EMPLOYEE BENEFIT PLAN AGREEMENT
Exhibit 10.31
This Employee Benefit Plan Agreement (this “Agreement”) is dated as of December 1, 2005 (the
“Effective Date”) between AMERICAN RAILCAR INDUSTRIES, INC., a Missouri corporation (“ARI”), and
ACF INDUSTRIES LLC, a Delaware limited liability company and successor to ACF Industries,
Incorporated, a New Jersey corporation (“ACF”).
WITNESSETH:
WHEREAS, ARI and ACF entered into that certain Asset Transfer Agreement, dated as of October
1, 1994 (the “Asset Transfer Agreement”), whereby ACF transferred to ARI certain assets incident to
the railcar business, and certain employees of ACF (“Transferred Employees”) transferred employment
from ACF to ARI, all effective as of October 1, 1994 (the “Asset Transfer Date”);
WHEREAS, the Asset Transfer Agreement provided, among other things, that Transferred Employees
shall continue to participate in certain employee benefit plans sponsored by ACF and identified in
Schedule 9.4(b) of the Asset Transfer Agreement as “Benefit Plans,” and ARI agreed to reimburse ACF
for the costs of providing benefits to the Transferred Employees under each of the Benefit Plans
after the Asset Transfer Date;
WHEREAS, the Asset Transfer Agreement further provided that ACF would retain all obligations
relating to the Transferred Employees participation in the Benefit Plans prior to the Asset
Transfer Date;
WHEREAS, after the Asset Transfer Date, employees have been hired by ARI, including certain
former employees of ACF, and such employees have participated or continued to participate in
certain of the Benefit Plans (collectively, the “Other ARI Employees”);
WHEREAS, ACF is the Plan Sponsor of the Employees’ Retirement Plan of ACF Industries LLC and
the Shippers Xxxxxxx Division of American Railcar Industries, Inc., Employees’ Pension Plan, and
ARI has been a participating employer in these plans since the Asset Transfer Date;
WHEREAS, pursuant to an Administration Agreement, dated as of the Asset Transfer Date, between
ACF and ARI (the “Administration Agreement”), ACF and ARI allocated the costs associated with
administering the ACF Benefit Plans (as defined below) in accordance with the Asset Transfer
Agreement;
WHEREAS, the Administration Agreement was terminated effective April 1, 2005, and following
such termination ACF and ARI have continued to allocate the respective costs associated with the
ACF Benefit Plans consistent with the allocations under the Administration Agreement and the Asset
Transfer Agreement;
WHEREAS, the Asset Transfer Agreement provides that at the time that ARI shall cease to be a
member of ACF’s “controlled group” (as such term is defined in the Employee Retirement Income
Security Act of 1974, as amended, “ERISA”) that the Transferred Employees shall cease to
participate in the Benefit Plans and that the parties shall cooperate to achieve such allocation of
the assets and liabilities of the Benefit Plans accrued after the Asset Transfer Date in a manner
that the parties shall deem appropriate;
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WHEREAS, ARI is contemplating one or more transactions pursuant to which it will cease to be a
member of ACF’s controlled group; and
WHEREAS, ARI and ACF now desire to allocate the assets, liabilities and obligations of the
Benefit Plans in the manner set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set
forth, the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement the following terms shall have the
respective meanings set forth below.
(a) “ACF Retirement Plan” means, the Employees’ Retirement Plan of ACF Industries LLC.
(b) “Shippers Plan” means the Shippers Xxxxxxx Division of American Railcar Industries, Inc.
Employees’ Pension Plan.
(c) “Executive Survivor Insurance Plan” means the Executive Survivor Insurance Plan, as part
of the Program of Insurance Benefits for Salaried Employees of ACF Industries, Incorporated.
(d) “Retiree Insurance Plans” means the post-retirement group health and life insurance plans
of ACF.
(e) “SERP” or “Supplemental Retirement Plan” means the Supplemental Retirement Plan of ACF
Industries, Incorporated.
(f) “ACF Benefit Plans” means collectively, the ACF Retirement Plan, Shippers Plan, the
Executive Survivor Insurance Plan, the Retiree Insurance Plans and the SERP.
(g) “ARI Participating Employees” means collectively the Transferred Employees and the Other
ARI Employees.
