Exhibit 10.37
AMERICAN RAILCAR INDUSTRIES, INC.
2005 EQUITY INCENTIVE PLAN
NOTICE OF STOCK OPTION AWARD
Unless otherwise defined herein, the terms defined in the 2005 Equity
Incentive Plan shall have the same defined meanings in this Notice of Stock
Option Award and the attached Stock Option Award Terms, which is incorporated
herein by reference (together, the "Award Agreement").
PARTICIPANT (the "PARTICIPANT")
GRANT
The undersigned Participant has been granted an Option to purchase Common Stock
of American Railcar Industries, Inc. (the "Company"), subject to the terms and
conditions of the Plan and this Award Agreement, as follows:
DATE OF GRANT ______________________ TOTAL EXERCISE PRICE ____________________
TYPE OF OPTION [ ] Incentive Stock Option TOTAL NUMBER OF SHARES GRANTED ____________________
[ ] Nonstatutory Stock Option TERM/EXPIRATION DATE [5 YEARS]
EXERCISE PRICE PER SHARE [FMV ON GRANT DATE]
Vesting Schedule:
This Option shall be exercisable, in whole or in part, according to the
following vesting schedule:
VESTING DATE % OF GRANT (OR # OF SHARES) VESTED
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One year anniversary of Grant Date 33.33% of Grant
Two year anniversary of Grant Date 66.66% of Grant
Three year anniversary of Grant Date 100% of Grant
PARTICIPANT AMERICAN RAILCAR INDUSTRIES, INC.
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By
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Print Name Title
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AMERICAN RAILCAR INDUSTRIES, INC.
STOCK OPTION
AWARD TERMS
1. Grant of Option. The Committee hereby grants to the Participant named
in the Notice of Stock Option Grant an option (the "Option") to
purchase the number of Shares set forth in the Notice of Stock Option
Award, at the exercise price per Share set forth in the Notice of
Stock Option Grant (the "Exercise Price"), and subject to the terms
and conditions of the 2005 Equity Incentive Plan (the "Plan"), which
is incorporated herein by reference. In the event of a conflict
between the terms and conditions of the Plan and this Stock Option
Award Agreement, the terms and conditions of the Plan shall prevail.
If designated in the Notice of Stock Option Grant as an Incentive
Stock Option ("ISO"), this Option is intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Code.
Nevertheless, to the extent that it exceeds the $100,000 limitation
rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option ("NSO").
2. Exercise of Option.
i. Right to Exercise. This Option may be exercised during its term
in accordance with the Vesting Schedule set out in the Notice of
Stock Option Award and with the applicable provisions of the Plan
and this Award Agreement, including, without limitation, if the
Participant is terminated for Cause as described more fully in
Section 9 of the Plan, the Option shall immediately terminate.
ii. Method of Exercise. This Option shall be exercisable by delivery
of an exercise notice in the form attached as Exhibit A (the
"Exercise Notice") which shall state the election to exercise the
Option, the number of Shares with respect to which the Option is
being exercised (the "Exercised Shares"), and such other
representations and agreements as may be required by the Company.
The Exercise Notice shall be accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares. This Option
shall be deemed to be exercised upon receipt by the Company of
such fully executed Exercise Notice accompanied by payment of the
aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of an Option unless such
issuance and such exercise complies with applicable laws. Assuming such
compliance, for income tax purposes the Shares shall be considered
transferred to the Participant on the date on which the Option is exercised
with respect to such Shares.
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3. Termination. This Option shall be exercisable for three months after
Participant ceases to be an employee; provided, however, if the
Relationship is terminated by the Company for cause, the Option shall
terminate immediately. Upon Participant's death or Disability, this
Option may be exercised for twelve months after the Relationship
ceases. In no event may Participant exercise this Option after the
Term/Expiration Date as provided above.
4. Participant's Representations. In the event the Shares have not been
registered under the Securities Act of 1933, as amended, (the
"Securities Act") at the time this Option is exercised and as a
condition of such exercise, the Participant shall, if required by the
Company, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his or her investment representations
as requested by the Company.
5. Lock-Up Period. Participant hereby agrees that, if so requested by the
Company or any representative of the underwriters (the "Managing
Underwriter") in connection with any registration of the offering of
any securities of the Company under the Securities Act, Participant
shall not sell or otherwise transfer any Shares or other securities of
the Company during the 180-day period (or such other period as may be
requested in writing by the Managing Underwriter and agreed to in
writing by the Company) (the "Market Standoff Period") following the
effective date of a registration statement of the Company filed under
the Securities Act. The Company may impose stop-transfer instructions
with respect to securities subject to the foregoing restrictions until
the end of such Market Standoff Period.
6. Restrictions on Exercise. This Option may not be exercised until such
time as the Plan has been approved by the stockholders of the Company,
or if the issuance of such Shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation
of any applicable law.
7. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Participant
only by Participant. The terms of the Plan and this Award Agreement
shall be binding upon the executors, Committees, heirs, successors and
assigns of the Participant.
