EXHIBIT 10.2


 


FORM OF


ARCTIC CAT INC.


 


DIRECTOR


NON-QUALIFIED


STOCK OPTION AGREEMENT


 


THIS
OPTION AGREEMENT is made as of the 1st day of April 20    
(the “Option Date”), between ARCTIC CAT INC., a Minnesota corporation (the
“Company”), and
                                 ,
a non-employee member of the Board of Directors of the Company (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 carry out the purpose of the 2007 Omnibus Stock and Incentive Plan
(the “2007 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 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 11,000 shares of the Common Stock of
the Company on the terms and conditions herein set forth.  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 the Option shall be $           per share.


 


3.             Term of Option.  The term of the Option shall be for a period
expiring ten (10) years from the Option Date.  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.  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 3,667 shares;


 


(b)                                 from and after 24 months
from the Option Date, the Option may be exercised as to an additional 3,667
shares; and


 


(c)                                  from and after 36 months
from the Option Date, the Option may be exercised as to an additional 3,666
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.  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.


 


6.             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 in cash
or by certified check or bank draft payable to the Company, by any other form
of legal consideration deemed sufficient by the Company and consistent with the
purpose of the 2007 Stock Plan and applicable law, or in the sole discretion of
the Company, by delivery of shares of unrestricted Common Stock of the Company
with a fair market value equal to the purchase price or by a combination of
cash and such shares, whose fair market value shall equal the purchase
price.  For purposes of this paragraph
the “fair market value” of the Common Stock of the Company shall be established
in the manner set forth in Section 2(p) of the 2007 Stock Plan.  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.  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.


 


7.             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.


 


8.             Stock Plan.  This Option is subject to certain additional
terms and conditions set forth in the 2007 Stock Plan pursuant to which this
Option has been issued.  A copy of the
2007 Stock Plan is on file with the Chief Financial Officer of the Company and
each Option holder by acceptance hereof agrees to and accepts this Option
subject to the terms of the 2007 Stock Plan.


 


9.             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.


 


10.          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.


 


11.          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.


 


12.          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 of 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.


 


13.          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 agreement shall
be final, binding and conclusive.


 


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


 


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 or her hand, all as of the day and year first above written.


 


 


	
   

  	
   

  	
  ARCTIC
  CAT INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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  ,
  Optionee