ACAT Arctic Cat Inc.

As filed with the Securities and Exchange Commission on December 2, 2014

Registration No. 333-            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

ARCTIC CAT INC.

(Exact name of Registrant as specified in its charter)

 

 

 

Minnesota		41-1443470
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

505 Hwy 169 North, Suite 1000

Plymouth, Minnesota 55441

(763) 354-1800

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Inducement Non-Qualified Stock Option Agreement

Inducement Restricted Stock Unit Agreement

(Full title of the plan)

Timothy C. Delmore

Chief Financial Officer and Secretary

Arctic Cat Inc.

505 Highway 169 North, Suite 1000

Plymouth, Minnesota 55441

(763) 354-1800

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

John R. Houston, Esq.

Fredrikson & Byron, P.A.

200 South Sixth Street, Suite 4000

Minneapolis, Minnesota 55402

(612) 492-7000

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer		x		Accelerated filer		¨
Non-accelerated filer		¨  (Do not check if a smaller reporting company)		Smaller reporting company		¨

 

 

CALCULATION OF REGISTRATION FEE

 

Title of Securities To Be Registered		Amount To Be Registered		Proposed Maximum Offering Price Per Share		Proposed Maximum Aggregate Offering Price		Amount Of Registration Fee
Common stock, par value $0.01 per share (“Common Stock”)		238,390 shares (1)		$32.63 (2)		$7,778,666 (2)		$903.88

(1)

Represents shares of Common Stock of Arctic Cat Inc. (the “Registrant”) reserved for issuance pursuant to a certain (i) Inducement Non-Qualified Stock Option Agreement and (ii) Inducement Restricted Stock Unit Agreement to be entered into between the Registrant and Christopher T. Metz as a material inducement for his employment with the Registrant. In addition, this Registration Statement, pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the “Securities Act”), also covers any additional shares of Common Stock that may become issuable by reason of any stock dividend, stock split, recapitalization or any other similar transaction effected without receipt of consideration that increases the number of the Registrant’s outstanding shares of Common Stock.

(2)	Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) and Rule 457(h)(1) of the Securities Act. Such price is based upon the average of the high and low prices of the Registrant’s Common Stock as reported on the NASDAQ Global Select Market on December 1, 2014.

 

 

 

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EXPLANATORY NOTE

This Registration Statement registers 238,390 shares of Common Stock that may be issued pursuant to a certain (i) Inducement Non-Qualified Stock Option Agreement and (ii) Inducement Restricted Stock Unit Agreement (the “Inducement Agreements”) to be entered into between the Registrant and Christopher T. Metz as a material inducement for his employment with the Registrant. The actual number of shares of Common Stock to be issued pursuant to the Inducement Awards will be based on the Registrant’s closing stock price on December 3, 2014. The Inducement Agreements were approved by the Registrant’s independent Compensation and Human Resources Committee and Board of Directors in reliance on the employment inducement exception to shareholder approval provided under NASDAQ Listing Rule 5635(c)(4).

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act and the Note to Part I of Form S-8.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3. Incorporation of Documents by Reference.

The following documents have been filed by the Registrant with the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are incorporated in this Registration Statement by reference (other than any portions of any such documents that are not deemed “filed” under the Exchange Act and applicable Commission rules, including any exhibits relating to such information):

 

•

the Registrant’s Annual Report on Form 10-K for the fiscal year ended March 31, 2014, filed with the Commission on May 30, 2014, including portions of the Registrant’s Proxy Statement for its 2014 Annual Meeting of Shareholders held August 7, 2014, filed with the Commission on June 20, 2014, to the extent specifically incorporated by reference into such Form 10-K;

 

•

all other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the Exchange Act since March 31, 2014; and

 

•

the description of the Registrant’s capital stock contained in its Registration Statement on Form 8-A filed with the Commission on May 21, 1990, and any other amendment or report filed for the purpose of updating such description, as amended and restated in a Current Report on Form 8-K dated December 2, 2014.

All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (except as to specific sections of such documents as set forth therein and as to containing disclosure furnished under either Item 2.02 or Item 7.01 of the Registrant’s current reports on Form 8-K, including any exhibits relating to information furnished under either Item 2.02 or Item 7.01 of Form 8-K), prior to the filing of a post-effective amendment which indicates that all the securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated herein by reference and to be a part hereof from the date of filing such documents.

Any statement contained in a document incorporated or deemed to be incorporated by reference in this Registration Statement shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained in this Registration Statement or in any other subsequently filed document that also is, or is deemed to be, incorporated by reference in this Registration Statement modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

Item 4. Description of Securities.

Not applicable.

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Item 5. Interests of Named Experts and Counsel.

Not applicable.

Item 6. Indemnification of Officers and Directors.

Section 302A.521 of the Minnesota Business Corporation Act (the “MBCA”) provides that a corporation shall indemnify any person made or threatened to be made a party to a proceeding by reason of acts or omissions performed in his or her official capacity as an officer, director, employee or agent of the corporation against judgments, penalties, fines, including without limitation, excise taxes assessed against such person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorneys’ fees and disbursements, incurred by the person in connection with the proceeding, if, with respect to the acts or omissions of the person complained of in the proceeding, the person:

(a) has not been indemnified by another organization or employee benefit plan for the same expenses with respect to the same acts or omissions;

(b) acted in good faith;

(c) received no improper personal benefit and Section 302A.255 of the MBCA (regarding conflicts of interest), if applicable, has been satisfied;

(d) in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful; and

(e) in the case of acts or omissions by persons in their official capacity for the corporation, reasonably believed that the conduct was in the best interests of the corporation, or in the case of acts or omissions by persons in their capacity for other organizations, reasonably believed that the conduct was not opposed to the best interests of the corporation.

