Document:

exv10w53

Exhibit 10.53

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a
request for confidential treatment and, where applicable, have been marked with an asterisk
(“[*****]”) to denote where omissions have been made. The confidential material has been filed
separately with the Securities and Exchange Commission.

FLEET SERVICES AGREEMENT

Date: January 1, 2008

Between

AMERICAN RAILCAR INDUSTRIES, INC.

And

AMERICAN RAILCAR LEASING, LLC

 

 

This agreement (“Agreement”) is to confirm and document our mutual understanding with respect to
the terms and conditions under which American Railcar Industries, Inc. (hereinafter “ARI”) of 100
Clark Street, St. Charles, MO 63301, a Missouri corporation, agrees to provide AMERICAN RAILCAR
LEASING LLC (hereinafter “ARL ”) of 100 Clark Street, Suite 201 ,St. Charles, MO 63301 with
certain services as hereinafter specified.

	 	1.	 	SERVICES

	 	a.	 	For the purposes hereof, the term “Services” shall include, without limitation,
the following activities and services to be provided to ARL by ARI:
	 
	 	 	 	Repair Services as described by Exhibit A, “American Railcar Leasing, LLC Fleet
Services”, which is attached hereto and incorporated herein. The rates and fees for the
Services shall be as specified in Exhibit A. These rates and fees will be effective for
all cars arriving, or services provided, after January 1, 2008 and are [*****] for one
year. After the initial one year term, the labor rate [*****] may be increased
annually, not to exceed [*****] in any one year. Any changes resulting from such
negotiation will take affect on the date mutually agreed-to by the parties.
	 
	 	b.	 	Fleet Services as described by Exhibit B, “American Railcar Leasing LLC Repair
Services”, which is attached hereto and incorporated herein. The rates and fees for
the Services shall be as specified in Exhibit B. These rates and fees will be
effective for all cars arriving, or services provided, after January 1, 2008, and are
firm for three years.

	 	2.	 	PAYMENT
	 
	 	 	 	An invoice shall be submitted at the beginning of each month. Such invoice shall identify
the Services, and items, if any, that require payment for disbursements made by ARI on
behalf of ARL. Such items shall include, but not be limited to railcar cleaning,
maintenance, repairs, modifications, paint and lining, shop loading, associated reporting,
and payment of ad valorem taxes. The invoice provided shall accurately reflect the
appropriate charges and/or credits due ARL on a monthly basis.
	 
	 	 	 	All invoices are due and payable by ARL to ARI via wire transfer within 5 business days at
the end of a month for which the invoices are due. Any disbursements made by ARI on behalf
of ARL will be paid on ARL’s behalf in a timely manner and ARL will reimburse ARI upon
notification for any such disbursements.
	 
	 	3.	 	TERM

	 	a.	 	The term of this Agreement shall commence upon January 1, 2008 and shall
continue for a period of three (3) years. Thereafter, this Agreement shall remain in
effect from year to year unless a party, at least sixty (60) days prior to the end of
the 3-year period or any subsequent annual period, notifies the other party in writing
that this Agreement shall terminate at the end of the then current period.
	 
	 	b.	 	Notwithstanding any termination of this Agreement, ARI agrees to provide ARL,
during the period prior to termination and/or for up to three months thereafter, at
ARL’s option, such assistance as ARL may request to return to ARL, or to transfer to
another provider, all of

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	 	 	 	ARL’s data, inventory, and ARI’s related responsibilities for the Services provided
under this Agreement. Compensation to the canceled party for such transfer assistance
services shall be no greater than the compensation for Services provided in Exhibit D
attached hereto and incorporated herein.

4.1 INSURANCE

	 	a.	 	ARI shall obtain, and shall at all times during the Term maintain in full
force and effect, with financially sound and reputable insurers selected in
accordance with sound commercial and industry practices such property, casualty,
public liability and other insurance on its property, assets, and business in such
amounts and against such risks as is consistent and in accordance with sound
commercial and industry practice for activities similar to ARI’s obligations
hereunder.
	 
	 	b.	 	Without limitation on the foregoing clause (a), ARI shall obtain, and
shall at all times during the Term maintain in full force and effect, with respect
to the Cars, policies of such insurance and against such risks as are maintained by
ARI from time to time with respect to other railcars for which it performs
maintenance and servicing, including casualty, public liability and pollution
coverage for all losses related to cargo, including clean-up costs and legal defense
costs, subject, in each case, to compliance with certain insurance-related
provisions in the User Leases and other provisions of this Section 4.1. Such
insurance shall be in addition to any insurance provided by a User pursuant to the
terms of any lease to which such Car is then subject. All insurance obtained by ARI
with respect to the Cars may (and shall to the extent reasonably practicable unless
ARL objects) be maintained under policies of insurance that ARI obtains for itself
and other railcars so long as ARL and any other Person designated by ARL are
additional insured’s there under and loss payees, as their interests may appear,
with respect to the Cars, and such insurance may be placed through insurers who are
Affiliates of ARI so long as the prices and terms thereof are comparable to those
that could be obtained from comparable unaffiliated insurers. Copies of policies
and certificates of insurance with respect thereto shall be furnished promptly to
ARL. If at any time the insurance maintained by ARI on the Cars shall lapse or have
limits lower than as described therein for whatever reason, ARI, promptly upon
receipt of notice of the lapse of or decrease in such insurance coverage, shall give
notice to ARL of the same. ARI shall also notify ARL promptly with respect to any
default in the payment of any premium or of any other act or omission of ARI or of
any other Person of which ARI has knowledge that might invalidate, render
unenforceable, result in a lapse of or reduce any insurance coverage on the Cars
maintained by ARI pursuant to this Agreement. ARI shall collect any amounts due
from the insurers under such policies and shall provide ARL with such reasonable
assistance as ARL may request in any dealings that ARL may have with such insurers,
including the pursuit of any claims under such policies. To the extent that ARI
elects to self-insure against certain risks with respect to the Cars, then upon the
occurrence of an applicable insurable event with respect to a Car, ARI shall remit
to ARL the amount of such self-insured risk.
	 
	 	c.	 	Each insurance policy maintained by ARI pursuant to the provisions of
Section 4.1(b) shall (i) expressly provide that no cancellation or termination
thereof material change therein shall be effective unless at least thirty (30) days’
prior written notice shall have

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	 	 	 	been given to ARL, (ii) expressly provide that if such insurance shall be cancelled
for any reason whatsoever, or if any substantial changes are made in the coverage
that affect the interest of ARL or any other Person listed as an additional insured
or loss payee, or if such insurance shall be allowed to lapse for nonpayment of
premium, such cancellation, change or lapse shall not be effective as to ARL and any
such other Person for thirty (30) days after receipt by ARL of written notice from
such insurers of such cancellation, change or lapse, (iii) permit ARL or any such
other Person to make payments to affect the continuation of such insurance coverage
upon notice of cancellation due to nonpayment of premium, and (iv) expressly provide
that if such insurance shall not be renewed for any reason whatsoever, such insurers
shall provide written notice of such non-renewal to ARL at least thirty (30) days
prior to the expiration date of the policy.
	 
	 	d.	 	ARI shall deliver or cause to be delivered to ARL (i) no later than the
date hereof, certificates evidencing the insurance required pursuant to this section
4.1 and evidence satisfactory to ARL that the Cars have been properly included in a
schedule to the insurance policies required pursuant to Section 4.1(b), and (ii)
promptly after each renewal thereof, additional certificates evidencing the renewal
of such insurance.
	 
	 	e.	 	In the event that any insurance coverage required by Section 4.1(b) or
the limits deductible amounts, or requirements thereof are not reasonably available
and commercially feasible in the available insurance market, ARL shall not
unreasonably withhold its agreement to waive the requirement of such coverage,
limits, deductible amounts, or requirements to the extent the maintenance thereof is
not so available; provided, however, that (i) ARI shall have made a request for such
waiver and shall have provided ARL with written reports prepared by an independent
insurance advisor certifying that such coverage, limits, deductible amounts, or
requirements are not reasonably available and commercially feasible in the available
insurance market for railcars similar to the Cars and, where the required amount of
coverage is not so available, certifying as maximum amount that is so available and
(ii) any waiver granted pursuant to this clause shall be effective only during the
period that the coverage, limits, deductible amounts, or requirements thereby waived
are not reasonably available and commercially feasible in the available insurance
market.

