidiaries) is terminated without Cause
(as defined in the Plan); provided, however, if the employment is terminated by the
Company for Cause, the SARs shall terminate immediately. In the event of the termination of
employment of the SARs Holder with the Company for any reason whatsoever, any Unvested SARs shall
cease to exist on such date and be extinguished and be of no further force or effect. Upon the SARs
Holder’s death, any vested SARs may be exercised for a period of twelve (12) months from the date
of termination of employment. Notwithstanding anything to the contrary in the foregoing, in no
event may any SARs be exercised after the Expiration Date set forth above or as otherwise provided
in the Plan.
6. Non-Transferable by the SARs Holder. Except by will or the laws of descent, the
SARs and all rights, title and interest therein granted hereunder are not transferable by the SARs
Holder, directly or indirectly, by sale, assignment, pledge, hypothecation, transfer or otherwise
(each a “Transfer”). Except as provided above, no Transfer of the SARs granted hereunder, whether
voluntary or involuntary, by the operation of law or otherwise, shall vest in any person or entity,
any direct or indirect title, interest or right therein whatsoever, but immediately upon any such
attempted Transfer, all SARs granted hereunder shall cease to exist and be extinguished and be of
no further force or effect.
7. No Guarantee of Continued Service. SARS HOLDER ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SARS PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING IN THE RELATIONSHIP AT THE WILL
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OF THE COMPANY (NOT
THROUGH THE ACT OF BEING ENGAGED, BEING GRANTED THIS SAR OR ACQUIRING SHARES HEREUNDER). SARS
HOLDER FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER
AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED EMPLOYMENT FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN
ANY WAY WITH SARS HOLDER’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE RELATIONSHIP AT ANY TIME,
WITH OR WITHOUT CAUSE.
8. Withholding. All amounts paid to the SARs Holder hereunder shall be subject to
normal federal, state and, if applicable, local or foreign tax withholding and deductions imposed
by any one or more federal, state, local and/or foreign governments, or pursuant to any foreign or
domestic applicable law, rule or regulation.
9. Entire Agreement; Governing Law. The Plan is incorporated herein by reference.
The Plan and this Award Agreement constitute the entire agreement of the parties with respect to
the subject matter hereof and supersede in their entirety all prior undertakings and agreements of
the Company and SARs Holder with respect to the subject matter hereof, and may not be modified
(except as provided herein and in the Plan) adversely to the SARs Holder’s interest except by means
of a writing signed by the Company and SARs Holder. This agreement is governed by the internal
substantive laws but not the choice of law rules of the State of Delaware.
10. Confidentiality, Non-Compete and Non-Solicit. Pursuant to the terms and
conditions of the Plan, SARs Holder has executed and delivered to the Company the Confidentiality,
Non-Compete and Non-Solicit Agreement attached hereto as Exhibit B.
11. SARs Holder Acknowledgement. Receipt of a copy of the Plan and represents that he
or she is familiar with the terms and provisions thereof, and hereby accepts this Award Agreement
subject to all of the terms and provisions thereof. ▇▇▇▇ ▇▇▇▇▇▇ has reviewed the Plan and this
Award Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Award Agreement. SARs Holder
hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Plan or this Award Agreement. SARs Holder further
agrees to notify the Company upon any change in the residence address indicated below. A facsimile
or photocopy of an executed counterpart of this Award Agreement shall be sufficient to bind the
party or parties whose signature(s) appear thereon.