In addition, Section 302A.521, subd. 3, of the MBCA requires payment or reimbursement by the corporation, upon written request, of reasonable expenses (including attorneys’ fees) incurred by a person in advance of the final disposition of a proceeding, (a) upon receipt by the corporation of a written affirmation by the person of a good faith belief that the requirements for indemnification set forth above have been met as well as a written undertaking by the person to repay all amounts so paid or reimbursed by the corporation, if it is ultimately determined that the criteria for indemnification have not been satisfied, and (b) after a determination that the facts then known to those making the determination would not preclude indemnification under this section.

A decision as to required indemnification is made by a disinterested majority of the Registrant’s Board of Directors present at a meeting at which a disinterested quorum is present, or by a designated committee of the Registrant’s Board of Directors consisting of disinterested directors, by special legal counsel, by the shareholders, or by a court. A director is disinterested if he or she is not a party to the proceeding for which indemnification or expense advancement is at issue. Section 302A.521 contains detailed terms regarding such right of indemnification and reference is made thereto for a complete statement of such indemnification rights.

As permitted by Section 302A.251 of the MBCA, Article XII of the Registrant’s Amended and Restated Articles of Incorporation provide that a director of the Registrant shall not be personally liable to the Registrant or its shareholders for monetary damages for breach of a fiduciary duty as a director, except for liability (1) for breach of the director’s duty of loyalty to the Registrant or its shareholders; (2) for acts or omissions not in good faith that involve intentional misconduct or a knowing violation of law; (3) for paying a dividend or approving a stock repurchase in violation of Section 302A.559 of the MBCA or for violating the securities registration or anti-fraud provisions of Section 80A.23 of the MBCA; (4) for any transaction from which the director derived any improper personal benefit; or (5) for any action or omission occurring prior to the date when the provision became effective. Article X of the Registrant’s Amended and Restated Bylaws provide that the Registrant shall indemnify officers and directors to the extent permitted by the MBCA as it may be amended from time to time. The Registrant also maintains a director and officer liability insurance policy to cover the Registrant and the Registrant’s directors and officers against damages, judgments, settlements and costs incurred by reason of certain acts of such persons in their capacities as directors and officers.

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Item 7. Exemption from Registration Claimed.

Not applicable.

Item 8. Exhibits.

 

Exhibit No.		Description
5.1*		Opinion of Fredrikson & Byron, P.A. as to the legality of the securities being registered.
10.1*		Form of Inducement Non-Qualified Stock Option Agreement between the Registrant and Christopher T. Metz.
10.2*		Form of Inducement Restricted Stock Unit Agreement between the Registrant and Christopher T. Metz.
23.1*		Consent of Grant Thornton LLP.
23.2*		Consent of Fredrikson & Byron, P.A. (contained in its opinion filed as Exhibit 5.1).
24.1*		Power of Attorney (included in signature page to this Registration Statement).

 

*	Filed herewith.

Item 9. Undertakings.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

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(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Plymouth, State of Minnesota, on December 2, 2014.

 

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POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Christopher A. Twomey, Timothy C. Delmore and Michael D. Okerlund, and each of them, his or her true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign the Form S-8 Registration Statement of Arctic Cat Inc. relating to the Inducement Agreements, any or all amendments or post-effective amendments to the Form S-8 Registration Statement, and any or all future Form S-8 Registration Statements filed for the purpose of registering additional shares resulting from share increases under such Inducement Agreements, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, each acting alone, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities indicated on December 2, 2014.

 

Signature		Title
/s/ CHRISTOPHER A. TWOMEY		Chief Executive Officer and Chairman of the Board
Christopher A. Twomey		(Principal Executive Officer)
/s/ TIMOTHY C. DELMORE		Chief Financial Officer and Secretary
Timothy C. Delmore		(Principal Financial and Accounting Officer)
/s/ TONY J. CHRISTIANSON		Director
Tony J. Christianson
/s/ D. CHRISTIAN KOCH		Director
D. Christian Koch
/s/ SUSAN E. LESTER		Director
Susan E. Lester
/s/ JOSEPH F. PUISHYS		Director
Joseph F. Puishys
		Director
Kenneth J. Roering

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ARCTIC CAT INC.

EXHIBIT INDEX

 

Exhibit No.		Description
5.1*		Opinion of Fredrikson & Byron, P.A. as to the legality of the securities being registered.
10.1*		Form of Inducement Non-Qualified Stock Option Agreement between the Registrant and Christopher T. Metz.
10.2*		Form of Inducement Restricted Stock Unit Agreement between the Registrant and Christopher T. Metz.
23.1*		Consent of Grant Thornton LLP.
23.2*		Consent of Fredrikson & Byron, P.A. (contained in its opinion filed as Exhibit 5.1).
24.1*		Power of Attorney (included in signature page to this Registration Statement).

 

*	Filed herewith.

EXHIBIT 5.1

FREDRIKSON & BYRON, P.A.

200 South Sixth Street, Suite 4000

Minneapolis, MN 55402

December 2, 2014

Arctic Cat Inc.

505 Highway 169 North, Suite 1000

Plymouth, Minnesota 55441

 

Re:

Registration Statement on Form S-8

Ladies and Gentlemen:

We are acting as corporate counsel to Arctic Cat Inc., a Minnesota corporation (the “Company”), in connection with the registration by the Company on Form S-8 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Act”), of 238,390 shares of Common Stock (the “Shares”) issuable by the Company pursuant to a certain (i) Inducement Non-Qualified Stock Option Agreement and (ii) Inducement Restricted Stock Unit Agreement (the “Inducement Agreements”) to be entered into between the Company and Christopher T. Metz.

In acting as such counsel and for the purpose of rendering this opinion, we have reviewed copies of the following, as presented, and represented as being such, to us by the Company: (i) the Company’s Restated Articles of Incorporation; (ii) the Company’s Amended and Restated Bylaws; (iii) certain corporate resolutions adopted by the Company’s Board of Directors and independent Compensation and Human Resources Committee pertaining to the adoption and approval of the Inducement Agreements; (iv) forms of the Inducement Agreements; and (v) the Registration Statement. In our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with the original of all documents submitted to us as copies thereof.