	 	5.	 	INDEMNIFICATION
	 
	 	 	 	ARL shall defend, indemnify and hold ARI harmless from and against any and all claims,
actions, damages, expenses, losses or liabilities incurred by or asserted against ARI to the
extent caused by ARL’s negligence or breach of this Agreement. ARI shall defend, indemnify
and hold ARL harmless from and against any and all claims, actions, damages, expenses,
losses or liabilities incurred or asserted against ARL to the extent caused by ARI’s
negligence or breach of this Agreement.
	 
	 	6.	 	REMEDIES.
	 
	 	 	 	It is mutually agreed that the time of performance of the Services hereunder and payment of
charges is of the essence of this Agreement. If either party shall default in the
performance or observance of any of the other agreements herein contained to be performed or
observed and such default shall continue for ten (10) days after written notice from the
non-defaulting party, or if there shall be filed by or against either party a petition in
bankruptcy or for reorganization under the Bankruptcy Law or there shall be a receiver
appointed for any part of such party’s
property or

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	 	such party shall make a general assignment for the benefit of creditors, then
and in any of said events, the other party at its election, may immediately terminate this
Agreement.

7. CONFIDENTIALITY

ARI, its employees and agents shall treat and maintain as confidential all of
ARL’s confidential and proprietary information, and agrees not to use or disclose any
such information to others except as is necessary to perform Services hereunder. This
information will include but not be limited to any technical information, experience
or data regarding ARL’s products, plans, programs, plants, processes, costs,
equipment, operations, or customers which may be disclosed to or come within the
knowledge of ARI, its employees and agents in the performance of this Agreement.
However, no confidential relationship will arise or exist as to any such disclosed
subject matter which is in the public domain other than as a result of a breach of
this agreement or other wrongful acts by ARI, its employees, or agents.

ARL, its employees and agents shall treat and maintain as confidential all of ARI’s
confidential and proprietary information, and agrees not to use or disclose any such
information to others except as is necessary to utilize and benefit from the Services
hereunder. This information will include but not be limited to any technical
information, experience or data regarding ARI’s products, plans, programs, plants,
processes, costs, equipment, operations, or customers which may be disclosed to or come
within the knowledge of ARL, its employees and agents in the performance of this
Agreement. However, no confidential relationship will arise or exist as to any such
disclosed subject matter which is in the public domain other than as a result of a
breach of this agreement or other wrongful acts by ARL, its employees, or agents.

	8.	 NOTICES

Any notices, requests, demands, and determinations under this Agreement (other than routine
operational communications), shall be in writing and shall be deemed duly given (i) when
delivered by hand, (ii) one (1) business day after being given to a nationally recognized
express courier with a reliable system for tracking delivery, or (iii) when sent confirmed
facsimile or e-mail with a copy sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed as follows:

	 	 	 
	If to ARL:
	 	American Railcar Leasing  LLC
	 
	 	100 Clark St., Suite 201
	 
	 	St. Charles, MO 63301
	 
	 	Attn:  Dave Maechling ,  Director – Leasing Services
	 
	 	 
	If to ARI
	 	American Railcar Industries, Inc.
	 
	 	100 Clark Street
	 
	 	St. Charles, MO  63301
	 
	 	Attn:  Alan Lullman

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	 	 	 	Either party, by written notice to the other party, may change the person and/or address to
which notice shall be given. Both parties agree to acknowledge in writing the receipt of
any notice delivered in person.
	 
	 	9.	 	WAIVER
	 
	 	 	 	The failure of a party hereunder to assert the right to enforce an obligation of the other
party shall not be deemed a waiver of such right or obligation and in no event shall any
waiver by ARL or ARI of any default under this Agreement operate as a waiver of any further
default, whether of a like or different character or a continuing waiver of subsequent
defaults.
	 
	 	10.	 	MISCELLANEOUS

	 	a.	 	This Agreement shall be governed by the laws of the State of New York. By
signing this Agreement, the parties agree to submit to the jurisdiction of the courts
of the State of New York. The confidentiality and indemnification obligations of the
parties under this Agreement shall survive the termination or expiration of this
Agreement.
	 
	 	b.	 	If any clause or provision of this Agreement shall be adjudged invalid or
unenforceable by a court of competent jurisdiction or by operation of any applicable
law, it shall not affect the validity or enforceability of any other clause or
provision, which shall remain in full force and effect.
	 
	 	c.	 	Neither party will assign, transfer, encumber, or otherwise dispose of this
Agreement without the written consent of the other party, where such consent shall not
be unreasonably withheld. Any transfer cost will be borne by the party making the
transfer.
	 
	 	d.	 	In no event shall either party be liable for any consequential, incidental,
special, or punitive damages, including but not limited to any damages for lost
profits, or business opportunities, or damage to reputation.
	 
	 	e.	 	This Agreement, along with its Exhibits and Riders, constitutes the entire
Agreement with respect to ARI, ARL and the Services, and supersedes all prior
negotiations, dealings, and agreements, whether verbal or written. This Agreement may
not be modified unless done in writing and signed by authorized representatives of ARI
and ARL.
	 
	 	f.	 	The headings of this Agreement are for reference only and are not to be
construed as part of this Agreement.

     11. Most Favored Terms. If, at any time during the term, ARI provides maintenance,
repair and other services similar to those provided hereunder to any other Person on terms
(including price and priority) more favorable than those offered to ARL, ARI will promptly notify
ARL in writing and will offer and make available to ARL such terms for such period as such more
favorable terms are provided to such other Person.

     12. DEFINITIONS

“AAR” means the Association of American Railroads and any successor thereto.

“ARI” shall have the meaning set forth in the preamble hereof.

“ARL” shall have the meaning set forth in the preamble hereof.

“Cars” means at any time the hopper, tank and other railcars owned or managed by ARL or any of
its Affiliates.

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“Owner” means any Person that owns Cars.

“Person” means any individual, corporation, partnership, limited liability company, joint
venture, association, joint stock company, trust, unincorporated organization or other entity, or
Governmental Authority.

“Regulatory Authorities” means the ICC, the DOT, the DOL, the AAR or any other governmental
authority or industry agency or authority that has proper jurisdiction to regulate the ownership,
leasing, operation, maintenance or use of the Cars.

“ICC” means the United States Interstate Commerce Commission.

“DOL” means the United States Department of Labor.

“DOT” means the United States Department of Transportation.

“User Lease” means any car service contract or other lease of one or more Cars or any separate
schedule or rider to a master car service contract or other lease and which schedule or rider
incorporates by reference all of the terms and conditions of such master contract or lease other
than those in other schedules or riders thereto or as specifically identified in such schedule or
rider.

“User” means any shipper, railroad or other Person not an Affiliate of ARL or any Owner who uses
cars pursuant to a User Lease.

IN WITNESS WHEREOF, the parties have executed this Agreement:

	 	 	 	 	 	 	 
	American Railcar Industries, Inc.	 	American railcar leasing, llc
	 
	 	 	 	 	 	 
	By:

	 	/s/ Alan C. Lullman 	 	By:	 	/s/ H. L. McKinstry 
	 

	 	 
	 	 	 	 
	Name:

	 	Alan C. Lullman
	 	Name:
	 	Harry L. McKinstry
	Title:

	 	Sr. Vice President
	 	Title:
	 	Vice President – Finance & Controller
	 
	 	 	 	 	 	 
	Date:

	 	   February
26, 2008
 	 	Date:	 	   February
26, 2008
 
	 

	 	 
	 	 	 	 

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EXHIBIT A

(FINAL TERMS OF PROPOSAL)

AMERICAN RAILCAR LEASING, LLC 

REPAIR SERVICES

1. REPAIR SERVICES

	 	a.	 	ARI shall use reasonable commercial efforts to cause the Cars to be
repaired in good operating order and condition. The standard for Repair services
shall be the highest of (i) standard industry practice, (ii) any standard required
or set forth for the Cars or railcars of a similar class by law or any Regulatory
Authority, and (iii) with respect to the Cars or railcars of a similar class by law
or any Regulatory Authority, and (iv) with respect to the Cars leased to each User,
any standard set by such User, whether by terms of a User Lease or by other
understanding or agreement between a User and ARL or an Owner; provided, however,
that such standard shall never be lower than the standard for Repair services
provided to any other customer of ARI to which ARI provides general maintenance
services for a fleet of owned or leased railcars; and provided , further, that
subject to Section 1(e), (1) expenditures for Repair services in excess of those
expenditures shall not be made without the prior written consent of ARL unless such
Repair services are required pursuant to applicable law or the rules and regulations
of any Regulatory Authority and (2) unless required pursuant to applicable law or
the rules and regulations of any Regulatory Authority or consented to in writing by
ARL, no action shall be taken hereunder by ARI, regardless of cost, that reduces the
value or utility of any Car. Repair services shall include, without limitation, all
repairs, servicing, painting, alterations, modifications, improvements or additions
to the Cars in order to meet any of the foregoing standards. (Repair services also
shall include sales of railcar materials and parts requested by railroads, mobile
units, mini-shops or ARL). Simultaneously with the execution and delivery of this
Agreement, ARL shall provide ARI with guidelines with respect to certain Cars, which
guidelines may be amended by ARL from time to time. In the event that Repair
services are to be provided in respect of any Car covered by such guidelines, ARI
shall notify ARL prior to the performance of such Repair services.
	 
