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Exhibit 10.5    
    

	LOGO Fleet Retail Group	Mail Stop: MA DE 10510A

40 Broad Street, 10th Floor

Boston, MA 02109

617 434.4004 tel

corporate.fleet.com

March 12, 2004 

Sharon
Link

Senior Vice President Finance & Administration

Gander Mountain Company

4567 American Boulevard West

Minneapolis, MN 55437 

RE:    Loan
and Security Agreement Dated as of December 19, 2001 as Amended May 23, 2003, June 4, 2003 and January 2, 2004 (the "Loan and Security Agreement")
among Gander Mountain Company ("Borrower"), Fleet Retail Finance Inc. and the Other Lending Institutions From Time to Time Party to the Loan and Security Agreement ("Revolving Credit Lenders")
and Fleet Retail Finance Inc. as Agent ("Agent") for Itself and the Other Revolving Credit Lenders 

Dear
Sharon: 

        Fleet
Retail Finance Inc., as Agent and as a Revolving Credit Lender, agrees that the Loan and Security Agreement shall be amended, subject to approval of the Revolving Credit
Lenders, to delete Schedule 5.19 in its entirety and by modifying Section 5.19 of the Loan and Security Agreement to read: 

        Business
Plan. The Business Plan of the Borrower for the Years 2001 through 2004 as provided to the Agent and the Lenders in connection with the Third Amendment to the Loan and Security
Agreement dated January 2, 2004 (the "Third Amendment"). 

        Upon
approval of the Revolving Credit Lenders of the foregoing, Fleet shall make conforming changes to the Third Amendment to reflect such change. 

	 	Very truly yours,
	

 	

FLEET RETAIL FINANCE INC.

as Agent and as Revolving Credit Lender
	

 	

/s/  SALLY A. SHEEHAN      
 Sally A. Sheehan,

Managing Director

A FleetBoston Financial Company  

 

	ACKNOWLEDGE AND AGREED:

	 	 

	
 	

 	
 	

 
	
GANDER MOUNTAIN COMPANY	
 	

 
	

By:	

/s/  SHARON K. LINK      
	
 	

 
	Title: SVP - Finance Administration	 	 
	
WELLS FARGO FOOTHILL, INC.

FKA FOOTHILL CAPITAL CORPORATION,
 as Syndication Agent and as a Revolving Credit Lender	
 	

 
	

By:	

/s/  BRAD ENGEL      
	
 	

 
	Name: Brad Engel	 	 
	Title: Assistant Vice President	 	 
	
THE CIT GROUP/BUSINESS CREDIT, INC.,
 as a Revolving Credit Lender	
 	

 
	

By:	

/s/  ADRIAN AVALOS      
	
 	

 
	Name: Adrian Avalos	 	 
	Title: Vice President	 	 
	
UBS AG, STAMFORD BRANCH
 As a Revolving Credit Lender	
 	

 
	

By:	

/s/  THOMAS M. WATSON      
	
 	

 
	Name: Thomas M. Watson	 	 
	Title: Director	 	 
	
WEBSTER BUSINESS CREDIT CORPORATION,
 as a Revolving Credit Lender	
 	

 
	

By:	

/s/  JOHN L. PALERMO      
	
 	

 
	Name: John L. Palermo	 	 
	Title: Vice President	 	 
	
GENERAL ELECTRIC CAPITAL CORPORATION,
 as a Revolving Credit Lender	
 	

 
	

By:	

/s/  KRISTINA M. MILLER      
	
 	

 
	Name: Kristina M. Miller	 	 
	Title: Duly Authorized Signatory	 	 

2

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Exhibit 10.5QuickLinks
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Exhibit 10.20    
    

 
 

GANDER MOUNTAIN COMPANY
  AMENDED AND RESTATED
  EXECUTIVE STOCK OPTION AGREEMENT    
    

        THIS EXECUTIVE STOCK OPTION AGREEMENT (this "Agreement") was made and entered into effective as of the 1st day of
April, 1998, and is amended and restated effective as of 12:01 a.m. on the 31st day of December, 2000, by and between Gander Mountain Company, a Delaware corporation (the "Company"), and Al
Dittrich, a resident of the State of Minnesota ("Executive"). 

 
 

RECITALS:    
    

        A.    The
Company is a continuation of Gander Mountain, L.L.C., which previously existed in the form of a Delaware limited liability company, and which converted into a
Delaware corporation pursuant to Delaware law effective as of 12:01 a.m. on December 31, 2000 (the "Conversion"). 

        B.    The
Company is subject to an Executive Unit Option Agreement with Executive effective as of April 1, 1998 (the "1998 Agreement"). 

        C.    In
light of the Conversion, the Company and Executive wish to amend and restate in its entirety the 1998 Agreement. 

        D.    This
Agreement is intended by the Company and Executive to amend, restate and supersede in its entirety the 1998 Agreement. 

 
 

AGREEMENT    
    

        NOW, THEREFORE, for good and valuable consideration, the Company and Executive agree as follows: 

        1.    Grant of Option.    The Company hereby grants to Executive the right and option (the
"Option") to purchase Three Thousand Five Hundred Forty-Six (3,546) shares of the Company's Class B Nonvoting Common Stock, $.01 par value (the "Executive Shares") on the terms and
conditions hereinafter set forth. 

        2.    Purchase Price.    The purchase price of the Executive Shares subject to the Option
shall be Two Hundred Ninety-Six Dollars and 11/100 ($296.11) per Executive Share. 

        3.    Vesting of Options.    

        3.1    Vesting/Exercise Schedule.    Subject to the remaining provisions of this Agreement,
the Option has vested and become exercisable and shall continue to vest and become exercisable in respect of the Executive Shares incrementally in accordance with the Vesting and Exercise Schedule
below so long as Executive continues to be employed by the Company. Commencing on April 1, 1999, this Option has vested and will continue to vest as follows: 

VESTING AND EXERCISE SCHEDULE (CUMULATIVE): 

	Vesting Date and Initial Date of Exercisability
	 	Number of Executive Shares as to which Option Becomes Vested and Exercisable

	April 1, 1999	 	886
	April 1, 2000	 	886
	April 1, 2001	 	887
	April 1, 2002	 	887

        3.2    Requirement of Continuous Employment.    Notwithstanding anything stated in this
Agreement, no part of the Option that would otherwise vest pursuant to this Section 3 in respect 

 

of
any vesting/exercise date shall vest unless Executive is employed by the Company on such vesting/exercise date and has been continuously so employed since the date of this Agreement. If Executive's
employment with the Company terminates at any time for any reason whatsoever, any unvested portion of this Option shall automatically terminate on the date of termination. 

        3.3    Vesting/Exercise Schedule Cumulative.    The Vesting and Exercise Schedule in
Section 3.1 above shall be cumulative; thus, to the extent the Option has become vested and exercisable, but has not already been exercised and has not expired, terminated or been canceled,
Executive may at any time, and from time to time, purchase all or any portion of the Executive Shares then purchasable under the Vesting and Exercise Schedule in Section 3.1 above. 

        4.    Exercise.    Executive may exercise the vested portion of the Option subject to the
following: 

        4.1    Time of Exercise.    Subject to the remaining terms of this Section 4, Executive
may exercise the vested portion of the Option at any time and from time to time until the Option expires. Executive may purchase all or any number of Executive Shares purchasable under the Option upon
any exercise of the
Option. Notwithstanding the foregoing or any other provision herein to the contrary, in no event shall the Option be exercisable at any time after it shall have expired pursuant to Section 6
hereof. 

        4.2    Exercise by Executive or Others.    During the lifetime of Executive, only Executive or
his guardian or his legal representative may exercise the Option. After the death of Executive, the Option may be exercised by Executive's Personal Representative or the beneficiaries of Executive's
estate, as the case may be. Subject to the time period within which the Option is exercisable after Executive's death, Disability, retirement, or termination of employment as specified in
Section 4.3 hereof, the Option may be exercised: 

        (a)   only
while Executive is an employee of the Company or any subsidiary thereof; 

        (b)   only
if Executive has been continuously so employed since the date of this Agreement; and 

        (c)   only
with respect to the Executive Shares vested as of a date immediately prior to Executive's death, Disability, retirement or termination, as the case may be. 

        4.3    Exercise Following Death, Disability, Retirement or Termination of Employment by the Company Without
Cause.    Executive or his legal representative, as the case may be, may, subject to the further limitations of this Agreement, exercise the Option with respect to
any Executive Shares that have vested pursuant to Section 3.1 above, in whole or in part: 

        (a)   within
one hundred eighty (180) days after the death of Executive; 

        (b)   within
ninety (90) days after termination of Executive's employment with the Company if Executive's termination is due to a Disability or if Executive retires in
accordance with the Company's retirement policy then in effect; or 

        (c)   within
ninety (90) days after termination of Executive's employment with the Company, if Executive's employment is terminated without Cause by the Company. 