Based on, and subject to, the foregoing review and upon representations and information provided by the Company or its officers or directors, it is our opinion as of this date that, upon issuance and delivery of the Shares against receipt by the Company of the consideration for the Shares pursuant to the terms of the Inducement Agreements, the Shares will be validly issued, fully paid and nonassessable. This opinion is limited to the Minnesota Business Corporation Act.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange Commission.

 

Sincerely,
FREDRIKSON & BYRON, P.A.
By:		/s/ John R. Houston
		John R. Houston, Vice President

Exhibit 10.1

ARCTIC CAT INC.

INDUCEMENT NON-QUALIFIED STOCK OPTION AGREEMENT

FOR EXECUTIVE OFFICER

THIS INDUCEMENT NON-QUALIFIED STOCK OPTION AGREEMENT is made as of the 3rd day of December, 2014 (the “Option Date”), between ARCTIC CAT INC., a Minnesota corporation (the “Company”), and Christopher T. Metz, an employee of the Company or one or more of its subsidiaries (the “Optionee”).

WHEREAS, the Company desires, by affording the Optionee an opportunity to purchase shares of its Common Stock, $.01 par value (the “Common Stock”), as hereinafter provided, to enable the Company and its Subsidiaries to induce the employment of the Optionee and to enable such individual to participate in the long-term success and growth of the Company by giving him a proprietary interest in the Company, thereby aligning the interests of such person with the Company’s shareholders;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto have agreed, and do hereby agree, as follows:

1. Grant of Option. The Company hereby grants to the Optionee the right and option (hereinafter called the “Option”) to purchase from the Company all or any part of an aggregate amount of [                    ] shares of the Common Stock of the Company on the terms and conditions herein set forth. The number of shares granted under this Stock Option is calculated to equate to a value of two million dollars ($2,000,000) based on the closing price of the Company’s stock (represented by symbol “ACAT” on the NASDAQ Exchange) on the Option Date and on an assumed Black-Scholes ratio of forty percent (40%). This grant does not qualify as an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended.

2. Purchase Price. The purchase price of the shares of the Common Stock covered by this Option shall be $[        ] per share, which is equal to 100% of the Fair Market Value of a Share on the Option Date.

3. Term of Option. The term of the Option shall be for a period of ten (10) years from the Option Date, subject to earlier termination as hereinafter provided. In no event shall the Option be exercisable after the expiration of the term of the Option.

4. Exercise of Option. During the first year the Option is outstanding it may not be exercised with respect to any of the shares covered thereby. Subject to the provisions of Sections 6 and 7 hereof, the Option may thereafter be exercised during the term specified in Section 3 as follows:

a. from and after 12 months from the Option Date, the Option may be exercised as to [        ] (1/3 of the total grant) shares;

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b. from and after 24 months from the Option Date, the Option may be exercised as to an additional [        ] (1/3 of the total grant) shares;

c. from and after 36 months from the Option Date, the Option may be exercised as to an additional [        ] (1/3 of the total grant) shares.

5. Non-Transferability. The Option shall not be transferable otherwise than by will or the laws of descent and distribution, and the Option may be exercised, during the lifetime of the Optionee, only by the Optionee or, if permissible under applicable law, by the Optionee’s guardian or legal representative; provided, that the Committee, in its discretion and subject to such additional terms and conditions as it determines, may permit Optionee to transfer the Option to any “family member” (as such term is defined in the General Instructions to Form S-8 (or any successor to such Instructions or such Form) under the Securities Act of 1933, as amended) at any time that Optionee holds such Option, provided that such transfers may not be for value (i.e., the transferor may not receive any consideration therefore) and the family member may not make any subsequent transfers other than by will or by the laws of descent and distribution. More particularly (but without limiting the generality of the foregoing), the Option may not be assigned, transferred (except as provided above), pledged, or hypothecated in any way; shall not be assignable by operation of law; and shall not be subject to execution, attachment, or similar process. Any attempted assignment, transfer, pledge, hypothecation, or other disposition of the Option contrary to the provisions hereof, and the levy of any execution, attachment, or similar process upon the Option, shall be null and void and without effect. The Committee may establish procedures as it deems appropriate for Optionee to designate a Person or Persons, as beneficiary or beneficiaries, to exercise the rights of Optionee and receive any property distributable with respect to the Option in the event of Optionee’s death.

6. Termination of Employment. In the event the employment of the Optionee shall be terminated for any reason whatsoever, the Option may be exercised by the Optionee at any time (i) until expiration of the term specified in Section 3, if such termination was by reason of Retirement at any time following the first anniversary of the date of this Agreement, (ii) within one (1) month after such termination if such termination was for any reason other than Retirement following the first anniversary of the date of this Agreement, Cause (as defined in the Optionee’s Employment Agreement (the “Employment Agreement”)) or due to death or Disability (as defined in the Employment Agreement), and (iii) no later than the date of termination if such termination was for Cause; provided, however, that in no event may the Option be exercised later than the expiration of the term specified in Section 3; and provided further, that (A) upon termination by reason of Retirement at any time following the first anniversary of the date of this Agreement, all outstanding Options then held by the Optionee that have not vested will continue to vest in accordance with their terms, (B) upon termination by the Company without Cause, or resignation by Optionee for Good Reason (as defined in the Employment Agreement), or due to death or Disability, all Options immediately will become vested as of the date of such termination, resignation or separation event, and (C) upon termination by the Company for Cause or resignation by Optionee other than for Good Reason, all Options held by the Optionee shall be exercisable only to the extent the Optionee shall have been entitled to do so at the date of his or her termination of employment.

 

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7. Death or Permanent Disability of Optionee; Change in Control. If the Optionee shall die while still employed by the Company or one or more of its subsidiaries, or shall become permanently and totally disabled (as determined by the Committee) while still employed by the Company or one or more of its subsidiaries, the Option may be exercised by the Optionee, his or her legal representative or the person to whom the Option is transferred by will or the applicable laws of descent and distribution, at any time within twelve (12) months after the Optionee’s death or termination by reason of permanent and total disability, but in no event later than the expiration of the term specified in Section 3 hereof. If a Change in Control (as defined in the Employment Agreement) occurs, all outstanding Options which have not otherwise vested, shall immediately vest in full and become exercisable.