	 	b.	 	Repair services may be performed by ARI or third Persons as may be
designated by ARL from time-to-time. All other services to be provided by ARI
under this Agreement shall be performed by ARI unless otherwise consented to in
writing by ARL.
	 
	 	c.	 	If material supplied by ARI or work performed by it is found to be
defective, ARL shall notify ARI and ARL shall have the right to require the prompt
correction thereof by ARI and ARI’s expense and risk or, at ARL’s option, ARL may
correct the work or have the same corrected, charging ARI for the cost of making
such correction. Such correction
shall not affect ARI’s warranty pursuant to Section 1(d). If correction of such
work is

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	 	 	 	impractical, in the opinion of ARL, ARI shall bear all risk after notice of
rejection and ARI will, if requested in writing to do so by ARL, at ARI’s expense,
promptly such work or parts, ARL may by contract or otherwise replace such work or
such parts and charge ARI the excess cost occasioned to ARL thereby. In lieu of the
foregoing, ARL may reject and/or return any defective work or materials and ARI
shall refund to ARL any payment made therefore.
	 
	 	d.	 	ARI warrants to ARL that (i) all labor furnished to ARL hereunder shall
be performed in a workmanlike manner, (ii) all parts furnished to ARL hereunder that
are designed by ARI shall be free from all defects in design and materials, and
(iii) all parts furnished by ARL hereunder that are designed by ARL and manufactured
by ARI shall be free from all defects in materials. ARI agrees that this warranty
shall survive acceptance of and payment for such Repair services. In the event that
ARL requests that ARI obtain any parts from a third party, ARI shall assign to ARL
any warranties obtained from such third party in respect of such parts or, if such
third party warranties are not assignable, shall cooperate with ARL so as to afford
ARL the benefit of such third party warranties.
	 
	 	e.	 	Compliance with Law. ARI shall comply in all respects with all
applicable laws, rules and regulations of all Governmental Authorities in the
operations of it business and in carrying out its obligations hereunder. ARI, at
ARL’s expense, shall use reasonable commercial efforts to cause the Cars to comply,
and ARL agrees that each User Lease entered into or renewed after the date hereof
shall require the User there under to comply, in all respects with all applicable
laws, rules and regulations of the Regulatory Authorities. In the event that such
laws, rules or regulations require any alteration of a Car, or in the event that any
equipment or appliance of a Car shall be required to be changed or replaced, or in
the event that any additional or other equipment or appliance is required to be
installed on a Car in order to comply with such laws, rules or regulations, ARI
shall notify ARL that such Alteration is required and, ARL so instructs, at ARL’s
expense, shall make such alteration, change, replacement or addition. In addition,
promptly after ARI has notice that any laws, rules or regulations will or may
require an Alteration, ARI shall notify ARL whether ARI believes, in the exercise of
its good faith business judgment, that such law, rule or regulation should be
contested.

	1.1	 	REPAIR SERVICE PAYMENTS. For Repair Services provided under this agreement by ARI, ARL will
pay for:

i) Materials and parts utilized in the performance of these services. A) ARI’s
actual cost of purchasing such materials or parts including inbound freight,
[*****] or B) if ARI manufactures such material or parts, ARI’s then current
market selling price for such materials or parts, plus ii) labor costs at an
initial hourly rate of [*****] per car, as adjusted by the parties pursuant to
the terms of section 1(a). iii) AAR repair work to ARL’s cars will be billed
[*****].

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EXHIBIT B

AMERICAN RAILCAR LEASING LLC

FLEET SERVICES

1. ARI shall provide the following services to ARL:

	 	i)	 	Shop loading logistical support. (Equivalent of
[*****] personnel with all associated expenses) at a cost of [*****].
The logistical support is defined as the following:

	 	a)	 	Activities and reporting necessary to
coordinate efficient loading of ARL cars into ARI shops.
	 
	 	b)	 	Turn around days of ARL cars in the same
time frame as the turn around days as provided to any other person,
in any event not to exceed 45 days.
	 
	 	c)	 	Reporting of available capacity for ARL
cars in ARI shops 6 weeks out.
	 
	 	d)	 	Continued maintenance of appropriate
inventory levels to support timely thru put of cars in ARI repair
facilities.
	 
	 	e)	 	Proactive and confidential reporting to
ARL of any maintenance trends that affect the ARL fleet.
	 
	 	f)	 	Separation of cost responsibility on all
ARL’s BRC’s at the shop level.
	 
	 	g)	 	Electronic status reports of ARL cars in
ARI shops on a daily basis.

In addition, ARI will provide, on an Ad Hoc basis, by quote the following services, it
required by ARL.

	 	a)	 	Engineering support
	 
	 	b)	 	Quality manual/regulatory

All costs will be adjusted by the parties pursuant to the terms of Section 1(b).

ii) Ad Valorem Taxes, services as described in Exhibit C, which is attached hereto, and
incorporated herein. The annual cost of such service is [*****].

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EXHIBIT C

AD VALOREM TAXES

Service to be provided for a fleet of approximately [*****] cars for a minimum period of 12 months.
Fee is to be on a flat monthly amount, to include all normal operating expenses. The only
additions would be for travel expense, and outsourced services, such as legal fees. These
additional services require prior approval of ARL.

Services

	 	•	 	Attend the regular meetings of the RSI, at your expense.
	 
	 	•	 	Participate in various legal and legislative matters in conjunction with the RSI and
make recommendations to ARL that would be worthwhile to ARL to support financially. Any
travel required as the result of the participation of ARL in specific efforts would be
billed in addition to the monthly rent, after approval by ARL.
	 
	 	•	 	Present obsolescence information, compile and present movement studies, protest and
correct assessor errors in order to assure that all tax amounts are fair and as small as
legally possible. Contest such assessments with the appropriate taxing jurisdictions and
appeal boards as necessary.
	 
	 	•	 	Prepare and file all tax returns, in accordance with due dates, or revised due dates.
	 
	 	•	 	Sign such tax returns, (with authorization given by ARL).
	 
	 	•	 	Provide electronic copies of all tax returns to ARL.
	 
	 	•	 	Review notice of assessed value in various states, request work papers if necessary and
check values for accuracy and reasonableness. Correct errors if found, and discuss
corrected values with assessors. If the assessed values are excessive, evaluate whether to
negotiate and/or protest. Contest such assessments with the appropriate taxing
jurisdictions and appeal boards as necessary.
	 
	 	•	 	All tax bills should be mailed directly to the Tax Service Supplier. All payments are
to be processed and issued by the Tax Service Supplier in a timely manner. ARL will fund
the Tax

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	 	 	 	Service Supplier prior to the Tax Service Supplier paying the tax bills. The Tax
Service Supplier will provide information in detail showing the payments made.
	 
	 	•	 	The Tax Service Supplier will provide ARL, on an annual basis, with electronic copies of
all tax bills and cancelled checks.

Litigation

The Tax Service Supplier will represent ARL in any litigation of tax matters. Any such litigation
of tax matters be it for ARL or part of a class action, must be agreed to by ARL in advance.

EXHIBIT D

 AMERICAN RAILCAR LEASING, LLC

As specified in Section 3 (b), TERM, the compensation due ARI for Services relating to the
termination of this Agreement shall be as follows:

	 	a.	 	[*****] per hour, based on an eight (8) hour day.
	 
	 	b.	 	All hours over eight (8) per day payable at the rate of [*****] per hour.
	 
	 	c.	 	If travel is involved, ARL shall pay all reasonable travel, food, and lodging expenses.
	 
	 	d.	 	For days involving travel only, a maximum of [*****] hours at the [*****] per
hour rate is chargeable, plus reasonable travel expenses.
	 
	 	e.	 	Copies, facsimiles, magnetic media, and other office supplies will be charged at ARI’s
prevailing rate at the time of Services, which shall be consistent with reasonable commercial
rates.

