Document:

exv10w28

 

Exhibit 10.28

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”)

«Name»

«Address»

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

	 	«Grant_Date»
	 	Total Exercise Price
	 	$«Total_Exercise_Price»
	 
	 	 	 	 	 	 
	Type of Option

	 	oIncentive

Stock Option
	 	Total Number of
Shares Granted
	 	«Shares_Granted»
	 
	 	 	 	 	 	 
	 

	 	o Nonstatutory

Stock Option	 	Performance Criteria	 	«Yes, as provided below»
	 
	 	 	 	 	 	 
	Exercise Price per

Share

	 	$«Exercise_Price»
	 	Term/Expiration Date
	 	«Five years from Grant

Date»

Vesting Schedule:

This Option shall be exercisable, in whole or in part, according to the following vesting schedule:

	 	 	 
	Number of Months (or years) of	% of Grant (or # of Shares) Vested
	Service	 	 
	 
	 	 
	One year anniversary of Grant Date

	 	33% of Grant
	 
	 	 
	Two year anniversary of Grant Date

	 	66% of Grant
	 
	 	 
	Three year anniversary of Grant Date

	 	100% of Grant

 

 

Performance
Criteria [To be determined]

Vesting of this Option shall cease upon termination of Employment (the “Relationship”) of the
Participant with the Company.

	 	 	 
	Participant	 	American Railcar Industries, Inc.
	 
	 	 
	 

	 	 
	Signature

	 	By
	 
	 	 
	 

	 	 
	Print Name

	 	Title
	 
	 	 
	 
	 	 
	 
	 	 
	 
	 	 
	Residence Address
	 	 

 

 

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.

 

 

	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

2

 

	 	 	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.

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

3

 

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.

4

 

EXHIBIT A

2005 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

American Railcar Industries, Inc.

100 Clark St.

St. Charles, MO 63301

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.]

 

 

	 	 	 
	Submitted by:	 	Accepted by:
	 
	 	 
	PARTICIPANT

	 	AMERICAN RAILCAR INDUSTRIES, INC.
	 
	 	 
	 

	 	 
	Signature

	 	By
	 
	 	 
	 

	 	 
	Print Name

	 	Title
	 
	 	 
	Address:

	 	Address:
	 
	 	 
	 

	 	100 Clark St.
	 

	 	St. Charles, MO 63301
	 

	 	Attention: President
	 
	 	 
	 

	 	 
	 

	 	Date Received

2<PAGE>
                                                                   Exhibit 10.34

                        AMERICAN RAILCAR INDUSTRIES, INC.

                          SUPPLEMENTARY RETIREMENT PLAN

                           EFFECTIVE DECEMBER 1, 2005
<PAGE>
                        AMERICAN RAILCAR INDUSTRIES, INC.
                          SUPPLEMENTARY RETIREMENT PLAN
                                TABLE OF CONTENTS

ARTICLE I - INTRODUCTION.....................................................  1

  1.1   ADOPTION AND HISTORY OF THE PLAN.....................................  1

  1.2   EFFECTIVE DATE OF PLAN...............................................  1

  1.3   STRUCTURE AND PURPOSE................................................  1

ARTICLE II - DEFINITIONS.....................................................  2

  2.1   ACF..................................................................  2

  2.2   COMPANY..............................................................  2

  2.3   BOARD OF DIRECTORS...................................................  2

  2.4   COMMITTEE............................................................  2

  2.5   EMPLOYEE.............................................................  2

  2.6   EMPLOYEES' RETIREMENT PLAN ..........................................  2

  2.7   SUPPLEMENTARY COMPENSATION PLAN......................................  2

  2.8   SPECIAL COMPENSATION.................................................  2

  2.9   PLAN YEAR............................................................  3

  2.10  SERVICE FACTOR.......................................................  3

ARTICLE III - BENEFITS.......................................................  3

  3.1   AMOUNT OF BENEFIT....................................................  3

  3.2   ELIGIBILITY..........................................................  4

  3.3   PAYMENT OF BENEFITS..................................................  5

ARTICLE IV - ADMINISTRATION..................................................  5

  4.1   ADMINISTRATOR........................................................  5

  4.2   INTERPRETATION.......................................................  5

ARTICLE V - SOURCES OF PAYMENT...............................................  5

ARTICLE VI - AMENDMENT OR TERMINATION........................................  6

ARTICLE VII - GENERAL PROVISIONS.............................................  6

  7.1   NON-ALIENATION OF BENEFITS...........................................  6

  7.2   PLAN NOT A CONTRACT OF EMPLOYMENT....................................  6

  7.3   CONSTRUCTION OF TERMS................................................  6

                                      - i -
<PAGE>
  7.4   SUCCESSORS...........................................................  6

  7.5   OFFICIAL ACTIONS.....................................................  7

  7.6   CONTROLLING STATE LAW................................................  7

  7.7   SEVERABILITY.........................................................  7

  7.8   WITHHOLDING..........................................................  7

  7.9   COMPLIANCE WITH SECTION 409A.........................................  7

                                     - ii -
<PAGE>
                                               AMERICAN RAILCAR INDUSTRIES, INC.
                                                   SUPPLEMENTARY RETIREMENT PLAN