8. Method of Exercising Option. Subject to the terms and conditions of this Option Agreement, the Option may be exercised by written notice to the Chief Financial Officer of the Company at the principal office of the Company. Such notice shall state the election to exercise the Option and the number of shares in respect of which it is being exercised, and shall be signed by the person so exercising the Option. Such notice shall be accompanied by payment of the full purchase price of such shares which payment shall be made (i) in cash or by certified check or bank draft payable to the Company, (ii) by any other form of legal consideration deemed sufficient by the Company and consistent with the purpose of this Agreement and applicable law, (iii) in the sole discretion of the Company, by delivery of shares of Common Stock of the Company having a Fair Market Value equal to the purchase price, or (iv) by a combination of cash and shares of Common Stock, whose Fair Market Value shall equal the purchase price. For purposes of this Section 8, the “Fair Market Value” of the Common Stock of the Company shall be established in the manner set forth in Section 20 of this Agreement. The certificate or certificates for the shares as to which the Option shall have been so exercised shall be registered in the name of the person so exercising the Option, or if the Optionee so elects, in the name of the Optionee or one other person as joint tenants, and shall be delivered as soon as practicable after the notice shall have been received. The Option and rights thereunder shall be exercisable during the Optionee’s lifetime only by the Optionee (except as provided herein) or, if permissible under applicable law, by the Optionee’s guardian or legal representative. In the event the Option shall be exercised by any person other than the Optionee, such notice shall be accompanied by appropriate proof of the right of such person to exercise the Option. All shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and nonassessable.

9. Withholding Requirements. Upon exercise of the Option by the Optionee and prior to the delivery of shares purchased pursuant to such exercise, the Company shall have the right to require the Optionee to remit to the Company cash in an amount sufficient to satisfy applicable federal and state tax withholding requirements. The Company shall inform the Optionee as to whether it will require the Optionee to remit cash for withholding taxes in accordance with the preceding sentence within two (2) business days after receiving from the Optionee notice that such Optionee intends to exercise, or has exercised, all or a portion of the Option. Alternatively, in order to assist Optionee with paying all or a portion of applicable taxes to be withheld or collected upon exercise, the Committee, in its discretion and subject to such additional terms and conditions as it may adopt, may permit the Optionee to satisfy such tax obligation by (i) electing to have the Company withhold a portion of the shares otherwise to be delivered upon exercise of the Option having a Fair Market Value (determined in the manner set

 

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forth in Section 20 of this Agreement) equal to the amount of such taxes, provided that the maximum amount shall not exceed the amount of the required withholding, or (ii) delivering to the Company shares of Common Stock other than shares issuable upon exercise having a Fair Market Value (determined in the manner set forth in Section 20 of this Agreement) equal to the amount of such taxes.

10. Administration.

a. Power and Authority of the Committee. The Agreement shall be administered by the Committee. Subject to the express provisions of the Agreement and to applicable law, the Committee shall have full power and authority to: (i) accelerate the exercisability or waive any restrictions relating to the Option; (ii) extend the exercise period; (iii) determine whether, to what extent and under what circumstances the Option may be exercised in cash, Shares, other securities, other Company equity awards held by Optionee or other property, or canceled, forfeited or suspended; (iv) interpret and administer the Agreement; (v) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of this Option and this Agreement; (vi) delegate to one or more executive officers of the Company the authority to administer this Option and this Agreement or any aspect of them; and (vii) make any other determination and take any other action, prospectively or retrospectively, that the Committee deems necessary or desirable for the administration of this Option and this Agreement. Unless otherwise expressly provided herein, all designations, determinations, interpretations and other decisions under or with respect to this Option and this Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon the Optionee and any holder or beneficiary of the Option.

b. Power and Authority of the Board. Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, exercise the powers and duties of the Committee hereunder without any further action of the Committee, and in that event, any reference to Committee shall also refer to the Board.

11. Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or any other similar corporate transaction, equity restructuring or event affects the Shares underlying the Option, then the Committee shall make an appropriate adjustment that will equalize the fair value of such Shares or Options before and after the transaction, restructuring or event, including but not limited to making adjustment to any or all of (i) the number and type of Shares (or other securities or other property) subject to this Option, and (ii) the purchase price or exercise price with respect to this Option.

 

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12. General. The Company shall at all times during the term of the Option reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Option Agreement, shall pay all original issue and transfer taxes with respect to the issue and transfer of shares pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith, and will from time to time use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto.

13. Investment Certificate. Prior to the receipt of the certificates pursuant to the exercise of the Option granted hereunder, the Optionee shall, if required in the Company’s discretion, demonstrate an intent to hold the shares acquired by exercise of the Option for investment and not with a view to resale or distribution thereof to the public by delivering to the Company an investment certificate or letter in such form as the Company may require.

14. Restrictions: Securities Exchange Listing. All Shares or other securities delivered under the Agreement pursuant to the Option or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Agreement, applicable federal or state securities laws and regulatory requirements, and the Committee may direct appropriate stop transfer orders and cause other legends to be placed on the certificates for such Shares or other securities to reflect such restrictions. The Company shall not be required to deliver any Shares or other securities covered by an Award unless and until such Shares or other securities have been and continue to be admitted for trading on the NASDAQ Exchange.

15. Status. Neither the Optionee nor the Optionee’s executor, administrator, heirs, or legatees shall be or have any rights or privileges of a shareholder of the Company in respect of the shares transferable upon exercise of the Option granted hereunder, unless and until certificates representing such shares shall be endorsed, transferred, and delivered and the transferee has caused the Optionee’s name to be entered as the shareholder of record on the books of the Company.

