EXHIBIT 10.6

FORM OF

ARCTIC CAT INC.

STOCK-SETTLED APPRECIATION RIGHTS AGREEMENT

This STOCK-SETTLED APPRECIATION RIGHTS AGREEMENT (“Agreement”) is made as of the
            day of             , 20     (the “Effective Date”), between Arctic
Cat Inc., a Minnesota corporation (the “Company”), and                     , an
employee of the Company or one or more of its subsidiaries (“Employee”).

WHEREAS, the Company desires, by granting to Employee a stock-settled
appreciation right (the “SSAR”) with respect to the common stock of the Company
(the “Common Stock”), to carry out the purpose of the 2013 Omnibus Stock and
Incentive Plan (the “2013 Stock Plan”) of the Company approved by its
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) The SSAR. The Company hereby grants to Employee a SSAR with respect to a
total of             shares of the Common Stock at a grant price of
            and     /100 Dollars ($            ) per share (the “Grant Price”),
which is equal to the closing sale price of a share of the Common Stock on The
Nasdaq Stock Market, or if not so listed, such other stock exchange on which the
Common Stock is listed (“Market Price”), on the Effective Date of this
Agreement.

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

(c) 2013 Stock Plan. The SSAR is subject to all of the terms and conditions set
forth in the 2013 Stock Plan, including future amendments thereto, if any. A
copy of the 2013 Stock Plan is on file with the Chief Financial Officer of the
Company, and Employee, by acceptance hereof, agrees to and accepts this award of
the SSAR subject to the terms of the 2013 Stock Plan.

2. Exercise of the SSAR.

(a) Right to Exercise. The SSAR may be exercised, in whole or in part, upon
vesting in accordance with subparagraph (b) of this Paragraph 2 and during the
term set forth in Paragraph 6. Upon exercise, Employee shall be entitled to
receive from the Company a number of shares of the Common Stock with an
aggregate market value on the date of exercise equal to the product of: (A) the
number of shares in respect of which the SSAR is being exercised, multiplied by
(B) the excess of (i) the Market Price of one share of the Common Stock on the
date or dates of exercise, over (ii) the Grant Price; provided, however, that
the maximum amount of this clause (B) shall be Ten Dollars ($10.00). Fractional
shares of the Common Stock shall be paid in cash based on the Market Price on
the date of exercise.

(b) Vesting. The SSAR herein granted shall be exercisable at such time as
trading of the Company’s shares of Common Stock have a Market Price equal to or
greater than             and     /100 Dollars ($            ) for thirty (30) of
the preceding forty (40) trading days; provided, however, in no event shall the
SSAR be exercisable earlier than one (1) year from the Effective Date of this
Agreement (the “First Year”); and provided further, however, the SSAR herein
granted shall not be exercisable with respect to any shares if Employee is not
employed by the Company on March 31, 20            for any reason except
Retirement (as defined in the 2013 Stock Plan), in which case a portion of the
SSAR which is equivalent to the portion of the First Year in which Employee was
not employed by the Company will be forfeited

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(c) Method of Exercise. The SSAR shall be exercisable by written notice which
shall state the election to exercise the SSAR and the number of shares in
respect of which the SSAR is being exercised, and such other representations and
agreements as to the holder’s investment intent with respect to the shares to be
issued as may be required by the Company pursuant to the provisions of the 2013
Stock Plan. Such written notice shall be signed by Employee and shall be
delivered in person or by certified mail to the Secretary of the Company. The
certificate or certificates for the shares as to which the SSAR shall have been
so exercised shall be registered in the name of Employee, or if Employee so
elects, in the name of Employee or one other person as joint tenants, and shall
be delivered as soon as practicable after the notice shall have been received.
In the event the SSAR shall be exercised by any person other than Employee, such
notice shall be accompanied by appropriate proof of the right of such person to
exercise the SSAR. The shares issued upon exercise of the SSAR as provided
herein shall be fully paid and nonassessable.

(d) Restriction on Exercise. No shares will be issued pursuant to the exercise
of the SSAR unless such issuance and such exercise shall comply with all
relevant provisions of law and the requirements of The Nasdaq Stock Market or
such other stock exchange on which the Common Stock is listed. Assuming such
compliance, for income tax purposes, the shares shall be considered transferred
to Employee on the date on which the SSAR is exercised with respect to such
shares.

