EX-10.19



 






Exhibit 10.19




AMERICAN RAILCAR, INC.

2005 EQUITY INCENTIVE PLAN



1. Purpose and Eligibility. The purpose of this 2005 Equity Incentive Plan (the “Plan”) of
American Railcar, Inc., a Delaware corporation (the “Company”) is to provide stock options, stock
issuances, stock units and other equity interests in the Company (each, an “Award”) to (a)
employees, officers, directors, consultants and advisors of the Company and its Parents and
Subsidiaries, and (b) any other Person who is determined by the Board to have made (or is expected
to make) contributions to the Company. Any person to whom an Award has been granted under the Plan
is called a “Participant.” Additional definitions are contained in Section 10.



2. Administration.




     a. Administration by Board of Directors. The Plan will be administered by the Board of
Directors of the Company (the “Board”). The Board, in its sole discretion, shall have the authority
to grant and amend Awards, to adopt, amend and repeal rules relating to the Plan and to interpret
and correct the provisions of the Plan and any Award. The Board shall have authority, subject to
the express limitations of the Plan, (i) to construe and determine the respective Stock Option
Agreement, Awards and the Plan, (ii) to prescribe, amend and rescind rules and regulations relating
to the Plan and any Awards, (iii) to determine the terms and provisions of the respective Stock
Option Agreements and Awards, which need not be identical, (iv) to initiate an Option Exchange
Program, and (v) to make all other determinations in the judgment of the Board of Directors
necessary or desirable for the administration and interpretation of the Plan. The Board may correct
any defect or supply any omission or reconcile any inconsistency in the Plan or in any Stock Option
Agreement or Award in the manner and to the extent it shall deem expedient to carry the Plan, any
Stock Option Agreement or Award into effect and it shall be the sole and final judge of such
expediency. All decisions by the Board shall be final and binding on all interested persons.
Neither the Company nor any member of the Board shall be liable for any action or determination
relating to the Plan.



     b. Appointment of Committee. To the extent permitted by applicable law, the Board
may delegate any or all of its powers under the Plan to one or more committees or subcommittees of
the Board (a “Committee”). All references in the Plan to the “Board” shall mean such Committee or
the Board.



     c. Delegation to Executive Officers. To the extent permitted by applicable law, the
Board may delegate to one or more executive officers of the Company the power to grant Awards and
exercise such other powers under the Plan as the Board may determine, provided that the Board shall
fix the maximum number of Awards to be granted and the maximum number of shares issuable to any one
Participant pursuant to Awards granted by such executive officers.



     d. Applicability of Section Rule 16b-3. Notwithstanding anything to the contrary in
the foregoing if, or at such time as, the Common Stock is or becomes registered under Section 12 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor



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statute, the Plan shall be administered in a manner consistent with Rule 16b-3 promulgated
thereunder, as it may be amended from time to time, or any successor rules (“Rule 16b-3”), such
that all subsequent grants of Awards hereunder to Reporting Persons, as hereinafter defined, shall
be exempt under such rule. Those provisions of the Plan which make express reference to Rule 16b-3
or which are required in order for certain option transactions to qualify for exemption under Rule
16b-3 shall apply only to such persons as are required to file reports under Section 16 (a) of the
Exchange Act (a “Reporting Person”).



     e. Applicability of Section 162 (m). Those provisions of the Plan which are required
by or make express reference to Section 162 (m) of the Code or any regulations thereunder, or any
successor section of the Code or regulations thereunder (“Section 162 (m)”) shall apply only upon
the Company’s becoming a company that is subject to Section 162 (m). Notwithstanding any provisions
in this Plan to the contrary, whenever the Board is authorized to exercise its discretion in the
administration or amendment of this Plan or any Award hereunder or otherwise, the Board may not
exercise such discretion in a manner that would cause any outstanding Award that would otherwise
qualify as performance-based compensation under Section 162 (m) to fail to so qualify under Section
162 (m).