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ADDENDUM TO:

FLEET SERVICES AGREEMENT

DATED: JANUARY, 1, 2008

Between:      American Railcar Industries and American Railcar Leasing, LLC

For the purposes of this Agreement, the language underlined below has the same meaning with regard
to payment of invoices:

Section 2, PAYMENT, Paragraph 2, reads as follows:

“All invoices are due and payable by ARL to ARI via wire transfer within 5 business days at
the end of a month for which the invoices are due. Any disbursements made by ARI
on behalf of ARL will be paid on ARL’s behalf in a timely manner and ARL will reimburse ARI
upon notification for any such disbursements.”

In a meeting in Todd Emro’s Office on February 22, 2008, the Parties agreed that the following
language has the same meaning as the underlined language above: “services were provided.”

	 	 	 
	AMERICAN RAILCAR INDUSTRIES

	 	AMERICAN RAILCAR LEASING, LLC
	 
	 	 
	/s/ Alan C. Lullman

	 	/s/ H. L. McKinstry
	 

	 	 
	Alan C. Lullman – Sr. Vice President

	 	Harry McKinstry – VP Finance & Controller
	 
	 	 
	Date:
   February
26, 2008

	 	Date:    February
26, 2008

	 

	 	 

12exv10w1

    Exhibit 10.1

 

 

    IMATION CORP.

    2008 STOCK INCENTIVE PLAN

 

    Section 1.  Purpose.

 

    The purpose of the Plan is to promote the interests of the
    Company and its stockholders by aiding the Company in attracting
    and retaining employees, officers, consultants, independent
    contractors, advisors and non-employee Directors capable of
    assuring the future success of the Company, to offer such
    persons incentives to put forth maximum efforts for the success
    of the Company’s business and to compensate such persons
    through various stock-based arrangements and provide them with
    opportunities for stock ownership in the Company, thereby
    aligning the interests of such persons with the Company’s
    stockholders.

 

    Section 2.  Definitions.

 

    As used in the Plan, the following terms shall have the meanings
    set forth below:

 

    (a) “Affiliate” shall mean (i) any
    entity that, directly or indirectly through one or more
    intermediaries, is controlled by the Company and (ii) any
    entity in which the Company has a significant equity interest,
    in each case as determined by the Committee.

 

    (b) “Award” shall mean any Option, Stock
    Appreciation Right, Restricted Stock, Restricted Stock Unit,
    Dividend Equivalent, Performance Award, Stock Award or Other
    Stock-Based Award granted under the Plan.

 

    (c) “Award Agreement” shall mean any
    written agreement, contract or other instrument or document
    evidencing an Award granted under the Plan. An Award Agreement
    may be in an electronic medium and need not be signed by a
    representative of the Company or the Participant. Each Award
    Agreement shall be subject to the applicable terms and
    conditions of the Plan and any other terms and conditions (not
    inconsistent with the Plan) determined by the Committee.

 

    (d) “Board” shall mean the Board of
    Directors of the Company.

 

    (e) “Change in Control” shall have the
    meaning ascribed to such term in an Award Agreement, or any
    other applicable employment, severance or change in control
    agreement between the Participant and the Company.

 

    (f) “Code” shall mean the Internal Revenue
    Code of 1986, as amended from time to time, and any regulations
    promulgated thereunder.

 

    (g) “Committee” shall mean the
    Compensation Committee of the Board or any successor committee
    of the Board designated by the Board to administer the Plan. The
    Committee shall be comprised of not less than such number of
    Directors as shall be required to permit Awards granted under
    the Plan to qualify under
    Rule 16b-3,
    and each member of the Committee shall be a “Non-Employee
    Director” within the meaning of
    Rule 16b-3
    and an “outside director” within the meaning of
    Section 162(m). The Company expects to have the Plan
    administered in accordance with the requirements for the award
    of “qualified performance-based compensation” within
    the meaning of Section 162(m).

 

    (h) “Company” shall mean Imation Corp., a
    Delaware corporation, or any successor corporation.

 

    (i) “Director” shall mean a member of the
    Board.

 

    (j) “Dividend Equivalent” shall mean any
    right granted under Section 6(d) of the Plan.

 

    1

 

    (k) “Eligible Person” shall mean any
    employee, officer, consultant, independent contractor, advisor
    or non-employee Director providing services to the Company or
    any Affiliate whom the Committee determines to be an Eligible
    Person. An Eligible Person must be a natural person.

 

    (l) “Exchange Act” shall mean the
    Securities Exchange Act of 1934, as amended.

 

    (m) “Fair Market Value” shall mean, with
    respect to any property (including, without limitation, any
    Shares or other securities), the fair market value of such
    property determined by such methods or procedures as shall be
    established from time to time by the Committee. Notwithstanding
    the foregoing, unless otherwise determined by the Committee, the
    Fair Market Value of Shares on a given date for purposes of the
    Plan shall be the closing sale price of the Shares on the New
    York Stock Exchange as reported in the consolidated transaction
    reporting system on such date or, if such Exchange is not open
    for trading on such date, on the most recent preceding date when
    such Exchange is open for trading.

 

    (n) “Incentive Stock Option” shall mean an
    option granted under Section 6(a) of the Plan that is
    intended to meet the requirements of Section 422 of the
    Code or any successor provision.

 

    (o) “Non-Qualified Stock Option” shall
    mean an option granted under Section 6(a) of the Plan that
    is not intended to be an Incentive Stock Option.

 

    (p) “Option” shall mean an Incentive Stock
    Option or a Non-Qualified Stock Option.

 

    (q) “Other Stock-Based Award” shall mean
    any right granted under Section 6(g) of the Plan.

 

    (r) “Participant” shall mean an Eligible
    Person designated to be granted an Award under the Plan.

 

    (s) “Performance Award” shall mean any
    right granted under Section 6(e) of the Plan.

 

    (t) “Performance Goal” shall mean one or
    more of the following performance goals, either individually,
    alternatively or in any combination, applied on a corporate,
    subsidiary, division, business unit or line of business basis:
    sales, revenue, costs, expenses, earnings (including one or more
    of net profit after tax, gross profit, operating profit,
    earnings before interest and taxes, earnings before interest,
    taxes, depreciation and amortization and net earnings), earnings
    per share, earnings per share from continuing operations,
    operating income, pre-tax income, operating income margin, net
    income, margins (including one or more of gross, operating and
    net income margins), returns (including one or more of return on
    actual or proforma assets, net assets, equity, investment,
    capital and net capital employed), stockholder return (including
    total stockholder return relative to an index or peer group),
    stock price, economic value added, cash generation, cash flow,
    unit volume, working capital, market share, cost reductions and
    strategic plan development and implementation. Such goals may
    reflect absolute entity or business unit performance or a
    relative comparison to the performance of a peer group of
    entities or other external measure of the selected performance
    criteria. Pursuant to rules and conditions adopted by the
    Committee on or before the 90th day of the applicable
    performance period for which Performance Goals are established,
    the Committee may appropriately adjust any evaluation of
    performance under such goals to exclude the effect of certain
    events, including any of the following events: asset
    write-downs; litigation or claim judgments or settlements;
    changes in tax law, accounting principles or other such laws or
    provisions affecting reported results; severance, contract
    termination and other costs related to exiting certain business
    activities; acquisitions and gains or losses from the
    disposition of businesses or assets or from the early
    extinguishment of debt.

 

    (u) “Person” shall mean any individual or
    entity, including a corporation, partnership, limited liability
    company, association, joint venture or trust.

 

    (v) “Plan” shall mean this Imation Corp.
    2008 Stock Incentive Plan, as amended from time to time.

 

    2

 

    (w) “Qualifying Termination” shall have
    the meaning ascribed to it in any applicable Award Agreement,
    and, if not defined in any applicable Award Agreement, shall
    mean termination of employment under circumstances that, in the
    judgment of the Committee, warrant acceleration of the
    exercisability of Options or Stock Appreciation Rights or the
    lapse of restrictions relating to Restricted Stock, Restricted
    Stock Units or other Awards under the Plan. Without limiting the
    generality of the foregoing, a Qualifying Termination may apply
    to large scale terminations of employment relating to the
    disposition or divestiture of business or legal entities or
    similar circumstances.

