Exhibit 10.2

ARCTIC CAT INC. CHANGE IN CONTROL AGREEMENT

 

Parties:    Arctic Cat Inc.    (“Company”)    505 Hwy 169 North, Suite 1000   
   Plymouth, MN 55441       Christopher T. Metz    (“Executive”)    c/o Arctic
Cat Inc.       505 Hwy 169 North, Suite 1000       Plymouth, MN 55441   
Effective Date:    December 3, 2014   

RECITALS:

1. Executive has concurrently entered into an Employment Agreement to serve as
President and Chief Executive Officer of the Company effective this date and
will obtain extensive knowledge and experience relating to the Company’s
business.

2. The parties recognize that it is in the best interests of the Company and its
shareholders to provide certain benefits payable in certain circumstances upon a
“Change in Control” to encourage Executive to continue in his position, although
no such Change in Control is now contemplated or foreseen.

AGREEMENTS:

1. Term of Agreement. Except as otherwise provided herein, this Change in
Control Agreement (the “Agreement”) shall become effective on the date hereof
and shall continue in effect through December 31, 2015, and shall automatically
be extended for successive one-year periods thereafter unless either the Company
or the Executive provides written notice to the other party no later than two
months prior to the expiration of the initial term or any automatically extended
term of this Agreement of the intent not to extend. If, however, a Change in
Control has occurred during the initial or any automatically extended term of
this Agreement, this Agreement will continue in effect for a period of the later
of:

(a) the end of the Severance Protection Period;

(b) if an event triggering the Company’s severance payment obligations to the
Executive under Section 4 (and Section 5, if the obligation arises from a
covered termination within the Severance Protection Period) has occurred, until
the benefits payable to the Executive hereunder have been paid in full; or

(c) the date the Executive enters into a new employment agreement or change of
control agreement with the Company or its successor.

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This Agreement neither imposes nor confers any further rights or obligations on
the Company or the Executive on the day after the end of the term of this
Agreement. Expiration of the term of this Agreement of itself and without
separate action by the Company or the Executive will not end the employment
relationship between the Company and the Executive.

2. Certain Defined Terms.

(a) “Cause.” For purposes of this Agreement, “Cause” shall mean that the
Executive:

(i) willfully or materially breaches this Agreement or any other written
agreement with the Company, including but not limited to, repeated failure to
perform the duties that Executive is required to perform under the terms of this
Agreement;

(ii) willfully violates or fails to comply with any reasonable rule or policy
governing Executive’s performance or behavior, including, without limitation,
the prohibition against the use of illegal drugs and the use of alcohol in a way
that is materially harmful to the Company’s finances, general reputation, or
other legitimate business interest;

(iii) violates or willfully refuses to obey reasonable instructions of the
Board, provided that such instructions are not in violation of his separate
employment agreement;

(iv) willfully engages in conduct that is demonstrably and materially injurious
to the Company, monetarily or otherwise;

(v) in the performance of Executive’s duties under his separate employment
agreement, willfully engages in any act of misconduct, including misconduct
involving moral turpitude, which is injurious to the Company; or

(vi) is convicted of or pleads guilty to any criminal charge or indictment, the
nature of which the Company determines, in its sole discretion, has a
detrimental impact on the general reputation of the Company, its finances or
other legitimate business interests.

An act or failure to act is considered “willful” if done or not done with an
absence of good faith and without a reasonable belief that the act or failure to
act was in the best interests of the Company. For the avoidance of doubt,
Executive’s failure to achieve Company performance objectives shall not, in and
of itself, be considered “Cause” unless such failure results directly from
Executive’s willful failure to perform his duties. In the event of termination
for “Cause,” Executive shall not be entitled to any severance payments or any
other payments under this Agreement except for his Accrued Obligations (“Accrued
Obligations”) under the terms of his separate employment agreement. Executive
shall not be terminated for Cause unless and until the Company shall have
delivered to Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after reasonable notice
to Executive and an opportunity for Executive, together with Executive’s
counsel, to be heard before the Board), finding that, in the good faith opinion
of the Board, Executive’s conduct constituted Cause and specifying the
particulars thereof.