SARs Holder:
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American Railcar Industries, Inc. | |||||||
| By: | ||||||||
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2005 EQUITY INCENTIVE PLAN
EXERCISE NOTICE
EXERCISE NOTICE
American Railcar Industries, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
| 1. | Exercise of SARs. Effective as of today, ___, 20___, the undersigned (“Holder”) hereby elects to exercise _______________ SARs under and pursuant to the 2005 Equity Incentive Plan (the “Plan”) and the Stock Appreciation Rights Agreement dated ___, 20___ (the “Award Agreement”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Plan. | ||
| 2. | Representations of Holder. ▇▇▇▇▇▇ acknowledges that ▇▇▇▇▇▇ has received, read and understood the Plan and the Award Agreement and agrees to abide by and be bound by their terms and conditions. | ||
| 3. | Tax Consultation. Holder understands that Holder may suffer adverse tax consequences as a result of ▇▇▇▇▇▇’s exercise of the SARs. Holder represents that ▇▇▇▇▇▇ has consulted with any tax consultants Holder deems advisable in connection with the purchase or disposition of the Shares and that Holder is not relying on the Company for any tax advice. |
[Signatures appear on next page]
SAR Exercise Notice
Submitted by:
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Accepted by: | |||||
SARS HOLDER
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AMERICAN RAILCAR INDUSTRIES, INC. | |||||
Address: |
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CONFIDENTIALITY, NON-COMPETE AND
NON-SOLICITATION AGREEMENT
NON-SOLICITATION AGREEMENT
This CONFIDENTIALITY, NON-COMPETE AND NON-SOLICITATION AGREEMENT (hereinafter referred to as
“Agreement”) made as of the ___ day of ___, 2010, between American Railcar Industries,
Inc. a corporation incorporated under the laws of the State of Delaware (hereinafter referred to as
“Company”) and NAME: __________________ (hereinafter referred to as “Employee”).
WHEREAS, as a condition and inducement of the Company’s employment of, participation in any
equity incentive plans, or payment of any incentive owing to, and transfer of confidential
information to the Employee, the Company has requested and the Employee has agreed to enter into
this Agreement.
NOW THEREFORE in consideration of the provisions contained herein including the Company’s
employment of and transfer of confidential information to the Employee, the Company and the
Employee agree as follows:
| 1. | DEFINITIONS |
(a) For purposes of this Agreement the terms:
(i) “Affiliate” shall mean with respect to any specified Person, another Person which,
directly or indirectly, controls, is controlled by, or is under common control with such specified
Person;
(ii) “Company” shall mean American railcar Industries, Inc. and/or any of its subsidiaries,
parent or related corporations;
(iii) “Confidential Information” shall mean all information disclosed or otherwise made
available to the Employee by the Company, Affiliates, employees or representatives, about or
relating to the Company’s, or any of its Affiliates’ plans, business or activities, or employees,
including, but not limited to the information set forth in any business plan of the Company and
information concerning advertising, marketing plans and strategies, finances or financial
condition, accounting, methods, processes, trade secrets, Intellectual Property, product and
business plans, and current or potential customer, client, business partner or supplier lists and
records, service charges, rates and fees, investments plans or projections, research in respect of
acquired or potential target investments and communications and all Work Product;
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(iv) “Intellectual Property” shall mean all source-codes, object-codes, manuals and other
documentation and materials (whether or not in written form) and all versions thereof, together
with all other patents, licenses, trademarks, service marks, trade names (whether registered or
unregistered), copyrights, proprietary computer software, proprietary inventions, proprietary
technology, technical information, intellectual property, discoveries, designs, proprietary rights
and non-public information, trade secrets, in each case, whether or not patentable;
(v) “Person” an individual, corporation, partnership, trust or unincorporated organization,
limited liability company, limited liability partnership, joint venture, joint stock company, any
governmental agency or instrumentality or any other entity;
(vi) “Work Product” shall mean all work product (tangible, recorded or otherwise, and without
regard to the form or condition or state of completion) including, without limitation, Intellectual
Property invented, created, assembled or developed in connection with, with respect to, for, or in
relation to, the Company during the Employee’s employment by the Company.
| 2. | CONFIDENTIALITY |
(a) The Employee shall not (either during the continuance of the Employee’s employment by the
Company or at any time thereafter) disclose any Confidential Information to any Person other than
designated employees of the Company, and all such Confidential Information, either in electronic,
printed or verbal form will remain the property of the Company and shall not be used by the
Employee (either during the continuance of employment by the Company or at any time thereafter) for
Employees own purpose or for any purpose other than those of the Company. The Employee agrees that
the Company will retain proprietary rights in the Confidential Information and disclosure to or
awareness by the Employee of the Confidential Information shall not be deemed to confer any rights
whatsoever to the Employee in respect of any part of the Confidential Information.