3 Stock Available for Awards.




     a. Number of Shares. Subject to adjustment under Section 3(c), the aggregate number
of shares of common stock of the Company (the “Common Stock”) that may be issued pursuant to the
Plan is [INSERT NUMBER OF SHARES AUTHORIZED]. If any Award expires, or is terminated, surrendered
or forfeited, in whole or in part, the unissued Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan. If an Award granted under the Plan shall expire
or terminate for any reason without having been exercised in full, the unpurchased shares subject
to such Award shall again be available for subsequent Awards under the Plan, and if shares of
Common Stock issued pursuant to the Plan are repurchased by, or are surrendered or forfeited to,
the Company at no more than the price paid for such shares, such shares of Common Stock shall again
be available for the grant of Awards under the Plan. Shares issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares.



     b. Per-Participant Limit. Subject to adjustment under Section 3(c), no Participant
may be granted Awards during any one fiscal year to purchase more than [MAXIMUM NUMBER PER
PARTICIPANT] shares of Common Stock.



     c. Adjustment to Common Stock. Subject to Section 7, in the event of any stock split,
reverse stock split stock dividend, extraordinary cash dividend, recapitalization, reorganization,
merger, consolidation, combination, exchange of shares, liquidation, spin-off, split-up, or other
similar change in capitalization or similar event, (i) the number and class of securities available
for Awards under the Plan and the per-Participant share limit, (ii) the number and class of
securities, vesting schedule and exercise price per share subject to each outstanding Option, (iii)
the repurchase price per security subject to repurchase, and (iv) the terms of each other
outstanding Award shall be adjusted by the Company (or substituted Awards may be made



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if applicable) to the extent the Board shall determine, in good faith, that such an adjustment (or
substitution) is appropriate.


4. Stock Options.




     a. General. The Board may grant options to purchase Common Stock (each, an “Option”)
and determine the number of shares of Common Stock to be covered by each Option, the exercise price
of each Option and the conditions and limitations applicable to the exercise of each Option and the
shares of Common Stock issued upon the exercise of each Option, including, but not limited to,
vesting provisions, repurchase provisions and restrictions relating to applicable federal or state
securities laws. Each Option will be evidenced by a Stock Option Agreement, consisting of a Notice
of Stock Option Award and a Stock Option Award Agreement (collectively, a “Stock Option
Agreement”).



     b. Incentive Stock Options. An Option that the Board intends to be an incentive stock
option (an “Incentive Stock Option”) as defined in Section 422 of the Code, as amended, or any
successor statute (“Section 422”), shall be granted only to an employee of the Company and shall be
subject to and shall be construed consistently with the requirements of Section 422 and regulations
thereunder. The Board and the Company shall have no liability if an Option or any part thereof
that is intended to be an Incentive Stock Option does not qualify as such. An Option or any part
thereof that does not qualify as an Incentive Stock Option is referred to herein as a “Nonstatutory
Stock Option” or “Nonqualified Stock Option.”



     c. Dollar Limitation. For so long as the Code shall so provide, Options granted to any
employee under the Plan (and any other incentive stock option plans of the Company) which are
intended to qualify as Incentive Stock Options shall not qualify as Incentive Stock Options to the
extent that such Options, in the aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate fair market value (determined as of the
respective date or dates of grant) of more than $100,000. The amount of Incentive Stock Options
which exceed such $100,000 limitation shall be deemed to be Nonqualified Stock Options. For the
purpose of this limitation, unless otherwise required by the Code or regulations of the Internal
Revenue Service or determined by the Board, Options shall be taken into account in the order
granted, and the Board may designate that portion of any Incentive Stock Option that shall be
treated as Nonqualified Option in the event that the provisions of this paragraph apply to a
portion of any Option. The designation described in the preceding sentence may be made at such
time as the Committee considers appropriate, including after the issuance of the Option or at the
time of its exercise.



     d. Exercise Price. The Board shall establish the exercise price (or determine the
method by which the exercise price shall be determined) at the time each Option is granted and
specify the exercise price in the applicable Stock Option Agreement, provided, however, in no event
may the per share exercise price be less than the fair market value of the Common Stock at the time
of the grant. In the case of an Incentive Stock Option granted to a Participant who, at the time of
grant of such Option, owns stock representing more than ten percent (10%) of the voting power of
all classes of stock of the Company or any parent or subsidiary, then the exercise price shall be
no less than 110% of the fair market value of the Common Stock on the date of grant. In



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the case of a grant of an Incentive Stock Option to any other Participant, the exercise price shall
be no less than 100% of the fair market value of the Common Stock on the date of grant.