        4.4    Disability.    "Disability" shall mean the inability of Executive to perform on a
full-time basis the duties and responsibilities of his employment by reason of his illness or other physical or mental impairment or condition, if such inability continues for an
uninterrupted period of one hundred eighty (180) days or more. A period of inability shall be "uninterrupted" unless and until Executive returns to full-time work for a continuous
period of at least thirty (30) days. 

2

 

        4.5    Termination by the Company For Cause.    "Cause" shall mean the termination of
Executive's employment for any of the following reasons: 

        (a)   an
act or acts of dishonesty undertaken by Executive and intended to result in substantial gain or personal enrichment of Executive at the expense of the Company; 

        (b)   unlawful
conduct or gross misconduct that is willful and deliberate on Executive's part and that, in either event, is materially injurious to the Company; or 

        (c)   the
conviction of Executive of a felony. 

        5.    Dissolution, Liquidation, Merger, Etc.    In the event of the proposed dissolution or
liquidation of the Company or in the event of a proposed sale of all of the outstanding membership interests in the Company or all or substantially all of the assets of the Company or in the event of
a proposed reorganization, merger, consolidation or statutory exchange of the Company with or into any other entity, regardless whether the Company is the surviving entity (the actual effective date
of the dissolution, liquidation, sale, reorganization, merger, consolidation or statutory exchange being herein called an "Event"), the Board of Directors of the Company (the "Board") may, but shall
not be obligated to: 

        5.1   if
the Event is a reorganization, merger, consolidation, or statutory exchange make appropriate provision for the protection of the Option by the substitution of options
and appropriate equity interests in the entity surviving any merger or consolidation, or, if appropriate, the parent of such surviving entity, to be issuable upon the exercise of such options in lieu
of the Option and the Executive Shares; or 

        5.2   at
least thirty (30) days prior to the occurrence of an Event, declare, and provide written notice to Executive of the declaration, that the Option shall be
canceled at the time of, or immediately prior to the occurrence of, an Event (unless it shall have been exercised prior to the occurrence of the Event)
in exchange for payment to Executive, within ten (10) days after the Event, of cash equal to the amount (if any), for each vested or unvested Executive Share covered by the canceled Option with
respect to which the canceled Option shall not have expired, by which the fair market value (as defined in the last sentence of this Section 5.2) per Executive Share exceeds the per Executive
Share purchase price of the Executive Shares issuable upon exercise of the Option. The Option shall be exercisable as to all or any part of the vested and unvested portion of the Executive Shares
covered thereby during the period following a declaration pursuant to this Section 5.2 and preceding the time of cancellation of the Option. In the event of a declaration pursuant to this
Section 5.2, the Option, to the extent it shall not have been exercised prior to the Event, shall be canceled at the time of, or immediately prior to, the Event, as provided in the declaration,
subject to the payment obligations of the Company provided in this Section 5.2. Notwithstanding the foregoing, Executive shall not be entitled to the payment provided for in this
Section 5.2 and shall not be permitted to exercise the Option as provided in this Section 5.2 to the extent the Option shall have expired pursuant to Section 6 hereof. For
purposes of this Section, "fair market value" per Executive Share shall mean the cash plus the fair market value, as determined in good faith by the Board, of the non-cash consideration
that Executive would be entitled to receive per Executive Share upon the occurrence of the Event if Executive had exercised the Option. 

If
the Board does not elect to take the actions authorized in Section 5.1 or 5.2 above, then the Option shall remain outstanding. 

        6.    Expiration of Option.    The Option shall expire and all rights to purchase Executive
Shares hereunder shall cease on the earliest of (i) April 1, 2008, (ii) as to any vested portion of the Option, the expiration of the period within which the Option is exercisable
after Executive's death, disability, retirement, or termination of employment by the Company without Cause as specified in Section 4.3 

3

 

above,
(iii) as to any vested portion of the Option, upon Executive's voluntary termination of employment with the Company at any time or upon the termination of Executive's employment by the
Company for Cause at any time, (iv) as to any unvested portion of the Option, upon termination of Executive's employment with the Company at any time for any reason, or (v) the date, if
any, fixed for cancellation pursuant to Section 5.2 above. If the Option is no longer exercisable for any reason before being completely exercised, it shall be deemed to have lapsed or
terminated and will no longer be outstanding. 

        7.    Certain Events Not Deemed Termination of Employment.    Neither the transfer of
Executive between the Company and any subsidiary of the Company, nor a leave of absence granted to Executive and approved by the Board, shall be deemed a termination of employment. 

        8.    Manner of Exercise.    Subject to the terms and conditions of this Agreement, including
Section 13 below, the Option may be exercised by notice to the Company. The notice shall state the election to exercise the Option and the number of Executive Shares in respect of which it is
being exercised, and shall be signed by the person or persons so exercising the Option. If the person exercising the Option is not
Executive, he or she shall also send with the notice appropriate proof of his or her right to exercise the Option. The form of Notice of Exercise attached hereto as Exhibit A shall be
satisfactory if the person exercising the Option is Executive, but any other form containing the information required by this Section shall also be acceptable. Such notice shall be accompanied by
payment (by check, bank draft or money order payable to the Company) of the full purchase price of such Executive Shares or, at the discretion of the Board, by a reduction of the number of Executive
Shares otherwise deliverable upon exercise of the Option, valued at their fair market value (as determined in good faith by the Board) on the date as of which the Option is exercised, or through a
subsequent return to the Company of Executive Shares, valued at their fair market value (as determined in good faith by the Board) on the date as of which the Option is exercised. As soon as
practicable after receipt of the purchase price provided for above, the Company shall reflect on its books and records the appropriate ownership of the Executive Shares purchased and shall deliver a
certificate or certificates representing the Executive Shares purchased. 

        9.    Limitations on Transfer.    Executive shall not sell, transfer, assign, give or
otherwise dispose of the Option otherwise than by will or the laws of descent and distribution, and the Option shall not be subject to pledge, hypothecation, execution, attachment or similar process.
Any attempt to sell, transfer, assign, hypothecate or otherwise dispose of the Option contrary to the provisions hereof and the levy of any attachment or similar process upon the Option shall be null
and void. Concurrently with his execution of this Agreement, Executive and the Company shall execute and deliver an Amended and Restated Executive Transfer and Repurchase Agreement in the form
attached hereto as Exhibit B (the "Amended and Restated Transfer and Repurchase Agreement"). 

        10.    No Member Rights Before Exercise.    Executive shall have none of the rights of a
member with respect to any Executive Share subject to the Option until the Executive Share is actually issued to him upon exercise of the Option. 

        11.    Adjustment in Number of Executive Shares.    The Board shall, to the extent the Option
shall not have expired, make appropriate adjustments in the number of Executive Shares subject to the Option and in the purchase price per Executive Share to give effect to any adjustments made in the
number of outstanding shares of Class B Nonvoting Common Stock of the Company through merger, consolidation, recapitalization, reclassification, combination, membership interest dividend, split
or other similar change, provided that fractional interests shall be rounded to the nearest whole Executive Share. 

        12.    Tax Withholding.    The parties hereto recognize that the Company may be obligated to
withhold federal and state income taxes and FICA or other taxes upon Executive's exercise of the Option. Executive agrees that at the time he exercises the Option, if the Company is required to 

4

 

withhold
such taxes, he will promptly pay in cash upon demand to the Company such amounts as shall be necessary to satisfy such obligation. 

        13.    Amended and Restated Agreement, Transfer and Repurchase Agreement.    Executive
acknowledges and agrees that all Executive Shares purchased upon the exercise of the Option shall become subject immediately upon issuance to the terms of the Amended and Restated Transfer and
Repurchase Agreement. The Company and Executive each agree to execute any amendment or acknowledgment to such Amended and Restated Transfer and Repurchase Agreement as may be necessary to evidence the
fact that such Executive Shares are subject to the Amended and Restated Transfer and Repurchase Agreement. 

        14.    Investment Purpose; Registration.    Executive represents and warrants that any and all
Executive Shares purchased by Executive under the Option will be acquired for investment and not with a view to distribution or resale, and Executive hereby consents to an appropriate legend on the
certificates evidencing such Executive Shares to such effect and to the effect that the Executive Shares may not be disposed of except in compliance with all federal and state securities laws. The
Company shall have no obligation to register the Executive Shares purchased upon the exercise of the Option under federal or state securities laws either at the time the Executive Shares are issued
and delivered to Executive or are proposed to be disposed of by Executive unless otherwise expressly provided to the contrary in written agreements to which the Company and Executive are parties. 

        15.    Governing Law.    This Agreement shall be construed and governed by the laws of the
State of Minnesota. 

        16.    Notices.    Any notice required or permitted to be given by any party upon the other
shall be deemed given upon personal delivery to the other party, or two (2) days after deposit in United States mail, registered or certified, return receipt requested, postage prepaid,
addressed as follows: 

	If to Executive:	 	Al Dittrich

11224 Creek View Land

Champlin, Minnesota 55316
	

If to Company:	
 	

Gander Mountain Company

Attn: Chief Executive Officer

4567 West 80th Street

Minneapolis, MN 55437
	

With a copy to:	
 	

Gander Mountain Company

Attn: Legal Department

4567 West 80th Street

Minneapolis, MN 55437

Any
party may change its address for the service of notice by giving written notice of such change to the other party in any manner above specified. 

        17.    No Right to Continued Employment.    This Agreement (and the Option evidenced hereby)
shall not give Executive any right to continued employment by the Company. The Company may terminate Executive's employment and otherwise deal with Executive as an employee without regard to the
effect any such action may have on Executive's rights under this Agreement. 

        18.    Access to Information.    Executive has had access to information regarding and has had
an opportunity to ask questions regarding, the Company and the transactions contemplated hereby. 

        19.    Separate Representation.    Executive acknowledges that Executive has had the
opportunity to seek and receive independent advice from counsel of Executive's own selection in connection with this 

5

 

Agreement
and has not relied to any extent on any officer, director, or stockholder of, or counsel to, the Company in deciding to enter into this Agreement. 

        20.    State of Option.    Executive represents and warrants to the Company that the State of
Minnesota is the only jurisdiction in which an offer was made by the Company to grant this Option to Executive. 

        21.    Amendment.    No modification, amendment or waiver of any provision of this Agreement
will be effective against the Company or Executive unless such modification, amendment or waiver is approved in writing by the Company and Executive. The failure of any party to enforce any provisions
of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance
with its terms. 

        22.    Complete Agreement.    This Agreement constitutes the complete agreement among the
parties with respect to the subject matter hereof. This Agreement amends, restates and supersedes in its entirety the 1998 Agreement. Executive hereby consents to this Agreement amending, restating
and superseding in its entirety the 1998 Agreement. 

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

*
* * * * 

[Remainder of this page intentionally left blank.]

6

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above stated. 

	 	 	COMPANY:
	

 	
 	

GANDER MOUNTAIN COMPANY

(formerly Gander Mountain, L.L.C.)
	

 	
 	

By	

/s/ Ronald A. Erickson

	 	 	 	Ronald A. Erickson, Chairman
	

 	
 	
EXECUTIVE:
	

 	
 	

/s/ Al Dittrich
 Al Dittrich

[SIGNATURE PAGE] 

EXHIBIT A

TO EXECUTIVE STOCK OPTION AGREEMENT 

Notice of Exercise  

GANDER
MOUNTAIN COMPANY

Attention: Chief Executive Officer

4567 West 80th Street

Minneapolis, MN 55437 

GANDER
MOUNTAIN COMPANY

Attention: Legal Department

4567 West 80th Street

Minneapolis, MN 55437 

Chief
Executive Officer and Legal Department: 

        The
undersigned, holder of an Option to purchase            shares of Class B Nonvoting Common Stock (the "Executive Shares") of Gander Mountain Company (the "Company")
hereby irrevocably exercises such Option for and purchases            Executive Shares of the Company. Enclosed with this Notice is a [check/bank draft/money order] in the
amount of $                        as full payment for such Executive Shares. I have reviewed, and understand the terms of the
Amended and Restated Executive Transfer and Repurchase Agreement applicable to
such Executive Shares. I hereby agree to execute any amendment or acknowledgment or other instrument necessary to evidence my becoming a party to such Amended and Restated Executive Transfer and
Repurchase Agreement and that such Executive Shares are subject to the terms thereof. Please issue a certificate representing the Executive Shares to the undersigned at the address set forth following
my name below. 

Dated:
                                        

	 	 	Very truly yours,
	

 	
 	

    
 [Signature of Option Holder]
	

 	
 	

    
 [Printed Name]
	

 	
 	

    

	

 	
 	

    
 [Address to which Certificate should be delivered]

EXHIBIT B

TO EXECUTIVE STOCK OPTION AGREEMENT 

Amended and Restated Executive Transfer and Repurchase Agreement  

[Subsequently
Amended and Restated] 

QuickLinks

Exhibit 10.20

GANDER MOUNTAIN COMPANY AMENDED AND RESTATED EXECUTIVE STOCK OPTION AGREEMENT

RECITALS

AGREEMENT

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