================================================================================

                        AMERICAN RAILCAR INDUSTRIES, INC.
                          SUPPLEMENTARY RETIREMENT PLAN
                            ARTICLE I - INTRODUCTION

      1.1 ADOPTION AND HISTORY OF THE PLAN. ACF Industries, Incorporated (now
known as ACF Industries LLC) ("ACF") originally adopted the Supplementary
Retirement Plan of ACF Industries, Incorporated, effective January 1, 1971 (the
"ACF SERP"). The ACF SERP was subsequently amended from time to time and was
last amended to freeze the accrual of benefits thereunder, effective as of March
31, 2004. Pursuant to an Asset Transfer Agreement (the "Asset Transfer
Agreement"), dated as of October 1, 1994 (the "Asset Transfer Date"), between
American Railcar Industries, Inc. (the "Company") and ACF, the Company was
responsible for the cost associated with providing benefits accrued after the
Asset Transfer Date to its employees eligible to participate in the ACF SERP. In
connection with the Company's anticipated public offering, and to effect the
allocation of liabilities under the ACF SERP between the Company and ACF, the
Company and ACF entered into an Employee Benefit Plan Agreement, dated as of
December 1, 2005, pursuant to which the Company has assumed the obligation to
sponsor a Supplementary Employee Retirement Plan for that portion of the
benefits under the ACF SERP so allocated to the Company. Accordingly, and
subject to the terms and conditions set forth herein, the Company hereby adopts
the American Railcar Industries, Inc. Supplementary Retirement Plan (the
"Plan").

      1.2 EFFECTIVE DATE OF PLAN. In accordance with the terms of the Employee
Benefit Plan Agreement, this Plan is effective as of December 1, 2005; provided,
however, that no benefits shall accrue under this Plan with respect to an
Employee's service or compensation after March 31, 2004. Subject to the first
paragraph of Section 3.1 and Section 3.4, the rights and benefits of any person
entitled to benefits under this Plan shall be determined in accordance with the
applicable provisions of this Plan as in effect at the time of the termination
of employment of the eligible employee or, if such termination occurred prior to
the Effective Date, in accordance with the applicable provisions of the ACF Plan
at the time of such termination.

      1.3 STRUCTURE AND PURPOSE. The Plan is structured as two plans. The
portion of the Plan that provides benefits based on limitations imposed by
Section 415 of the Internal Revenue Code of 1986, as amended (the "Code") is
intended to be an "excess benefit plan" as defined by Sections 3(36) and 4(b)(5)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The portion of the Plan that provides benefits based on limitations imposed by
Section 401(a)(17) of the Code and on Special Compensation is intended to be a
plan that provides benefits to a select group of management or highly
compensated employees within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of ERISA.

                                      - 1 -
<PAGE>
                                               AMERICAN RAILCAR INDUSTRIES, INC.
                                                   SUPPLEMENTARY RETIREMENT PLAN

================================================================================

                            ARTICLE II - DEFINITIONS

      The following words and phrases, when used in this Plan, unless the
context clearly indicates otherwise, shall have the following meanings:

      2.1 ACF means ACF Industries LLC.

      2.2 COMPANY means American Railcar Industries, Inc.

      2.3 BOARD OF DIRECTORS means the Board of Directors of American Railcar
Industries, Inc.

      2.4 COMMITTEE means the Employee Benefits Administration Committee, the
administrator of the Plan as provided in Article IV. With respect to any action
taken prior to the Effective Date, the Committee means the ACF Employee Benefits
Administration Committee.

      2.5 EMPLOYEE means any person regularly employed by the Company on a
full-time basis after the Asset Transfer Date who was a recipient of cash
payments under the Supplementary Compensation Plan or who was the recipient of
cash payments under the same terms and conditions as such Supplementary
Compensation Plan, except that a person in the service of an Affiliate which is
not an Employer (as the terms "Employer" and "Affiliate" are defined and in
accordance with Section 4.14 of the Employees' Retirement Plan in effect on May
1, 1989) shall be considered to be an employee for the purpose of this Plan if
he receives Special Compensation.