(b) The restrictions and covenants set forth in (a) above applicable to the Confidential
Information shall not apply to any portion of the Confidential Information that the Employee can
clearly demonstrate is at the time of disclosure or thereafter generally available to and known by
the public (other than as a result of its disclosure by the Employee in breach of his obligations
herein).
(c) In the event that the Employee is (i) requested by interrogatory, subpoena, deposition,
civil investigation demand or other similar legal process or (ii) required by applicable laws,
rules or regulations, to disclose any Confidential Information, the Employee shall provide the
Company with prompt written notice of any such request or requirement so that the Company may seek
an appropriate protective order. If, failing the entry of a protective order, the Employee is, in
the written opinion of its counsel, compelled to disclose Confidential Information, the Employee
may disclose that portion of the Confidential Information which its counsel advises the Employee in
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such opinion that it is compelled to disclose. In any event, the Employee will not oppose, and
shall assist, action by the Company in any such proceeding to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded the Confidential
Information.
| 3. | NON-COMPETE |
The Employee covenants and agrees with the Company that during the continuance of employment,
and for a period of one (1) year from the date on which Employee ceases to be an employee of the
Company as a result of either the Employee’s resignation or termination of employment by the
Company for “Cause”, as defined herein, the Employee will not:
(1) within the territory(ies) or region(s) for which the Employee is or was responsible when
employed, (if the Employee was assigned to a territory or region) or,
(2) (if the employee did not have responsibility for a territory or region), within fifty
miles from the location at which the employee performed work on behalf of the Company, either
directly or indirectly, as principal, agent, owner, employee, partner, investor, shareholder (other
than solely as a holder of not more than 1% of the issued and outstanding shares of any public
corporation), consultant, advisor or otherwise howsoever participate in, act for, or on behalf of,
or for the benefit of, own, operate, carry on or engage in the operation of or have any financial
interest in or provide, directly or indirectly, financial assistance to or lend money to or
guarantee the debts or obligations of, any Person carrying on or engaged in any business that is
competitive with or identical to the business conducted by the Company in the United States of
America (the “Business”). For purposes of this Paragraph 3, any one of the following shall
constitute “Cause”: (1) the Employee’s material breach of this Agreement or Company policy; (2) the
Company’s default in performing its obligations under contracts with other persons or business
entities, or Company’s suffering of economic harm, if directly caused by the Employee; (3) the
Employee’s fraud with respect to the business or affairs of the Company or if the Employee is
convicted of committing a felony or any crime involving moral turpitude; or (4) other misconduct by
the Employee.
| 4. | NON-SOLICITATION |
The Employee covenants and agrees with the Company that during the continuance of this
employment, and for a period of one (1) year from the date on which he ceases to be an employee of
the Company for any reason, the Employee shall not directly, or indirectly, for himself or for any
other person or entity:
(a) attempt to divert or, solicit, interfere with or endeavor to entice away from, or attempt
to do any of the forgoing with respect to, the Company or its Affiliates, any customer, client or
any Person in the habit of dealing with the Company or its Affiliates, with whom the Employee had
contact with in a business capacity, was responsible for, or had knowledge of Confidential
Information about, and the Employee
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shall refrain from committing any act which would in any manner jeopardize any relationship
the Company has or may have with any customer, client or any person or entity;
(b) interfere with, entice away, hire, encourage, or otherwise attempt to obtain the
withdrawal of any employee of the Company or Affiliates in relation to the Business; or
(c) advise any Person or entity not to do business with the Company or Affiliates in relation
to the Business.
