Document:

EXHIBIT 10.3

 

EMPLOYMENT AGREEMENT

([Name of Executive])

 

THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of                        
     ,             
(the “Effective Date”) by and between Gander Mountain Company, a Minnesota
corporation (the “Company”), and                       ,
a resident of Minnesota (“Executive”).

 

RECITALS

 

A.                                   The Company engages in the business of
the retail sale and distribution of hunting, fishing, camping and other outdoor
recreational and athletic goods, clothing, equipment, and supplies.

 

B.                                     Executive
is currently employed by the Company as its                                              .

 

C.                                     [The
Company and Executive entered into an Employment Agreement, dated                                 
(the “Prior Agreement”), which the Company and Executive desire to cancel and
replace with this Agreement.] [OR THE FOLLOWING] [The Executive received an
offer letter from the Company, dated                                    ]
(the “Prior Agreement”), which the Company and Executive desire to cancel and
replace with this Agreement.]

 

D.                                    The
Company desires to employ Executive, and Executive wishes to be employed, as                                 
of the Company, on the terms and conditions set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing
premises and the respective agreements of the Company and Executive set forth
below, the Company and Executive, intending to be legally bound, agree as
follows:

 

1.                                       Employment.
Subject to all the terms and conditions of this Agreement, Executive’s period
of employment under this Agreement shall be the period commencing on the
Effective Date and ending on the second anniversary of the Effective Date (the “Initial
Term”), unless the Executive’s employment terminates earlier in accordance with
Section 8 hereof. Thereafter,
unless earlier terminated in accordance with Section 8 hereof, the term ofExecutive’s employment with the Company
shall be automatically extended for successive one-year periods following the
expiration of the Initial Term (each, a “Renewal Term” and, together with the
Initial Term, the “Term”), unless either party gives written notice to the
other party at least 90 days prior to the expiration of the Initial Term or any
Renewal Term that such party elects not to extend the term of Executive’s
employment.

 

 

2.                                       Position
and Duties; No Violations.

 

(a)                                  Employment
with the Company. While Executive is employed by the Company during the
Term, Executive shall be employed as                                    
of the Company, or with such other title as the Company may designate, and
shall perform such duties and responsibilities as the Company shall assign
to Executive from time to time.

 

(b)                                 Performance
of Duties and Responsibilities. Executive shall serve the Company
faithfully and to the best of Executive’s ability and shall devote Executive’s
full working time, attention and efforts to the business of the Company during
Executive’s employment with the Company hereunder. Executive shall report to
the Company’s Chief Executive Officer or to such other person as designated by
the Company. Executive hereby represents and confirms that Executive is under
no contractual or legal commitments that would prevent Executive from
fulfilling Executive’s duties and responsibilities as set forth in this
Agreement. During Executive’s employment with the Company, Executive shall not
accept other employment or engage in other material business activity, except
as approved in writing by the Board of Directors of the Company (the “Board”). Executive
may participate in charitable activities and personal investment
activities to a reasonable extent so long as such activities do not interfere
with the performance of Executive’s duties and responsibilities hereunder. Executive
may serve as a director of business organizations only as approved by the
Board.

 

(c)                                  No
Violation of Other Agreements. Executive hereby represents and agrees that
neither (i) Executive’s entering into this Agreement, (ii) Executive’s
employment with the Company, nor (iii) Executive’s carrying out the
provisions of this Agreement, will violate any other agreement (oral, written
or other) to which Executive is a party or by which Executive is bound.

 

3.                                       Compensation.

 

(a)                                  Base
Salary. While Executive is employed by the Company during the Term, the
Company shall pay to Executive a base salary at the rate of                                
Dollars ($                     )
per year, less deductions and withholdings, which base salary shall be paid in
accordance with the Company’s normal payroll policies and procedures. On or
before April 1 of each year during the Term, commencing in fiscal year
2006, the Compensation Committee of the Board (the “Compensation Committee”)
shall review Executive’s performance and may increase (but not reduce)
Executive’s base salary in its sole discretion; provided, however, that the
Compensation Committee may reduce Executive’s base salary by no more than
10% in any twelve-month period if such reduction is part of a general
reduction in the base salaries of all executives of the Company and; provided
further, that no such reduction shall reduce Executive’s base salary below the
initial base salary set forth in the first sentence of this Section 3(a).

