ARII American Railcar Industries, Inc. (delisted)

Based on this analysis, Western Reserve determined an implied multiple range of 9.0x to 10.5x for the Company’s manufacturing segment and an implied multiple range of 8.5x to 10.0x for the Company’s leasing segment.

No transaction selected by Western Reserve for its analysis is identical to the Merger. In evaluating the Merger, Western Reserve made numerous judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the Company’s and Western Reserve’s control. Mathematical analysis, such as determining the median, is not in itself a meaningful method of analyzing transaction data.

Taking into account the implied multiples of reference public companies and reference M&A transactions as described above and selected by Western Reserve in its professional judgment, the selected multiple range of the manufacturing segment was determined to be 9.9x to 11.5x and the selected multiple range of the leasing segment was determined to be 10.2x to 11.8x, representing an implied enterprise valuation range of $230.8 million to $269.4 million for the manufacturing segment and $1,217.5 to $1,414.5 million for the leasing segment. Based on this analysis, Western Reserve calculated and an implied per share price range for the Company’s Common Stock of $54.03 to $66.37. Western Reserve compared the implied per share price range to the Company’s closing price per share of $46.29 on October 19, 2018 and the Merger Consideration of $70.00 per share.

Discounted Cash Flow Analysis

Western Reserve performed a discounted cash flow analysis on a consolidated basis to estimate the intrinsic value of the Company as of June 30, 2018 based on the sum of the present values of the Company’s (i) unlevered free cash flows through the fiscal year ending 2028 using financial forecasts provided by the Company’s management and (ii) a projected terminal value based on using the exit multiple approach. The terminal value of the Company was calculated by applying to the Company’s calendar year ending December 31, 2028 estimated EBITDA provided by the Company’s management a multiple of 10.5x. The present value of the free cash flows was then calculated using discount factors ranging from 0.3926 to 0.9769, which were based on the estimated weighted average cost of capital for the Company. The present value of the terminal value of the Company was calculated using a discount factor of 0.3747. This analysis indicated reference range per share of Common stock of $51.33 to $65.57 per share, compared to the $70.00 per share in cash consideration to holders pursuant to the Merger.

Additional Information

For reference purposes only and not as a component of its fairness analysis, Western Reserve reviewed the historical low and high closing prices of the shares of the Company’s Common Stock during the 52-week period prior to October 19, 2018, noting that the low and high closing prices during such period ranged from $35.71 per share to $47.50 per share of the Company’s Common Stock, as compared to the Merger Consideration in the Merger of $70.00 per share and the closing price per share as of October 19, 2018 of $46.29. The Merger Consideration represents a premium of 96.0% to such 52-week low price, 47.4% to such 52-week high price and 51.2% to the closing price on October 19, 2018.

General

Western Reserve was selected by the Company based on Western Reserve’s qualifications, expertise and reputation. Western Reserve is a widely recognized investment banking and advisory firm. Western Reserve, as part of its investment banking business, is regularly engaged in the valuation of businesses and securities in connection with public offerings, private placements, business combinations and similar transactions, financial restructurings and other financial services. Western Reserve’s opinion has been approved by the Valuation and Fairness Opinion Committee of Western Reserve.

Western Reserve will receive a customary fee from the Company for its services related to the delivery of Western Reserve’s opinion. Western Reserve did not serve as a financial advisor to the Company in connection with the Merger and therefore will not receive a separate fee from the Company for any such services. The Company has also agreed to indemnify Western Reserve against certain liabilities, including liabilities under the federal securities laws. During the two years preceding the date of rendering its opinion, Western Reserve has not been engaged by the Board as financial advisor in any other matters.

Interest of Certain Persons in Matters to Be Acted Upon

In considering our Board of Directors’ recommendations with respect to the Merger, you should be aware that the Company’s officers and directors might have interests in the Merger that may be different from, or in addition to, the interests of the Company’s stockholders generally. These additional interests are described below and under “ Arrangements in Connection with a Change in Control. ” The Board of Directors was aware of these interests and considered them, among other matters, when it approved the Merger Agreement, and the transactions contemplated thereby, including the Merger.

Insight Portfolio Group LLC

Insight Portfolio Group LLC (“ Insight Portfolio Group ”) is an entity formed and controlled by Mr. Icahn in order to maximize the potential buying power of a group of entities with which Mr. Icahn has a relationship in negotiating rates with a wide range of suppliers of goods, services and tangible and intangible property. The Company along with a number of other entities with which Mr. Icahn has a relationship acquired a minority equity interest in Insight Portfolio Group and has agreed to pay a portion of Insight Portfolio Group’s operating expenses. The Company may purchase a variety of goods and services as a member of the buying group at prices and on terms that the Company believes are more favorable than those which would be achieved on a stand-alone basis. Since March 2010, Mr. Yevgeny Fundler, Senior Vice President, General Counsel and Secretary of the Company, has consulted for Insight Portfolio Group as its general counsel. In 2017, the Company paid approximately $0.2 million in fees to Insight Portfolio Group. Prior to the closing of the transactions contemplated by the Merger Agreement, the Company will take all actions necessary to terminate its relationship with Insight Portfolio Group by distributing its interest in Insight Portfolio Group to IEH or otherwise disposing of such interest.

Prior Relationships Between the Company and Mr. Unger

Mr. James Unger is currently a Managing Director of ITE Management. From March 1995 to April 2009, Mr. Unger served as the Company’s president and chief executive officer, and served on the Company’s Board of Directors from March 1995 until April 2009. On April 1, 2009, Mr. Unger resigned as the Company’s president and chief executive officer and was appointed as vice chairman of the Company’s Board of Directors. On September 30, 2013, Mr. Unger resigned from the Company’s Board of Directors. In addition, (i) since June 2003, Mr. Unger has served as president of Ohio Castings Company, LLC, a joint venture in which the Company has an interest; (ii) from July 2007 to August 2010, Mr. Unger served on the executive committee of Axis, LLC, the axle manufacturing joint venture in which the Company has a 41.9% interest; and (iii) from 2008 to August 2010, Mr. Unger served on the board of directors of Amtek Railcar Industries Private Limited, the Indian joint venture in which the Company previously had an interest. Mr. Unger’s son, Steven Unger, is currently the Company’s Chief Commercial Officer. Mr. Steven Unger did not participate in the negotiations of the Merger Agreement or the transactions contemplated thereby. In addition, the Company’s headquarters facility in St. Charles, Missouri is owned by St. Charles Properties, an entity controlled by Mr. Unger. Except as set forth in this information statement, the Company does not have any existing relationships with ITE Management or Mr. Unger. Following the closing of the transactions contemplated by the Merger Agreement, Mr. Unger is anticipated to serve as a non-executive Chairman of the Company.

Directors’ and Officers’ Indemnification and Insurance

The Merger Agreement provides that for six (6) years from and after the Effective Time, Parent will maintain in effect directors’ and officers’ liability insurance and fiduciary liability insurance coverage for events occurring prior to the closing of the Merger covering those persons that are directors and officers of the Company as of the date of the Merger Agreement and as of the closing of the Merger. The insurance coverage must be on terms substantially equivalent to and no less favorable in the aggregate than the existing directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company or, if no such insurance coverage is available, the best coverage that is then available; provided, however, that Parent will not be required to pay an annual premium in excess of 300% of the last annual premium paid by the Company prior to the date of the Merger Agreement.

Prior to the Effective Time, the Company intends to purchase prepaid “tail” policies which will provide coverage to directors and officers of the Company for an aggregate period of six (6) years with respect to claims arising from facts or events that occurred on or before the Effective Time, including in respect of the Merger Agreement or the transactions contemplated by the Merger Agreement. Such policies will satisfy Parent’s obligations described in the immediately preceding paragraph.