| 5. | INJUNCTIVE RELIEF |
Irreparable harm shall be presumed if the Employee breaches or threatens to breach any
agreement, covenant or provision of this Agreement, and under such circumstances damages will be
impossible to ascertain. Accordingly, the Employee agrees that in the event of any breach or
threatened breach of this Agreement, the Company shall be entitled to an injunction and other
equitable relief without being required to show irreparable harm, without posting any bond or
security in connection therewith, and that any court of competent jurisdiction may immediately
enjoin any breach or threatened breach of this Agreement. The equitable remedies contemplated
hereby shall not be deemed to be exclusive remedies for a breach of this Agreement but shall be in
addition to all other remedies available at law or equity.
| 6. | INVALIDITY |
If any provision of this Agreement is held to be illegal, invalid, or unenforceable under any
present or future law, and if the rights or obligations under this Agreement will not be materially
and adversely affected thereby, (a) such provision shall be fully severable; (b) this Agreement
shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part hereof; (c) the remaining provisions of this Agreement shall remain in full force
and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its
severance from this Agreement; and (d) in lieu of such illegal, invalid, or unenforceable
provision, there shall be added automatically as a part of this Agreement a legal, valid, and
enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as
may be possible.
| 7. | ACKNOWLEDGEMENT |
The Employee acknowledges reading and understanding the terms and conditions of this
Agreement, and that the Company has provided a reasonable opportunity for the employee, if the
Employee so chooses, to seek independent legal advice prior to executing this Agreement.
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| 8. | GOVERNING LAW/JURISDICTION/SERVICE OF PROCESS |
The validity, interpretation, performance, and enforcement of this Agreement shall be governed
by the laws of the State of New York without regard to the conflict of laws. In any action between
or among the parties arising out of this Agreement, (i) each of the parties irrevocably consents to
the exclusive jurisdiction and venue of the federal and state courts located in the State of New
York; (ii) if any such action is commenced in a state court, then, subject to applicable law,
neither party shall object to the removal of such action to any federal court located in the State
of New York; (iii) each of the parties irrevocably waives the right to trial by jury; and (iv) each
of the parties irrevocably consents to service of process by first class certified mail, return
receipt requested, postage prepaid, to the address of such party set forth in the signature page
hereto, unless a party notifies the other in writing of a different address.
| 9. | ENTIREAGREEMENT/AMENDMENTS/WAIVERS/COUNTERPARTS/NOTICES |
This Agreement shall constitute the entire agreement among the parties with respect to the
matters covered hereby and shall supersede all previous written, oral or implied understandings
among them with respect to such matters provided however, that nothing herein shall limit the
Employee’s responsibilities or the Company’s rights under any business conduct policy. This
Agreement or any of its provisions shall not be amended, waived or otherwise modified except by a
writing executed by all of the parties hereto. No failure or delay by the Company in exercising its
rights and remedies under or with respect to this Agreement shall operate as a waiver or bar any
further exercise of such rights and remedies. This Agreement may be executed in any number of
counterparts, each of which when executed shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument. All notices hereunder shall be given in
writing delivered to the address of the recipient set forth on the signature page hereto.
| 10. | MISCELLANEOUS |
(a) This Agreement does not alter, change or modify the employment-at-will relationship that
exists between the Company and the Employee and nothing herein shall be construed as requiring
cause for or advance notice of termination of employment.
(b) This Agreement shall be binding upon and inure to the benefit of the parties and their
successors and permitted assigns, as the case may be. The Company may assign this Agreement to any
affiliate of the Company and to any successor or assign of all or a substantial portion of the
Company’s business. The Employee may not assign or transfer any of his rights or obligations under
this Agreement.
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IN WITNESS WHEREOF the parties hereto have executed this Confidentiality, Non-Compete and
Non-Solicitation Agreement as of the date first written above.
EMPLOYEE
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AMERICAN RAILCAR INDUSTRIES, INC. | |||||
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