 

(b)                                 Annual
Incentive Bonus. Commencing with fiscal year 2006 and for each full fiscal
year thereafter that Executive is employed by the Company during the Term,
Executive shall be eligible for an annual cash incentive bonus in an amount up
to 100% of the annual base salary paid to Executive for such fiscal year, based
upon achievement of defined

 

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goals mutually agreed
upon by Executive and the Compensation Committee and in accordance with the
terms of any incentive plan of the Company in effect from time to time (the “Annual
Incentive Bonus”). The level of achievement of the objectives each year and the
amount payable as Annual Incentive Bonus shall be determined in good faith by
the Compensation Committee. Any Annual Incentive Bonus earned in a fiscal year
shall be paid to Executive on or before the sixtieth (60th) day
following the last day of such fiscal year.

 

(c)                                  Equity-Based
Awards; Accelerated Vesting and Period to Exercise. From time to time,
Executive shall be eligible for awards under the Amended and Restated 2004
Omnibus Stock Plan (the “Plan”), and the Compensation Committee, in its sole
discretion, may grant Executive an award under the Plan in accordance with
the terms and conditions of the Plan or any successor plan, as may be
amended from time to time. Upon the
occurrence of a Change in Control (as defined in Section 9 hereof) while
Executive is employed by the Company, the vesting of all stock options, grants
of restricted stock and other equity-based awards (collectively, the “Equity
Awards”) subject to time or performance based vesting then held by Executive
shall be accelerated and all such Equity Awards shall become immediately fully
vested upon such Change in Control. Upon the occurrence of the termination of
Executive’s employment by the Company without Cause (as defined in Section 9
hereof), the vesting of all Equity Awards subject to time based vesting then
held by Executive that would otherwise vest on or before the first anniversary
of the Termination Date (as defined in Section 8 hereof) shall be
accelerated and such Equity Awards shall become immediately vested to such
extent upon such termination without Cause. Notwithstanding any shorter period
specified in the applicable award agreement or plan, if Executive is entitled
to a Severance Amount (as defined in Section 8 hereof), then all vested
Equity Awards held by Executive on Executive’s Termination Date (including all Equity Awards for which vesting
accelerates pursuant to this Section 3(c)) shall remain exercisable
through the date that Executive receives the last payment of the Severance
Amount; provided that the provisions of this sentence shall not apply to any
Equity Awards granted or awarded to Executive prior to the date of this Agreement.

 

(d)                                 Benefits.
While Executive is employed by the Company during the Term, Executive shall be
entitled to participate in all employee benefit plans and programs of the
Company to the extent that Executive meets the eligibility requirements for
each individual plan or program. The Company provides no assurance as to the
adoption or continuance of any particular employee benefit plan or program, and
Executive’s participation in any such plan or program shall be subject to the
provisions, rules and regulations applicable thereto.

 

(e)                                  Expenses.
While Executive is employed by the Company during the Term, the Company shall
reimburse Executive for all reasonable and necessary out-of-pocket business,
travel and entertainment expenses incurred by Executive in the performance of
Executive’s duties and responsibilities hereunder, subject to the Company’s
normal policies and procedures for expense verification and documentation.

 

4.                                       Affiliated
Entities. As used in Sections 5, 6 and 7 of this Agreement, “Company” shall
include the Company and each corporation, partnership, or other entity that is
controlled by the Company, or is under common control with the Company (in each
case “control” meaning the direct or indirect ownership of 50% or more of all
outstanding equity interests); but shall not

 

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include Holiday Companies
or any entities (other than the Company) controlled by or under common control
with Holiday Companies.

 