16. Company Authority. The existence of the Option herein granted shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock of the Company or the rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

17. No Employment Rights. Nothing in this Option Agreement shall confer upon the Optionee any right to continue in the employ of the Company or of any of its subsidiaries or interfere in any way with the right of the Company or any such subsidiary to terminate the employment of the Optionee at any time with or without Cause.

 

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18. Income Tax Compliance.

a. “Deferred Compensation” means the Option, to the extent it provides for the “deferral of compensation” under a “nonqualified deferred compensation plan” (as those terms are defined under Code Section 409A) and that would be subject to the taxes specified in Code Section 409A(a)(l) if and to the extent that this Agreement does not meet or is not operated in compliance with the requirements of Code Section 409A(a)(2), (3) and (4) and the regulations promulgated thereunder, Deferred Compensation shall not include any amount that is otherwise exempt from the requirements of Code Section 409A and the regulations promulgated thereunder. Nothing in this Section 18 shall prohibit the Company from establishing a deferred compensation plan that allows for the deferral of salary, bonuses or other cash-based performance awards.

b. “Specified Employee” means the Optionee, so long as he is a key employee as described in Code Section 416(i)(l) (A)(i), (ii) and (iii) (and disregarding paragraph (5) thereof) at any time during the 12 months ending on each December 31, or such other “identification date” that applies consistently for all plans that provide “deferred compensation” that is subject to the requirements of Code Section 409A and regulations promulgated thereunder. The Optionee will be identified as a Specified Employee in accordance with the regulations promulgated under Code Section 409A, including with respect to the spin-off or merger of the company with any other company, and such identification shall apply for the twelve (12) month period commencing on the first day of the fourth month following the identification date. Notwithstanding the foregoing, the Optionee shall not be a Specified Employee unless the stock of the Company (or other member of a “controlled group of corporations” as determined under Code Section 1563) is publicly traded on an established securities market as of the date of Optionee’s “separation from service” as defined in Code Section 409A and the regulations promulgated thereunder.

c. Except to the extent such acceleration or deferral is permitted or complies with the requirements of Code Section 409A and the regulations promulgated thereunder, neither the Committee nor Optionee may accelerate or defer the time or schedule of any payment of, or the amount scheduled to be paid under, the Option to the extent that it constitutes Deferred Compensation; provided, however, that payment shall be permitted if it is in accordance with a fixed date or schedule or on account of “separation from service,” “disability,” “death,” “change in control” or “unforeseeable emergency” as those items are defined under Code Section 409A and the regulations promulgated thereunder.

d. Except as specifically provided otherwise herein, the Committee may not make payment to a Specified Employee of any portion of the Option that constitutes Deferred Compensation earlier than six (6) months following the Optionee’s “separation from service” as defined for purposes of Code Section 409A (or if earlier, upon the Specified Employee’s death), except as permitted under Code Section 409A. Any payments that otherwise would be payable to the Specified Employee during the foregoing six (6) month period will be accumulated and payment will be delayed until the first date after the six (6) month period.

e. The Committee may reform any provision in the Option to the extent it is intended to be exempt from Code Section 409A to maintain to the maximum extent practicable the original intent of the applicable provisions without violating the provisions of Code Section 409A and to preserve the economic benefits intended by the Award.

 

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19. Amendment. The Board and the Committee may amend this Agreement, but no amendment shall be made (i) which would impair the rights of Optionee with respect to the Option, without Optionee’s consent, or (ii) which without the approval of the shareholders of the Company would cause the Agreement to no longer comply with Rule 16b-3 or any other regulatory requirements. Further, the Board and the Committee may, with Optionee’s consent, correct any defect, supply any omission or reconcile any inconsistency in the Agreement in the manner and to the extent it shall deem desirable to implement or maintain the effectiveness of the Options or the Agreement.

20. Definitions. As used herein, the following terms shall have the meanings set forth below:

a. “Cause” shall have the meaning set forth in the Employment Agreement.

b. “Change in Control” shall have the meaning set forth in the Employment Agreement.

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

d. “Committee” shall mean the Compensation and Human Resources Committee of the Board of Directors of the Company (each a “Director” and collectively the “Board”) or any other committee of the Board designated by the Board to administer this Agreement or any portion hereof.

e. “Deferred Compensation” shall have the meaning set forth in Section 18 of this Agreement.

f. “Disability” shall have the meaning set forth in the Employment Agreement.

g. “Early Retirement” shall mean retirement, with consent of the Committee at the time of retirement, from active employment with the Company and any Subsidiary or Parent Corporation of the Company.

h. “Fair Market Value” shall mean the value of the Shares on a given date as determined by the Committee that, if applicable, will result in the Option being exempt from the requirements of a “deferred compensation plan” under Section 409A of the Code.

i. “Good Reason” shall have the meaning set forth in the Employment Agreement.

j. “Normal Retirement” shall mean retirement from active employment with the Company and any Subsidiary or Parent Corporation of the Company on or after (i) age 65 or (ii) age 55 if the Optionee has ever served the Company as a full-time employee for at least 15 years.

 

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k. “Parent Corporation” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of the corporations (other than the Company) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

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

m. “Retirement” shall mean Normal Retirement or Early Retirement.

n. “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, or any successor rule or regulation.

o. “Share” or “Shares” shall mean the common stock, $.01 par value per share, of the Company (the “Common Stock”) or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 11 of this Agreement.

p. “Specified Employee” shall have the meaning set forth in Section 18(b) hereof.

q. “Subsidiary” shall mean any current or future corporation which would be a “subsidiary corporation” of the Company, as that term is defined in Section 424 of the Internal Revenue Code of 1986, as amended.

r. “Total Market Value” shall have the meaning set forth in Section 17(b) hereof.

21. General Provisions.

a. Governing Law. The validity, construction and effect of this Option and this Agreement, and any rules and regulations relating to this Option and this Agreement, shall be determined in accordance with the internal laws, and not the law of conflicts, of the State of Minnesota.