 

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(b) “Change in Control.” For purposes of this Agreement, “Change in Control”
shall mean any one or more of the following events occurring after the date of
this Agreement:

(i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of (A) 50% of either the total
fair market value or the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”), or (B) during a
twelve-month period ending on the date of the most recent acquisition by such
Person, 30% of the Outstanding Company Voting Securities; provided, however,
that for purposes of this subsection (i), the following acquisitions shall not
constitute a Change in Control: (W) any acquisition directly from the Company,
(X) any acquisition by the Company, including any acquisition which by reducing
the number of shares outstanding, is the sole cause for increasing the
percentage of shares beneficially owned by any such Person to more than the
applicable percentage set forth above, (Y) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (Z) any acquisition by any corporation
pursuant to a transaction which complies with subclauses (A), (B) and (C) of
clause (iii) of this Section 2(b);

(ii) Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason within any period of twelve (12) months
to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’s stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board, shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;

(iii) Consummation by the Company of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of assets of another corporation (a “Business
Combination”), in each case, unless, following such Business Combination, all of
the following conditions are met:

(A) More than 50% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of the
corporation resulting from such Business Combination (including without
limitation, a corporation which as a result of such transaction owns the Company
or all or substantially all of the Company’s assets either directly or through
one or more subsidiaries) is represented by Outstanding Company Voting
Securities that were outstanding immediately prior to such Business Combination
(or, if applicable, is represented by shares into which such Outstanding

 

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Company Voting Securities were converted pursuant to such Business Combination)
and such voting power among the holders thereof is in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Outstanding Company Voting Securities;

(B) No Person (excluding any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination; and

(C) At least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination.

Notwithstanding any other provision in this Agreement, any transaction defined
above that does not constitute a “change in the ownership or effective control”
of the Company, or “change in the ownership of a substantial portion of the
assets” of the Company within the meaning of Treas. Reg. §§1.409A-3(a)(5) and
1.409A-3(i)(5) shall not be treated as a Change in Control.

(c) “Date of Termination.” For purposes of this Agreement, “Date of Termination”
shall mean the date specified in the Notice of Termination.

(d) “Disability.” For purposes of this Agreement, the term “Disability” means
that the Executive (i) is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or (ii) is receiving income replacement
benefits for a period of not less than three (3) months under the Company’s
accident and health plans by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months.

(e) “Good Reason.” Good Reason will exist in the event that the Company, without
the Executive’s written consent:

(i) materially and adversely diminishes the authority, powers, functions,
responsibilities or duties assigned to Executive, as compared to those in effect
immediately prior to the Change in Control (except for any diminution that
occurs solely as a result of the fact that the Company ceases to be a public
company);

(ii) materially reduces the Executive’s annual base salary, annual bonus
opportunity or long-term incentive opportunity, or any material reduction in the
Executive’s aggregate benefits (other than base salary, annual bonus opportunity
or long-term incentive opportunity) in effect immediately prior to a Change in
Control;

 

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(iii) materially relocates (defined as more than fifty (50) miles) the Company’s
principal executive offices or requires Executive to be based anywhere other
than the Company’s principal executive offices except for required travel on the
Company’s business to an extent substantially consistent with Executive’s prior
business travel obligations; or

(iv) materially breaches this Agreement or his separate employment agreement.

Within ninety (90) days following the Executive’s actual knowledge of the event
that the Executive determines constitutes Good Reason, the Executive must
provide written notice to the Company that the Executive has determined that
Good Reason exists and specify the event triggering Good Reason. Following
receipt of such notice, the Company must remedy the event within thirty
(30) days. If the Company fails to remedy the event within such thirty-day
period, the Executive must terminate for Good Reason within ten (10) days
thereafter.