5.                                       Confidential
Information. Except as required in the performance of Executive’s duties as
an employee of the Company or as authorized in writing by the Board, Executive
shall not, either during Executive’s employment with the Company or at any time
thereafter, use, disclose or make accessible to any person any confidential
information for any purpose. “Confidential Information” means information
proprietary to the Company or its customers or prospective customers and not
generally known (including trade secret information) about the Company’s
customers, products, services, personnel, suppliers, pricing, sales strategies,
technology, computer software code, methods, processes, designs, research,
development systems, techniques, finances, accounting, purchasing, and plans. All
information disclosed to Executive or to which Executive obtains access,
whether originated by Executive or by others, during the period of Executive’s
employment by the Company, shall be presumed to be Confidential Information if
it is treated by the Company as being Confidential Information or if Executive
has a reasonable basis to believe it to be Confidential Information. Executive
acknowledges that the above-described knowledge and information constitutes a
unique and valuable asset of the Company and represents a substantial investment
of time and expense by the Company, and that any disclosure or other use of
such knowledge or information other than for the sole benefit of the Company
would be wrongful and would cause irreparable harm to the Company. During
Executive’s employment with the Company, Executive shall refrain from
committing any acts that would materially reduce the value of such knowledge or
information to the Company. The foregoing obligations of confidentiality shall
not apply to any knowledge or information that (i) is now or subsequently
becomes generally publicly known, other than as a direct or indirect result of
the breach of this Agreement by Executive, (ii) is independently made
available to Executive in good faith by a third party who has not violated a
confidential relationship with the Company, or (iii) is required to be
disclosed by law or legal process. Notwithstanding
the previous sentence, prior to disclosure of Confidential Information pursuant
to clause (iii) thereof, Executive shall give the Company prompt notice of
the legal requirement for disclosure so that the Company may seek an
appropriate protective order and at the Company’s request and expense,
Executive shall cooperate with the Company in seeking such an order. If
Executive is nonetheless compelled to disclose Confidential Information as
permitted by such clause (iii), Executive shall disclose only that portion of
the Confidential Information as Executive is legally compelled to disclose and,
at the Company’s request and expense, shall use commercially reasonable efforts
to obtain assurances that confidential treatment will be accorded such
Confidential Information. Executive acknowledges that the obligations
imposed by this Section 5 are in addition to, and not in place of, any
obligations imposed by applicable statutory or common law.

 

6.                                       Noncompetition
Covenant.

 

(a)                                  Agreement
Not to Compete. During Executive’s employment with the Company and during
the Restricted Period (as defined below), Executive shall not, directly or
indirectly, on Executive’s own behalf or on behalf of any person or entity
other than the Company, including without limitation as a proprietor,
principal, agent, partner, officer, director, stockholder, employee, member of
any association, consultant or otherwise, engage in any

 

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business that is then
competitive with the business of the Company, including without limitation any
business that operates retail stores for the sale or distribution of hunting,
fishing, camping or other outdoor recreational and athletic goods, clothing,
equipment or supplies (such as Cabela’s Inc., Bass Pro Shops and Sportsman’s
Warehouse). Ownership by Executive, as a passive investment, of less than 0.5%
of the outstanding shares of capital stock of any corporation listed on a
national securities exchange or publicly traded in the over-the-counter market
shall not constitute a breach of this Section 6(a) or any other
provisions of this Section 6.

 

(b)                                 Agreement
Not to Hire. Except as required in the performance of Executive’s duties as
an employee of the Company, during Executive’s employment with the Company and
during the Restricted Period, Executive shall not, directly or indirectly,
hire, engage or solicit or induce or attempt to induce to cease working for the
Company, any person who is then an employee of the Company or who was an
employee of the Company during the six (6) month period immediately
preceding Executive’s termination of employment with the Company.

 

(c)                                  Agreement
Not to Solicit. Except as required in the performance of Executive’s duties
as an employee of the Company, during Executive’s employment with the Company
and during the Restricted Period, Executive shall not, directly or indirectly,
solicit, request, advise, induce or attempt to induce any vendor, supplier or
other business contact of the Company to cancel, curtail, cease doing business
with, or otherwise adversely change its relationship with the Company.

 

(d)                                 Restricted
Period. “Restricted Period” hereunder means a period of twelve consecutive
months immediately following the last day of Executive’s employment with the
Company.

 

(e)                                  Acknowledgment.
Executive hereby acknowledges that the provisions of this Section 6 are
reasonable and necessary to protect the legitimate interests of the Company and
that any violation of this Section 6 by Executive shall cause substantial
and irreparable harm to the Company to such an extent that monetary damages
alone would be an inadequate remedy therefor. Therefore, in the event that Executive
violates any provision of this Section 6, the Company shall be entitled to
an injunction, in addition to all the other remedies it may have,
restraining Executive from violating or continuing to violate such provision.

 

(f)                                    Blue
Pencil Doctrine. If the duration of, the scope of or any business activity
covered by any provision of this Section 6 is in excess of what is
determined to be valid and enforceable under applicable law, such provision
shall be construed to cover only that duration, scope or activity that is
determined to be valid and enforceable. Executive hereby acknowledges that this
Section 6 shall be given the construction that renders its provisions
valid and enforceable to the maximum extent, not exceeding its express terms,
possible under applicable law.