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

 

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c. No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to this Option or this Agreement, and the Committee shall determine whether cash shall be paid in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

d. Headings. Headings are given to the Sections and subsections of this Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Agreement or any provision hereof.

e. No Trust or Fund Created. The Agreement is intended to constitute an “unfunded” plan for incentive and deferred compensation. Neither this Option nor this Agreement shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Subsidiary and Optionee or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary pursuant to the Option, such right shall be no greater than the right of any unsecured general creditor of the Company or any Subsidiary. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created hereunder to deliver Shares or payments in lieu of or with respect to the Option granted hereunder; provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Agreement.

f. Disputes. As a condition of the granting of the Option herein granted, the Optionee agrees, for the Optionee and the Optionee’s personal representatives, that any dispute or disagreement which may arise under or as a result of or pursuant to this Option Agreement shall be determined by the Board of Directors of the Company, in its sole discretion, and that any interpretation by the Board of the terms of this Option Agreement shall be final, binding and conclusive; provided, however, that any dispute over the reason for the Optionee’s termination of employment shall be determined in accordance with the provisions of the Employment Agreement.

g. Binding Effect. This Option Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.

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IN WITNESS WHEREOF, the Company has caused this Option Agreement to be duly executed by an officer thereunto duly authorized, and the Optionee has hereunto set his hand, all as of the day and year first above written.

 

Exhibit 10.2

ARCTIC CAT INC.

INDUCEMENT RESTRICTED STOCK UNIT AGREEMENT

FOR EXECUTIVE OFFICER

This INDUCEMENT RESTRICTED STOCK UNIT AGREEMENT (“Agreement”) made as of the 3rd day of December, 2014 between ARCTIC CAT INC., a Minnesota corporation (the “Company”), and Christopher T. Metz, an employee of the Company or one or more of its subsidiaries (“Employee”).

WHEREAS, the Company desires, by granting Employee certain restricted stock units of the Company, as hereinafter provided, to enable the Company and its Subsidiaries to induce the employment of Employee and to enable such individual to participate in the long-term success and growth of the Company by giving him a proprietary interest in the Company, thereby aligning the interests of such person with the Company’s shareholders.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto have agreed, and do hereby agree, as follows:

1. Award.

a. Restricted Stock Units. Pursuant to this Agreement, [            ] Restricted Stock Units (“RSUs”), each RSU representing the right to receive one Share, shall be issued as hereinafter provided in Employee’s name subject to certain restrictions thereon.

b. Issuance of RSUs. The RSUs shall be issued upon acceptance hereof by Employee and upon satisfaction of the conditions of this Agreement.

2. Rights of Employee with Respect to the Restricted Stock Units.

a. No Shareholder Rights. The RSUs granted pursuant to this Agreement do not and shall not entitle the Employee to any rights of a holder of Shares. The rights of Employee with respect to the RSUs shall remain forfeitable at all times prior to the date on which such rights become vested and the restrictions with respect to the RSUs lapse, in accordance with Section 3.

b. Conversion of Restricted Stock Units; Issuance of Shares. No Shares shall be issued to Employee prior to the date on which the RSUs vest and the restrictions with respect to the RSUs lapse, in accordance with Section 3. Neither this Section 2(b) nor any action taken pursuant to or in accordance with this Section 2(b) shall be construed to create a trust of any kind. After all restrictions with respect to RSUs lapse pursuant to Section 3, the Company shall cause to be issued no later than 2.5 months after the end of the Company’s fiscal year (subject to Section 5), in payment for such RSUs that number of Shares equal to the number of RSUs with respect to which the restrictions have lapsed.

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3. Restrictions on RSUs. Employee hereby accepts the RSUs and agrees with respect thereto as follows:

a. Forfeiture Restrictions. The RSUs may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of, and in the event of termination of Employee’s employment with the Company or employing subsidiary for Cause (as defined in Employee’s Employment Agreement (the “Employment Agreement”) or by Employee for any reason other than death, Disability (as defined in the Employment Agreement) or for Good Reason (as defined in the Employment Agreement) then, except as otherwise provided in the last sentence of Section 3(b) of this Agreement, Employee shall, for no consideration, forfeit to the Company all RSUs to the extent then subject to the Forfeiture Restrictions. The Committee may establish procedures as it deems appropriate for Employee to designate a Person or Persons, as beneficiary or beneficiaries, to exercise the rights of Employee and receive any property distributable with respect to the RSUs in the event of Employee’s death. The RSUs and rights thereunder shall be exercisable during the Employee’s lifetime only by the Employee (except as provided herein) or, if permissible under applicable law, by the Employee’s guardian or legal representative. The RSUs and rights thereunder may not be pledged, alienated, attached or otherwise encumbered, and any purported pledge, alienation, attachment or encumbrance thereof shall be void and unenforceable against the Company or any Subsidiary.

The prohibition against transfer and the obligation to forfeit and surrender RSUs to the Company upon termination of employment are herein referred to as “Forfeiture Restrictions.” The Forfeiture Restrictions shall be binding upon and enforceable against any purported transferee of RSUs.

b. Lapse of Forfeiture Restrictions. The Forfeiture Restrictions shall lapse as to thirty-three and one-third percent (33 1/3%) of the RSUs on each of the first three anniversaries of the date of this Agreement provided that Employee has been continuously employed by the Company from the date of this Agreement through the lapse date. Notwithstanding the foregoing, the Forfeiture Restrictions shall lapse as to all of the RSUs on the earlier of (i) the occurrence of a Change in Control (as defined in the Employment Agreement), or (ii) the date Employee’s employment with the Company is terminated by reason of death, Disability or in the event of the Employee’s termination by the Company without Cause or resignation by Employee for Good Reason. Lapse of Forfeiture Restrictions under (i) or (ii) of this Section 3(b) shall be allowed only to the extent that the applicable Change in Control or termination events are at least as restrictive as the definitions set forth in Section 409A of the Code and the Treasury Regulations relating thereto. In the event Employee’s employment by the Company and any Subsidiary or Parent Corporation is terminated for Cause or Employee resigns without Good Reason, no further vesting shall occur and all RSUs then held by Employee that have not vested as of such termination or resignation will be terminated and forfeited to the Company for no consideration. In the event Employee’s employment is terminated by reason of resignation for Good Reason, the Committee which administers this Agreement or its delegate, as appropriate, may, in the Committee’s or such delegate’s sole discretion, approve the lapse of Forfeiture Restrictions as to any or all RSUs still subject to such Restrictions, such lapse to be effective on the date of such approval or Employee’s termination date, if later.