8. Term of Option. This Option may be exercised only within the Term set
out in the Notice of Stock Option Award which Term may not exceed five
(5) years from the Date of Grant, and may be exercised during such
Term only in accordance with the Plan and the terms of this Award
Agreement.
9. Notice of Disqualifying Disposition of Incentive Stock Option Shares.
If this Option is an Incentive Stock Option, and if the Participant
sells or otherwise disposes of any of the Shares acquired pursuant to
the Incentive Stock Option on or before the later of (1) the date two
years after the Date of Grant, or (2) the date one year after the date
of
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exercise, the Participant shall immediately notify the Company in
writing of such disposition. The Participant agrees that the
Participant may be subject to income tax withholding by the Company on
the compensation income recognized by the Participant.
10. Withholding. Pursuant to applicable federal, state, local or foreign
laws, the Company may be required to collect income or other taxes on
the grant of this Option, the exercise of this Option, the lapse of a
restriction placed on this Option or the Shares issued upon exercise
of this Option, or at other times. The Company may require, at such
time as it considers appropriate, that the Participant pay the Company
the amount of any taxes which the Company may determine is required to
be withheld or collected, and the Participant shall comply with the
requirement or demand of the Company. In its discretion, the Company
may withhold Shares to be received upon exercise of this Option or
offset against any amount owed by the Company to the Participant,
including compensation amounts, if in its sole discretion it deems
this to be an appropriate method for withholding or collecting taxes.
11. 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 Participant with respect to the subject matter hereof,
and may not be modified (except as provided herein and in the Plan)
adversely to the Participant's interest except by means of a writing
signed by the Company and Participant. This agreement is governed by
the internal substantive laws but not the choice of law rules of the
State of Delaware.
12. No Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS
EARNED ONLY BY CONTINUING IN THE RELATIONSHIP AT THE WILL OF THE
COMPANY (NOT THROUGH THE ACT OF BEING ENGAGED, BEING GRANTED THIS
OPTION OR ACQUIRING SHARES HEREUNDER). PARTICIPANT 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 PARTICIPANT'S RIGHT OR THE COMPANY'S RIGHT
TO TERMINATE THE RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.
13. Confidentiality, Non-Compete and Non-Solicitation. Pursuant to the
terms and conditions of the Plan, Participant has executed and
delivered to the Company the Confidentiality, Non-Compete and
Non-Solicitation Agreement attached hereto as Exhibit B.
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14. Participant Acknowledgement. Participant acknowledges 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 Option subject
to all of the terms and provisions thereof. Participant has reviewed
the Plan and this Option 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 Option. Participant 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 Option. Participant further agrees to notify the Company
upon any change in the residence address indicated below.
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EXHIBIT A
2005 EQUITY INCENTIVE PLAN
EXERCISE NOTICE
American Railcar Industries, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
1. Exercise of Option. Effective as of today, ______________, 200_, the
undersigned ("Participant") hereby elects to exercise Participant's
option to purchase _________ shares of the Common Stock (the "Shares")
of American Railcar Industries, Inc. (the "Company") under and
pursuant to the 2005 Equity Incentive Plan (the "Plan") and the Stock
Option Award Agreement dated ____________, 200__ (the "Award
Agreement").
2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price of the Shares, as set forth in the Award
Agreement.
3. Representations of Participant. Participant acknowledges that
Participant has received, read and understood the Plan and the Award
Agreement and agrees to abide by and be bound by their terms and
conditions.
4. Rights as Stockholder. Until the issuance of the Shares (as evidenced
by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the
Option. The Shares shall be issued to the Participant as soon as
practicable after the Option is exercised. No adjustment shall be made
for a dividend or other right for which the record date is prior to
the date of issuance except as provided in Section 3(c) of the Plan.
5. Tax Consultation. Participant understands that Participant may suffer
adverse tax consequences as a result of Participant's purchase or
disposition of the Shares. Participant represents that Participant has
consulted with any tax consultants Participant deems advisable in
connection with the purchase or disposition of the Shares and that
Participant is not relying on the Company for any tax advice.
[SIGNATURES APPEAR ON NEXT PAGE.]
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Submitted by: Accepted by:
PARTICIPANT AMERICAN RAILCAR INDUSTRIES, INC.
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By
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Print Name Title
Address: Address:
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▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
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Date Received
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EXHIBIT B
CONFIDENTIALITY, NON-COMPETE AND
NON-SOLICITATION AGREEMENT
This CONFIDENTIALITY, NON-COMPETE AND NON-SOLICITATION AGREEMENT
(hereinafter referred to as "Agreement") made as of the ______ day of
__________, 2006, 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,
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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;
(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.
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(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 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
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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 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.
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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.
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. ENTIRE AGREEMENT/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
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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.
IN WITNESS WHEREOF the parties hereto have executed this
Confidentiality, Non-Compete and Non-Solicitation Agreement as of the date first
written above.
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Print Name
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Employee Signature
Employee Address:
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AMERICAN RAILCAR INDUSTRIES, INC.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive
Officer
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