3. Adjustment. The number of shares subject to the SSAR herein granted or the
Grant Price are subject to adjustment by the Company’s Board of Directors in the
event of an increase or decrease in the number of issued shares of the Common
Stock resulting from a subdivision or consolidation of the Common Stock or the
payment of a stock dividend on the Common Stock, or any other increase or
decrease in the number of shares of the Common Stock effected without receipt or
payment of consideration by the Company.

4. No Rights of Shareholder. Until stock certificates are issued to Employee,
neither Employee nor any beneficiary or transferee thereof shall have any rights
or privileges of a shareholder of the Company with respect to the shares
issuable upon conversion of the SSAR. Except as expressly provided in Paragraph
3 or in the Plan, no adjustment to the SSAR shall be made for dividends or other
rights for which the record date occurs prior to the date the certificates
representing such shares are issued.

5. Transferability. This SSAR may not be transferred in any manner other than by
will or by laws of descent or distribution and may be exercised during the
lifetime of Employee only by Employee. More particularly (but without limiting
the generality of the foregoing), the SSAR 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 SSAR contrary to the provisions
hereof, and the levy of any execution, attachment, or similar process upon the
SSAR, shall be null and void and without effect. The terms of the SSAR shall be
binding upon Employee and his or her personal representative, heirs, successors
and assigns.

6. Term. This SSAR shall immediately terminate on the fifth (5th) anniversary of
the Grant Date and be of no further force and effect.

7. Withholding Taxes. Upon the exercise of the vested SSAR, Employee authorizes
the Company to withhold a portion of the shares that Employee would otherwise be
entitled to receive upon exercise of the SSAR, which is equal in value to an
amount sufficient to satisfy any applicable federal, state, local and foreign
withholding or other taxes.

8. Termination of Employment Relationship. Subject to Paragraph 2(b), in the
event the employment of Employee shall be terminated for any reason whatsoever,
the SSAR may be exercised by Employee at any time (i) until the date that is
twelve (12) months after the date the SSAR becomes vested or the date of
Retirement (as defined in the 2013 Stock Plan), whichever is later, if such
termination was by reason of Retirement, (ii) within one (1) month after such
termination if such termination was for any reason other than Retirement, Cause
(as defined in the 2013 Stock Plan) or as provided in paragraph 9 hereof, and
(iii) no later than the date of termination if such termination was for Cause;
provided, however, that in no event may the SSAR be exercised later than the
expiration of the term specified in paragraph 6. Unless otherwise determined by
the Committee in writing after the date of this Agreement, (A) upon termination
by reason of Retirement, the SSAR will continue to vest in accordance with its
terms, and (B) upon termination for any reason other than Retirement, the SSAR
shall be exercisable only to the extent Employee shall have

 

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been entitled to do so at the date of his or her termination of employment. So
long as Employee shall continue to be an employee of the Company or one or more
of its subsidiaries, the SSAR shall not be affected by any change of duties or
position. Nothing in this Agreement shall confer upon 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 Employee at any time.

9. Death or Permanent Disability of Employee. If Employee 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 SSAR may be
exercised (to the extent that Employee shall have been entitled to do so at the
date of his or her death or termination by reason of permanent and total
disability, unless otherwise determined by the Committee in writing after the
date of this Agreement) by Employee, his or her legal representative or the
person to whom the SSAR is transferred by will or the applicable laws of descent
and distribution, at any time within twelve (12) months after Employee’s death
or termination by reason of permanent and total disability, but in no event
later than the expiration of the term specified in paragraph 6 hereof.

10. Company Authority. The existence of the SSAR herein granted shall not affect
in any way the right or power of the Company or its shareholders 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 issuance of bonds, debentures, preferred or
prior preference stock ahead of or affecting the Common Stock 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.

11. Disputes. As a condition of the granting of the SSAR 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 Agreement shall be determined by the Board of Directors of the Company, in
its sole discretion, and that any interpretation of the Board of the terms of
this Agreement shall be final, binding and conclusive.

12. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Employee.

13. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Minnesota.

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.

 

ARCTIC CAT INC. By:  

 

 

Chief Executive Officer

 

Employee

 

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