Document:

exv4w1

 

EXHIBIT 4.1

THIRD SUPPLEMENTAL INDENTURE

     Third Supplemental Indenture (this “Supplemental Indenture”), dated as of April 10, 2007,
among LodgeNet StayOnline, Inc., a Delaware corporation (the “Guaranteeing Subsidiary”), LodgeNet
Entertainment Corporation, a Delaware corporation (the “Issuer”), and HSBC Bank USA, National
Association, as trustee under the indenture referred to below (the “Trustee”).

WITNESSETH

     WHEREAS, the Issuer has heretofore executed and delivered to the Trustee an Indenture dated as
of June 18, 2003 (the “Base Indenture”), as supplemented by the First Supplemental Indenture dated
as of June 18, 2003 (the “First Supplemental Indenture”) and the Second Supplemental Indenture
dated as of January 15, 2007 (the “Second Supplemental Indenture”; and, the Base Indenture as
supplemented by the First Supplemental Indenture and the Second Supplemental Indenture, the
“Indenture”) providing for the issuance of $200,000,000 aggregate principal amount of 9.50% Senior
Subordinated Notes due 2013 (the “Notes”);

     WHEREAS, the Issuer issued $200,000,000 aggregate principal amount of the Notes;

     WHEREAS, Section 902 of the Base Indenture provides that the Indenture may be amended with the
consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding
(subject to certain exceptions);

     WHEREAS, the Issuer desires and has requested the Trustee and Guaranteeing Subsidiary to join
with it in entering into this Supplemental Indenture for the purpose of amending the Indenture in
certain respects as permitted by Section 902 of the Indenture;

     WHEREAS, the execution and delivery of this Supplemental Indenture has been authorized by
Board of Directors of the Issuer;

     WHEREAS, the Issuer has received the consent of the Holders of a majority in aggregate
principal amount of the outstanding Notes and has satisfied all other conditions precedent, if any,
provided under the Indenture to enable the Issuer, the Guaranteeing Subsidiary and the Trustee to
enter into this Supplemental Indenture; and

     WHEREAS, following the execution of this Supplemental Indenture, the terms hereof will become
operative upon the acceptance for purchase by the Issuer of at least a majority in aggregate
principal amount of the outstanding Notes under the Indenture validly tendered pursuant to the
Offer to Purchase and Consent Solicitation Statement dated March 26, 2007, as amended, supplemented
or modified (the “Tender Offer Condition”).

 

 

     NOW, THEREFORE, in consideration of the above premises, each party hereby agrees, for the
benefit of the others and for the equal and ratable benefit of the Holders of the Notes, as
follows:

ARTICLE I

DEFINITIONS

     SECTION 1.1 DELETION OF DEFINITIONS AND RELATED REFERENCES AND AMENDMENT. Section 1.01
of the Indenture is hereby amended to delete in its entirety all terms and their respective
definitions for which all references are eliminated in the Indenture as a result of the amendments
set forth in Article II of this Supplemental Indenture. In addition, the definition of “Restricted
Subsidiary” is hereby amended to read as follows: ““Restricted Subsidiary” means any Subsidiary of
the Issuer on the date this Supplemental Indenture became effective.” The definition of
“Unrestricted Subsidiary” is hereby amended to read as follows: ““Unrestricted Subsidiary” means
any Subsidiary of the Issuer other than a Restricted Subsidiary.”