(f) “Notice of Termination.” For purposes of this Agreement, a “Notice of
Termination” shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth a
summary of the facts and circumstances claimed to provide a basis for
termination of Executive’s employment.

(g) “Severance Protection Period” shall mean the period commencing on the day on
which a Change in Control occurs and ending on the second anniversary following
such date and shall be inclusive of both such dates.

3. Termination by the Company Other Than for Cause or Resignation by the
Executive for Good Reason During the Severance Protection Period. If during the
Severance Protection Period, the Company terminates the Executive’s employment,
unless such termination is (i) because of Executive’s death or Disability,
(ii) by the Company for Cause, or (iii) by Executive other than for Good Reason,
then the terms of Section 4 will apply. If, during the Severance Protection
Period, the Company terminates Executive’s employment as a result of Executive’s
Disability or Executive’s employment terminates due to his death, then he will
be entitled to his Accrued Obligations, any unpaid prior fiscal year’s Annual
Bonus (as defined under the terms of his separate employment agreement), and an
amount equal to his Target Bonus as defined under the terms of his separate
employment agreement, and, in addition, Executive will be entitled to receive
severance or other benefits as may then be available under the Company’s
then-existing written benefits plans and practices, including but not limited to
any Company-sponsored disability insurance policy, or pursuant to other written
agreements with the Company, but will not be eligible for the benefits provided
under Section 4. Nothing in this Agreement shall limit the benefits otherwise
available under the agreements or programs of the Company for Disability, death
or otherwise.

4. Benefits Payable to Executive. In the event the Executive’s employment is
terminated by the Company without Cause or by the Executive for Good Reason
during the Severance Protection Period the Company shall pay Executive his
Accrued Benefits, and provided in either case that the Executive has executed a
written release of any and all claims arising during the Executive’s employment
in form and under the conditions as provided under the terms of his separate
employment agreement and the rescission period specified therein has expired,
the Company will pay or provide the following amounts or benefits to the
Executive:

 

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(a) any accrued but unpaid form or type of compensation, benefit or perquisite
that is vested or accrued at the Date of Termination of the Executive’s
employment with the Company for services rendered to such date, to be paid in
cash in a single sum on the 30th day following the Date of Termination;

(b) the Annual Bonus for the preceding fiscal year to the extent not paid, and
an amount equal to the Target Bonus he would have received for the fiscal year
which includes the Date of Termination (as “Annual Bonus” and “Target Bonus” are
defined under the terms of his separate employment agreement);

(c) a severance payment equal to 2.99 times the Executive’s Target Bonus waiving
any other condition precedent, such as continued employment, to be paid in cash
in a single sum on the 30th day following the Date of Termination;

(d) a severance payment equal to 2.99 times the Executive’s annual “Base Salary”
in effect on the Date of Termination (as “Base Salary” is defined under the
terms of his separate employment agreement) (without regard to any reduction
that is in breach of this Agreement), to be paid in cash in a single sum on the
30th day following the Date of Termination;

(e) payment in cash equal to the Company’s portion of the premium payable under
the Company’s group health and life insurance plans for health (i.e., medical,
dental and vision benefits) and life insurance benefits provided to the
Executive and to those family members covered through Executive under the
Company’s group health and life insurance plans immediately prior to the Date of
Termination. The Company shall pay or cause to have paid all amounts due under
this Section 4(e) in 24 monthly installments, with the first installment due or
credited within 30 days after the Date of Termination; provided, however, that
installments may be reduced or eliminated to the extent that Executive becomes
eligible for other group health and life insurance coverage through a subsequent
employer; and provided further that any group health and life insurance benefits
provided by the Company under this Section 4(e) shall run concurrently with any
continuation coverage to which Executive or his dependents may be entitled under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the
regulations issued thereunder, or under comparable state law.

(f) outplacement services, including counseling and guidance, to assist in
securing subsequent employment, up to a maximum dollar value of twenty-five
thousand dollars ($25,000) following Executive’s termination. Except as
otherwise expressly provided herein, to the extent any expense reimbursement
under this clause (f) is determined to be subject to Section 409A of the
Internal Revenue Code of 1986, as amended, and the regulations, notices and
other guidance of general applicability issued thereunder (“Section 409A”), the
amount of any such expenses eligible for reimbursement in one calendar year
shall not affect the expenses eligible for reimbursement in any other taxable
year; in no event shall any expenses be reimbursed after the last day of the
calendar year following the calendar year in which the Executive incurred such
expenses; and in no event shall any right to reimbursement be subject to
liquidation or exchange for another benefit.

 

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Except as provided in (a) through (f) above and Section 5 below, the Company
will have no further obligations under this Agreement. The purpose of providing
the benefits pursuant to Section 4(e) shall be to provide the Executive and/or
the Executive’s covered family members with continued health benefits at least
equal to those which would have been provided to them in accordance with the
Company’s health plans, programs, practices and policies if the Executive’s
employment had not been terminated or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company (in each case with such contributions by the Executive as would have
been required had the Executive’s employment not been terminated).

Notwithstanding anything contained in this Agreement to the contrary, Executive
shall be entitled to the severance pay and benefits described in this Section 4
only if (i) on or within 45 days following the Date of Termination, Executive
signs and does not rescind a release agreement in a form prepared by the Company
and given to Executive within ten days after the Date of Termination, to include
but not be limited to a comprehensive release of all legal claims by Executive
in favor of the Company (other than rights under this Agreement) and which
release shall be in the form customarily used by the Company for senior
executives, shall not impose any additional restrictive covenants upon
Executive’s activities, shall not require Executive to release his claims for
severance or for indemnification or insurance coverage, and shall not include a
nondisparagement provision unless such provision is mutual as between the
designated representatives of the Company and the Executive, and (ii) Executive
fully complies with his confidentiality, non-solicitation, non-competition and
disclosure and assignment obligations under his employment agreement, as
amended, with the Company. Such severance pay and benefits will be made or
commence on the 30th day following the Date of Termination if the release
specified in (i) above has been executed and not revoked by that 30th day.
Executive further understands and agrees that if he does not sign the required
release agreement, if he rescinds the required release agreement after signing,
or if he does not fully comply with the confidentiality, non-solicitation,
non-competition, and/or disclosure and assignment requirements set forth in his
employment agreement, he will not be entitled to the severance pay or benefits
described in this Section 4 and will be obligated to return any severance pay
and/or benefits already received.

5. Accelerated Vesting of Equity-Based Awards. If a Change in Control occurs,
all unvested stock options and restricted stock and stock equivalent awards,
including performance awards and stock-settled appreciation rights, that have
been granted or sold to the Executive by the Company and which have not
otherwise vested, shall immediately accelerate and vest in full. With respect to
stock equivalents, the acceleration and vesting described in this Section 5
shall be subject to any valid deferral election which was made prior to that
time by the Executive under any Company non-qualified deferred compensation
plan, program or permitted deferral arrangement then in effect.

 

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6. Golden Parachute Excise Tax Best Results. In the event that the severance and
other benefits provided for in this Agreement or otherwise payable to Executive
(a) constitute “parachute payments” within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended, (the “Code”) and (b) would be subject
to the excise tax imposed by Section 4999 of the Code, then such benefits shall
be either be: (i) delivered in full, or (ii) delivered as to such lesser extent
which would result in no portion of such severance benefits being subject to
excise tax under Section 4999 of the Code, whichever of the foregoing amounts,
taking into account the applicable federal, state and local income and
employment taxes and the excise tax imposed by Section 4999, results in the
receipt by Executive, on an after-tax basis, of the greatest amount of benefits,
notwithstanding that all or some portion of such benefits may be taxable under
Section 4999 of the Code.

Unless the Company and Executive otherwise agree in writing, any determination
required under this Section 6 will be made in writing by an accounting firm
selected by the Company or such other person or entity to which the parties
mutually agree (the “Accountants”), whose determination will be conclusive and
binding upon Executive and the Company for all purposes. For purposes of making
the calculations required by this Section 6, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and the Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. The Company shall
bear all costs the Accountants incur in connection with any calculations
contemplated by this Section 6. Any reduction in payments and/or benefits
required by this Section 6 shall occur in the following order: (A) cash payments
shall be reduced first and in reverse chronological order such that the cash
payment owed on the latest date following the occurrence of the event triggering
such excise tax will be the first cash payment to be reduced; (B) accelerated
vesting of stock awards shall be cancelled/reduced next and in the reverse order
of the date of grant for such stock awards (i.e., the vesting of the most
recently granted stock awards will be reduced first), with full-value awards
reversed before any stock option or stock appreciation rights are reduced; and
(C) deferred compensation amounts subject to Section 409A shall be reduced last.

7. Withholding Taxes. The Company shall be entitled to deduct from all payments
or benefits provided for under this Agreement any federal, state or local income
and employment-related taxes required by law to be withheld with respect to such
payments or benefits.

8. Successors and Assigns. This Agreement shall inure to the benefit of and
shall be enforceable by Executive, his heirs and the personal representative of
his estate, and shall be binding upon and inure to the benefit of the Company
and its successors and assigns. The Company will require the transferee of any
sale of all or substantially all of the business and assets of the Company or
the survivor of any merger, consolidation or other transaction expressly to
agree to honor this Agreement in the same manner and to the same extent that the
Company would be required to perform this Agreement if no such event had taken
place. Failure of the Company to obtain such agreement before the effective date
of such event shall be a breach of this Agreement and shall entitle Executive to
the benefits provided in Section 4, subject to Section 6, as if Executive had
terminated employment for Good Reason following a Change in Control.

 

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9. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt. All notices to the Company shall be
directed to the attention of the Board of Directors of the Company.

10. Captions. The headings or captions set forth in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.

11. Governing Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of Minnesota.

12. Construction. Wherever possible, each term and provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law. If any term or provision of this Agreement is invalid or
unenforceable under applicable law, (a) the remaining terms and provisions shall
be unimpaired, and (b) the invalid or unenforceable term or provision shall be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the unenforceable term or
provision.

13. Amendment; Waivers. This Agreement may not be modified, amended, waived or
discharged in any manner except by an instrument in writing signed by both
parties hereto. The waiver by either party of compliance with any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any other provision of this Agreement, or of any subsequent breach by such
party of a provision of this Agreement.

14. 409A Compliance. Notwithstanding any other provision of this Agreement to
the contrary, the parties to this Agreement intend that this Agreement will
satisfy the applicable requirements, if any, of Section 409A in a manner that
will preclude the imposition of additional taxes and interest imposed under
Section 409A. The parties agree that this Agreement will be amended (as
determined by the Company in its discretion) to the extent necessary to comply
with Section 409A, as amended from time to time. Further, if all or any portion
of the payments described in this Agreement are subject to the requirements of
Section 409A and the Company determines that the Executive is a “specified
employee” as defined in Section 409A as of the Date of Termination (which will
have the same meaning as “separation from service” as defined in Section 409A),
such payments will be paid on the first day following the six-month anniversary
of the Date of Termination or, if earlier on the date of the Executive’s death.
Any payments that were originally scheduled to be paid after the six-month
anniversary of the Date of Termination shall continue to be paid in accordance
to their predetermined schedule.

15. Entire Agreement. This Agreement supersedes all prior or contemporaneous
negotiations, commitments, agreements (written or oral) and writings between the
Company and Executive with respect to the subject matter hereof, including but
not limited to any negotiations, commitments, agreements or writings relating to
any severance benefits payable to Executive, and constitutes the entire
agreement and understanding between the parties hereto. All such other
negotiations, commitments, agreements and writings will have no further force or
effect, and the parties to any such other negotiation, commitment, agreement or
writing will have no further rights or obligations thereunder.

 

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16. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.