The Merger Agreement provides that, following the Effective Time, Parent will cause the surviving corporation to indemnify, defend and hold harmless all past and present directors and officers of the Company or any of the Company’s subsidiaries to the fullest extent provided in the Company’s charter, Bylaws or similar organizational documents of any subsidiary of the Company or any indemnification contract of the Company or any of its subsidiaries in effect as of the date of the Merger Agreement, for actions or omissions occurring at or prior to the Effective Time, including in connection with the Merger Agreement and the transactions contemplated by the Merger Agreement.

Arrangements in Connection with a Change in Control

The Company does not have any employment agreements or other arrangements with its employees, including its named executive officers, providing for payments upon termination or in connection with a change in control.

Pursuant to the terms of the Merger Agreement, at the Effective Time, each vested stock appreciation right granted under the Company’s 2005 Equity Incentive Plan, as amended and restated, that is outstanding and unexercised immediately prior to the Effective Time, or “ Company SARs ,” will be cancelled in exchange for the right to receive from Parent or its subsidiaries (including the Company as the surviving corporation in the Merger) a lump sum cash payment, without interest and less applicable taxes required to be withheld with respect to such payment, equal to, with respect to the portion, if any, of each Company SAR that is vested in accordance with its terms at or prior to the closing of the Merger (the “ vested SAR portion ”), the product of (i) the excess, if any, of (A) the Merger Consideration over (B) the exercise or base price per share of Common Stock subject to such vested SAR portion and (ii) the total number of shares of Common Stock underlying such vested SAR portion. The payment will be made on the first regularly scheduled payroll date occurring more than five (5) business days after the Effective Time.

Any Company SAR which has an exercise or base price per share of Common Stock that is greater than or equal to the per share Merger Consideration and any Company SAR (or any portion thereof) that is unvested in accordance with its terms at the closing of the Merger will be cancelled at the Effective Time for no consideration or payment.

Certain individuals who have served as directors and officers of the Company since the beginning of the 2018 fiscal year, including the Company’s named executive officers, will receive a lump sum cash payment calculated as described above in exchange for the cancellation of the Company SARs that they hold as of the Effective Time to the extent that their Company SARs have an exercise or base price per share of Common Stock that is less than the per share Merger Consideration.

Golden Parachute Compensation

None of the Company’s named executive officers will receive any compensatory payments or benefits that constitute “golden parachute” payments within the meaning of Item 402(t) of Regulation S-K. As described above, in connection with the Merger, each named executive officer will receive a lump sum cash payment in exchange for the cancellation of Company SARs that they hold as of the Effective Time to the extent that their Company SARs have an exercise or base price per share of Common Stock that is less than the per share Merger Consideration.

Material U.S. Federal Income Tax Consequences

The following is a summary of the material U.S. federal income tax consequences of the Merger to holders (other than IEH) whose shares of Common Stock are converted into the right to receive the Merger Consideration in the Merger, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based upon the Code, temporary and final Treasury regulations promulgated thereunder, judicial decisions and administrative rulings and practice, all as in effect as of the date hereof, all of which are subject to change (possibly with retroactive effect). This discussion does not address aspects of U.S. federal taxation other than income taxation, nor does it address aspects of U.S. federal income taxation that may be applicable to particular stockholders, such as stockholders who are dealers in securities, traders in securities that elect to use a mark to market method of accounting, insurance companies, tax-exempt organizations, financial institutions, regulated investment companies, real estate investment trusts, S corporations, individual retirement or other tax-deferred accounts, corporations that accumulate earnings to avoid U.S. federal income tax, controlled foreign corporations, passive foreign investment companies, stockholders who hold their shares of Common Stock as part of a straddle, hedge, conversion, synthetic security or constructive sale transaction for U.S. federal income tax purposes, stockholders who hold shares of Common Stock that may constitute Section 306 stock, stockholders that are accrual method taxpayers

for U.S. federal income tax purposes and are required to accelerate the recognition of any item of gross income with respect to the shares as a result of such income being recognized on an applicable financial statement, United States expatriates and former long-term residents, U.S. Holders (as defined below) who have a functional currency other than the U.S. dollar, stockholders subject to the alternative minimum tax, stockholders who will actually or constructively (under the rules of Section 318 of the Code) own any stock of Parent following the Merger, or stockholders who acquired their shares of Common Stock in a compensation transaction.

This summary is limited to persons that hold their shares of Common Stock as a “capital asset” within the meaning of Section 1221 of the Code. This discussion does not address any state, local, non-income or foreign tax consequences. There can be no assurance that the Internal Revenue Service (“ IRS ”) will not challenge the analysis or conclusions reached in this section, and no ruling from the IRS has been or will be sought on the transaction described herein or on any of the issues discussed below.

This summary is of a general nature only and is not intended to be legal or tax advice to either U.S. Holders or Non-U.S. Holders. Beneficial owners of shares of Common Stock are, therefore, urged to consult their own tax advisors as to the particular tax consequences applicable to them of exchanging their shares of Common Stock pursuant to the Merger, including the applicability of U.S. federal, state or local tax laws or non-U.S. or non-income tax laws, any changes in applicable tax laws and any pending or proposed legislation or regulations.

This summary also does not address the tax consequences to holders of shares of Common Stock who exercise appraisal rights under the NDBCA.

The U.S. federal income tax consequences set forth below are included for general informational purposes only and are based upon current law as of the date hereof. Because individual circumstances may differ, each holder of Common Stock should consult such holder’s own tax advisor to determine the applicability of the rules discussed below to such holder and the particular tax effects of the Merger, including the application and effect of state, local, foreign income and other tax laws.

For purposes of this information statement, the term “ U.S. Holder ” means a beneficial owner of shares of Common Stock that, for U.S. federal income tax purposes, is:

A “ Non-U.S. Holder ” is a beneficial holder of shares of Common Stock other than a U.S. Holder.

If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) is the beneficial holder of shares of Common Stock, the tax treatment of a partner in such partnership will depend upon the status of the partner and the activities of the partnership. Partners in such a partnership should consult their tax advisors as to the particular tax considerations applicable to them.

U.S. Holders

Disposition of Shares Pursuant to the Merger

Although not free from doubt, the Company intends to take the position that for U.S. federal income tax purposes the holders of our Common Stock will be treated as selling all of their shares of our Common Stock in exchange for cash in the Merger.

A U.S. Holder will recognize gain or loss on the disposition of its shares of Common Stock in the Merger. Gain or loss must be calculated separately for each block of shares of Common Stock (that is, shares of Common Stock acquired at the same cost in a single transaction) exchanged for cash in the Merger. The amount of gain or loss realized with respect to each block of shares of Common Stock generally will equal the difference between the amount of cash received for the Common Stock and the U.S. Holder’s adjusted tax basis in the shares. A U.S. Holder’s adjusted tax basis in a share of Common Stock generally will be equal to the amount the U.S. Holder paid

for the share of Common Stock. Any gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder has held the shares of Common Stock for more than one year on the disposition date. Otherwise, such gain or loss will be short-term capital gain or loss. Long-term capital gains recognized by certain non-corporate U.S. Holders, including individuals, generally will be taxable at a reduced rate. The deductibility of capital losses is subject to limitations.

Medicare Tax

Certain U.S. Holders, including individuals, estates and trusts, may be subject to an additional 3.8% “Medicare” tax on capital gain, if any, realized on the sale of their shares of Common Stock. For individuals, the additional “Medicare” tax applies to the lesser of (i) net investment income or (ii) the excess of modified adjusted gross income over $200,000 ($250,000 if married and filing jointly or $125,000 if married and filing separately). If you are a U.S. Holder that is an individual, estate or trust, you must consult your tax advisors regarding the applicability of the “Medicare” tax to you.

Information Reporting and Backup Withholding

Information returns may be required to be filed with the IRS relating to payments made to particular U.S. Holders. In addition, U.S. Holders may be subject to a backup withholding tax on such payments if they do not provide their taxpayer identification numbers in the manner required, or otherwise fail to comply with applicable backup withholding tax rules. Any amounts withheld under the backup withholding rules will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle the recipient to a refund provided the required information is timely furnished to the IRS.