ARTICLE II

AMENDMENTS TO INDENTURE

     SECTION 2.1 AMENDMENTS TO THE INDENTURE. The Indenture is hereby amended by deleting
the following sections of the Indenture and all references thereto in the Indenture in their
entirety:

Base Indenture Sections

	 	 	 
	Section 704
	 	Reports by Company
	Section 1006
	 	Statement by Officers as to Default

First Supplemental Indenture Sections

	 	 	 
	Sections 501(4), 501(5),

501(6) and 501(9) as set

forth in Section 1.1(22)(A)	 	Events of Default
	Section 1.1(22)(B)(ii)	 	Reports
	Section 1.1(22)(B)(iii)	 	Compliance Certificate
	Section 1.1(22)(B)(iv)	 	Taxes
	Section 1.1(22)(B)(v)	 	Stay, Extension and Usury Laws

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	Section 1.1(22)(B)(vi)
	 	Restricted Payments
	Section 1.1(22)(B)(vii)
	 	Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries
	Section 1.1(22)(B)(viii)
	 	Incurrence of Indebtedness and Issuance of Preferred Stock
	Section 1.1(22)(B)(x)
	 	Transactions with Affiliates
	Section 1.1(22)(B)(xi)
	 	Liens
	Section 1.1(22)(B)(xii)
	 	Business Activities
	Section 1.1(22)(B)(xiii)
	 	Corporate Existence
	Section 1.1(22)(B)(xiv)
	 	Anti-Layering
	Section 1.1(22)(B)(xv)
	 	Limitation on Sale and Leaseback Transaction
	Section 1.1(22)(B)(xvi)
	 	Payments for Consents
	Section 1.1(22)(B)(vii)
	 	Designation of Restricted and Unrestricted Subsidiaries
	Section 1.1(22)(B)(xviii)
	 	Additional Note Guarantees

     SECTION 2.2 AMENDMENT OF SECTION 1.1(22)(B)(ix). Section 1.1(22)(B)(ix) of the First
Supplemental Indenture is hereby amended and restated in its entirety to read as follows:

     “(ix) Asset Sales. Within 365 days after the receipt of any Net Proceeds from an Asset Sale by
the Issuer or a Restricted Subsidiary, the Issuer or a Restricted Subsidiary may apply those Net
Proceeds at its option:

     (1) to repay Senior Debt and, if the Senior Debt repaid is revolving credit Indebtedness, to
reduce commitments with respect thereto;

     (2) to repay pari passu Indebtedness with provisions similar to those set forth in the
Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets;
provided that the Issuer will redeem a ratable principal amount of the Notes if the Notes are then
redeemable or, if the Notes may not then be redeemed, the Issuer will make an offer (in accordance
with the procedures set forth in Paragraph 9(B) for an Asset Sale Offer) to all Holders to purchase
Notes in an aggregate principal amount that would otherwise be required to be redeemed, at a price
equal to 100% of the principal amount of such Notes plus accrued and unpaid interest to the date of
purchase;

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     (3) to acquire assets that are used or useful in a Permitted Business or to make capital
expenditures; or

     (4) to acquire all or substantially all of the assets of, or all of the Voting Stock of,
another Permitted Business.

     Pending the final application of any Net Proceeds, the Issuer may temporarily reduce revolving
credit borrowings or otherwise invest the Net Proceeds in cash or Cash Equivalents or in any other
manner that is not prohibited by the Indenture.

     Any Net Proceeds from Asset Sales that are not applied or invested as provided in the
preceding paragraph will constitute “Excess Proceeds”. When the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Issuer will make an Asset Sale Offer to all Holders of Notes to purchase
or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes in
compliance with Paragraph 9(B).”

     SECTION 2.3 AMENDMENT OF SECTION 1.1(22)(B)(xix). Section 1.1(22)(B)(xix) of the
First Supplemental Indenture is hereby amended and restated in its entirety to read as follows:

     “(xix) Merger, Consolidation, or Sale of Assets. The Issuer shall not, directly or indirectly,
consolidate or merge with or into another Person (whether or not the Issuer is the surviving
corporation), or sell, assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Issuer and its Restricted Subsidiaries taken as a whole, in one or
more related transactions, to another Person; unless:

     (a) either:

     (i) the Issuer is the surviving corporation; or

     (ii) the Person formed by or surviving any such consolidation or merger (if other than the
Issuer) or to which such sale, assignment, transfer, conveyance or other disposition has been made
is either (A) a corporation organized or existing under the laws of the United States, any state of
the United States or the District of Columbia or (B) a partnership or limited liability company
organized or existing under the laws of the United States, any state thereof or the District of
Columbia that has at least one Restricted Subsidiary that is a corporation organized or existing
under the laws of the United States, any state thereof or the District of Columbia which
corporation becomes a co-issuer of the Notes pursuant to a supplemental indenture duly and validly
executed by the Trustee; or

     (b) the Person formed by or surviving any such consolidation or merger (if other than the
Issuer) or the Person to which such sale, assignment, transfer, conveyance or other disposition
shall have been made assumes all the obligations of the Issuer under the Notes and the Indenture
pursuant to agreements reasonably satisfactory to the Trustee;

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     (c) [Reserved.];

     (d) [Reserved.]; and

     (e) The Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the Company and, if a
supplemental indenture is required in connection with such transaction, such supplemental indenture
comply with this paragraph and that all conditions precedent herein for relating to such
transaction have been satisfied.

     The Issuer will not be relieved of its Obligations to pay principal of, and interest on, the
Notes except in the case of a sale (but not lease) of all of its assets that meet the requirements
of this Paragraph 22(B)(xix). Further, this Paragraph will not apply to a sale, assignment,
transfer, conveyance or other disposition of assets between or among the Issuer and any of its
Wholly Owned Restricted Subsidiaries that are Guarantors.

     Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Issuer in a transaction that is
subject to, and that complies with the provisions of, this Paragraph 22(B)(xix), the successor
corporation formed by such consolidation or into or with which the Issuer is merged or to which
such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to,
and be substituted for (so that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of this Indenture referring to the “Issuer” shall
refer instead to the successor corporation and not to the Issuer), and may exercise every right and
power of the Issuer under this Indenture with the same effect as if such successor Person had been
named as the Issuer herein; provided, however, that the predecessor Issuer shall not be relieved
from the obligation to pay the principal of and interest on the Notes except in the case of a sale
of all of the Issuer’s assets in a transaction that is subject to, and that complies with the
provisions of, this Paragraph 22(B)(xix).”

     SECTION 2.4 AMENDMENT OF SECTION 1.1(29)(D)(3). Section 1.1(29)(D)(3) of the First
Supplemental Indenture is hereby amended and restated in its entirety to read as follows:

     “(3) Conditions to Legal or Covenant Defeasance.

     In order to exercise either Legal Defeasance or Covenant Defeasance under either Paragraph
29(D)(1) or (D)(2) hereof:

     (a) the Issuer must irrevocably deposit with the Trustee, in trust, for the benefit of the
Holders, cash in Dollars, non-callable U.S. Government Obligations, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest on the outstanding Notes
on the stated maturity date for payment thereof or on the applicable redemption date, as

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the case may be, and the Issuer must specify whether the Notes are being defeased to maturity or to
a particular redemption date;

     (b) [Reserved.];

     (c) [Reserved.];

     (d) [Reserved.];

     (e) [Reserved.];

     (f) [Reserved.];

     (g) [Reserved.]; and

     (h) the Issuer must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.”

ARTICLE III

MISCELLANEOUS PROVISIONS

     SECTION 3.1 DEFINED TERMS. For all purposes of this Supplemental Indenture, except as
otherwise defined or unless the context otherwise requires, terms used in capitalized form in this
Supplemental Indenture and defined in the Indenture have the meanings specified in the Indenture.

     SECTION 3.2 INDENTURE; NOTES. Except as amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms thereof shall remain in full force and effect.
This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder
of Notes heretofore or hereafter authenticated and delivered under the Indenture shall be bound by
the Indenture as amended hereby. In the case of conflict between the Indenture and this
Supplemental Indenture, the provisions of this Supplemental Indenture shall control. All
corresponding provisions of the Notes are hereby deemed amended to the same extent as provided in
this Supplemental Indenture.

     SECTION 3.3 GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE WILL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

     SECTION 3.4 SUCCESSORS. All agreements of the Issuer, the Guaranteeing Subsidiary and
the Trustee in this Supplemental Indenture and the Notes shall bind their respective successors and
assigns.

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     SECTION 3.5 DUPLICATE ORIGINALS. All parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them together shall
represent the same agreement.

     SECTION 3.6 SEVERABILITY. In case any one or more of the provisions in this
Supplemental Indenture or in the Notes shall be held invalid, illegal or unenforceable, in any
respect for any reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected or impaired thereby,
it being intended that all of the provisions hereof shall be enforceable to the full extent
permitted by law.

     SECTION 3.7 THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever
for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in
respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing
Subsidiary and the Issuer.

     SECTION 3.8 EFFECTIVENESS; OPERATIVENESS. The provisions of this Supplemental
Indenture will take effect immediately upon execution thereof by the parties hereto; however, the
provisions of Articles I and II will become operative only upon satisfaction of the Tender Offer
Condition. If the Tender Offer Condition does not occur, the terms of this Supplemental Indenture
shall be null and void.

     SECTION 3.9 EFFECT OF HEADINGS. The headings of the Articles and Sections of this
Supplemental Indenture have been inserted for convenience of reference only, are not intended to be
considered a part hereof and shall not modify or restrict any of the terms or provision hereof.

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     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed and attested, all as of the date first above written.

Dated: April 10, 2007

	 	 	 	 	 
	 	LODGENET STAYONLINE, INC.

 	 
	 	By:  	/s/ James G. Naro
 	 
	 	 	Name:  	James G. Naro 	 
	 	 	Title:  	Attorney in Fact 	 
	 

	 	 	 	 	 
	 	LODGENET ENTERTAINMENT CORPORATION

 	 
	 	By:  	/s/ Gary H. Ritondaro
 	 
	 	 	Name:  	Gary H. Ritondaro 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL ASSOCIATION

as Trustee

 	 
	 	By:  	/s/ Anthony A. Bocchino
 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 

8exv10w46

 

Exhibit 10.46

AMERICAN RAILCAR INDUSTRIES, INC.

2005 EQUITY INCENTIVE PLAN

STOCK APPRECIATION RIGHTS AGREEMENT

Name of SARs Holder:

Address of SARs Holder:

Grant Date: April 4, 2007

Total Number of SARs:

Exercise Price Per SAR: $29.49

SAR Term/Expiration
Date: April 4, 2014

     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
	April 4, 2008
	 	 	25	%
	April 4, 2009
	 	 	50	%
	April 4, 2010
	 	 	75	%
	April 4, 2011
	 	 	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. SARs Holder 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:

	 	 	 	American Railcar Industries, Inc.	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 
	 

	 	 
	 	 	 	 

Print Name:
	 

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EXHIBIT A

to

Stock Appreciation Rights Agreement

2005 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

American Railcar Industries, Inc.

100 Clark St.

St. Charles, MO 63301

Attention: President

	 	1.	 	Exercise of SARs. Effective as of today, ___, 200___, 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 ___, 200___ (the “Award Agreement”). Capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in the Plan.
	 
	 	2.	 	Representations of Holder. Holder acknowledges that Holder 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 Holder’s exercise of the SARs. Holder represents that
Holder 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:

	 	 	 	Accepted by:	 	 
	 
	 	 	 	 	 	 
	SARS HOLDER

	 	 	 	AMERICAN RAILCAR INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Signature

	 	 
	 	 

By
	 	 
	 
	 	 	 	 	 	 
	 

Print Name

	 	 
	 	 

Title
	 	 
	 
	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

Date Received
	 	 

 

 

EXHIBIT B

to

Stock Appreciation Rights Agreement

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 ___, 2007, 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

5

 

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

	 	 	 	AMERICAN RAILCAR INDUSTRIES, INC.	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

Signature

	 	 
	 	 

By
	 	 

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