2. Prior Treatment. Except as otherwise provided herein, each party agrees that any
amounts due by ARI to ACF in respect of the ACF Benefit Plans from the Asset Transfer Date through
the Effective Date have been paid in full, and that neither party has any obligations to the other
party with respect thereto.
3. Pension Plans. Effective as of the Effective Date (i) ARI shall and hereby does
assume sponsorship of the Shippers Plan and ACF shall and hereby does cease to be a participating
employer in the Shippers Plan and shall cease to have any further liability or obligation with
respect to such plan; and (ii) ACF shall remain the plan sponsor of the ACF Retirement Plan and ARI
shall cease to be a participating employer in the ACF Retirement Plan and shall cease to have any
further liability or obligation with respect to such plan, including, without limitation, any
funding obligations for the plan.
4. Executive Survivor Insurance Plan. Effective as of the Effective Date, ARI shall
and hereby does assume all liabilities and obligations to provide benefits under the Executive
Survivor Insurance Plan with respect to ARI Participating Employees covered by the Executive
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Survivor Insurance Plan, a list of which is attached as Schedule 1 hereto. In connection
therewith, ARI has obtained a group term life insurance policy on the life of each such ARI
Participating Employee and is and shall continue to be responsible for payment of premiums and all
other obligations with respect to such policy in accordance with the terms thereof. ACF shall
retain all liabilities and obligations to provide the benefits under the Executive Survivor
Insurance Plan with respect to any and all persons under the Executive Survivor Insurance Plan,
other than ARI Participating Employees, entitled to benefits thereunder.
5. Retiree Insurance Plans. Effective as of the Effective Date, ARI shall and hereby
does assume all liabilities and obligations to provide benefits under the Retiree Insurance Plans
for ARI Participating Employees, including any such benefits attributable to any employment of such
employees prior to the Asset Transfer Date. A list of such employees who are currently retired and
receiving such benefits is set forth on Schedule 2 hereto. ACF agrees that it has retained
all obligations to provide benefits under the Retiree Insurance Plans in respect of any and all
persons, other than ARI Participating Employees, participating in the Retiree Insurance Plans.
6. SERP. Effective as of the Effective Date, ARI shall and hereby does assume all
liabilities and all obligations to provide benefits, attributable solely to employment service with
ARI after the Asset Transfer Date, under the SERP for ARI Participating Employees. A list of such
employees and, in the case of employees with any benefits attributable to employment prior to the
Asset Transfer Date, the amount of such employees’ estimated annual benefit attributable to
employment service with ARI after the Asset Transfer Date, is set forth on Schedule 3
hereto. ACF shall retain all liabilities and obligations to provide benefits under the SERP in
respect of any and all persons, other than the ARI Participating Employees (except as otherwise
provided in Schedule 3), entitled to benefits thereunder.
7. Net Payment for Assumed Liabilities. In consideration of the foregoing, including
the assumption of pension plan and Retiree Insurance Plan liabilities by the respective parties
pursuant to Sections 3 and 5 hereof, ARI shall make a net payment in cash to ACF in the amount of
$6,310,000 within 30 days following the Effective Date, which amount represents the difference
between (i) the $9,238,000 in additional unfunded liabilities assumed by ACF in respect of the ARI
Participating Employees under the ACF Retirement Plan for periods following the Asset Transfer
Date, net of the additional unfunded liabilities assumed by ARI in respect of ARI Participating
Employees in the Shippers Plan for periods prior to the Asset Transfer Date and in respect of
participants in the Shippers Plan who are not ARI Participating Employees; and (ii) the $2,928,000
in additional unfunded liabilities assumed by ARI with respect to the pre-Asset Transfer Date
liabilities of the ARI Participating Employees under the Retiree Insurance Plans, in each case as
determined by the actuaries for the respective plans as of December 1, 2005, using actuarial
assumptions appropriate for reporting liabilities under Financial Accounting Standards Nos. 132 and
106, as applicable, and, in the case of the ACF Retirement Plan and the Shippers Plan, allocating
the assets of the respective plans under the principles of Section 4044 of ERISA.