Non-U.S. Holders

A Non-U.S. Holder will generally not be subject to U.S. federal income tax on gain recognized on its shares of Common Stock pursuant to the Merger unless:

A Non-U.S. Holder described in the first bullet point immediately above will be subject to regular U.S. federal income tax on any gain realized as if the Non-U.S. Holder were a U.S. Holder, subject to any applicable income tax treaty providing otherwise. If such Non-U.S. Holder is a foreign corporation for U.S. federal income tax purposes, then any gain described in the first bullet above may also be subject to an additional “branch profits tax” at a 30% rate (or a lower treaty rate).

With regard to the second bullet point immediately above, any foreign individuals who are present in the United States for 183 days or more in the taxable year of the Merger will be subject to tax at a rate of 30% (or a lower treaty rate) on any capital gain realized, which may be offset by certain U.S.-source capital losses recognized in the same taxable year.

With regard to the third bullet point immediately above, the Company believes that it has not been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the five-year period preceding the Merger. As a result, a Non-U.S. Holder described solely in the third bullet point immediately above (and not described in the first or second bullet point immediately above) should not be subject to U.S. federal income tax on any gain recognized on its shares of Common Stock pursuant to the Merger.

Information Reporting and Backup Withholding

We intend to apply U.S. information reporting and backup withholding (at a current rate of 24%) with respect to payments a Non-U.S. Holder receives pursuant to the Merger, as applicable, unless such Non-U.S. Holder (i) is

an exempt recipient and, when required, demonstrates this fact, or (ii) provides a certificate (e.g., IRS Form W-8BEN or IRS Form W-8BEN-E) as to its non-U.S. status. Any amounts withheld under the backup withholding rules will be allowed as a credit against the Non-U.S. Holder’s U.S. federal income tax liability and may entitle the recipient to a refund provided the required information is timely furnished to the IRS.

Regulatory and Other Governmental Approvals

The Merger Agreement provides that each of the parties must use its reasonable best efforts to obtain all necessary actions, waivers, consents, approvals, orders, and authorizations from all applicable governmental entities, including, without limitation, those in connection with the HSR Act.

Antitrust/HSR

The Merger is subject to review by the U.S. Antitrust Division of the Department of Justice (the “ Antitrust Division ”) and the U.S. Federal Trade Commission (the “ FTC ”) under the HSR Act. The HSR Act provides that transactions like the Merger may not be completed until certain information and documents have been submitted to the Antitrust Division and the FTC and the applicable waiting period has expired or been terminated. On October 23, 2018, each of Parent and the Company made the requisite filings with the Antitrust Division and the FTC pursuant to the HSR Act and requested early termination of the initial thirty-day waiting period, which the FTC granted on November 2, 2018.

The FTC and the Antitrust Division frequently scrutinize the legality of transactions like the Merger. At any time before or after the consummation of the Merger, notwithstanding the early termination of the applicable waiting period under the HSR Act, the FTC or the Antitrust Division could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Merger or seeking a divestiture of a substantial portion of the Company’s assets or seeking other conduct relief. At any time before or after the consummation of the Merger, and notwithstanding the early termination of the applicable waiting period under the HSR Act, any state or private party could seek to enjoin the consummation of the Merger or seek other structural or conduct relief or damages.

Market Price of Our Stock; Effect on Trading Market; Delisting and Deregistration of Common Stock

Shares of the Company’s Common Stock are listed on the NASDAQ under the symbol “ARII.” The closing sale price of the Common Stock on the NASDAQ on October 19, 2018, which was the last trading day before we announced the Merger, was $46.26. On November 5, 2018, the last practicable trading day before the date of this information statement, the closing price of Common Stock on the NASDAQ was $70.45. You are encouraged to obtain current market prices for the Company’s Common Stock.

If the Merger is completed, the Common Stock will no longer be listed on the NASDAQ. In addition, the registration of the Common Stock under Section 12 of the Exchange Act will be terminated, and we will no longer file periodic reports with the SEC on account of the Common Stock.

MERGER AGREEMENT

The summary of the material provisions of the Merger Agreement set forth below and elsewhere in this information statement is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached as Annex A to this information statement, and which is incorporated by reference into this information statement. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. We encourage you to read the Merger Agreement carefully in its entirety, as well as this information statement and any documents incorporated herein by reference.

The Merger

On October 22, 2018, the Company entered into a Merger Agreement with Parent, pursuant to which Merger Sub will be merged with and into the Company, with the Company continuing as the surviving corporation in the Merger. Following the consummation of the Merger, the Company will be a wholly-owned subsidiary of Parent.

Subject to the terms of the Merger Agreement, at the Effective Time, each share of Common Stock issued and outstanding immediately prior to the Effective Time (other than (i) shares of Common Stock held by Parent, Merger Sub or any of their respective subsidiaries, (ii) shares of Common Stock owned by the Company or the Company’s subsidiaries, or (iii) shares of Common Stock owned by holders who have properly exercised appraisal rights under North Dakota law) will be cancelled and converted automatically into the right to receive the per share Merger Consideration, or $70.00 per share of Common Stock, which is payable in cash. The aggregate Merger Consideration to be received by the stockholders of the Company will be approximately $1.34 billion. The Merger Consideration may be increased in the event that interest is determined to be payable as a result of Parent’s failure to timely deposit funds into escrow.

Directors and Officers; Articles of Incorporation; Bylaws

The board of directors of the surviving corporation will consist of the directors of Merger Sub or such other individuals designated by Parent to hold office from and after the Effective Time until their resignation or removal or until their respective successors have been duly elected and qualified.

The officers of Merger Sub immediately prior to the Effective Time or such other individuals designated by Parent as of the Effective Time will become the officers of the surviving corporation, each to hold office in accordance with the Articles of Incorporation and Bylaws of the surviving corporation until their respective successors shall have been duly elected, designated or qualified, or until their earlier death, resignation or removal in accordance with the Articles of Incorporation and Bylaws of the surviving corporation.

The Articles of Incorporation of the surviving corporation will be amended in the Merger to be in the form of the Articles of Incorporation attached as Exhibit C to the Merger Agreement, until thereafter changed or amended as provided therein or by applicable law. The Bylaws of Merger Sub in effect immediately prior to the Effective Time will be the Bylaws of the surviving corporation, and as so amended shall be the Bylaws of the surviving corporation until thereafter changed or amended as provided therein or by applicable law. A copy of the Bylaws is attached as Exhibit D to the Merger Agreement.

Stockholders Seeking Appraisal

The Merger Agreement provides that those stockholders who are entitled to demand, and who have properly demanded, payment for and appraisal of their shares will not have the right to receive a portion of the Merger Consideration for their shares of Common Stock, but will receive payment in cash for the fair value of their shares of Common Stock as determined in accordance with North Dakota law. If a holder fails to perfect, waives, withdraws or loses his, her or its right to appraisal of our Common Stock, his, her or its shares will be treated as if they had been converted into and are exchangeable for their share of the Merger Consideration as of the Effective Time without interest and the stockholder’s right to appraisal will be extinguished. The Company must give Parent prompt notice of demands for appraisal and the Company may not make a payment with respect to a demand for appraisal or settle any such demands without Parent’s prior written consent.

The fair value of shares of our Common Stock as determined in accordance with North Dakota law may be more or less than (or the same as) the Merger Consideration to be paid to stockholders who choose not to exercise their appraisal rights. Stockholders who wish to exercise appraisal rights must precisely follow specific procedures. Under

Section 10-19.1-88 of the NDBCA, holders of shares of the Company’s Common Stock who are entitled to appraisal rights must be provided a notice of appraisal rights. The record date for purposes of determining the stockholders entitled to receive the notice of appraisal rights is October 22, 2018. As of October 22, 2018, there were 19,083,878 shares of the Company’s Common Stock outstanding.

Stockholders who wish to exercise appraisal rights must make a written demand for payment and appraisal on or prior to December 7, 2018, which is the date that is thirty (30) days following the mailing of this information statement, and otherwise comply precisely with the procedures set forth in Sections 10-19.1-87 and 10-19.1-88 of the NDBCA for perfecting appraisal rights. Additional details on appraisal rights are described in “Appraisal Rights” beginning on page 57 .