 

    (x) “Restricted Stock” shall mean any
    Share granted under Section 6(c) of the Plan.

 

    (y) “Restricted Stock Unit” shall mean any
    unit granted under Section 6(c) of the Plan evidencing the
    right to receive a Share (or a cash payment equal to the Fair
    Market Value of a Share) at some future date.

 

    (z) “Rule 16b-3”
    shall mean
    Rule 16b-3
    promulgated by the Securities and Exchange Commission under the
    Exchange Act or any successor rule or regulation.

 

    (aa) “Section 162(m)” shall mean
    Section 162(m) of the Code, or any successor provision, and
    the applicable Treasury Regulations promulgated thereunder.

 

    (bb) “Section 409A” shall mean
    Section 409A of the Code, or any successor provision, and
    applicable Treasury Regulations and other applicable guidance
    thereunder.

 

    (cc) “Shares” shall mean shares of Common
    Stock, par value of $0.01 per share, of the Company or such
    other securities or property as may become subject to Awards
    pursuant to an adjustment made under Section 4(c) of the
    Plan.

 

    (dd) “Specified Employee” shall mean a
    specified employee as defined in Code Section 409A(a)(2)(B)
    or applicable proposed or final regulations under Code
    Section 409A.

 

    (ee) “Stock Appreciation Right” shall mean
    any right granted under Section 6(b) of the Plan.

 

    (ff) “Stock Award” shall mean any Share
    granted under Section 6(f) of the Plan.

 

    Section 3.  Administration.

 

    (a) Power and Authority of the
    Committee.  The Plan shall be administered by
    the Committee. Subject to the express provisions of the Plan and
    to applicable law, the Committee shall have full power and
    authority to: (i) designate Participants;
    (ii) determine the type or types of Awards to be granted to
    each Participant under the Plan; (iii) determine the number
    of Shares to be covered by (or the method by which payments or
    other rights are to be calculated in connection with) each
    Award; (iv) determine the terms and conditions of any Award
    or Award Agreement, including any terms relating to the
    forfeiture of any Award and the forfeiture, recapture or
    disgorgement of any cash, Shares, other securities, other
    Awards, other property and other amounts payable with respect to
    any Award; (v) amend the terms and conditions of any Award
    or Award Agreement, provided, however, that, except as otherwise
    provided in Section 4(c) hereof, the Committee shall not
    reprice, adjust or amend the exercise price of Options or the
    grant price of Stock Appreciation Rights previously awarded to
    any Participant, whether through amendment, cancellation and
    replacement grant, or any other means; (vi) accelerate the
    exercisability of any Award or the lapse of restrictions
    relating to any Award; (vii) determine whether, to what
    extent and under what circumstances Awards may be exercised in
    cash, Shares, other securities, other Awards or other property,
    or canceled, forfeited or suspended; (viii) determine
    whether, to what extent and under what circumstances cash,
    Shares, other securities, other Awards, other property and other
    amounts payable with respect to an Award under the Plan shall be
    deferred either automatically or at the election of the holder
    of the Award or the Committee; (ix) interpret and
    administer the Plan and any instrument or agreement, including
    any Award Agreement, relating to the Plan; (x) establish,
    amend, suspend or waive such rules and regulations and appoint
    such agents as it shall deem appropriate for the proper
    administration of the

 

    3

 

    Plan; (xi) make any other determination and take any other
    action that the Committee deems necessary or desirable for the
    administration of the Plan; and (xii) adopt such
    modifications, rules, procedures and subplans as may be
    necessary or desirable to comply with provisions of the laws of
    non-U.S. jurisdictions
    in which the Company or an Affiliate may operate, including,
    without limitation, establishing any special rules for
    Affiliates, Eligible Persons or Participants located in any
    particular country, in order to meet the objectives of the Plan
    and to ensure the viability of the intended benefits of Awards
    granted to Participants located in such
    non-United
    States jurisdictions. Unless otherwise expressly provided in the
    Plan, all designations, determinations, interpretations and
    other decisions under or with respect to the Plan or any Award
    or Award Agreement shall be within the sole discretion of the
    Committee, may be made at any time and shall be final,
    conclusive and binding upon any Participant, any holder or
    beneficiary of any Award or Award Agreement, and any employee of
    the Company or any Affiliate.

 

    (b) Delegation.  The Committee may
    delegate its powers and duties under the Plan to one or more
    Directors (including a Director who is also an officer of the
    Company) or a committee of Directors, subject to such terms,
    conditions and limitations as the Committee may establish in its
    sole discretion; provided, however, that the Committee shall not
    delegate its powers and duties under the Plan (i) with
    regard to officers or directors of the Company or any Affiliate
    who are subject to Section 16 of the Exchange Act or
    (ii) in such a manner as would cause the Plan not to comply
    with the requirements of Section 162(m). In addition, the
    Committee may authorize one or more officers of the Company to
    grant Options under the Plan, subject to the limitations of
    Section 157 of the Delaware General Corporation Law;
    provided, however, that such officers shall not be authorized to
    grant Options to officers or directors of the Company or any
    Affiliate who are subject to Section 16 of the Exchange Act.

 

    (c) Power and Authority of the Board of
    Directors.  Notwithstanding anything to the
    contrary contained herein, the Board may, at any time and from
    time to time, without any further action of the Committee,
    exercise the powers and duties of the Committee under the Plan,
    unless the exercise of such powers and duties by the Board would
    cause the Plan not to comply with the requirements of
    Section 162(m).

 

    Section 4.  Shares Available
    for Awards.

 

    (a) Shares Available.  Subject
    to adjustment as provided in Section 4(c) of the Plan, the
    aggregate number of Shares that may be issued under all Awards
    under the Plan shall be 4,000,000. Shares to be issued under the
    Plan may be authorized but unissued Shares, treasury shares or
    Shares acquired in the open market or otherwise. If an Award
    terminates or is forfeited or cancelled without the issuance of
    any Shares, or if any Shares covered by an Award or to which an
    Award relates are not issued for any other reason, then the
    number of Shares counted against the aggregate number of Shares
    available under the Plan with respect to such Award, to the
    extent of any such termination, forfeiture, cancellation or
    other event, shall again be available for granting Awards under
    the Plan. If Shares of Restricted Stock are forfeited or
    otherwise reacquired by the Company prior to vesting, whether or
    not dividends have been paid on such Shares, then the number of
    Shares counted against the aggregate number of Shares available
    under the Plan with respect to such Award of Restricted Stock,
    to the extent of any such forfeiture or reacquisition by the
    Company, shall again be available for granting Awards under the
    Plan. Shares that are withheld in full or partial payment to the
    Company of the purchase or exercise price relating to an Award
    or in connection with the satisfaction of tax obligations
    relating to an Award shall not be available for granting Awards
    under the Plan.

 

    (b) Accounting for Awards.  For
    purposes of this Section 4, if an Award entitles the holder
    thereof to receive or purchase Shares, the number of Shares
    covered by such Award or to which such Award relates shall be
    counted on the date of grant of such Award against the aggregate
    number of Shares available for granting Awards under the Plan.
    For Stock Appreciation Rights settled in Shares upon exercise,
    the aggregate number of Shares with respect to which the Stock
    Appreciation Right is exercised, rather than the number of
    Shares actually issued upon exercise, shall be counted against

 

    4

 

    the number of Shares available for Awards under the Plan. Awards
    that do not entitle the holder thereof to receive or purchase
    Shares and Awards that are settled in cash shall not be counted
    against the aggregate number of Shares available for Awards
    under the Plan.

 

    (c) Adjustments.  In the event that
    any dividend or other distribution (whether in the form of cash,
    Shares, other securities or other property), recapitalization,
    stock split, reverse stock split, reorganization, merger,
    consolidation,
    split-up,
    spin-off, combination, repurchase or exchange of Shares or other
    securities of the Company, issuance of warrants or other rights
    to purchase Shares or other securities of the Company or other
    similar corporate transaction or event affects the Shares such
    that an adjustment is necessary in order to prevent dilution or
    enlargement of the benefits or potential benefits intended to be
    made available under the Plan, then the Committee shall, in such
    manner as it may deem equitable, adjust any or all of
    (i) the number and type of Shares (or other securities or
    other property) that thereafter may be made the subject of
    Awards, (ii) the number and type of Shares (or other
    securities or other property) subject to outstanding Awards,
    (iii) the purchase or exercise price with respect to any
    Award and (iv) the limitations contained in
    Section 4(d) of the Plan.

 

    (d) Award Limitations Under the Plan.

 

    (i) Section 162(m) Limitation for Certain Types
    of Awards.  No Eligible Person may be granted
    Options, Stock Appreciation Rights or any other Award or Awards
    under the Plan, the value of which Award or Awards is based
    solely on an increase in the value of the Shares after the date
    of grant of such Award or Awards, for more than
    500,000 Shares (subject to adjustment as provided in
    Section 4(c) of the Plan) in the aggregate in any calendar
    year.

 

    (ii) Section 162(m) Limitation for Performance
    Awards.  The maximum amount payable pursuant
    to all Performance Awards to any Participant in the aggregate in
    any calendar year shall be $2,000,000 in value, whether payable
    in cash, Shares or other property. This limitation does not
    apply to any Award subject to the limitation contained in
    Section 4(d)(i) of the Plan.

 

    (iii) Plan Limitation on Awards Other Than Options
    and Stock Appreciation Rights.  No more than
    2,000,000 Shares, subject to adjustment as provided in
    Section 4(c) of the Plan, shall be available under the Plan
    for issuance pursuant to grants of Awards other than Options and
    Stock Appreciation Rights; provided, however, that if any Awards
    other than Options and Stock Appreciation Rights terminate or
    are forfeited or cancelled without the issuance of any Shares or
    if Shares subject to any Awards other than Options and Stock
    Appreciation Rights are forfeited or otherwise reacquired by the
    Company prior to vesting, whether or not dividends have been
    paid on such Shares, then the Shares subject to such
    termination, forfeiture, cancellation or reacquisition by the
    Company shall again be available for grants of Awards other than
    Options and Stock Appreciation Rights for purposes of this
    limitation on grants of such Awards. Awards other than Options
    and Stock Appreciation Rights that do not entitle the holder
    thereof to receive or purchase Shares, and Awards other than
    Options and Stock Appreciation Rights that are settled in cash,
    shall not be counted against the aggregate number of Shares
    available for Awards other than Options and Stock Appreciation
    Rights pursuant to this Section 4(d)(iii).

 

    (iv) Limitation on Awards Granted to Non-Employee
    Directors.  Directors who are not also
    employees of the Company or an Affiliate may not be granted
    Awards in the aggregate for more than 1,000,000 Shares
    available for Awards under the Plan, subject to adjustment as
    provided in Section 4(c) of the Plan.

 

    Section 5.  Eligibility.

 

    Any Eligible Person shall be eligible to be designated a
    Participant. In determining which Eligible Persons shall receive
    an Award and the terms of any Award, the Committee may take into
    account the nature of the services rendered by the respective
    Eligible Persons, their present and potential contributions to
    the success of the Company or such other factors as the
    Committee, in its discretion, shall deem relevant.
    Notwithstanding the foregoing, an Incentive Stock Option may
    only be granted to

 

    5

 

    full-time or part-time employees (which term as used herein
    includes, without limitation, officers and Directors who are
    also employees), and an Incentive Stock Option shall not be
    granted to an employee of an Affiliate unless such Affiliate is
    also a “subsidiary corporation” of the Company within
    the meaning of Section 424(f) of the Code or any successor
    provision. Further, notwithstanding the foregoing, Options and
    Stock Appreciation Rights shall not be granted to an Eligible
    Person providing direct services to an Affiliate unless the
    Company has a “controlling interest” in such Affiliate
    within the meaning of Treas. Reg. Sec. 1.409A-1(b)(5)(iii)(E)(1).

 

    Section 6.  Awards.

 

    (a) Options.  The Committee is
    hereby authorized to grant Options to Eligible Persons with the
    following terms and conditions and with such additional terms
    and conditions not inconsistent with the provisions of the Plan
    as the Committee shall determine:

 

    (i) Exercise Price.  The purchase
    price per Share purchasable under an Option shall be determined
    by the Committee and shall not be less than 100% of the Fair
    Market Value of a Share on the date of grant of such Option;
    provided, however, that the Committee may designate a per share
    exercise price below Fair Market Value on the date of grant
    (A) to the extent necessary or appropriate, as determined
    by the Committee, to satisfy applicable legal or regulatory
    requirements of a foreign jurisdiction or (B) if the Option
    is granted in substitution for a stock option previously granted
    by an entity that is acquired by or merged with the Company or
    an Affiliate.

 

    (ii) Option Term.  The term of each
    Option shall be fixed by the Committee but shall not be longer
    than 10 years from the date of grant.

 

    (iii) Time and Method of
    Exercise.  The Committee shall determine the
    time or times at which an Option may be exercised in whole or in
    part and the method or methods by which, and the form or forms
    (including, without limitation, cash, Shares, other securities,
    other Awards or other property, or any combination thereof,
    having a Fair Market Value on the exercise date equal to the
    applicable exercise price) in which, payment of the exercise
    price with respect thereto may be made or deemed to have been
    made.

 

    (b) Stock Appreciation Rights.  The
    Committee is hereby authorized to grant Stock Appreciation
    Rights to Eligible Persons subject to the terms of the Plan and
    any applicable Award Agreement. A Stock Appreciation Right
    granted under the Plan shall confer on the holder thereof a
    right to receive upon exercise thereof the excess of
    (i) the Fair Market Value of one Share on the date of
    exercise (or, if the Committee shall so determine, at any time
    during a specified period before or after the date of exercise)
    over (ii) the grant price of the Stock Appreciation Right
    as specified by the Committee, which price shall not be less
    than 100% of the Fair Market Value of one Share on the date of
    grant of the Stock Appreciation Right. Subject to the terms of
    the Plan and any applicable Award Agreement, the grant price,
    term, methods of exercise, dates of exercise, methods of
    settlement and any other terms and conditions of any Stock
    Appreciation Right shall be as determined by the Committee. The
    Committee may impose such conditions or restrictions on the
    exercise of any Stock Appreciation Right as it may deem
    appropriate.

 

    (c) Restricted Stock and Restricted Stock
    Units.  The Committee is hereby authorized to
    grant Awards of Restricted Stock and Restricted Stock Units to
    Eligible Persons with the following terms and conditions and
    with such additional terms and conditions not inconsistent with
    the provisions of the Plan as the Committee shall determine:

 

    (i) Restrictions.  Shares of
    Restricted Stock and Restricted Stock Units shall be subject to
    such restrictions as the Committee may impose (including,
    without limitation, any limitation on the right to vote a Share
    of Restricted Stock or the right to receive any dividend or
    other right or property with respect thereto), which
    restrictions may lapse separately or in combination at such time
    or times, in such installments or otherwise, as the Committee
    may deem appropriate. The minimum vesting period of such Awards
    shall be one year from the date of grant. Notwithstanding

 

    6

 

    the foregoing, the Committee may permit acceleration of vesting
    of such Awards in the event of the Participant’s death,
    disability or retirement or a Change in Control of the Company.

 

    (ii) Issuance and Delivery of
    Shares.  Any Restricted Stock granted under
    the Plan shall be issued at the time such Awards are granted and
    may be evidenced in such manner as the Committee may deem
    appropriate, including book-entry registration or issuance of a
    stock certificate or certificates, which certificate or
    certificates shall be held by the Company. Such certificate or
    certificates shall be registered in the name of the Participant
    and shall bear an appropriate legend referring to the
    restrictions applicable to such Restricted Stock. Shares
    representing Restricted Stock that is no longer subject to
    restrictions shall be delivered to the Participant promptly
    after the applicable restrictions lapse or are waived. In the
    case of Restricted Stock Units, no Shares shall be issued at the
    time such Awards are granted. Upon the lapse or waiver of
    restrictions and the restricted period relating to Restricted
    Stock Units evidencing the right to receive Shares, such Shares
    shall be issued and delivered to the holder of the Restricted
    Stock Units.

 

    (iii) Forfeiture.  Except as
    otherwise determined by the Committee, upon a Participant’s
    termination of employment or resignation or removal as a
    Director (in either case, as determined under criteria
    established by the Committee) during the applicable restriction
    period, all Shares of Restricted Stock and all Restricted Stock
    Units held by the Participant at such time shall be forfeited
    and reacquired by the Company; provided, however, that the
    Committee may, when it finds that a waiver would be in the best
    interest of the Company, waive in whole or in part any or all
    remaining restrictions with respect to Shares of Restricted
    Stock or Restricted Stock Units.

 

    (d) Dividend Equivalents.  The
    Committee is hereby authorized to grant Dividend Equivalents to
    Eligible Persons under which the Participant shall be entitled
    to receive payments (in cash, Shares, other securities, other
    Awards or other property as determined in the discretion of the
    Committee) equivalent to the amount of cash dividends paid by
    the Company to holders of Shares with respect to a number of
    Shares determined by the Committee. Subject to the terms of the
    Plan and any applicable Award Agreement, such Dividend
    Equivalents may have such terms and conditions as the Committee
    shall determine. Notwithstanding the foregoing, the Committee
    may not grant Dividend Equivalents to Eligible Persons in
    connection with grants of Options or Stock Appreciation Rights
    to such Eligible Persons.

 

    (e) Performance Awards.  The
    Committee is hereby authorized to grant to Eligible Persons
    Performance Awards which are intended to be “qualified
    performance-based compensation” within the meaning of
    Section 162(m). A Performance Award granted under the Plan
    may be payable in cash or in Shares (including, without
    limitation, Restricted Stock). Performance Awards shall, to the
    extent required by Section 162(m), be conditioned solely on
    the achievement of one or more objective Performance Goals, and
    such Performance Goals shall be established by the Committee
    within the time period prescribed by, and shall otherwise comply
    with the requirements of, Section 162(m). Subject to the
    terms of the Plan and any applicable Award Agreement, the
    Performance Goals to be achieved during any performance period,
    the length of any performance period, the amount of any
    Performance Award granted, the amount of any payment or transfer
    to be made pursuant to any Performance Award and any other terms
    and conditions of any Performance Award shall be determined by
    the Committee. The Committee shall also certify in writing that
    such Performance Goals have been met prior to payment of the
    Performance Awards to the extent required by Section 162(m).

 

    (f) Stock Awards.  The Committee is
    hereby authorized to grant to Eligible Persons Shares without
    restrictions thereon, as deemed by the Committee to be
    consistent with the purpose of the Plan. Subject to the terms of
    the Plan and any applicable Award Agreement, such Stock Awards
    may have such terms and conditions as the Committee shall
    determine.

 

    (g) Other Stock-Based Awards.  The
    Committee is hereby authorized to grant to Eligible Persons such
    other Awards that are denominated or payable in, valued in whole
    or in part by reference to, or

 

    7

 

    otherwise based on or related to, Shares (including, without
    limitation, securities convertible into Shares), as are deemed
    by the Committee to be consistent with the purpose of the Plan.
    The Committee shall determine the terms and conditions of such
    Awards, subject to the terms of the Plan and the Award
    Agreement. Shares, or other securities delivered pursuant to a
    purchase right granted under this Section 6(g), shall be
    purchased for consideration having a value equal to at least
    100% of the Fair Market Value of such Shares or other securities
    on the date the purchase right is granted. The consideration
    paid by the Participant may be paid by such method or methods
    and in such form or forms (including, without limitation, cash,
    Shares, other securities, other Awards or other property, or any
    combination thereof), as the Committee shall determine.

 

    (h) General.

 

    (i) Consideration for
    Awards.  Awards may be granted for no cash
    consideration or for any cash or other consideration as may be
    determined by the Committee or required by applicable law.

 

    (ii) Awards May Be Granted Separately or
    Together.  Awards may, in the discretion of
    the Committee, be granted either alone or in addition to, in
    tandem with or in substitution for any other Award or any award
    granted under any other plan of the Company or any Affiliate.
    Awards granted in addition to or in tandem with other Awards or
    in addition to or in tandem with awards granted under any other
    plan of the Company or any Affiliate may be granted either at
    the same time as or at a different time from the grant of such
    other Awards or awards.

 

    (iii) Forms of Payment under
    Awards.  Subject to the terms of the Plan and
    of any applicable Award Agreement, payments or transfers to be
    made by the Company or an Affiliate upon the grant, exercise or
    payment of an Award may be made in such form or forms as the
    Committee shall determine (including, without limitation, cash,
    Shares, other securities, other Awards or other property, or any
    combination thereof), and may be made in a single payment or
    transfer, in installments or on a deferred basis, in each case
    in accordance with rules and procedures established by the
    Committee. Such rules and procedures may include, without
    limitation, provisions for the payment or crediting of
    reasonable interest on installment or deferred payments or the
    grant or crediting of Dividend Equivalents with respect to
    installment or deferred payments.

 

    (iv) Term of Awards.  The term of
    each Award shall be for a period not longer than 10 years
    from the date of grant.

 

    (v) Limits on Transfer of
    Awards.  Except as otherwise provided in this
    Section 6(h)(v), no Award (other than a Stock Award) and no
    right under any such Award shall be transferable by a
    Participant other than by will or by the laws of descent and
    distribution. The Committee may establish procedures as it deems
    appropriate for a Participant to designate a Person or Persons,
    as beneficiary or beneficiaries, to exercise the rights of the
    Participant and receive any property distributable with respect
    to any Award in the event of the Participant’s death. The
    Committee, in its discretion and subject to such additional
    terms and conditions as it determines, may permit a Participant
    to transfer a Non-Qualified Stock Option to any “family
    member” (as such term is defined in the General
    Instructions to
    Form S-8
    (or any successor to such Instructions or such Form) under the
    Securities Act of 1933, as amended) at any time that such
    Participant holds such Option, provided that such transfers may
    not be for value (i.e., the transferor may not receive any
    consideration therefor) and the family member may not make any
    subsequent transfers other than by will or by the laws of
    descent and distribution. Each Award under the Plan or right
    under any such Award shall be exercisable during the
    Participant’s lifetime only by the Participant (except as
    provided herein or in an Award Agreement or amendment thereto
    relating to a Non-Qualified Stock Option) or, if permissible
    under applicable law, by the Participant’s guardian or
    legal representative. No Award (other than a Stock Award) or
    right under any such Award may be pledged, alienated, attached
    or otherwise encumbered, and any purported pledge, alienation,
    attachment or encumbrance thereof shall be void and
    unenforceable against the Company or any Affiliate.

 

    8

 

    (vi) Restrictions; Securities Exchange
    Listing.  All Shares or other securities
    delivered under the Plan pursuant to any Award or the exercise
    thereof shall be subject to such restrictions as the Committee
    may deem advisable under the Plan, applicable federal or state
    securities laws and regulatory requirements, and the Committee
    may cause appropriate entries to be made or legends to be placed
    on the certificates for such Shares or other securities to
    reflect such restrictions. If the Shares or other securities are
    traded on a securities exchange, the Company shall not be
    required to deliver any Shares or other securities covered by an
    Award unless and until such Shares or other securities have been
    admitted for trading on such securities exchange.

 

    (vii) Section 409A
    Provisions.  Notwithstanding anything in the
    Plan or any Award Agreement to the contrary, to the extent that
    any amount or benefit that constitutes “deferred
    compensation” to a Participant under Section 409A of
    the Code and applicable guidance thereunder is otherwise payable
    or distributable to a Participant under the Plan or any Award
    Agreement solely by reason of the occurrence of a Change in
    Control or due to the Participant’s disability or
    “separation from service” (as such term is defined
    under Section 409A), such amount or benefit will not be
    payable or distributable to the Participant by reason of such
    circumstance unless the Committee determines in good faith that
    (i) the circumstances giving rise to such Change in
    Control, disability or separation from service meet the
    definition of a change in ownership or control, disability, or
    separation from service, as the case may be, in
    Section 409A(a)(2)(A) of the Code and applicable proposed
    or final regulations, or (ii) the payment or distribution
    of such amount or benefit would be exempt from the application
    of Section 409A by reason of the short-term deferral
    exemption or otherwise. Any payment or distribution that
    otherwise would be made to a Participant who is a Specified
    Employee (as determined by the Committee in good faith) on
    account of separation from service may not be made before the
    date which is 6 months after the date of the Specified
    Employee’s separation from service (or if earlier, upon the
    Specified Employee’s death) unless the payment or
    distribution is exempt from the application of Section 409A
    by reason of the short-term deferral exemption or otherwise.

 

    Section 7.  Amendment
    and Termination; Corrections.