 

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7.                                       Intellectual
Property.

 

(a)                                  Disclosure
and Assignment. As of the Effective Date, Executive hereby transfers and
assigns to the Company (or its designee) all right, title, and interest of
Executive in and to every idea, concept, invention, and improvement (whether
patented, patentable or not) conceived or reduced to practice by Executive
whether solely or in collaboration with others while Executive is employed by
the Company, and all copyrighted or copyrightable matter created by Executive
whether solely or in collaboration with others while Executive is employed by
the Company, in each case, that relates to the Company’s business
(collectively, “Creations”). Executive shall communicate promptly and disclose
to the Company, in such form as the Company may request, all
information, details, and data pertaining to each Creation. Every copyrightable
Creation, regardless of whether copyright protection is sought or preserved by
the Company, shall be a “work made for hire” as defined in 17 U.S.C. § 101,
and the Company shall own all rights in and to such matter throughout the
world, without the payment of any royalty or other consideration to Executive
or anyone claiming through Executive.

 

(b)                                 Trademarks.
All right, title, and interest in and to any and all trademarks, trade names,
service marks, and logos adopted, used, or considered for use by the Company
during Executive’s employment (whether or not developed by Executive) to
identify the Company’s business or other goods or services (collectively, the “Marks”),
together with the goodwill appurtenant thereto, and all other materials, ideas,
or other property conceived, created, developed, adopted, or improved by
Executive solely or jointly during Executive’s employment by the Company and
relating to its business shall be owned exclusively by the Company. Executive
shall not have, and will not claim to have, any right, title, or interest of
any kind in or to the Marks or such other property.

 

(c)                                  Documentation.
Executive shall execute and deliver to the Company such formal transfers and
assignments and such other documents as the Company may request to permit
the Company (or its designee) to file and prosecute such registration
applications and other documents it deems useful to protect or enforce its
rights hereunder. Any idea, invention, copyrightable matter, or other property
relating to the Company’s business and disclosed by Executive prior to the
first anniversary of the effective date of Executive’s termination of
employment shall be deemed to be governed by the terms of this Section 7
unless proven by Executive to have been first conceived and made after such
termination date.

 

(d)                                 Non-Applicability.
Executive is hereby notified that this Section 7 does not apply to any
invention for which no equipment, supplies, facility, Confidential Information,
or other trade secret information of the Company was used and which was
developed entirely on Executive’s own time, unless (1) the invention relates
(a) directly to the business of the Company or (b) to the Company’s
actual or demonstrably anticipated research or development, or (2) the
invention results from any work performed by Executive for the Company.

 

8.                                       Termination
of Employment.

 

(a)                                  Executive’s
employment with the Company shall terminate immediately upon:

 

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(i)                                     The
effective date of termination of Executive’s employment specified in a written
notice of termination received by Executive from the Company;

 

(ii)                                  the Company’s receipt of Executive’s
written resignation from the Company;

 

(iii)                               Executive’s Disability
(as defined below); or

 

(iv)                              Executive’s death.

 

(b)                                 The
date upon which Executive’s termination of employment with the Company occurs
shall be the “Termination Date.”

 

9.                                       Payments
upon Termination of Employment.

 

(a)                                  If
Executive’s employment with the Company is terminated by reason of:

 

(i)                                     Executive’s
abandonment of Executive’s employment or Executive’s resignation for any reason;

 

(ii)                                  termination
of Executive’s employment by the Company for Cause (as defined below); or

 

(iii)                               expiration of the Term;
following notice by the Executive of non-renewal, pursuant to Section 1
above,

 

the Company shall pay to
Executive the Executive’s then-current base salary through the Termination Date
and any Annual Incentive Bonus earned but unpaid for the completed fiscal year
preceding the fiscal year in which the Termination Date occurs; provided that
such Annual Incentive Bonus payments shall be payable in the same manner and at
the same time that Annual Incentive Bonus payments are made to current
employees of the Company.

 

(b)                                 If
Executive’s employment with the Company is involuntarily terminated by the
Company for any reason other than for Cause (as defined below), including
without limitation the expiration of the Term following notice by the Company
of non-renewal pursuant to Section 1 above, then the Company shall,
subject to Sections 9(j) and 9(k) of this Agreement and in addition to any base
salary earned through the Termination Date and any Annual Incentive Bonus
earned but unpaid for the completed fiscal year preceding the fiscal year in
which the Termination Date occurs, pay to Executive:

 

(i)                                     an
amount equal to Executive’s then-current annual base salary; and

 

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(ii)                                  an
amount equal to the Annual Incentive Bonus that Executive earned under Section 3(b) for
the last full fiscal year of Executive’s employment with the Company.