Procedures for Receiving Merger Consideration

As soon as practicable after the Effective Time (and in no event later than three (3) Business Days after the Effective Time), the surviving corporation will cause a paying agent to mail to each holder of record of certificated shares of Common Stock (as of immediately prior to the Effective Time) a letter of transmittal and instructions as to how to surrender such holder’s stock certificates in exchange for the Merger Consideration.

Upon surrender of such certificates to the paying agent (or delivery of an affidavit of loss thereof in accordance with the Merger Agreement), together with delivery of a duly executed and completed letter of transmittal, and such other documents as may be reasonably required by the paying agent, the holder of such certificates will be entitled to receive the per share Merger Consideration for each share of Common Stock formerly represented by such certificate, and the surrendered certificate will be immediately canceled. No interest will be paid or accrued on the cash payable upon surrender of such certificates.

If any portion of the Merger Consideration is to be paid to a person other than the person in whose name the surrendered certificate is registered, it will be a condition to such payment that (i) either such certificate be properly endorsed or otherwise be in proper form for transfer and (ii) the person requesting such payment will pay to the paying agent any transfer or other tax required as a result of such payment and establish to the satisfaction of Parent and the surviving corporation that such tax has been paid or is not required to be paid.

Parent, Merger Sub, the surviving corporation and the paying agent, as the case may be, will be entitled to deduct and withhold from any amounts otherwise payable pursuant to the Merger Agreement, such amounts as are required to be deducted and withheld pursuant to any applicable tax laws.

Holders of record of book-entry shares will not be required to deliver a certificate or an executed letter of transmittal to the paying agent to receive the Merger Consideration. In lieu thereof, such holder will, upon receipt by the paying agent of an “agent’s message” in customary form, be entitled to receive the Merger Consideration, as promptly as practicable after the Effective Time without any further action required on the part of those holders, and such book-entry shares will be cancelled. No interest will be paid or accrued on the cash payable upon surrender or transfer of such book-entry shares.

Representations and Warranties

The parties to the Merger Agreement have made certain customary representations and warranties, including representations and warranties relating to, among other things:

In addition, the Merger Agreement contains the following customary representations and warranties made by the Company to Parent and Merger Sub, including representations and warranties relating to:

The Merger Agreement also contains the following customary representations and warranties of Parent and Merger Sub, among others:

Certain of the representations and warranties in the Merger Agreement are qualified as to “materiality” or “Company Material Adverse Effect.” The Merger Agreement provides that a Company Material Adverse Effect means any effect, development, event, occurrence, fact, condition or change that, individually or in the aggregate, is or would reasonably be expected to become materially adverse to (a) the ability of the Company to consummate the transactions contemplated by the Merger Agreement, including the Merger, on a timely basis, or (b) the business, results of operations, condition (financial or otherwise) or assets of the Company and its subsidiaries, taken as a whole; provided, however , that “Company Material Adverse Effect” shall not include any effect, development, event, occurrence, fact, condition or change, arising out of or attributable to:

Any Company Material Adverse Effect arising out of or resulting from any event, occurrence, fact, condition or change referred to in clauses (i) - (iv) and (vii) may constitute, and will be taken into account in determining the occurrence of, a Company Material Adverse Effect only to the extent the impact of such event, occurrence, fact, condition or change is disproportionally adverse to the Company and its subsidiaries, taken as a whole, relative to other companies in the industries and geographic locations in which the Company and its subsidiaries operate.

Conduct of Business by the Company Prior to Consummation of the Merger

The Company agrees that prior to the Effective Time, except (i) to the extent required by applicable law, (ii) as otherwise expressly required by any other provision of the Merger Agreement or the ancillary agreements, or expressly required or permitted by the Company Disclosure Letter or (iii) with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), the Company will, and will cause each of its subsidiaries to, (A) conduct its operations only in the ordinary course of business and (B) use its commercially reasonable efforts to keep available the services of the current officers, employees and consultants of the Company and each of its subsidiaries and to preserve the goodwill and current relationships of the Company and each of its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has business relations.

Further, the Company agrees that until the Effective Time, it will not, and will not permit any of its subsidiaries to, directly or indirectly, take any of the following actions without the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed in the case of certain actions):

collective bargaining agreement, or any works council, labor union or similar agreement or arrangement or become obligated to contribute to any multiemployer benefit plan; (F) terminate, promote or change the title of any employee or other service provider (retroactively or otherwise) with annual compensation in excess of $100,000; or (G) hire or make an offer to hire any new employee, officer, director or individual consultant with annual compensation in excess of $100,000 (subject to certain exceptions);

Stockholder Action By Written Consent

Concurrently with the execution of the Merger Agreement, on October 22, 2018 the Company delivered the Written Consent to Parent that the Company had received from IEH, which on such date owned shares of Common Stock representing approximately 62.2% of the outstanding shares of Common Stock entitled to vote on the adoption of the Merger Agreement and approval of the Merger. Pursuant to the terms of the Merger Agreement, the Written Consent will automatically become effective as of the Written Consent Effective Time, unless such time is otherwise extended or the Merger Agreement is terminated in accordance with its terms. As a result of the delivery of the Written Consent, no further approval by the Company’s stockholders is required in connection with the Merger Agreement or the Merger.

In the event the Merger Agreement is terminated in accordance with its terms, the Written Consent will not become effective and will be deemed null and void.

Conditions to the Merger

The closing of the transactions contemplated by the Merger Agreement are subject to customary conditions, including, among other things, (i) receiving the required approval of the Company’s stockholders, which approval will be effected as of the Written Consent Effective Time, (ii) no temporary restraining order, preliminary or permanent injunction or other judgment, order or decree issued by any court of competent jurisdiction or other legal restraint or prohibition shall be in effect, and no law shall have been enacted, entered, promulgated, enforced or deemed applicable by any governmental entity that, in any case, prohibits or makes illegal the consummation of the Merger on the terms set forth in the Merger Agreement, (iii) the expiration or termination of the applicable waiting period under the HSR Act (for which the FTC granted early termination of the waiting period on November 2, 2018), and (iv) twenty (20) days having elapsed since the mailing to the Company’s stockholders of a definitive information statement with respect to adoption of the Merger Agreement by IEH pursuant to the Written Consent.

In addition, the closing of the transactions contemplated by the Merger Agreement are subject to the representations and warranties given by each party in the Merger Agreement continuing to be true and correct at and as of the Effective Time except for any such representations and warranties that relate to a specific date or time (which need only be true and correct as of such date or time) and except as has not had or would not reasonably be expect to have, individually or in the aggregate with all other failures to be true or correct, a Parent Material Adverse Effect (as defined in the Merger Agreement) with respect to the representations and warranties of Parent and Merger Sub, or a Company Material Adverse Effect with respect to the representations and warranties of the Company (other than certain representations and warranties of the Company, which must be true and correct in all material respects). The closing of the transactions contemplated by the Merger Agreement are also subject to each party thereto having performed and complied in all material respects with all covenants and agreements required to be performed or complied with by such party under the Merger Agreement.

The transactions contemplated by the Merger Agreement are not conditioned upon Parent obtaining financing.

Financing Cooperation

The Company has agreed, from the date of the Merger Agreement to the earlier of the Effective Time and the termination of the Merger Agreement, to, and to cause its subsidiaries to, use their respective commercially reasonable efforts to provide Parent on a timely basis, at Parent’s sole expense, such customary or necessary cooperation as is reasonably requested by Parent, upon reasonable advance notice, in connection with Parent’s debt financing, including, among other things, providing access to appropriate members of senior management of the Company and the information specifically set forth in the Merger Agreement. The cooperation obligation is subject to the limitations set forth in the Merger Agreement.