 

    (a) Amendments to the Plan.  The
    Board may amend, alter, suspend, discontinue or terminate the
    Plan at any time; provided, however, that, notwithstanding any
    other provision of the Plan or any Award Agreement, prior
    approval of the stockholders of the Company shall be required
    for any amendment to the Plan that:

 

    (i) requires stockholder approval under the rules or
    regulations of the Securities and Exchange Commission, the New
    York Stock Exchange, the National Association of Securities
    Dealers, Inc. or any other securities exchange that are
    applicable to the Company;

 

    (ii) increases the number of shares authorized under the
    Plan as specified in Section 4(a) of the Plan;

 

    (iii) increases the number of shares subject to the
    limitations contained in Sections 4(d)(i), (iii) and
    (iv) of the Plan or the dollar amount subject to the
    limitation contained in Section 4(d)(ii) of the Plan;

 

    (iv) permits repricing of Options or Stock Appreciation
    Rights which is prohibited by Section 3(a)(v) of the Plan;

 

    (v) permits the award of Options or Stock Appreciation
    Rights at a price less than 100% of the Fair Market Value of a
    Share on the date of grant of such Option or Stock Appreciation
    Right, contrary to the provisions of Sections 6(a)(i) and
    6(b)(ii) of the Plan; and

 

    (vi) would cause Section 162(m) to become unavailable
    with respect to the Plan.

 

    (b) Amendments to Awards.  Subject
    to the provisions of the Plan, the Committee may waive any
    conditions of or rights of the Company under any outstanding
    Award, prospectively or retroactively. Except as otherwise
    provided in the Plan, the Committee may amend, alter, suspend,
    discontinue or

 

    9

 

    terminate any outstanding Award, prospectively or retroactively,
    but no such action may adversely affect the rights of the holder
    of such Award without the consent of the Participant or holder
    or beneficiary thereof. The Company intends that Awards under
    the Plan shall satisfy the requirements of Section 409A to
    avoid any adverse tax results thereunder, and the Committee
    shall administer and interpret the Plan and all Award Agreements
    in a manner consistent with that intent. If any provision of the
    Plan or an Award Agreement would result in adverse tax
    consequences under Section 409A, the Committee may amend
    that provision (or take any other action reasonably necessary)
    to avoid any adverse tax results and no action taken to comply
    with Section 409A shall be deemed to impair or otherwise
    adversely affect the rights of any holder of an Award or
    beneficiary thereof.

 

    (c) Correction of Defects, Omissions and
    Inconsistencies.  The Committee may correct
    any defect, supply any omission or reconcile any inconsistency
    in the Plan or in any Award or Award Agreement in the manner and
    to the extent it shall deem desirable to implement or maintain
    the effectiveness of the Plan.

 

    Section 8.  Income
    Tax Withholding.

 

    In order to comply with all applicable federal, state, local or
    foreign income tax laws or regulations, the Company may take
    such action as it deems appropriate to ensure that all
    applicable federal, state, local or foreign payroll,
    withholding, income or other taxes, which are the sole and
    absolute responsibility of a Participant, are withheld or
    collected from such Participant. In order to assist a
    Participant in paying all or a portion of the applicable taxes
    to be withheld or collected upon exercise or receipt of (or the
    lapse of restrictions relating to) an Award, the Committee, in
    its discretion and subject to such additional terms and
    conditions as it may adopt, may permit the Participant to
    satisfy such tax obligation by (a) electing to have the
    Company withhold a portion of the Shares otherwise to be
    delivered upon exercise or receipt of (or the lapse of
    restrictions relating to) such Award with a Fair Market Value
    equal to the amount of such taxes or (b) delivering to the
    Company Shares other than Shares issuable upon exercise or
    receipt of (or the lapse of restrictions relating to) such Award
    with a Fair Market Value equal to the amount of such taxes. The
    election, if any, must be made on or before the date that the
    amount of tax to be withheld is determined.

 

    Section 9.  General
    Provisions.

 

    (a) No Rights to Awards.  No
    Eligible Person, Participant or other Person shall have any
    claim to be granted any Award under the Plan, and there is no
    obligation for uniformity of treatment of Eligible Persons,
    Participants or holders or beneficiaries of Awards under the
    Plan. The terms and conditions of Awards need not be the same
    with respect to any Participant or with respect to different
    Participants.

 

    (b) Award Agreements.  No
    Participant shall have rights under an Award granted to such
    Participant unless and until an Award Agreement shall have been
    duly executed on behalf of the Company and, if requested by the
    Company, signed by the Participant, or until such Award
    Agreement is delivered and accepted through any electronic
    medium in accordance with procedures established by the Company.

 

    (c) No Rights of
    Stockholders.  Except with respect to
    Restricted Stock and Stock Awards, neither a Participant nor the
    Participant’s legal representative shall be, or have any of
    the rights and privileges of, a stockholder of the Company with
    respect to any Shares issuable upon the exercise or payment of
    any Award, in whole or in part, unless and until the Shares have
    been issued.

 

    (d) No Limit on Other Compensation Plans or
    Arrangements.  Nothing contained in the Plan
    shall prevent the Company or any Affiliate from adopting or
    continuing in effect other or additional compensation plans or
    arrangements, and such plans or arrangements may be either
    generally applicable or applicable only in specific cases.

 

    (e) No Right to Employment or
    Directorship.  The grant of an Award shall not
    be construed as giving a Participant the right to be retained as
    an employee of the Company or any Affiliate, or a

 

    10

 

    Director to be retained as a Director, nor will it affect in any
    way the right of the Company or an Affiliate to terminate a
    Participant’s employment at any time, with or without
    cause. In addition, the Company or an Affiliate may at any time
    dismiss a Participant from employment free from any liability or
    any claim under the Plan or any Award, unless otherwise
    expressly provided in the Plan or in any Award Agreement.

 

    (f) Governing Law.  The internal
    law, and not the law of conflicts, of the State of Delaware,
    shall govern all questions concerning the validity, construction
    and effect of the Plan or any Award, and any rules and
    regulations relating to the Plan or any Award.

 

    (g) Severability.  If any provision
    of the Plan or any Award is or becomes or is deemed to be
    invalid, illegal or unenforceable in any jurisdiction or would
    disqualify the Plan or any Award under any law deemed applicable
    by the Committee, such provision shall be construed or deemed
    amended to conform to applicable laws, or if it cannot be so
    construed or deemed amended without, in the determination of the
    Committee, materially altering the purpose or intent of the Plan
    or the Award, such provision shall be stricken as to such
    jurisdiction or Award, and the remainder of the Plan or any such
    Award shall remain in full force and effect.

 

    (h) No Trust or
    Fund Created.  Neither the Plan nor any
    Award shall create or be construed to create a trust or separate
    fund of any kind or a fiduciary relationship between the Company
    or any Affiliate and a Participant or any other Person. To the
    extent that any Person acquires a right to receive payments from
    the Company or any Affiliate pursuant to an Award, such right
    shall be no greater than the right of any unsecured general
    creditor of the Company or any Affiliate.

 

    (i) No Fractional Shares.  No
    fractional Shares shall be issued or delivered pursuant to the
    Plan or any Award, and the Committee shall determine whether
    cash shall be paid in lieu of any fractional Share or whether
    such fractional Share or any rights thereto shall be canceled,
    terminated or otherwise eliminated.

 

    (j) Headings.  Headings are given
    to the Sections and subsections of the Plan solely as a
    convenience to facilitate reference. Such headings shall not be
    deemed in any way material or relevant to the construction or
    interpretation of the Plan or any provision thereof.

 

    Section 10.  Effective
    Date of the Plan; Effect on Prior Plan.

 

    The Plan shall be subject to approval by the stockholders of the
    Company at the annual meeting of stockholders of the Company to
    be held on May 7, 2008 and the Plan shall be effective as
    of the date of such stockholder approval. On and after the date
    of stockholder approval of the Plan, no awards shall be granted
    under the Company’s 2005 Stock Incentive Plan, but all
    outstanding awards previously granted under the 2005 Stock
    Incentive Plan shall remain outstanding in accordance with the
    terms thereof.

 

    Section 11.  Term
    of the Plan.

 

    The Plan shall terminate at midnight on May 6, 2018, unless
    terminated before then by the Board. Awards may be granted under
    the Plan until the Plan terminates or until all Shares available
    for Awards under the Plan have been purchased or acquired;
    provided, however, that Incentive Stock Options may not be
    granted following the
    10-year
    anniversary of the Board’s adoption of the Plan. As long as
    any Awards are outstanding under the Plan, the terms of the Plan
    shall govern such Awards.

 

 

    11

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