      2.6 EMPLOYEES' RETIREMENT PLAN means the Employees' Retirement Plan of ACF
Industries LLC, as in effect on December 1, 2005.

      2.7 SUPPLEMENTARY COMPENSATION PLAN means ACF's 1965 Supplementary
Compensation Plan, as adopted by ACF stockholders on August 26, 1965, as amended
from time to time, and ACF's 1975 Supplementary Compensation Plan, as adopted by
ACF stockholders on May 15, 1975, as amended from time to time.

      2.8 SPECIAL COMPENSATION means cash payments made by the Company or ACF
after January 1, 1981, to any Employee under the terms of the Supplementary
Compensation Plan or under the same terms and conditions as such Supplementary
Compensation Plan excluding, however, (1) such payments made after the end of
the Plan Year in which an Employee ceases his employment with the Company or
ACF, or (2) any such payments made within a Plan Year during which no
compensation (as defined in Section 2.11 of the Employees' Retirement Plan) is
received.

      Special Compensation shall also mean cash payments made after January 1,
1981, as bonuses, awards, incentive compensation or other payments in excess of
basic salary, whether pursuant to a plan or otherwise, except any such payment
which the Committee may specify, or made pursuant to any plan or arrangement
which the Committee may specify, as not being Special Compensation for purposes
of this Plan. With respect to any Employee whose

                                      - 2 -
<PAGE>
                                               AMERICAN RAILCAR INDUSTRIES, INC.
                                                   SUPPLEMENTARY RETIREMENT PLAN

================================================================================

employment with the Company or ACF is terminated after December 31, 1983
pursuant to an agreement which provides for the accrual of benefit credits under
the Company's or ACF's retirement plans based on an assumed rate of compensation
for any period of time following such termination, or which otherwise provides
for the payment of benefits by reference to any such assumed rate of
compensation, Special Compensation shall include assumed compensation at such
rate for such period.

      2.9 PLAN YEAR means the calendar year.

      2.10 SERVICE FACTOR means the quotient (rounded off to two decimal places)
arrived at by dividing twenty-eight (28) by the difference between sixty-five
(65) and the age at which an employee becomes a participant in the Employees'
Retirement Plan. If such quotient shall be less than one (1), the Service Factor
shall be deemed to be one (1), and if such quotient shall be greater than one
and sixty-five hundredths (1.65), the Service Factor shall be deemed to be one
and sixty-five hundredths (1.65).

                             ARTICLE III - BENEFITS

      3.1 AMOUNT OF BENEFIT. Subject to Section 3.4 hereof, the amount of annual
benefit hereunder shall be the benefit accrued after the Asset Transfer Date
attributable solely to employment with the Company (it being understood that no
benefits may accrue under the Plan with respect to an Employee's service or
compensation after March 31, 2004) as calculated under either paragraph (a) or
(b) (whichever is applicable, and whichever provides the greater benefit)
hereof:

(a)   With respect to those Employees who meet the eligibility requirements of
      subsection 3.2(a), the amount of annual benefit shall be equal to:

      (i)   the amount resulting from the application of the benefit formulas of
            the Employees' Retirement Plan, exclusive of Section 5.1(c) of such
            plan (without regard to the maximum benefit limitations provided for
            in Article VIII thereof) to the sum of (a) Special Compensation and
            (b) Compensation as defined in Section 2.11 of the Employees'
            Retirement Plan, without regard to any limitation on compensation
            resulting from the application of the requirements of Section
            401(a)(17) of the Code, less

      (ii)  the actual benefit payable under the Employees' Retirement Plan, and
            all amounts payable from any other source funded or provided by ACF
            or the Company, including, without limitation, any annuity policy,
            with respect to any benefit otherwise payable hereunder.

(b)   With respect to those Employees who meet the eligibility requirements of
      subsection 3.2(b), the amount of annual benefit shall be equal to:

                                      - 3 -
<PAGE>
                                               AMERICAN RAILCAR INDUSTRIES, INC.
                                                   SUPPLEMENTARY RETIREMENT PLAN

================================================================================

      (i)   the Employee's applicable Service Factor multiplied by the amount
            resulting from the application of the benefit formula of the
            Employees' Retirement Plan, exclusive of Section 5.1(c) of such plan
            (without regard to the maximum benefit limitations provided for in
            Article VIII thereof, or the minimum benefit provision under Section
            5.2 or 14.5 thereof), to the total of:

            (1)   Special Compensation, and

            (2)   Compensation as defined in the Employees' Retirement Plan
                  without regard to any limitation on compensation resulting
                  from the application of the requirements of Section 401(a)(17)
                  of the Code; less

      (ii)  the actual benefit payable under the Employees' Retirement Plan, and
            all amounts payable from any other source funded or provided by ACF
            or the Company, including, without limitation, any annuity policy,
            with respect to any benefit otherwise payable hereunder.