 

(c)                                  If
Executive’s employment with the Company terminates by reason of Executive’s
death or Disability, the Company shall pay to Executive or Executive’s
beneficiary or Executive’s estate, as the case may be, Executive’s
then-current base salary through the Termination Date, any earned and unpaid
Annual Incentive Bonus for the fiscal year preceding the fiscal year in which
the Termination Date occurs and a pro-rated portion of any Annual Incentive
Bonus for the fiscal year in which the Termination Date occurs, based on the
number of days during such fiscal year Executive was employed by the Company,
payable in the same manner and at the same time that Annual Incentive Bonus
payments are made to current employees of the Company.

 

(d)                                 Notwithstanding
the provisions of Sections 9(a) and 9(b), if, within twelve months following the occurrence of a Change in Control
(as defined below), Executive’s employment with the Company is terminated by
either Executive or the Company for any reason, then the Company shall, subject
to Sections 9(j) and 9(k) of this Agreement and in addition to any base
salary earned through the Termination Date and any Annual Incentive Bonus
earned but unpaid for the preceding fiscal year, and in lieu of any payments required by Sections 9(a) or 9(b) of this
Agreement, pay to Executive:

 

(i)                                     an
amount equal to Executive’s then-current annual base salary; and

 

(ii)                                  an
amount equal to the Annual Incentive Bonus that Executive earned under Section 3(b) for
the last full fiscal year of Executive’s employment with the Company.

 

In the event that
Executive becomes eligible for payments under this Section 9(d), the
Company shall be released from its obligation to make any payments pursuant to
Sections 9(a) or 9(b) above.

 

(e)                                  Any amount payable to Executive pursuant
to Section 9(b)(i) and 9(b)(ii) or pursuant to Section 9(d)(i) and
9(d)(ii), as applicable (the “Severance Amount”), shall be subject to
deductions and withholdings for applicable taxes but shall not be subject to
deductions for any other amounts received by Executive as a result of future
employment or otherwise. Fifty percent (50%) of the Severance Amount shall be
paid to Executive by the Company in a lump sum on the first day of the seventh
month after the Termination Date. The remaining balance of the Severance Amount
shall be paid to Executive by the Company in equal installments pursuant to the
Company’s regular payroll practices and procedures, commencing on the first
normal payroll date of the Company following the date of payment of the first
lump sum payment and continuing for six months thereafter.

 

(f)                                    Cause.
“Cause” hereunder shall mean:

 

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(i)                                     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;

 

(ii)                                  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;

 

(iii)                               the conviction of
Executive of a felony;

 

(iv)                              material
and deliberate failure of Executive to perform Executive’s duties and
responsibilities hereunder or to satisfy Executive’s obligations as an officer
or employee of the Company, which failure has not been cured by Executive within
15 days after written notice thereof to Executive from the Company; or

 

(v)                                 material
breach of any terms and conditions of this Agreement by Executive not caused by
the Company, which breach has not been cured by Executive within 15 days after
written notice thereof to Executive from the Company.

 

(g)                                 A
“Change in Control” of the Company shall be deemed to occur if any of the
following occur:

 

(i)                                     Any
“person” (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) after the
date of this Agreement first acquires or becomes a “beneficial owner” (as
defined in Rule 13d-3 or any successor rule under the Exchange Act),
directly or indirectly, of securities of the Company representing 30% or more
of the combined voting power of the Company’s then outstanding securities
entitled to vote generally in the election of directors (“Voting Securities”),
provided, however, that the following shall not constitute a Change in Control
pursuant to this Section 9:

 

(A)                              any
acquisition of Shares or Voting Securities of the Company directly from the
Company;

 

(B)                                any
acquisition or beneficial ownership by the Company or a subsidiary;

 

(C)                                any
acquisition or beneficial ownership by any employee benefit plan (or related
trust) sponsored or maintained by the Company or one or more of its
subsidiaries;

 

9

 