     e. Duration of Options. Each Option shall be exercisable at such times and subject to
such terms and conditions as the Board may specify in the applicable Stock Option Agreement;
provided, that the term of any Incentive Stock Option may not be more than ten (10) years from the
date of grant. In the case of an Incentive Stock Option granted to a Participant who, at the time
of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of
all classes of stock of the Company or any parent or subsidiary, the term of the Option shall be
no longer than five (5) years from the date of grant.



     f. Exercise of Option. Options may be exercised only by delivery to the Company of a
written notice of exercise signed by the proper person together with payment in full as specified
in Section 4(g) and the Stock Option Agreement for the number of shares for which the Option is
exercised.



     g. Payment Upon Exercise. Common Stock purchased upon the exercise of an Option
shall be paid for by one or any combination of the following forms of payment as permitted by the
Board in its sole and absolute discretion:



          i. by check payable to the order of the Company;




          ii. only if the Common Stock is then publicly traded, by delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient
funds to pay the exercise price, or delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price;




          iii. to the extent explicitly provided in the applicable Stock Option Agreement, by delivery
of shares of Common Stock owned by the Participant valued at fair market value (as determined by
the Board or as determined pursuant to the applicable Stock Option Agreement); and




          iv. payment of such other lawful consideration as the Board may determine.



Except as otherwise expressly set forth in a Stock Option Agreement, the Board shall have no
obligation to accept consideration other than cash and in particular, unless the Board so expressly
provides, in no event will the Company accept the delivery of shares of Common Stock that have not
been owned by the Participant at least six months prior to the exercise. The fair market value of
any shares of the Company’s Common Stock or other non-cash consideration which may be delivered
upon exercise of an Option shall be determined in such manner as may be prescribed by the Board.




     h. Acceleration, Extension, Etc. The Board may, in its sole discretion, and in all
instances subject to any relevant tax and accounting considerations which may adversely impact or
impair the Company, (i) accelerate the date or dates on which all or any particular Options or



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Awards granted under the Plan may be exercised, or (ii) extend the dates during which all or any
particular Options or Awards granted under the Plan may be exercised or vest.



     i. Determination of Fair Market Value. If, at the time an Option is granted under the
Plan, the Company’s Common Stock is publicly traded under the Exchange Act, “fair market value”
shall mean (i) if the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq Small Cap Market of
The Nasdaq Stock Market, its fair market value shall be the last reported sales price for such
stock (on that date) or the closing bid, if no sales were reported as quoted on such exchange or
system as reported in The Wall Street Journal or such other source as the Board deems reliable; or
(ii) the average of the closing bid and asked prices last quoted (on that date) by an established
quotation service for over-the-counter securities, if the Common Stock is not reported on a
national market system. In the absence of an established market for the Common Stock, the fair
market value thereof shall be determined in good faith by the Board after taking into consideration
all factors which it deems appropriate.


5. Restricted Stock.




     a. Grants. The Board may grant Awards entitling recipients to acquire shares of
Common Stock, subject to (i) delivery to the Company by the Participant of a check in an amount at
least equal to the par value of the shares purchased, and (ii) the right of the Company to
repurchase all or part of such shares at their issue price or other stated or formula price from
the Participant in the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods established by the Board
for such Award (each, a “Restricted Stock Award”).



     b. Terms and Conditions. The Board shall determine the terms and conditions of any
such Restricted Stock Award. Any stock certificates issued in respect of a Restricted Stock Award
shall be registered in the name of the Participant and, unless otherwise determined by the Board,
deposited by the Participant, together with a stock power endorsed in blank, with the Company (or
its designee). After the expiration of the applicable restriction periods, the Company (or such
designee) shall deliver the certificates no longer subject to such restrictions to the Participant
or, if the Participant has died, to the beneficiary designated by a Participant, in a manner
determined by the Board, to receive amounts due or exercise rights of the Participant in the event
of the Participant’s death (the “Designated Beneficiary”). In the absence of an effective
designation by a Participant, Designated Beneficiary shall mean the Participant’s estate.


6. Other Stock-Based Awards. The Board shall have the right to grant other Awards based
upon the Common Stock having such terms and conditions as the Board may determine, including,
without limitation, the grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation rights, phantom stock awards or
stock units.