      For purposes of this Section 3.1, the benefit formula of the Employees'
Retirement Plan shall mean the formula used to determine the Employee's actual
benefit payable under and in accordance with the terms of the Employees'
Retirement Plan; provided that Section 5.1(c) shall be disregarded for purposes
of Section 3.1(a)(i) and 3.1(b)(i) herein; and provided further that with
respect to a participant with fewer than five years of Benefit Service (as
defined in the Employees' Retirement Plan) as of May 1, 1981, for purposes of
this Plan the entire benefit under the Employees' Retirement Plan shall be
computed under Section 5.1(b) of such plan based on all of the years of Benefit
Service completed before May 1, 1981; and Average Annual Compensation (as
defined in the Employees' Retirement Plan) of the Participant shall be computed
in accordance with Section 2.6 of the Employees' Retirement Plan except that
Compensation before May 1, 1981 shall be taken into account in determining
Average Annual Compensation.

      In no event will the benefit accrued under subsection 3.1(a)(i) or
subsection 3.1(b)(i) of this Section 3.1 as of the last day of any Plan Year
decrease due to a decrease in Compensation or Special Compensation.

      3.2 ELIGIBILITY.

(a)   An Employee shall be entitled to a benefit pursuant to Section 3.1(a)
      hereof if he, his beneficiary or his spouse qualify for retirement
      benefits (Normal, Early, Late, Vested Deferred, or Survivor Spouse
      Benefit) under the Employees' Retirement Plan.

(b)   An Employee shall be entitled to a benefit pursuant to section 3.1(b)
      hereof if:

      (i)   he has attained age fifty-five and has at least five years of
            Vesting Service under the Employees' Retirement Plan; and

                                      - 4 -
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                                               AMERICAN RAILCAR INDUSTRIES, INC.
                                                   SUPPLEMENTARY RETIREMENT PLAN

================================================================================

      (ii)  either he, his beneficiary or spouse qualify for retirement benefits
            under the Employees' Retirement Plan; and

      (iii) he was at any time an officer (but not including assistant officer)
            of ACF or the Company; or he is a key executive or assistant officer
            who previously has been designated by the Committee as being
            eligible to participate in the ACF SERP pursuant to Section 3.2(b)
            thereof.

      3.3 PAYMENT OF BENEFITS. Benefits shall be payable under this Plan under
the same terms and conditions and for the same period of time as benefits
payable under the Employees' Retirement Plan, except as otherwise provided in
this Plan.

      The Committee may, in its discretion, adopt procedures with respect to the
payment of benefits hereunder where the amount payable, after deductions, is
less than $120 per year, and may pay such benefits quarterly, semiannually,
annually, or by lump sum, in which latter case the amount so paid shall be the
actuarial equivalent of the monthly retirement benefit, calculated in accordance
with Table A of the Employees' Retirement Plan.

      3.4 ACF OBLIGATIONS. Notwithstanding anything to the contrary in the Plan,
nothing herein shall obligate the Company to assume any liabilities or
obligations under the ACF SERP, or to pay any benefit hereunder, to any person
with respect to such person's employment with ACF (whether before or after the
Asset Transfer Date), it being understood that ACF shall be solely responsible
for providing any such benefits.

                          ARTICLE IV - ADMINISTRATION

      4.1 ADMINISTRATOR. The Plan shall be administered by the Committee whose
members shall be appointed by the Board of Directors of the Company. The
Committee has the sole discretion and authority to make benefit determinations
and to resolve any dispute arising under the Plan. An individual serving on the
Committee may participate in benefits under the Plan provided he is otherwise
eligible.

      4.2 INTERPRETATION. The Committee has the sole discretion to interpret and
construe the Plan, such interpretation to be final and conclusive on all persons
claiming benefits under the Plan.

                         ARTICLE V - SOURCES OF PAYMENT

      Benefits payable under this Plan shall be paid by the Company out of its
general assets. No entity other than the Company shall be obligated to pay
benefits due under this Plan. An eligible Employee shall not have any rights
with respect to benefits under the Plan other than the unsecured right to
receive payments as provided herein. The Company shall not be obligated to set
aside, earmark or escrow any funds or other assets to satisfy its obligation
hereunder. Any benefit payable

                                      - 5 -
<PAGE>
                                               AMERICAN RAILCAR INDUSTRIES, INC.
                                                   SUPPLEMENTARY RETIREMENT PLAN

================================================================================

in accordance with the terms of this Plan shall not be represented by a note or
any evidence of indebtedness other than the promises contained in this Plan.