 

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4. Tax Matters.

a. Election to Defer Distribution. If the distribution of Shares upon lapsing of Forfeiture Restrictions applicable to the RSUs granted by this Agreement is subject to U.S. tax law, Employee may elect to defer the distribution of some or all of such Shares. Such deferral election shall be in accordance with the rules as established by the Committee and in general must be received in writing by the Company no later than the last day of the fiscal year preceding the fiscal year in which the RSU is granted.

b. Payment of Tax. To the extent that the receipt of the RSUs or the lapse of any Forfeiture Restrictions results in income to Employee for federal, state, local or foreign income tax laws or regulations, Employee shall deliver to the Company at the time of such receipt or lapse, as the case may be, such amount of money or Shares with a fair market value equal to the amount of such taxes, in each case as the Company may require to meet its withholding obligation under applicable tax laws or regulations (provided that the maximum amount shall not exceed the amount of the required withholding). If Employee fails to deliver the foregoing money or Shares, the Company is authorized to withhold from any cash or Shares remuneration then or thereafter payable to Employee any tax required to be withheld by reason of such resulting compensation income.

c. 409A Compliance. Notwithstanding anything to the contrary herein, and unless otherwise agreed by the Company and Employee in writing, if Employee is a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code as of the date of any termination, payment of deferred compensation subject to Section 409A of the Code shall be made to Employee in one lump sum no earlier than six months following the date of termination; provided, however, that any payment or portion thereof which is subject to an exemption for separation pay to specified employees as provided under Section 409A of the Code and the relevant Treasury Regulations thereunder, or is subject to any other exemption provided under Section 409A of the Code and the relevant Treasury Regulations thereunder allowing for payment to a specified employee prior to the date that is six months following the date of termination of employment, may be paid to Employee the later of twenty (20) days following such date of termination or the date Employee fulfills any conditions to receipt of such payment or portion thereof (which conditions must be capable of being satisfied within two and one-half months of the date of termination).

5. Delivery of Shares. The Company shall not be required to deliver any Shares upon vesting or lapse of restrictions of any RSUs until the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of any securities exchange) as may be determined by the Company to be applicable are satisfied. Employee agrees that such Shares will not be sold or otherwise disposed of in any manner which would constitute a violation of any applicable federal or state securities laws. Employee also agrees (i) that the certificates representing such Shares may bear such legend or legends as the Company deems

 

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appropriate in order to assure compliance with applicable securities laws, (ii) that the Company may refuse to register the transfer of such Shares on the stock transfer records of the Company if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable securities law and (iii) that the Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of the Shares. The Company shall not be required to deliver any Shares or other securities covered by an Award unless and until such Shares or other securities have been and continue to be admitted for trading on the NASDAQ Exchange.

6. No Right to Continued Employment. Nothing in this Agreement shall confer upon the Employee any right to continue in the employ of the Company or of any of its subsidiaries or interfere in any way with the right of the Company or any such subsidiary to terminate the employment of the Employee at any time, with or without Cause.

7. Administration.

a. Power and Authority of the Committee. The Agreement shall be administered by the Committee. Subject to the express provisions of the Agreement and to applicable law, the Committee shall have full power and authority to: (i) waive any restrictions relating to the RSUs; (iii) interpret and administer the Agreement; (iv) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of these RSUs and this Agreement; (v) delegate to one or more executive officers of the Company the authority to administer these RSUs and this Agreement or any aspect of them; and (vi) make any other determination and take any other action, prospectively or retrospectively, that the Committee deems necessary or desirable for the administration of these RSUs and this Agreement. Unless otherwise expressly provided herein, all designations, determinations, interpretations and other decisions under or with respect to these RSUs and this Agreement shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive and binding upon Employee and any holder or beneficiary of the RSUs. No provision contained in this Agreement shall in any way terminate, modify or alter, or be construed or interpreted as terminating, modifying or altering any of the powers, rights or authority vested in the Committee or, to the extent delegated, in its delegate pursuant to the terms of this Agreement or resolutions adopted in furtherance of hereof, including, without limitation, the right to make certain determinations and elections with respect to the RSUs.

b. Power and Authority of the Board. Notwithstanding anything to the contrary contained herein, the Board may, at any time and from time to time, exercise the powers and duties of the Committee hereunder without any further action of the Committee, and in that event, any reference to Committee shall also refer to the Board.

8. Adjustments. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company or any

 

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other similar corporate transaction, equity restructuring or event affects the Shares underlying the RSUs, then the Committee shall make an appropriate adjustment that will equalize the fair value of such Shares or RSUs before and after the transaction, restructuring or event, including but not limited to making adjustment to any or all of the number and type of Shares (or other securities or other property) subject to these RSUs.