Non-Solicitation; Window Shop Period; Change of Board Recommendation

Non-Solicitation

During the period from the date of the Merger Agreement until the Effective Time, or, if earlier, the termination of the Merger Agreement in accordance with its terms (the “ interim period ”), the Company, its affiliates and its and their respective representatives may not, on behalf of the Company, directly or indirectly:

The Company must also, and must also cause its affiliates and representatives to, cease immediately and cause to be terminated, and not authorize or knowingly permit any of its or their representatives to continue, any and all existing activities, discussion or negotiations, if any, with any third party conducted prior to the date of the Merger Agreement with respect to any acquisition proposal and also use its reasonable best efforts to cause any such third party (or its agents or advisors) in possession of non-public information in respect of the Company or any of its subsidiaries that was furnished by or on behalf of the Company and its affiliates to return or destroy all of such information.

Window Shop Activities

Notwithstanding the restrictions on the Company’s ability to solicit acquisition proposals, if at any time following the date of the Merger Agreement and prior to the Written Consent Effective Time, which we refer to as the “ window shop period ,” (i) the Company receives a bona fide written acquisition proposal from a third party that does not result from the Company’s violation of the non-solicitation provision in the Merger Agreement and the Company, its affiliates and its and their representatives are not in willful and material breach of the non-solicitation and related window shop provisions of the Merger Agreement and (ii) the Board of Directors (or a committee thereof) determines in good faith, based on information then available and after consultation with outside counsel and based on financial analyses believed to be reasonable by the Board, that such acquisition proposal constitutes, or would reasonably be expected to result in, a superior proposal (as defined below) and the failure to take such action would reasonably be expected to be inconsistent with the directors’ fiduciary duties to the Company’s stockholders under applicable law or the agreed upon standard (as defined below), then the Company has the right to, among other things, furnish non-public information to such third party and participate in discussions or negotiations with any third party making such acquisition proposal regarding the acquisition proposal (“ window shop activities ”). From and after the Written Consent Effective Time, the Company will be prohibited from engaging in any window shop activities.

Change of Board Recommendation

During the interim period, the Board of Directors and any committee thereof may not:

Notwithstanding the restrictions on the Board of Directors’ ability to effect a change of board recommendation, during the window shop period, if (i) the Company has received a bona fide acquisition proposal from a third party

that does not result from a violation of the non-solicitation provisions applicable to the Company, its affiliates and their respective representatives described above, (ii) the Company, its affiliates and their respective representatives are not in willful and material breach of the non-solicitation and window shop provisions of the Merger Agreement and (iii) the Board of Directors (or a duly authorized committee thereof) determines in good faith after consultation with outside legal counsel and based on financial analyses believed to be reasonable by the Board of Directors, that such acquisition proposal constitutes a superior proposal and failure to take such action would be inconsistent with the directors’ fiduciary duties to the Company’s stockholders under applicable law or the agreed upon standard, the Board of Directors may at any time prior to the Written Consent Effective Time, effect a change of board recommendation with respect to such acquisition proposal, subject to the terms of the Merger Agreement. Except as otherwise expressly provided in the Written Consent, a change of board recommendation will have no effect on the effectiveness of the Written Consent.

Pursuant to the terms of the Merger Agreement, to effect a change of board recommendation:

In the event a change of board recommendation with respect to the Merger is effected during the window shop period, the Written Consent will not become effective as of the Written Consent Effective Time and will be deemed null and void. In addition, if the Merger Agreement is terminated under circumstances relating to a change of board recommendation, the Company may be required to pay a termination fee of $65 million to Parent.

The Company has agreed to promptly (and in any event within 24 hours) notify Parent in writing of the receipt of any acquisition proposal, any request for non-public information relating to the Company or its subsidiaries made in connection with an acquisition proposal or request for access to the business, properties, assets, books or records of the Company or any of its subsidiaries made in connection with an acquisition proposal, which notice shall identify the third party making such acquisition proposal and include a copy of such acquisition proposal (or, if not made in writing, a reasonably detailed written description of such acquisition proposal). The Company has also agreed to keep Parent promptly informed (and in any event within 24 hours) in all material respects of the status of, and any material communications relating to, such acquisition proposal (including any change in the price or other material terms thereof) and to provide Parent within 24 hours after receipt thereof all copies of any material correspondence and written materials received by the Company from the persons making such acquisition proposal.

As used in this information statement and the Merger Agreement, an “acquisition proposal” means any inquiry, offer or proposal from a third party not affiliated with the Company concerning (i) a merger, consolidation, business combination, recapitalization, reorganization or similar transaction involving the Company or any of its subsidiaries, (ii) a sale, lease or other disposition by merger, consolidation, business combination, share exchange, joint venture or otherwise, of assets of the Company (including equity interests of any subsidiary of the Company) or its

subsidiaries representing more than 20% of the consolidated assets of the Company and its subsidiaries, measured either by book value or fair market value, (iii) an issuance or acquisition (including by way of merger, consolidation, business combination or share exchange) of equity interests representing more than 20% of the voting power of the Company, or (iv) any combination of the foregoing (in each case, other than the Merger).

As used in this information statement and the Merger Agreement, a “superior proposal” means a bona fide unsolicited written acquisition proposal (except the references therein to “20%” shall be replaced by “75%”) that the Board of Directors (or a duly authorized committee thereof) determines in good faith after consultation with legal counsel, taking into account such factors as the Board (or any duly authorized committee thereof) considers in good faith to be appropriate (including the conditionality, timing and likelihood of consummation of such proposals), is reasonably likely to be consummated in accordance with its terms taking into account all financial (including economic and financing terms), regulatory (which may include the relative likelihood and timeliness of obtaining antitrust approvals), legal and other aspects, and, if consummated, would be more favorable from a financial point of view to the Company’s stockholders than the Merger (taking in account any proposed changed terms).

As used in this information statement and the Merger Agreement, the “agreed upon standard” means a duty to obtain the highest value reasonably available to the Company’s stockholders, it being acknowledged by the parties that such standard (i) is to be applied only for the limited purposes of the specific clauses of the Merger Agreement in which it appears, (ii) shall not imply that the directors of the Company have a fiduciary duty to act in accordance with such standard unless and to the extent such duty is required by applicable law, and (iii) is intended to have contractual effect only as between the parties in order to provide an enhanced level of certainty concerning the circumstances in which the Board of Directors (or a duly authorized committee thereof) may take the actions permitted by Sections 5.3(b) and Section 5.3(d) of the Merger Agreement (which pertain to the window shop activities and a change of board recommendation).

Termination of the Merger Agreement

The Merger Agreement may be terminated and the Merger and other transactions contemplated thereby may be abandoned at any time prior to the Effective Time as follows:

The Company may also terminate the Merger Agreement if, following delivery by the Company of a written notice to Parent of a Specified Breach by Parent or Merger Sub that would reasonably be expected to prevent or materially impair the closing of the Merger (a “ Breach Escrow Election Notice ”), (A) Parent, by the deadline specified in the Merger Agreement, fails to (1) deposit the Breach Escrow Amount (as defined in the Merger Agreement) and (2) confirm in writing that it is willing to attempt in good faith to consummate the Merger, or (B) the breach of the Merger Agreement by Parent that gave rise to the written notice provided by the Company makes the consummation of the Merger impossible.

In the event of termination of the Merger Agreement by either the Company or Parent, written notice will be given to the other party or parties, specifying the provisions of the Merger Agreement pursuant to which such termination is made and the basis therefor described in reasonable detail. Upon termination, the Merger Agreement will become void and have no further force and effect, without any liability or obligation on the party of any party (except as otherwise provided in the Merger Agreement), provided that none of the parties will be relieved from liabilities for damages incurred or suffered as a result of a material breach of any representations, warranties, covenants or other agreements set forth in the Merger Agreement prior to such termination or the requirement to make the termination fee payments described below under “— Termination Fees .”