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7. General Provisions Applicable to Awards.




     a. Transferability of Awards. Except as the Board may otherwise determine or provide
in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the person to whom they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution, and, during the life of the Participant, shall be exercisable
only by the Participant; provided, however, except as the Board may otherwise determine or provide
in an Award, that Nonstatutory Options and Restricted Stock Awards may be transferred pursuant to a
qualified domestic relations order (as defined in the Employee Retirement Income Security Act of
1974, as amended) or to a grantor-retained annuity trust or a similar estate-planning vehicle in
which the trust is bound by all provisions of the Stock Option Agreement and Restricted Stock
Award, which are applicable to the Participant. References to a Participant, to the extent relevant
in the context, shall include references to authorized transferees.



     b. Documentation. Each Award under the Plan shall be evidenced by a written
instrument in such form as the Board shall determine or as executed by an officer of the Company
pursuant to authority delegated by the Board. Each Award may contain terms and conditions in
addition to those set forth in the Plan, provided that such terms and conditions do not contravene
the provisions of the Plan or applicable law.



     c. Board Discretion. The terms of each type of Award need not be identical, and the
Board need not treat Participants uniformly.



     d. Additional Award Provisions. The Board may, in its sole discretion, include
additional provisions in any Stock Option Agreement, Restricted Stock Award or other Award granted
under the Plan, including without limitation restrictions on transfer, repurchase rights,
commitments to pay cash bonuses, to make, arrange for or guaranty loans or to transfer other
property to Participants upon exercise of Awards, or transfer other property to Participants upon
exercise of Awards, or such other provisions as shall be determined by the Board; provided that
such additional provisions shall not be inconsistent with any other term or condition of the Plan
or applicable law.



     e. Termination of Status. The Board shall determine the effect on an Award of the
disability (as defined in Section 22(e)(3) of the Code), death, retirement, authorized leave of
absence or other change in the employment or other status of a Participant and the extent to which,
and the period during which, the Participant, or the Participant’s legal representative,
conservator, guardian or Designated Beneficiary, may exercise rights under the Award, subject to
applicable law and the provisions of the Code related to Incentive Stock Options.



     f. Change in Control. Unless otherwise expressly provided in the applicable Stock
Option Agreement or Restricted Stock Award or other Award, in connection with the occurrence of a
Change in Control (as defined below), the Board shall, in its sole discretion as to any outstanding
Awards including any portions thereof (on the same basis or on different bases, as the Board shall
specify), take one or any combination of the following actions:



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          A. make appropriate provision for the continuation of such Awards by the Company or the
assumption of such Awards by the surviving or acquiring entity and by substituting on an equitable
basis for the shares then subject to such Awards either (x) the consideration payable with respect
to the outstanding shares of Common Stock in connection with the Change in Control, (y) shares of
stock of the surviving or acquiring corporation or (z) such other securities as the Board deems
appropriate, the fair market value of which (as determined by the Board in its sole discretion)
shall not materially differ from the fair market value of the shares of Common Stock subject to
such Awards immediately preceding the Change in Control;




          B. accelerate the date of exercise or vesting of such Awards;




          C. permit the exchange of such Award for the right to participate in any stock option or other
employee benefit plan of any successor corporation;




          D. provide for the repurchase of the Award for an amount equal to the difference of (i) the
consideration received per share for the securities underlying the Award in the Change in Control
minus (ii) the per share exercise price, if any, of such securities. Such amount shall be payable
in cash for the property payable with respect to such securities in connection with the Change in
Control. The value of any such property shall be determined by the Board in its sole discretion;
or




          E. provide for the termination of any such Awards immediately prior to the consummation of the
Acquisition; provided that no such termination will be effective if the Acquisition is not
consummated.