8. Indemnification.
(a) ACF covenants and agrees with ARI that ACF shall indemnify ARI and its directors and
officers, and each of their successors and assigns (individually an “ARI Indemnified Party”) and
hold them harmless from and against in respect of any and all costs, losses, claims, liabilities,
fines, penalties, damages and expenses (including court costs and reasonable fees and disbursements
of counsel) resulting from or arising from any of the liabilities or obligations retained
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by or otherwise allocated to ACF under this Agreement.
(b) ARI covenants and agrees with ACF that ARI shall indemnify ACF and its directors and
officers and each of their successors and assigns (individually an “ACF Indemnified Party”) and
hold them harmless from, against and in respect of any and all costs, losses, claims, liabilities,
fines, penalties, damages and expenses (including court costs and reasonable fees and disbursements
of counsel) resulting from or arising out of any of the liabilities or obligations assumed by or
otherwise allocated to ARI under this Agreement.
9. Asset Transfer Agreement. Except as otherwise modified hereby, the terms and
conditions of the Asset Transfer Agreement as they relate to ACF Benefit Plans is hereby ratified
and confirmed.
10. Entire Agreement; Modification and Waiver. This Agreement (including the recitals
herein and any schedules or exhibits hereto, each of which is an integral part of this Agreement)
sets forth the entire agreement and understanding between ARI and ACF with respect to the subject
matter hereof. This Agreement may not be waived, changed, altered, modified or amended in any
respect without a writing to that effect, signed by each of the parties hereto. Failure of a party
to enforce one or more of the provisions of this Agreement or to exercise any option or other
rights hereunder or to require at any time performance of any of the obligations hereof shall not
in any manner be construed (a) to be a waiver of such provisions by such party, (b) to affect the
validity of this Agreement or such party’s right thereafter to enforce each and every provision of
this Agreement, or (c) to preclude such party from taking any other action at any time that it
would be legally entitled to take.
11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES)
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
12. Severability. Any provision of this Agreement that may be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof so long
as the economic or legal substance of the transactions contemplated thereby is not affected in any
manner adverse to any party. Any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction. To the extent
permitted by law, the parties hereby waive any provision of law that renders any provision of this
Agreement prohibited or unenforceable in any respect. In addition, in the event of any such
prohibition or unenforceability, the parties agree that it is their intention and agreement that
any such provision that is held or determined to be prohibited or unenforceable, as written, in any
jurisdiction shall nonetheless be in force and binding to the fullest extent permitted by the law
of such jurisdiction as though such provision had been written in such a manner and to such an
extent as to be enforceable therein under the circumstances.
13. Successors and Assigns. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and permitted assigns of the parties
hereto.
14. Third Party Beneficiaries. The terms and provisions of this Agreement are
intended for the benefit of each party hereto and their respective successors or permitted assigns,
and
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it is not the intention of the parties to confer third-party beneficiary rights upon any other
Person. Without limiting the foregoing, nothing herein shall limit the right of ARI or ACF to
amend or terminate in their sole discretion any employee benefit plan, program or benefit in
accordance with the terms therein.
15. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
16. CONSENT TO JURISDICTION. ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ARI OR ACF
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR ANY TRANSACTION CONTEMPLATED HEREBY, MAY BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN XXX XXXX XX XXX XXXX, XXXXX XX XXX XXXX AND ARI AND ACF
EACH WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING AND, SOLELY FOR THE PURPOSES OF ENFORCING. THIS AGREEMENT, ARI AND ACF
EACH IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR
PROCEEDING.
17. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, AS AGAINST
THE OTHER PARTY HERETO, ANY RIGHTS IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY CIVIL ACTION OR
PROCEEDING (WHETHER ARISING IN CONTRACT OR TORT OR OTHERWISE), INCLUDING ANY COUNTERCLAIM, ARISING
UNDER OR RELATING TO THIS AGREEMENT, INCLUDING IN RESPECT OF THE NEGOTIATION, ADMINISTRATION OR
ENFORCEMENT HEREOF OR THEREOF.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| AMERICAN RAILCAR INDUSTRIES, INC. |
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| By: | /s/ Xxxxx X. Xxxxx | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | President | |||
| ACF INDUSTRIES LLC |
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| By: | /s/ Xxxx X. Xxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxx | |||
| Title: | General Counsel, Treasurer, Vice President and Secretary | |||
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