Termination Fee

A termination fee payment of $65 million will be payable by the Company to Parent if the Merger Agreement is terminated:

A Parent Termination Fee of $130 million will be payable by Parent to the Company if the Merger Agreement is terminated:

In addition, the Company is also entitled to the Parent Termination Fee in the event that (i) the Company delivers a Breach Escrow Election Notice to Parent and (ii) (A) the Company terminates the Merger Agreement in connection therewith or (B) (1) the Merger Agreement is terminated after delivery of the Breach Escrow Election Notice for any other reason and (2) there has not been a willful and material breach of the Merger Agreement by the Company that was a cause of the failure of the closing of the Merger to occur.

As described under “ The Merger—Financing of the Transaction—Limited Guarantee ,” Sponsor entered into a limited guarantee in favor of the Company to guarantee, among other things, Parent’s and/or Merger Sub’s payment obligations with respect to the payment of the Parent Termination Fee of $130 million by Parent to the Company in the event the Merger Agreement is terminated under the circumstances described above.

In the event that the Company fails to pay the termination fee to Parent when due, or Parent fails to pay the Parent Termination Fee to the Company when due, such party will reimburse the other party for all reasonable costs and expenses actually incurred or accrued by such party (including reasonable fees and expenses of counsel) in collection with any action taken to collect payment of such amounts, together with interest on such unpaid amounts.

Remedies; Specific Performance

The parties have agreed that, (i) except for an order of specific performance as and only to the extent expressly permitted by the Merger Agreement and (ii) the Company’s rights as a third party beneficiary under Parent’s equity commitment letter, the Company’s right to receive the Parent Termination Fee from Parent when payable pursuant to the terms of the Merger Agreement, and the Company’s right to seek damages following termination, will constitute the Company’s exclusive remedies against Parent, Merger Sub, the Sponsor, Parent’s financing sources or any of their respective former, current or future general or limited partners, stockholders, equity holders, controlling person, members, managers, agents, representatives, affiliates or assignees (collectively, “ Parent related parties ”) for all losses or damages suffered as a result of the failure of the transactions contemplated by the Merger Agreement to be consummated (for any reason or for no reason or otherwise) or for a breach or failure to perform under the Merger Agreement or under the limited guarantee, Parent’s equity commitment letter, any certificate or other document delivered in connection thereunder or otherwise in respect of any oral representation made or alleged to have been made in connection therewith.

Notwithstanding anything to the contrary contained in the Merger Agreement, (i) under no circumstances will the Company be entitled to, and in no event will the Company seek to recover, monetary damages from any Parent related party (other than Parent, Merger Sub or the Sponsor pursuant to the limited guarantee), (ii) in no event will the Company be entitled to seek or obtain any consequential damages that were not reasonably foreseeable or specific or punitive damages from any Parent related party and (iii) in no event will any amounts recovered from Parent or Merger Sub or Sponsor be in excess of the maximum amount (as defined in the limited guarantee).

The Company, Parent and Merger Sub have agreed that, except where the Merger Agreement is terminated in accordance with the terms set forth above, each party is entitled to seek an injunction or injunctions, specific performance and other equitable relief to prevent breaches or threatened breaches of the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement. The Company, however, is only entitled to an injunction, specific performance or other equitable remedies in connection with enforcing Parent’s and Merger Sub’s obligations to consummate the Merger and causing the equity financing to be funded if, and only if, (i) the marketing period has ended and the closing conditions applicable to the Company have been satisfied or waived at the time the closing would have occurred but for the failure of Parent and Merger Sub to complete the closing by the

date that the closing is required to have occurred, (ii) the debt financing (or any alternative financing contemplated by the Merger Agreement) is available to be funded or has been funded or will be funded at the closing if the equity financing is funded at the closing, and (iii) the Company has irrevocably confirmed in writing to Parent that (A) all conditions to the Company’s obligations to consummate the closing set forth in the Merger Agreement have been satisfied or waived and (B) if specific performance is granted and the debt financing is funded, then the closing will occur.

In no event will the Company be entitled to receive both a grant of specific performance that results in a closing of the merger at which the Merger Consideration is received by the Company’s stockholders and monetary damages.

Employee Matters

The Merger Agreement provides that, for a period of six (6) months following the Effective Time, the employees of the Company that remain employed by the surviving corporation will receive base compensation that is no less favorable than the base compensation in effect immediately prior to the Effective Time. Parent will also provide benefits (including target annual cash bonus opportunity but excluding equity-based or equity-linked compensation or benefits, and excluding any pension or other retiree benefits) to each continuing employee that, taken as a whole, have a value that is substantially comparable in the aggregate to such benefits provided to similarly-situated employees of Parent and its subsidiaries, or provided to such continuing employee immediately prior to the Effective Time, as determined by Parent in its discretion. Notwithstanding the foregoing, continuing employees who are subject to collective bargaining agreements will receive the compensation and benefits provided for in the applicable collective bargaining agreements.

Following the completion of the Merger, Parent will recognize each continuing employee’s service with the Company or any of its subsidiaries for all purposes with respect to benefit plans maintained by Parent or any of its subsidiaries, including determining eligibility to participate, vesting and benefit accruals (including any vacation and paid time off accruals), provided , however , that such service need not be recognized or credited (i) to the extent that such recognition would result in any duplication of coverage or benefits, (ii) with respect to a newly established plan for which prior service is not taken into account or with respect to any equity-based compensation, or (iii) to the extent that such recognition would result in benefit accruals with respect to any defined benefit plan.

Parent will take reasonable best efforts to waive, or cause to be waived, any pre-existing condition limitations, exclusions, evidence of insurability, actively-at-work requirements and waiting periods under any welfare benefit plan maintained by Parent or any of its subsidiaries in which continuing employees (and their covered family members) will be eligible to participate from and after the Effective Time, except to the extent that such pre-existing condition limitations, exclusions, actively-at-work requirements and waiting periods would not have been satisfied or waived under the comparable Company benefit plan immediately prior to the Effective Time. In addition, Parent will take reasonable best efforts to recognize, or cause to be recognized, the dollar amount of all co-payments / co-insurance, deductibles, out-of-pocket maximums and similar expenses incurred by each continuing employee (and his or her covered family members) during the calendar year in which the Effective Time occurs for purposes of satisfying such year’s deductible and out-of-pocket maximum under the relevant welfare benefit plans in which such continuing employee (and family members) will be eligible to participate from and after the Effective Time.

From and after the Effective Time through the end of calendar year 2018, Parent will, or will cause the surviving corporation to, honor and continue the Company’s Management Incentive Plan for fiscal year 2018 as in effect immediately prior to the Effective Time in accordance with its terms. Parent will also pay, or will cause the surviving corporation to pay, to eligible Company employees cash bonuses under the Management Incentive Plan for calendar year 2018 in the ordinary course (and at the time ordinarily paid) based on actual results for such year.

Amendment, Extension, and Waiver

The parties may amend provisions of the Merger Agreement at any time, except that after stockholder approval has been obtained, no amendment that requires further approval by stockholders of the Company is permitted without the further approval of such stockholders. All such amendments must be in writing and signed by each of the parties.

At any time prior to the Effective Time, the parties may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any breach of the representations and warranties of the other party contained in the Merger Agreement or in any document delivered pursuant to the Merger Agreement, or (c) waive compliance by the other with any of the agreements or covenants contained in the Merger Agreement,

except that after stockholder approval has been obtained, no extension or waiver that decreases the Merger Consideration, other than as explicitly contemplated by the Merger Agreement, or which adversely affects the rights of the Company’s stockholders, is permitted without the further approval of such stockholders. Any agreement on the part of a party to any such extension or waiver will be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to the Merger Agreement to assert any of its rights under the Merger Agreement or otherwise shall not constitute a waiver of such rights.

Governing Law

The Merger Agreement and all claims and causes of action based upon, arising out of or in connection therewith will be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to laws that may be applicable under conflicts of laws principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. Notwithstanding the foregoing, the Merger, the fiduciary duties of the Board of Directors and the internal corporate affairs of the Company will, in each case, be governed by the laws of the State of North Dakota, and any claim, controversy or dispute of any kind or nature to which the debt financing sources are a party and that is in any way related to any debt commitment letter, the Merger Agreement, the transactions contemplated by the Merger Agreement or the debt financing, will be governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to principles or rules or conflict of laws to the extent such principles or rules would require or permit the application of laws of another jurisdiction.