     g. Change in Control Defined. For purposes of this Agreement, “Change in Control”
means the consummation of any transaction (including, without limitation, any sale of stock,
merger, consolidation or spin-off), the result of which is that any Person, other than Carl Icahn
or the Related Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50% of
the Voting Stock of the Company. For purposes of the definition of Change in Control, the
capitalized terms shall have the following meaning: “Beneficial Owner” has the meaning assigned to
such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the
Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that
such “person” has the right to acquire by conversion or exercise of other securities, whether such
right is currently exercisable or is exercisable only after the passage of time. The terms
“Beneficially Owns” and “Beneficially Owned” have a corresponding meaning. “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and any successor thereto. “Related Parties”
means: (1) Carl Icahn, any spouse and any child, stepchild, sibling or descendant of Carl Icahn;
(2) any estate of Carl Icahn or of any person under clause (1); (3) any person who receives a
beneficial interest in any estate under clause (2) to the extent of such interest; (4) any
executor, personal administrator or trustee who holds such beneficial interest in the Company for
the benefit of, or as fiduciary for, any person under clauses (1), (2) or (3) to the extent of such
interest; and (5) any Person, directly or indirectly owned or controlled by Carl Icahn or any other
person or persons identified in clauses (1), (2), (3) or (4), and (6) any not-for-



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profit entity not subject to taxation pursuant to Section 501(c)(3) of the Code or any successor
provision to which Carl Icahn or any person identified in clauses (1), (2), or (3) above is a
member of the Board of Directors or an equivalent governing body of, and is a senior officer or
trustee, as the case may be, of any such entity. “Voting Stock” means any class or series of
capital stock, or of an equity interest in an entity other than a corporation, that is (A)
ordinarily entitled to vote in the election of directors thereof at a meeting of stockholders
called for such purpose, without the occurrence of any additional event or contingency or (B) in
the case of an entity other than a corporation, ordinarily entitled to elect or appoint the
governing body of such entity, without the occurrence of any additional event or contingency.



     h. Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Board shall notify each Participant as soon as practicable prior to
the effective date of such proposed transaction. The Board in its sole discretion may provide for
a Participant to have the right to exercise his or her Award until fifteen (15) days prior to such
transaction as to all of the shares of Common Stock covered by the Option or Award, including
shares as to which the Option or Award would not otherwise be exercisable, which exercise may in
the sole discretion of the Board, be made subject to and conditioned upon the consummation of such
proposed transaction. In addition, the Board may provide that any Company repurchase option
applicable to any shares of Common Stock purchased upon exercise of an Option or Award shall lapse
as to all such shares of Common Stock, provided the proposed dissolution and liquidation takes
place at the time and in the manner contemplated.



     i. Assumption of Options Upon Certain Events. In connection with a merger or
consolidation of an entity with the Company or the acquisition by the Company of property or stock
of an entity, the Board may grant Awards under the Plan in substitution for stock and stock-based
awards issued by such entity or an affiliate thereof. The substitute Awards shall be granted on
such terms and conditions as the Board considers appropriate in the circumstances.



     j. Parachute Payments and Parachute Awards. Notwithstanding the provisions of Section
7(f) and in the sole discretion of the Company, if, in connection with a Change in Control
described therein, if a tax under Section 4999 of the Code would be imposed on the Participant
(after taking into account the exceptions set forth in Sections 280G(b)(4) and 280G(b)(5) of the
Code, if applicable), then the number of Awards which shall become exercisable, realizable or
vested as provided in such Section shall be reduced (or delayed), to the minimum extent necessary,
so that no such tax would be imposed on the Participant (the Awards not becoming so accelerated,
realizable or vested, the “Parachute Awards”). All determinations required to be made under this
Section 7(j) shall be made by the Company.



     k. Amendment of Awards. The Board may amend, modify or terminate any outstanding
Award including, but not limited to, substituting therefor another Award of the same or a different
type, changing the date of exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required
unless the Board determines that the action, taking into account any related action, would not
materially and adversely affect the Participant and such action is expressly permitted herein,
including, without limitation, Section 7(m).



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     l. Conditions on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.



     m. Acceleration. The Board may, without the Participant’s consent, at any time provide
that any Options shall become immediately exercisable in full or in part, that any Restricted Stock
Awards shall be free of some or all restrictions, or that any other stock-based Awards may become
exercisable in full or in part or free of some or all restrictions or conditions, or otherwise
realizable in full or in part, as the case may be, despite the fact that the foregoing actions may
(i) cause the application of Sections 280G and 4999 of the Code if a change in control of the
Company occurs, or (ii) disqualify all or part of the Option as an Incentive Stock Option.


8. Withholding. The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee or recipient of an Award any federal, state or local taxes of any
kind required by law to be withheld with respect to any shares issued upon exercise of Options
under the Plan or the purchase of shares subject to the Award. Subject to the prior approval of the
Company, which may be withheld by the Company in its sole discretion, the optionee or recipient of
an Award may elect to satisfy such obligation, in whole or in part, (a) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of an Option or the
purchase of shares subject to an Award or (b) by delivering to the Company shares of Common Stock
already owned by the optionee or Award recipient of an Award. The shares so delivered or withheld
shall have a fair market value of the shares used to satisfy such withholding obligation as shall
be determined by the Company as of the date that the amount of tax to be withheld is to be
determined. An optionee or recipient of an Award who has made an election pursuant to this Section
may only satisfy his or her withholding obligation with shares of Common Stock which are not
subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.



9. No Exercise of Option if Engagement or Employment Terminated for Cause. If the
employment or engagement of any Participant is terminated “for Cause,” the Award may terminate,
upon a determination of the Board, on the date of such termination and the Option shall thereupon
not be exercisable to any extent whatsoever and the Company shall have the right to repurchase any
shares of Common Stock, subject to a Restricted Stock Award whether or not such shares have vested,
at the Participant’s initial purchase price. For purposes of this Section 9, “for Cause” shall be
defined as follows: (i) if the Participant has executed an employment agreement, then the
definition of “cause” contained therein, if any, shall govern, or (ii) conduct, as determined by
the Board of Directors, involving any one of the following: (a) misconduct or inadequate
performance by the Participant which is injurious to the Company; (b) the commission of an act of
embezzlement, fraud or theft, which results in economic loss,


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damage or injury to the Company; (c) the unauthorized disclosure of any trade secret or
confidential information of the Company (or any client, customer, supplier or other third party who
has a business relationship with the Company) or the violation of any noncompetition or
nonsolicitation covenant or assignment of inventions obligation with the Company; (d) the
commission of an act which constitutes unfair competition with the Company or which induces any
customer or prospective customer of the Company to breach a contract with the Company or to decline
to do business with the Company; (e) the indictment of the Participant for a felony or serious
misdemeanor offense, either in connection with the performance of his or her obligations to the
Company or which shall adversely affect the Participant’s ability to perform such obligations; (f)
the commission of an act of fraud or breach of fiduciary duty which results in loss, damage or
injury to the Company; or (g) the failure of the Participant to perform in a material respect his
or her employment, consulting or advisory obligations without proper cause. The Board may in its
discretion waive or modify the provisions of this Section at a meeting of the Board with respect to
any individual Participant with regard to the facts and circumstances of any particular situation
involving a determination under this Section.



10. Miscellaneous.




     a. Definitions.



          i. “Company,” for purposes of eligibility under the Plan, shall include any present or future
subsidiary corporations of American Railcar, Inc., as defined in Section 424(f) of the Code (a
“Subsidiary”), and any present or future parent corporation of American Railcar, Inc., as defined
in Section 424(e) of the Code. For purposes of Awards other than Incentive Stock Options, the term
“Company” shall include any other business venture in which the Company has a direct or indirect
significant interest, as determined by the Board in its sole discretion.




          ii. “Code” means the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder.




          iii. “Employee” for purposes of eligibility under the Plan shall include a person to whom an
offer of employment has been extended by the Company.




          iv “Option Exchange Program” means a program whereby outstanding options are exchanged for
options with a lower exercise price.




     b. No Right To Employment or Other Status. No person shall have any claim or right to
be granted an Award, and the grant of an Award shall not be construed as giving a Participant the
right to continued employment or any other relationship with the Company. The Company expressly
reserves the right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan.



     c. No Rights As Stockholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a stockholder with respect to



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any shares of Common Stock to be distributed with respect to an Award until becoming the record
holder thereof.



     d. Effective Date and Term of Plan. The Plan shall become effective on the date on
which it is adopted by the Board. No Awards shall be granted under the Plan after the completion of
ten years from the date on which the Plan was adopted by the Board, but Awards previously granted
may extend beyond that date.



     e. Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time.



     f. Governing Law. The provisions of the Plan and all Awards made hereunder shall be
governed by and interpreted in accordance with the laws of the state of Delaware, without regard to any applicable conflicts of law.



Approvals

Original Plan:

Adopted by the Board of Directors on:




Approved by the stockholders on:





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