                     ARTICLE VI - AMENDMENT OR TERMINATION

      The Plan may be amended from time to time in whole or in part or may be
terminated at any time by the Board of Directors, and the Plan may be amended
from time to time by the Committee, except that the Committee shall not have the
authority to terminate the Plan or to make amendments thereto if such amendments
materially increase the benefits payable under the Plan or the benefits payable
to any member of the Committee unless such amendments are required by the
provisions of any law or governmental regulation; provided, however, that no
amendment may be made which will deprive any Employee or any former employee or
other person receiving benefits under the Plan, without his consent, of any
benefits under the Plan to which he would otherwise become entitled, determined
as of the date of amendment or termination.

                        ARTICLE VII - GENERAL PROVISIONS

      7.1 NON-ALIENATION OF BENEFITS.

(a)   The interests of eligible Employees and their beneficiaries under this
      Plan shall not be subject to the claims of their creditors and may not be
      voluntarily or involuntarily anticipated, alienated, sold, transferred,
      assigned, pledged, or encumbered. Any attempt by an eligible Employee, his
      beneficiary or any other person to anticipate, alienate, sell, transfer,
      assign, pledge, encumber, charge or otherwise dispose of any right to
      benefits payable hereunder shall be void.

(b)   If any Employee, retiree or any beneficiary under the Plan becomes
      bankrupt or attempts to anticipate, alienate, sell, transfer, assign,
      pledge, encumber or charge any benefit under the Plan, except as
      specifically provided herein, in its discretion the Committee may hold or
      apply such benefit to or for the benefit of such Employee, retiree or
      beneficiary, his spouse, children or other dependents, or any of them, in
      such manner and in such proportion as the Committee may deem proper.

      7.2 PLAN NOT A CONTRACT of EMPLOYMENT. The Plan does not constitute a
contract of employment, and participation in the Plan will not give any Employee
the right to be retained in the employment of the Company.

      7.3 CONSTRUCTION OF TERMS. Words of gender shall include persons and
entities of any gender, the plural shall include the singular, and the singular
shall include the plural. Section headings exist for reference purposes only,
and shall not be construed as part of the Plan.

      7.4 SUCCESSORS. The provisions of this Plan shall be binding upon the
Company, its successors and assigns and upon every eligible Employee, his heirs,
beneficiaries, estates and legal representatives.

                                      - 6 -
<PAGE>
                                               AMERICAN RAILCAR INDUSTRIES, INC.
                                                   SUPPLEMENTARY RETIREMENT PLAN

================================================================================

      7.5 OFFICIAL ACTIONS. Any action required to be taken by the Board of
Directors of the Company pursuant to the Plan may be performed by any person or
persons, including a committee, to which the Board of Directors delegates the
authority to take actions of that kind. Whenever under the terms of this Plan an
entity corporation is permitted or required to take some action such action may
be taken by an officer of the corporation who has been duly authorized by the
Board of Directors of such corporation to take actions of that kind.

      7.6 CONTROLLING STATE LAW. To the extent not superseded by the laws of the
United States, the laws of the State of Missouri shall be controlling in all
matters relating to this Plan.

      7.7 SEVERABILITY. In case any provision of this Plan shall be held illegal
or invalid for any reason, such illegality or invalidity shall not affect the
remaining provisions of the Plan, and the Plan shall be construed and enforced
as if such illegal and invalid provisions had never been set forth.

      7.8 WITHHOLDING. The Company shall withhold from amounts due under this
Plan the amount necessary to enable the Company to remit to the appropriate
government entity or entities on behalf of the Employee or beneficiary as may be
required by the federal income tax withholding provisions of the Internal
Revenue Code, by an applicable state's income tax, or by an applicable city,
county or municipality's earnings or income tax act.

      7.9 COMPLIANCE WITH SECTION 409A. The Company shall administer the Plan in
compliance with the requirements of Section 409A of the Code and any
interpretative guidance issued thereunder. The Company may in its sole and
absolute discretion delay benefit distributions or make such other modifications
to the Plan as it deems necessary to comply with Section 409A of the Code.

      IN WITNESS WHEREOF, American Railcar Industries, Inc. has adopted the
foregoing instrument this ___________ day of January, 2006.

                                         AMERICAN RAILCAR INDUSTRIES, INC.

                                         By:
                                             -------------------------------

                                         Title:
                                               -----------------------------

                                     - 7 -

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