In addition, any matter to which a source of Parent’s debt financing is a party that is related to a Company Material Adverse Effect, the interpretation of representations and warranties under the Merger Agreement, or the consummation of the transactions contemplated by the Merger Agreement, in each case, will be governed by, and construed in accordance with, the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

Joinder Agreement

On October 26, 2018, Merger Sub executed the Joinder Agreement with the Company and Parent pursuant to which Merger Sub became a party to the Merger Agreement. A form of the Joinder Agreement is attached as Exhibit E to the Merger Agreement.

Escrow Agreement

Pursuant to the terms of the Merger Agreement, Parent agreed to deposit funds in escrow to secure Parent’s obligations to pay the Parent Termination Fee if such fee is payable to the Company under the terms of the Merger Agreement. On October 24, 2018, Parent deposited $55 million in immediately available funds with Citibank, N.A. (the “ Escrow Agent ”) into an escrow account to be held pursuant to the terms and conditions of the escrow agreement (“ Escrow Agreement ”). In addition, on or prior to 5:00 p.m. on November 16, 2018, Parent has agreed to deposit up to an additional $75 million so that the aggregate amount held by the Escrow Agent pursuant to the terms of the Escrow Agreement is $130 million. In the event that Parent fails to deposit such additional amount, in whole or in part, with the Escrow Agent, then the Company may terminate the Merger Agreement and be entitled to payment of the Parent Termination Fee.

VOTING AGREEMENT

The summary of the material provisions of the Voting Agreement set forth below and elsewhere in this information statement is qualified in its entirety by reference to the Voting Agreement, a copy of which is attached as Exhibit B to the Merger Agreement attached as Annex A to this information statement and is incorporated by reference into this information statement. This summary does not purport to be complete and may not contain all of the information about the Voting Agreement that is important to you. We encourage you to read the Voting Agreement carefully in its entirety, as well as this information statement and any documents incorporated herein by reference.

In connection with the execution of the Merger Agreement, Parent, on one hand, and IEH and certain of IEH’s affiliates (each, a “ Stockholder Party ,” and collectively, the “ Stockholder Parties ”), on the other hand, entered into a Voting Agreement with respect to all Common Stock owned of record or beneficially by the Stockholder Parties, and any additional shares of Common Stock or other voting securities of the Company of which the Stockholder Parties acquire record or beneficial ownership of during the term of the Voting Agreement (collectively, the “ Subject Shares ”). As of October 22, 2018, the record date for determining stockholders entitled to act by written consent with respect to the Merger Agreement, IEH was the record owner of 11,871,268 shares of Common Stock, representing approximately 62.2% of the voting power of the issued and outstanding shares of Common Stock and the requisite number of shares of Common Stock necessary to adopt and approve the Merger Agreement in accordance with Section 10-19.1-98 of the NDBCA. The other Stockholder Parties, which consist of certain affiliates of IEH, beneficially own all of the shares of Common Stock held of record by IEH.

Subject to the terms and conditions set forth in the Voting Agreement, from October 22, 2018 through the date on which the Voting Agreement is terminated in accordance with its terms (the “ Voting Period ”), each Stockholder Party is required to vote, or cause the applicable holder of its Subject Shares to vote (or deliver a duly executed written consent with respect thereto), all of its Subject Shares (i) in favor of (a) any proposal to adopt and approve or reapprove the Merger Agreement and the transactions contemplated thereby, including the Merger, and (b) waiving any notice requirements applicable to the Merger, the Merger Agreement or any of the transactions contemplated therein contained in or pursuant to the Company’s organizational documents or applicable law, and (ii) against (x) any action or agreement that would reasonably be expected to prevent or materially delay the consummation of the Merger or any other transactions contemplated by the Merger Agreement, (y) any acquisition proposal and any action in furtherance of any such acquisition proposal and (z) any action, proposal, transaction or agreement that is intended or would result in a breach in any material respect of any covenant, representation or warranty or any other obligation or agreement of the Company under the Merger Agreement or the Stockholder Parties under the Voting Agreement. During the Voting Period, each Stockholder Party has also agreed to not take, or cause the applicable holder of its Subject Shares to take, any action to revoke, supersede, withdraw, terminate or otherwise impair or override, the Written Consent.

Each Stockholder Party has also agreed to waive and not exercise any rights to demand appraisal of any shares of Common Stock held by the Stockholder Party or right to dissent from the Merger that such Stockholder Party may have under applicable law, including pursuant to Section 10-19.1-87 of the NDBCA. Further, while the Voting Agreement remains in effect, subject to certain exceptions, each Stockholder Party has agreed not to commence, join in, facilitate, assist or encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against Parent, the Company or any of their respective successors, directors or officers, (a) challenging the validity, binding nature or enforceability of, or seeking to enjoin the operation of, the Voting Agreement or the Merger Agreement, or (b) alleging a breach of any fiduciary duty of any person in connection with the evaluation, negotiation, entry into or consummation of the Merger Agreement.

During the Voting Period, each Stockholder Party, subject to certain exceptions, is prohibited from, without Parent’s prior written consent, (i) directly or indirectly, whether by merger, consolidation or otherwise, offering for sale, selling (including short sales), transferring, tendering, pledging, encumbering, assigning or otherwise disposing of (including by gift or by operation of law) (collectively, a “ transfer ”), or entering into any contract, option, derivative, hedging or other agreement or arrangement or understanding (including any profit-sharing arrangement, through the granting of any proxies or powers of attorney, in connection with a voting trust or voting agreement or by operation of law) with respect to, or consenting to or permitting, a transfer of, any or all of the Subject Shares or any interest therein or (ii) taking any action inconsistent with the Voting Agreement, the Merger Agreement or the transactions contemplated thereby.

Further, during the Voting Period, each Stockholder Party has agreed it shall not, and shall not authorize or permit any of its respective representatives to, (i) initiate, solicit, facilitate or knowingly encourage any acquisition

proposal or the making or submission thereof or the making of any proposal that could reasonably be expected to lead to any acquisition proposal, (ii) participate in any negotiations regarding, or furnish any third party any non-public information relating to the Company or its subsidiaries, in connection with an acquisition proposal or (iii) adopt or approve any acquisition proposal. The Stockholder Parties have also agreed to, and to cause their respective representatives to, cease immediately and cause to be terminated any and all existing activities, discussion or negotiations, if any, with any third party conducted prior to the date of the Voting Agreement with respect to any acquisition proposal.

The Voting Agreement will terminate upon the earliest of (i) the mutual written consent of Parent and the Stockholder Parties, (ii) the Effective Time, (iii) the termination of the Merger Agreement in accordance with its terms or (iv) the time of any modification, waiver or amendment of the Merger Agreement that reduces or changes the form of the Merger Consideration payable pursuant to the terms of the Merger Agreement as in effect on the date of the Voting Agreement or which is otherwise adverse to the Stockholder Parties in any material respect, in each case, without the prior written consent of the Stockholder Parties.

On October 22, 2018, the Company received and delivered to Parent the Written Consent executed by IEH, which on such date owned shares of Common Stock representing approximately 62.2% of the outstanding shares of Common Stock entitled to vote on the adoption of the Merger Agreement and the approval of the Merger. Therefore, no further approval by the Company’s stockholders is required in connection with the Merger Agreement or the Merger.

APPRAISAL RIGHTS

The discussion of the provisions set forth below is not a complete summary regarding your appraisal rights under North Dakota law and is qualified in its entirety by reference to the full text of Sections 10-19.1-87 and 10-19.1-88 of the NDBCA, which is attached to this information statement as Annex C. Stockholders intending to exercise appraisal rights should carefully review Annex C in its entirety. Failure to follow precisely any of the statutory procedures set forth in Sections 10-19.1-87 and 10-19.1-88 of the NDBCA will result in a loss of these rights.

