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North Dakota
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000-51728
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43-1481791
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(State or other jurisdiction
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(Commission
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(IRS Employer
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of incorporation)
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File Number)
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Identification No.)
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100 Clark Street
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St. Charles, Missouri
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63301
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(Address of principal executive offices)
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(Zip Code)
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibit Number
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Description
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10.1
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Employment Agreement between American Railcar Industries, Inc. and Jeffrey S. Hollister, dated as of September
24
, 2014.
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10.2
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Offer Letter, dated September
24
, 2014, between American Railcar Industries, Inc. and Umesh Choksi.
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99.1
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Press release dated Septembe
r 24, 201
4 of American Railcar Industries, Inc.
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Date: September 24, 2014
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American Railcar Industries, Inc.
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By:
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/s/ Yevgeny Fundler
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Name:
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Yevgeny Fundler
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Title:
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Senior Vice President, General Counsel and Secretary
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1.
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Employment
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(a)
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Upon the terms and conditions set forth in this Agreement, the Company hereby agrees to employ the Executive and the Executive hereby agrees and accepts to become so employed. During the Term of Employment (as defined in Section 2), the Executive shall be employed in the position of the President and Chief Executive Officer of the Company, reporting to the Board of Directors of the Company (the “Board”), and as an officer of subsidiaries of the Company as specified and directed by the Board from time to time, and shall perform such duties, as are specified from time to time by, and shall serve in such capacities at the pleasure of, the Company and the Board, subject to the terms hereof.
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(b)
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During the Term of Employment (as defined below), the Executive shall perform his duties faithfully and to the best of his abilities and shall devote all of his professional time and attention, exclusively on a full time basis, at the Company’s offices in St. Charles, Missouri, or on Company approved business travel, to the business and affairs of the Company and shall use his best efforts to advance the best interest of the Company and shall comply with all of the policies of the Company, including, without limitation, such policies with respect to legal compliance, conflicts of interest, confidentiality and business ethics, as are from time to time in effect.
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(c)
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During the Term of Employment, the Executive shall not, without the prior written consent of the Board, directly or indirectly render services to, or otherwise act in a business or professional capacity on behalf of or for the benefit of, any other “Person” (as defined below) as an employee, advisor, member of a board or similar governing body, independent contractor, agent, consultant, representative or otherwise, whether or not compensated; except that the Executive may continue to be a passive investor in Creek Bottom Farms of Clay County LLC as long as such activities do not conflict or interfere with the performance of his duties and obligations under this Agreement. "Person" or “person”, as used in this Agreement, means any individual, partnership, limited partnership, corporation, limited liability company, trust, foundation, estate, cooperative, association (except his homeowners association, if any), organization, proprietorship, firm, joint venture, joint stock company, syndicate, company, committee, government or governmental subdivision or agency, or other entity, whether or not conducted for profit.
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2.
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Term
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(a)
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Base Compensation
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(b)
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Bonus Compensation
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(c)
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Relocation
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(d)
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Long-Term Incentive Compensation
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(a)
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The Expiration Date;
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(b)
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The: (i) death of the Executive or (ii) determination of the Board, that the Executive has become physically or mentally incapacitated so as to be unable to perform the essential functions of the Executive’s duties to the Company for (x) 60 consecutive days or (y) 80 days in any 12-month period, even with reasonable accommodation, (the “Disability”);
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(c)
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The discharge of the Executive by the Company with Cause;
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(d)
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The discharge of the Executive by the Company without Cause;
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(e)
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The voluntary resignation of the Executive without Good Reason, in which case the Executive agrees to provide the Company with not less than 30 days prior written notice of his resignation, and in any event the Company may, at its option, declare such resignation to be effective on any day upon or following receipt of such notice; or
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(f)
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The voluntary resignation of the Executive for Good Reason.
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(a)
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In the event that the Executive’s employment is terminated for the reason set forth in Section 5(a) above (i.e., Expiration Date) or Section 5(b) (i.e., death or disability), then, in lieu of any other payments of any kind (including without limitation, any severance payments), the Executive shall be entitled to receive the following:
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(i)
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the Executive’s Accrued Obligations that are due and unpaid to the Executive from the Company as of the date on which the Termination Event in question occurred (the “Clause (a) Termination Date”), such amounts to be paid within thirty (30) days following the Clause (a) Termination Date; and
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(ii)
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any amounts of Bonus Compensation earned and due in respect of a completed fiscal year, which remains unpaid to the Executive as of the Clause (a) Termination Date, such Bonus Compensation to be paid, if applicable, subject to the terms of any bonus plan and in accordance with Section 3(b) above;
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(b)
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In the event that the Executive’s employment is terminated due to the discharge of the Executive by the Company without Cause (Section 5(d), above) (which the Company is free to do at any time in its sole and absolute discretion) or the Executive’s termination of this Agreement for Good Reason (Section 5(f) above), then, in lieu of any other payments of any kind (including, without limitation, any other severance payments), the Executive shall be entitled to the following:
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(i)
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the Executive’s Accrued Obligations that are due and unpaid to the Executive from the Company as of the date on which the Termination Event in question occurred (the “Clause (d) or (f) Termination Date”), such amounts to be paid within thirty (30) days following the Clause (d) or (f) Termination Date;
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(ii)
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any amounts of Bonus Compensation earned and due with respect to a completed fiscal year, which remains unpaid to the Executive as of the Clause (d) or (f) Termination Date, such Bonus Compensation to be paid, if applicable, subject to the terms of any bonus plan and in accordance with Section 3(b) above; and
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(iii)
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the continuation of the Executive’s Base Salary at the rate in effect immediately prior to the Clause (d) or (f) Termination Date, for the lesser of (A) six (6) months and (B) the remainder of the Term of
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(a)
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In the event that the Executive’s employment is terminated for the reason set forth in Section 5(c) (i.e., Cause) or 5(e) (i.e., Voluntary Resignation), then, in lieu of any other payments of any kind (including without limitation, any severance payments), the Executive shall be entitled to receive, within thirty (30) days following the date on which the Termination Event in question occurred (the “Clause (c) or (e) Termination Date”): only and solely the Executive’s Accrued Obligations, due and unpaid to the Executive from the Company as of the Clause (c) or (e) Termination Date. For the avoidance of doubt, in such event (unless the employment of Executive has continued from the Commencement Date through the Expiration Date) no payments or any other amounts shall be payable in respect of the Performance-Based Cash Awards.
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(a)
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In addition to, and not in limitation of, all of the other terms and provisions of this Agreement, the Executive agrees that during the Term of Employment, the Executive will comply with the provisions of Section 1 above.
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(b)
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In addition, during the Executive’s employment and continuing for a period of 180 days following the last day of employment by the Company (the “Non-Compete Period”), the Executive will not, either directly or indirectly, as principal, agent, owner, employee, director, partner, investor, shareholder (other than solely as a holder of not more than 1% of the issued and outstanding shares of any public corporation), consultant, advisor or otherwise howsoever own, operate, carry on or engage in the operation of or otherwise work for or assist the operation of, or have any financial interest in or provide, directly or indirectly, financial assistance to or lend money to or guarantee the debts or obligations of any Person carrying on or engaged in any business that is similar to or competitive with the business conducted by the Company or any of its subsidiaries during or on the date of termination of the Executive’s employment. The Company shall have the right, in its sole discretion, upon written notice to the Executive within seven calendar days of his last day of employment by the Company (or if notice of termination has not been provided, within two business days of the last day of employment), to extend the Non-Compete Period for up to six additional 30 day periods (for an aggregate of 180 days) by paying the Executive, as additional severance pay, the continuation of his Base Salary at the annual salary rate in effect at the time his employment terminates per 30 day period during the extended Non-Compete Period and an amount equal to one-twelfth of his target Bonus Compensation for the fiscal year in which his employment terminates per 30 day period during the extended Non-Compete Period; provided that for the avoidance of doubt, the Executive shall not be entitled to any other compensation or payments relating to the obligations set forth in this Section 8, except as expressly provided in Section 6.
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(c)
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The Executive covenants and agrees with the Company and its subsidiaries that, during the Term of Employment and for one year following the last day of employment, the Executive shall not directly, or indirectly, for himself or for any other Person:
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(i)
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solicit, interfere with or endeavor to entice away from the Company or any of its subsidiaries or affiliates, any current or prospective supplier, customer, client or any Person in the habit of dealing with any of the foregoing;
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(ii)
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attempt to direct or solicit any current or prospective supplier, customer or client away from the Company or any of its subsidiaries or affiliates;
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(iii)
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interfere with, entice away or otherwise attempt to obtain or induce the withdrawal of any employee of the Company or any of its subsidiaries or affiliates; or
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(iv)
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advise any Person not to do business with, or be employed by, the Company or any of its subsidiaries or affiliates.
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9.
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Taxes; Code Section 409A
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(a)
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In the event the Company determines that any compensation or benefit payable hereunder may be subject to the requirements of Code Section 409A, the Company may adopt such amendments to this Agreement or take any other actions necessary for such compensation or benefit to either (a) be exempt from the requirements of Code Section 409A or (b) satisfy an applicable exception thereto.
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(b)
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Whenever a payment under this Agreement specifies a payment period, the actual date of payment within such specified period shall be within the sole discretion of the Company, and the Executive shall have no right (directly or indirectly) to determine the year in which such payment is made. In the event a payment period straddles two consecutive calendar years, the payment shall be made in the later of such calendar years.
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(c)
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No compensation or benefit that is subject to the requirements of Code Section 409A and that is payable upon the Executive’s termination of employment shall be paid unless the Executive’s termination of employment constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h).
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(d)
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If the Executive is deemed at the time of his separation from service to be a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i), to the extent delayed commencement of any portion of the compensation or benefits to which the Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i) (any such delayed commencement, a “Payment Delay”), such compensation or benefits shall not be provided to the Executive prior to the earlier of (1) the date immediately following the expiration of the six-month period measured from the date of the Executive’s “separation from service” with the Company or (2) the date of the Executive’s death. Upon the earlier of such dates, all payments and benefits deferred pursuant to the Payment Delay shall be paid in a lump sum to the Executive, and any remaining compensation and benefits due under the Agreement shall be paid or provided as otherwise set forth herein. The determination of whether the Executive is a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i) as of the time of his separation from service shall be made by the Company in accordance with the terms of Code Section 409A and applicable guidance thereunder (including without limitation Treasury Regulation Section 1.409A-1(i) and any successor provision thereto).
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(e)
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Any installment payment payable hereunder shall be deemed to be a separate payment for purposes of Code Section 409A.
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(f)
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All expenses or other reimbursements paid pursuant to this Agreement that are taxable income to the Executive shall in no event be paid later than the end of the calendar year next following the calendar year in which the Executive incurs
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(a)
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This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all previous written, and all previous or contemporaneous oral negotiations, understandings, arrangements, and agreements, and may be amended, modified or changed only by a written instrument executed by the Executive and the Company. No term or condition of this Agreement shall be deemed to have been waived, except by a statement in writing signed by the party against whom enforcement of the waiver is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. In the event of any inconsistency between this Agreement and any other agreement, plan, program, policy or practice (collectively, “Other Provision”) of the Company, the terms of this Agreement shall control over such Other Provision.
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(b)
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This Agreement and all of the provisions hereof shall inure to the benefit of and be binding upon the legal representative, heirs, distributees, successors (whether by merger, operation of law or otherwise) and assigns of the parties hereto;
provided
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however
, that the Executive may not delegate any of the Executive’s duties hereunder, and may not assign any of the Executive’s rights hereunder, and any such purported or attempted assignment or delegation shall be null and void and of no legal effect. In the event the Company assigns this Agreement and its successor assumes the Company’s obligations hereunder in writing or by operation of law, (i) the Company shall be released from all of its obligations hereunder, and (ii) all of the references to the Company, and to the Board, shall be deemed to be references to the Company’s assignee or successor and to the governing body of such assignee or successor, respectively. The Company and all of its future or current subsidiaries, and for purposes of Section 7 hereof, the Company’s affiliates, shall be and be deemed to be third-party beneficiaries of this Agreement.
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(c)
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This Agreement will be interpreted and the rights of the parties determined in accordance with the laws of the United States applicable thereto and the internal laws of the State of New York without giving effect to the conflict of laws principles thereof. Any unresolved dispute arising out of this Agreement shall be litigated in any court of competent jurisdiction in the Borough of Manhattan in New York City; provided that the Company may elect to pursue a court action to seek injunctive relief in any court of competent jurisdiction to terminate the violation of its proprietary rights, including but not limited to trade secrets, copyrights or trademarks. Each party shall pay its own costs and fees in connection with any litigation hereunder.
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(d)
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Waiver of Jury Trial.
THE PARTIES HERETO AGREE TO WAIVE THE RIGHT TO A TRIAL BY JURY. THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY EMPLOYEE, AND EMPLOYEE ACKNOWLEDGES THAT, EXCEPT FOR THE COMPANY’S AGREEMENT TO LIKEWISE WAIVE ITS RIGHTS TO A TRIAL BY JURY (WHICH THE COMPANY HEREBY MAKES), THE COMPANY HAS NOT MADE ANY REPRESENTATIONS OF FACTS TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. EMPLOYEE FURTHER ACKNOWLEDGES THAT HE HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER AND AS EVIDENCE OF THIS FACT SIGNS THIS AGREEMENT BELOW.
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(e)
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The Executive acknowledges, covenants, agrees, warrants and represents that: (i) he is not a party to any contract, nor is he subject to, or bound by any commitment, restrictive covenant or agreement, order, judgment, decree, law, statute, ordinance, rule, regulation or other restriction of any kind or character, which either would or purports to, prevent or restrict him from entering into and performing his obligations under this Agreement free of any limitations, (ii) he is free to enter into the arrangements contemplated herein, (iii) he is not subject to any agreement or obligation that would limit his ability to act on behalf of the Company or any of its subsidiaries, and (iv) his termination of his existing employment, his entry into the employment contemplated herein and his performance of his duties in respect thereof, will not violate or conflict with any agreement or obligation to which he is subject. In particular, the Executive will not use or disclose any information in violation of any agreement he may have.
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(f)
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The Executive acknowledges that he has had the opportunity to receive assistance of legal counsel in reviewing and negotiating this Agreement.
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(g)
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This Agreement and all of its provisions (other than the provisions of Sections 3(c), 5, 6, 7, 8, 9, 10(o) and 10(p) hereof, which shall survive termination of employment and/or termination of this Agreement) shall terminate upon the Executive ceasing to be an employee of the Company for any reason.
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(h)
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All notices and other communications hereunder shall be in writing; shall be delivered by hand delivery to the other party or mailed by registered or certified mail, return receipt requested, postage prepaid or by a nationally recognized courier service such as Federal Express; shall be deemed delivered upon actual receipt; and shall be addressed as follows:
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(i)
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The Executive shall not issue any press release or otherwise make any public statement or announcement with respect to the Company or this Agreement, including without limitation, in connection with the provision of the services hereunder, without the prior written consent of the Company.
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(j)
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Any termination of the Executive's employment with the Company shall constitute an automatic resignation of the Executive as an officer of the Company, its subsidiaries and each affiliate of the Company, and an automatic resignation of the Executive, to the extent applicable, from any and all the board of directors, committees, or similar governing body of the Company, its subsidiaries and their respective affiliates, and from the board of directors, committees, or similar governing body of any corporation, limited liability company, or other entity in which the Company, its subsidiaries or any of their respective affiliates holds an equity interest and with respect to which board or similar governing body the Executive serves as the Company's, such subsidiaries’ or such affiliate's designee or other representative.
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(k)
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This Agreement may be executed in two or more counterparts (and by facsimile), each of which shall be deemed to be an original, and all of which, taken together, shall be deemed to be one and the same instrument.
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(l)
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If any paragraph or part or subpart of any paragraph in this Agreement or the application thereof is construed to be overbroad and/or unenforceable, then the court making such determination shall have the authority to narrow the paragraph or part or subpart of the paragraph as necessary to make it enforceable and the paragraph or part or subpart of the paragraph shall then be enforceable in its/their narrowed form. Moreover, each paragraph or part or subpart of each paragraph in this Agreement is independent of and severable (separate) from each other. In the event that any paragraph or part or subpart of any paragraph in this Agreement is determined to be legally invalid or unenforceable by a court and is not modified by a court to be enforceable, the affected paragraph or part or subpart of such paragraph shall be stricken from this Agreement, and the remaining paragraphs or parts or subparts of such paragraphs of this Agreement shall remain in full force and effect.
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(m)
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In the event of the continuation of the employment by the Company or its affiliates after the Expiration Date, such employment shall be “at will” and shall not constitute a continuation of employment under this Agreement.
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(n)
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For all purposes under this Agreement, any calculation, allocation, expense, estimate or other amount, if any, to be determined under this Agreement or for the purpose of this Agreement (including all determinations of eligibility), for any period or portion of a period, and any amount payable or allocable to the Executive under this Agreement for any period or portion of a period, shall be made, determined and calculated solely and exclusively in accordance with the terms of this Agreement by the Board in its judgment, exercised in its sole and absolute discretion, and all determinations and calculations by the Board shall be conclusive and binding on the Company and on the Executive and shall not be subject to litigation, mediation, arbitration or other third party determination or review.
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(o)
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Notwithstanding any other provisions in this Agreement to the contrary, and to the extent not prohibited by applicable law, any bonus or incentive based payment, or any other compensation, paid or payable to Executive pursuant to this Agreement or any other arrangement or plan of the Company, will be required to be paid back to the Company by the Executive (clawback) if and to the extent that the Company reasonably determines that either (i) the Company (or any of its affiliates) experienced significant financial or reputational harm due to Executive’s misconduct or gross dereliction of duty in violation of applicable law or Company policy or procedures, or (ii) such payment was based upon incorrect financial information. Executive agrees to pay to the Company any amounts that he is required to pay to the Company under this provision not more than 90 days following written demand. Executive specifically authorizes the Company to withhold from his future wages any amounts that he is required to pay to the Company under this provision to the extent not prohibited by applicable law. This Section shall survive the Term of Employment for a period of three (3) years.
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(p)
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For one (1) year following the termination or resignation of the Executive’s employment with the Company for any reason, the Executive agrees to cooperate with the Company upon request of the Board and to be available to the Company with respect to matters arising out of the Executive’s services to the Company and its affiliates,
provided
,
however
, such period of cooperation shall be for three (3) years, following any such termination or resignation of Executive’s employment for any reason, with respect to tax matters involving the Company or any of its affiliates. The Company shall reimburse the Executive for any out-of-pocket expenses reasonably incurred in connection with such matters.
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P
RESS
R
ELEASE
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AMERICAN RAILCAR INDUSTRIES, INC.
100 Clark Street, St. Charles, Missouri 63301
www.americanrailcar.com
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FOR RELEASE:
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September 24, 2014
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CONTACT:
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Jeffrey S. Hollister
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636.940.6000
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AMERICAN RAILCAR INDUSTRIES, INC. NAMES
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JEFFREY S. HOLLISTER PRESIDENT AND CEO
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AND UMESH CHOKSI SENIOR VICE PRESIDENT, CFO AND TREASURER
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