9. Company Authority. The existence of the RSUs herein granted shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the common stock of the Company or its rights thereof, or dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

10. [Reserved]

11. Income Tax Compliance.

a. “Deferred Compensation” means the RSUs, to the extent it provides for the “deferral of compensation” under a “nonqualified deferred compensation plan” (as those terms are defined under Code Section 409A) and that would be subject to the taxes specified in Code Section 409A(a)(l) if and to the extent that this Agreement does not meet or is not operated in compliance with the requirements of Code Section 409A(a)(2), (3) and (4) and the regulations promulgated thereunder, Deferred Compensation shall not include any amount that is otherwise exempt from the requirements of Code Section 409A and the regulations promulgated thereunder. Nothing in this Section 11 shall prohibit the Company from establishing a deferred compensation plan that allows for the deferral of salary, bonuses or other cash-based performance awards.

b. “Specified Employee” means Employee, so long as he is a key employee as described in Code Section 416(i)(l)(A)(i), (ii) and (iii) (and disregarding paragraph (5) thereof) at any time during the 12 months ending on each December 31, or such other “identification date” that applies consistently for all plans that provide “deferred compensation” that is subject to the requirements of Code Section 409A and regulations promulgated thereunder. The Employee will be identified as a Specified Employee in accordance with the regulations promulgated under Code Section 409A, including with respect to the spin-off or merger of the company with any other company, and such identification shall apply for the twelve (12) month period commencing on the first day of the fourth month following the identification date. Notwithstanding the foregoing, Employee shall not be a Specified Employee unless the stock of the Company (or other member of a “controlled group of corporations” as determined under Code Section 1563) is publicly traded on an established securities market as of the date of Employee’s “separation from service” as defined in Code Section 409A and the regulations promulgated thereunder.

 

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c. Except to the extent such acceleration or deferral is permitted or complies with the requirements of Code Section 409A and the regulations promulgated thereunder, neither the Committee nor the Employee may accelerate or defer the time or schedule of any payment of, or the amount scheduled to be paid under, the RSUs to the extent that they constitutes Deferred Compensation; provided, however, that payment shall be permitted if it is in accordance with a fixed date or schedule or on account of “separation from service,” “disability,” “death,” “change in control” or “unforeseeable emergency” as those items are defined under Code Section 409A and the regulations promulgated thereunder.

d. Except as specifically provided otherwise herein, the Committee may not make payment to a Specified Employee of any portion of the RSUs that constitute Deferred Compensation earlier than six (6) months following the Employee’s “separation from service” as defined for purposes of Code Section 409A (or if earlier, upon the Specified Employee’s death), except as permitted under Code Section 409A. Any payments that otherwise would be payable to the Specified Employee during the foregoing six (6) month period will be accumulated and payment will be delayed until the first date after the six (6) month period.

e. The Committee may reform any provision in this Agreement to the extent the RSUs are intended to be exempt from Code Section 409A to maintain to the maximum extent practicable the original intent of the applicable provisions without violating the provisions of Code Section 409A and to preserve the economic benefits intended by the Award.

12. Amendment. The Board and the Committee may amend this Agreement, but no amendment shall be made (i) which would impair the rights or economic benefit of Employee with respect to the RSUs, without Employee’s consent, or (ii) which without the approval of the shareholders of the Company would cause the Agreement to no longer comply with Rule 16b-3 or any other regulatory requirements. Further, the Board and the Committee, with the Employee’s consent, may correct any defect, supply any omission or reconcile any inconsistency in the Agreement in the manner and to the extent it shall deem desirable to implement or maintain the effectiveness of the RSUs or the Agreement.

13. Definitions. Capitalized terms not defined herein shall have the meaning set forth in Employment Agreement, unless the context clearly requires otherwise. The following terms shall have the meanings set forth below:

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

b. “Committee” shall mean the Compensation and Human Resources Committee of the Board of Directors of the Company (each a “Director” and collectively the “Board”) or any other committee of the Board designated by the Board to administer this Agreement or any portion hereof.

 

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c. “Deferred Compensation” shall have the meaning set forth in Section 11(a) of this Agreement.

d. “Parent Corporation” shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of the corporations (other than the Company) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

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

f. “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, or any successor rule or regulation.

g. “Share” or “Shares” shall mean the common stock, $.01 par value per share, of the Company (the “Common Stock”) or such other securities or property as may become subject to Awards pursuant to an adjustment made under Section 8 of this Agreement.

h. “Specified Employee” shall have the meaning set forth in Section 11(b) hereof.

i. “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

14. General Provisions.

a. Governing Law. The validity, construction and effect of these RSUs and this Agreement, and any rules and regulations relating to these RSUs and this Agreement, shall be determined in accordance with the internal laws, and not the law of conflicts, of the State of Minnesota.

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

c. No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to these RSUs or this Agreement, and the Committee shall determine whether cash shall be paid in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.

 

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d. Headings. Headings are given to the Sections and subsections of this Agreement solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Agreement or any provision hereof.

e. No Trust or Fund Created. The Agreement is intended to constitute an “unfunded” plan for incentive and deferred compensation. Neither these RSUs nor this Agreement shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Subsidiary and Employee or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary pursuant to the RSUs, such right shall be no greater than the right of any unsecured general creditor of the Company or any Subsidiary. In its sole discretion, the Committee may authorize the creation of trusts or other arrangements to meet the obligations created hereunder to deliver Shares or payments in lieu of or with respect to the RSUs granted hereunder; provided, however, that the existence of such trusts or other arrangements is consistent with the unfunded status of the Agreement.

f. Disputes. As a condition of the granting of the RSUs herein granted, Employee agrees, for Employee and Employee’s personal representatives, that any dispute or disagreement which may arise under or as a result of or pursuant to this RSU Agreement shall be determined by the Board of Directors of the Company, in its sole discretion, and that any interpretation by the Board of the terms of this RSU Agreement shall be final, binding and conclusive; provided, however, that any dispute over the reason for the Employee’s termination of employment shall be determined in accordance with the provisions of the Employment Agreement.

g. Binding Effect. This RSU Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by an officer thereunto duly authorized, and Employee has executed this Agreement, all as of the date first above written.

 

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We have issued our reports dated May 30, 2014, with respect to the consolidated financial statements and internal control over financial reporting included in the Annual Report on Form 10-K for the year ended March 31, 2014, of Arctic Cat Inc., which are incorporated by reference in this Registration Statement. We consent to the incorporation by reference in the Registration Statement of the aforementioned reports.

/s/ GRANT THORNTON LLP

Minneapolis, Minnesota

December 2, 2014