If the Merger is completed, holders of Common Stock who did not consent to the adoption of the Merger Agreement and who precisely follow the procedures specified in Sections 10-19.1-87 and 10-19.1-88 of the NDBCA within the appropriate time periods have the right to dissent from the Merger by demanding payment in cash for their shares of Common Stock equal to the fair value of the shares as determined by agreement with the Company or by a court in an action timely brought by the dissenting stockholders. We refer to a dissenting stockholder’s right to demand payment for their shares of Common Stock as “ appraisal rights .”

The following summary description of Sections 10-19.1-87 and 10-19.1-88 of the NDBCA is intended as a brief summary of the material provisions of the statutory procedures required to be followed by a stockholder to exercise their appraisal rights pursuant to Sections 10-19.1-87 and 10-19.1-88 of the NDBCA. This summary, however, is not a complete statement of all applicable requirements and is qualified in its entirety by reference to the full text of Sections 10-19.1-87 and 10-19.1-88 of the NDBCA, which is attached to this information statement as Annex C . All references in Sections 10-19.1-87 and 10-19.1-88 of the NDBCA and this summary to “stockholder” are to the record holder of the shares of Common Stock as to which appraisal rights are asserted. Failure to comply strictly with the procedures set forth in Sections 10-19.1-87 and 10-19.1-88 of the NDBCA will result in the loss of appraisal rights.

Under Section 10-19.1-87 of the NDBCA, where a merger is adopted by stockholders acting by written consent in lieu of a meeting of the stockholders, then either the constituent corporation, before the Effective Time, or the surviving corporation must notify each stockholder of the constituent corporation who did not sign or consent to the written consent that such stockholder is entitled to exercise appraisal rights. The notice must also include a form to be used to certify the date on which the stockholder, or the beneficial owner on whose behalf the stockholder dissents, acquired its shares of Common Stock or an interest in them and to demand payment.

Under Section 10-19.1-88 of the NDBCA, holders of shares of the Company’s Common Stock who are entitled to exercise appraisal rights must be provided a notice of appraisal rights. The record date for purposes of determining the stockholders entitled to receive the notice of appraisal rights is October 22, 2018. As of October 22, 2018, there were 19,083,878 shares of the Company’s Common Stock outstanding.

This information statement constitutes notice to holders of Common Stock concerning the availability of appraisal rights under Sections 10-19.1-87 and 10-19.1-88 of the NDBCA, copies of which are attached to this information statement as Annex C. Any stockholder who wishes to exercise such appraisal rights or who wishes to preserve his, her or its right to do so should review the following discussion and Annex C carefully, because failure to timely and properly comply with the procedures specified will result in the loss of appraisal rights under the NDBCA.

Holders of shares of Common Stock who desire to exercise their appraisal rights, who we refer to as “ dissenting stockholders ,” must deliver to the Company a written demand for payment (along with the certification form) and their certificated shares of the Company’s Common Stock, if any, for deposit with the Company within thirty (30) days after the date of mailing of this Notice of Action By Written Consent and Appraisal Rights and information statement, or December 7, 2018.

All written demands for appraisal of shares of Common Stock must be mailed or delivered to: American Railcar Industries, Inc., 100 Clark Street, St. Charles, Missouri 63301, Attention: Corporate Secretary. Only a holder of record of shares of Common Stock is entitled to demand an appraisal of the shares registered in that holder’s name. A record stockholder may exercise appraisal rights as to fewer than all shares of Common Stock registered in the record stockholder’s name only if the record stockholder dissents with respect to all shares beneficially owned by any one person and discloses the name and address of each beneficial owner on whose behalf the stockholder is exercising appraisal rights. A beneficial stockholder may exercise appraisal rights as to the shares of Common Stock held on the beneficial stockholder’s behalf only if the beneficial stockholder complies with the procedure for the perfection of appraisal rights described below.

A dissenting stockholder will retain all other rights of a stockholder until the Merger takes effect. However, under the NDBCA, a dissenting stockholder may not also challenge the corporate action ( i.e., the Merger) creating the right to appraisal rights unless the action is unlawful or fraudulent with respect to the stockholder or the Company.

After the Effective Time, or after the Company receives a valid demand for payment, whichever is later, the Company will remit, to each dissenting stockholder who has timely and properly submitted a written demand for payment (including the certification form) and deposited its certificated shares, if any, the amount the Company estimates to be the fair value of the shares of Common Stock, plus interest, which we refer to as the “ remittance .” Under the NDBCA, “fair value” with respect to shares of Common Stock subject to appraisal rights means the value of the shares immediately before the effective date of the Merger. In accordance with the NDBCA, the remittance will be accompanied by: (i) the Company’s closing balance sheet and statement of income for a fiscal year ending not more than sixteen months before the effective date of the Merger, together with the latest available interim financial statements; (ii) an estimate by the Company of the fair value of the shares and a brief description of the method used to reach the estimate; and (iii) a copy of Sections 10-19.1-87 and 10-19.1-88 of the NDBCA.

If the dissenting stockholder believes the amount of the remittance from the Company is less than the fair value of its shares plus interest, such dissenting stockholder may decline the Company’s offer and give written notice to the Company within thirty (30) days after the Company has mailed the remittance, and demand payment of the difference. If a dissenting stockholder fails to timely demand payment of the difference, such stockholder is entitled only to the amount of the remittance. Within sixty (60) days of the Company’s receipt of a demand from a dissenting stockholder challenging the proposed remittance, the Company shall either pay to the dissenting stockholder the amount demanded by the dissenting stockholder or, following discussions with the dissenting stockholder, the amount agreed to by the Company and the dissenting stockholder or file in court a petition requesting that a court determine the fair value of the dissenting stockholder’s shares of Common Stock plus interest. The petition is required to be filed in Burleigh County, North Dakota, which is the county in North Dakota in which the registered office of the Company is located, and must name as parties all dissenters who have exercised appraisal rights and who have not reached agreement with the Company.

After filing the petition, the Company must serve all parties with a summons and a copy of the petition. The court may appoint appraisers, with powers and authorities the court deems proper, to receive evidence on and recommend the amount of the fair value of the shares of Common Stock. The court shall determine whether the dissenting stockholder(s) in question have fully complied with the requirements of Section 10-19.1-88 of the NDBCA, and shall determine the fair value of the shares, taking into account any and all factors the court finds relevant, computed by any method or combination of methods that the court, in its discretion, sees fit to use, whether or not used by the Company or by a dissenting stockholder. The fair value of the shares as determined by the court is binding on all stockholders, wherever located. The court will also determine the costs and expenses of the proceeding, including the reasonable expenses in compensation of any appraisers appointed by the court, and is required to assess those costs and expenses against the Company, except that the court may assess part or all of those costs and expenses against a dissenting stockholder whose action in demanding payment for its shares of Common Stock is found to be arbitrary, vexatious, or not in good faith. The court may also award, in its discretion, fees and expenses to an attorney for the dissenting stockholders out of the amount awarded to the dissenting stockholders, if any.

A dissenting stockholder is entitled to judgment for the amount by which the fair value of the shares as determined by the court, plus interest, exceeds the amount of the remittance, if any, previously remitted to the dissenting stockholder by the Company. The dissenting stockholder shall not be liable to the Company for the amount, if any, by which the amount of the remittance, if any, previously remitted to the dissenting stockholder by the Company exceeds the fair value of the shares as determined by the court, plus interest.

If the court finds that the Company has failed to comply substantially with Section 10-19.1-88 of the NDBCA, the court may assess all fees and expenses of any experts or attorneys as the court deems equitable. These fees and expenses may also be assessed against a person who has acted arbitrarily, vexatiously, or not in good faith in bringing the proceeding, and may be awarded to a party injured by those actions.

In view of the complexity of Sections 10-19.1.87 and 10-19.1-88 of the NDBCA, the Company’s stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors.