Document:

Exhibit 10(i)

 

FORM OF

ARCTIC CAT INC.

 

INCENTIVE

STOCK OPTION AGREEMENT

 

THIS OPTION AGREEMENT is made as of the              
day of               ,
200    (the “Option Date”),
between ARCTIC CAT INC., a Minnesota corporation (the “Company”), and                                 ,
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 carry out the purpose of the 2002 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                   
shares of the Common Stock of the Company on the terms and conditions herein
set forth.  It is intended that the
Option shall constitute an incentive stock option, as defined in Section 422A
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.

 

3.                                       Term
of Option.  The term of the Option
shall be for a period of             
(      ) years from the Option Date, subject to earlier
termination as hereinafter provided.

 

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 paragraphs 6 and 7 hereof, the Option may thereafter be exercised
during the term specified in Paragraph 3 as follows:

 

(a)                                  from
and after 12 months from the Option Date, the Option may be exercised as to               
shares.

 

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

 

(c)                                  from
and after 36 months from the Option Dale, the Option may be exercised as to an
additional               
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.                                       Termination
of Employment.  In the event the
employment of the Optionee shall be terminated for any reason whatsoever, the
Option may be exercised (to the extent the Optionee shall have been entitled to
do so at the date of his or her termination of employment) by the Optionee at
any time (i) within three (3) months after such termination of
employment if such termination was by reason of Retirement (as defined in the
2002 Stock Plan), (ii) within one (1) month after such termination if
such termination was for any reason other than Retirement, Cause (as defined in
the 2002 Stock Plan) or as provided in paragraph 7 hereof, and (iii) no
later than the date of termination if such termination was for Cause (as
defined in the 2002 Stock Plan), but in no event may the Option be exercised
later than the expiration of the term specified in paragraph 3.  So long as the Optionee shall continue to be
an employee of the Company or one or more of its subsidiaries, the Option shall
not be affected by any change of duties or position.  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.

 

7.                                       Death
or Permanent Disability of Optionee. 
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
while still employed by the Company or one or more of its subsidiaries, the
Option may be exercised (to the extent that the Optionee shall have been
entitled to do so at the date of his or her death or termination by reason of
permanent and total disability) 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 paragraph 3 hereof.

 

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 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 2002 Stock Plan and applicable
law, or, in the sole discretion of the Company, by delivery of shares of 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 1(i) of the 2002 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.

 

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.

 

10.                                 Stock
Plan.  This Option is subject to
certain additional terms and conditions set forth in the 2002 Stock Plan
pursuant to which this Option has been issued. 
A copy of the 2002 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 2002 Stock Plan.

 

11.                                 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.

 

12.                                 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.

 

13.                                 Subsidiary.  As used herein, the term “subsidiary” shall
mean any current or future corporation which would be a “subsidiary corporation”
of the Company, as that term is defined in Section 425 of the Internal
Revenue Code of 1986, as amended.

 

14.                                 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.

 

15.                                 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.

 

16.                                 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.

 

 

17.                                 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.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  , OptioneeExhibit 10(j)

 

FORM OF

ARCTIC CAT INC.

 

NON-QUALIFIED

STOCK OPTION AGREEMENT

 

THIS OPTION AGREEMENT is made as of the           
day of           , 200    (the “Option Date”), between ARCTIC CAT INC.,
a Minnesota corporation (the “Company”), and                            ,
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 carry out the purpose of the 2002 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                     
shares of the Common Stock of the Company on the terms and conditions herein
set forth.

 

2.                                       Purchase
Price.  The purchase price of the
shares of the Common Stock covered by this Option shall be $            
per share.

 

3.                                       Term
of Option.  The term of the Option
shall be for a period of              (      ) years
from the Option Date, subject to earlier termination as hereinafter provided.

 

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 paragraphs 6 and 7 hereof, the Option may thereafter be exercised
during the term specified in Paragraph 3 as follows:

 

(a)                                  from
and after 12 months from the Option Date, the Option may be exercised as to            
shares.

 

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

 

(c)                                  from
and after 36 months from the Option Dale, the Option may be exercised as to an
additional               
 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.                                       Termination
of Employment.  In the event the
employment of the Optionee shall be terminated for any reason whatsoever, the
Option may be exercised (to the extent the Optionee shall have been entitled to
do so at the date of his or her termination of employment) by the Optionee at
any time (i) within three (3) months after such termination of
employment if such termination was by reason of Retirement (as defined in the
2002 Stock Plan), (ii) within one (1) month after such termination if
such termination was for any reason other than Retirement, Cause (as defined in
the 2002 Stock Plan) or as provided in paragraph 7 hereof, and (iii) no
later than the date of termination if such termination was for Cause (as
defined in the 2002 Stock Plan), but in no event may the Option be exercised
later than the expiration of the term specified in paragraph 3.  So long as the Optionee shall continue to be
an employee of the Company or one or more of its subsidiaries, the Option shall
not be affected by any change of duties or position.  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.

 

7.                                       Death
or Permanent Disability of Optionee. 
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
while still employed by the Company or one or more of its subsidiaries, the
Option may be exercised (to the extent that the Optionee shall have been
entitled to do so at the date of his or her death or termination by reason of
permanent and total disability) 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 paragraph 3 hereof.

 

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 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 2002 Stock Plan and applicable
law, or, in the sole discretion of the Company by delivery of shares of 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 1(i) of the 2002 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.

 

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.

 

 

10.                                 Stock
Plan.  This Option is subject to
certain additional terms and conditions set forth in the 2002 Stock Plan
pursuant to which this Option has been issued. 
A copy of the 2002 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 2002 Stock Plan.

 

11.                                 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.

 

12.                                 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.

 

13.                                 Subsidiary.  As used herein, the term “subsidiary” shall
mean any current or future corporation which would be a “subsidiary corporation”
of the Company, as that term is defined in Section 425 of the Internal
Revenue Code of 1986, as amended.

 

14.                                 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.

 

15.                                 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.

 

16.                                 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.

 

 

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

 

	
   

  	
  ARCTIC CAT INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  , Optionee

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