17. No Duty to Mitigate. Executive shall not be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement, nor shall the amount
of any payment hereunder be reduced by any compensation earned by Executive as
result of employment by another employer or by any retirement benefits which may
be paid or payable to Executive except for those welfare benefits provided
pursuant to Section 4(e).

18. Enforcement. If Executive incurs legal, accounting, expert witness or other
fees and expenses in an effort to establish entitlement to compensation and
benefits under this Agreement, the Company shall, regardless of the outcome of
such effort, pay or reimburse Executive for such fees and expenses. The Company
shall reimburse Executive for such fees and expenses on a monthly basis within
10 days after its receipt of his request for reimbursement accompanied by
reasonable evidence that the fees and expenses were incurred. If the Company
fails to pay any amount provided under this Agreement when due, the Company
shall pay interest on such amount at a rate equal to 200 basis points over the
prime commercial lending rate published from time to time in The Wall Street
Journal; provided, however, that if the interest rate determined in accordance
with this Section shall in no event exceed the highest legally-permissible
interest rate.

19. Arbitration. Any dispute arising out of or relating to this Agreement or the
alleged breach of it, or the making of this Agreement, including claims of fraud
in the inducement, shall be discussed between the disputing parties in a good
faith effort to arrive at a mutual settlement of any such controversy. If, after
20 days of such discussions, such dispute cannot be resolved, such dispute shall
be settled by binding arbitration. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall be a retired state or federal judge or an attorney who has
practiced securities litigation or business litigation for at least 10 years. If
the parties cannot agree on an arbitrator within 20 days, any party may request
that the chief judge of the District Court for Hennepin County, Minnesota,
select an arbitrator. Arbitration will be conducted pursuant to the provisions
of this Agreement, and the commercial arbitration rules of the American
Arbitration Association, unless such rules are inconsistent with the provisions
of this Agreement; provided however, the arbitration shall not be administered
by the American Arbitration Association. Discovery shall be limited. The
arbitrator shall have the authority to award any remedy or relief that a court
of this state could order or grant; provided, however, that punitive or
exemplary damages shall not be awarded. Unless otherwise ordered by the
arbitrator, the parties shall share equally in the payment of the fees and
expenses of the arbitrator. The arbitrator may award to the prevailing party, if
any, as determined by the arbitrator, all of the prevailing party’s costs and
fees, including the arbitrator’s fees, and expenses, and the prevailing party’s
travel expenses, out-of-pocket expenses and reasonable attorneys’ fees. Unless
otherwise agreed by the parties, the place of any arbitration proceedings shall
be Hennepin County, Minnesota.

 

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20. Indemnification. In addition to any rights to indemnification to which the
Executive is entitled under the Company’s governing documents, to the maximum
extent permitted by applicable law, the Company will indemnify the Executive at
all times, during and after the Term of this Agreement, against any loss,
damage, penalty, liability or other cost or expense (collectively a “loss”) that
Executive may be subject to as result of Executive’s service as an officer,
director or employee of the Company, or of any subsidiary or affiliate of the
Company, except to the extent that such loss is the result of Executive’s
fraudulent, illegal, tortious conduct, or willful breach, and, to the full
extent permitted by applicable law, will advance to Executive as incurred any
expenses incurred by Executive, including reasonable fees and disbursements of
legal counsel, in defending any civil, criminal, or administrative proceeding,
including any investigation, that could give rise to a loss, subject to
Executive’s obligation to repay any such advance if it is finally determined
that he was not entitled to indemnification. Both during and after the Term of
this Agreement, the Executive shall be covered by any directors and officers or
similar insurance policy that may be maintained by the Company at the same level
applicable to active senior executives and members of its Board.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year written below.

 

    ARCTIC CAT INC. Date: November 10, 2014     By:  

/s/ CHRISTOPHER A. TWOMEY

    Its:   Chairman of the Board Date: November 10, 2014    

/s/ CHRISTOPHER T. METZ

    Christopher T. Metz, Executive

 

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