(D)                               any
acquisition or beneficial ownership by any corporation with respect to which,
immediately following such acquisition, more than 50% of both the combined
voting power of the Company’s then outstanding Voting Securities and the Shares
of the Company is then beneficially owned by all or substantially all of the
persons who beneficially owned Voting Securities and Shares of the Company
immediately prior to such acquisition in substantially the same proportions as
their ownership of such Voting Securities and Shares, as the case may be,
immediately prior to such acquisition;

 

(ii)                                  A
majority of the members of the Board of Directors of the Company shall not be
Continuing Directors. “Continuing Directors” shall mean:  (A) individuals who, on the date hereof,
are directors of the Company, (B) individuals elected as directors of the
Company subsequent to the date hereof for whose election proxies shall have
been solicited by the Board of Directors of the Company, (C) individuals
elected as directors of the Company subsequent to the date hereof pursuant to a
nomination or board representation right of preferred stockholders of the
Company or (D) any individual elected or appointed by the Board of
Directors of the Company to fill vacancies on the Board of Directors of the
Company caused by death or resignation (but not by removal) or to fill newly-created
directorships;

 

(iii)                               Consummation of a
reorganization, merger or consolidation of the Company or a statutory exchange
of outstanding Voting Securities of the Company, unless, immediately following
such reorganization, merger, consolidation or exchange, all or substantially all
of the persons who were the beneficial owners, respectively, of Voting
Securities and Shares of the Company immediately prior to such reorganization,
merger, consolidation or exchange beneficially own, directly or indirectly,
more than 50% of, respectively, the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors and the then outstanding shares of common stock, as the case may be,
of the corporation that is the issuer of such securities held by the
stockholders of the Company after such reorganization, merger, consolidation or
exchange in substantially the same proportions as their ownership, immediately
prior to such reorganization, merger, consolidation or exchange, of the Voting
Securities and Shares of the Company, as the case may be; or

 

10

 

(iv)                              Consummation
of (A) a complete liquidation or dissolution of the Company or (B) the
sale or other disposition of all or substantially all of the assets of the
Company (in one or a series of transactions), other than to a corporation
with respect to which, immediately following such sale or other disposition,
more than 50% of, respectively, the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors and the then outstanding shares of common stock of
such corporation is then beneficially owned, directly or indirectly, by all or
substantially all of the persons who were the beneficial owners, respectively,
of the Voting Securities and Shares of the Company immediately prior to such
sale or other disposition in substantially the same proportions as their
ownership, immediately prior to such sale or other disposition, of the Voting
Securities and Shares of the Company, as the case may be.

 

(h)                                 “Disability”
hereunder shall mean the inability of Executive to perform on a full-time
basis the duties and responsibilities of Executive’s employment with the
Company by reason of Executive’s illness or other physical or mental impairment
or condition, if such inability continues for an uninterrupted period of 90
days or more during any 360-day period. A period of inability shall be “uninterrupted”
unless and until Executive returns to full-time work for a continuous period of
at least 30 days.

 

(i)                                     In
the event of termination of Executive’s employment, the sole obligation of the
Company to make payments to Executive shall be its obligation to make the
payments called for by Sections 9(a), 9(b), 9(c), or 9(d) hereof, as
the case may be, and the Company shall have no other obligation to make
payments to Executive or to Executive’s beneficiary or Executive’s estate,
except as otherwise provided by law.

 

(j)                                     Notwithstanding
any other provision hereof, the Company shall not be obligated to make any
payments under Section 9(b) or 9(d) of this Agreement unless
Executive has signed a full release of claims against the Company, in a form and
scope to be prescribed by the Board in its reasonable discretion, all
applicable consideration periods and rescission periods provided by law shall
have expired, and Executive is in compliance with the terms of this Agreement
as of the dates of the payments.

 

(k)                                  Certain
Reduction of Payments by the Company.

 

(i)                                     Notwithstanding
anything contained herein to the contrary, prior to the payment of any amounts
pursuant to Section 9(d) hereof, an independent national accounting
firm designated by the Company (the “Accounting Firm”) shall compute whether
there would be any “excess parachute payments” payable to Executive, within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”), taking into account the total “parachute payments,” within the
meaning of Section 280G of the Code, payable to Executive by the Company
or any successor thereto under this Agreement and any other plan, agreement or

 

11

 

otherwise. If there would be any excess parachute
payments, the Accounting Firm will compute the net after-tax proceeds to
Executive, taking into account the excise tax imposed by Section 4999 of
the Code, if (i) the payments hereunder were reduced, but not below zero,
such that the total parachute payments payable to Executive would not exceed
three (3) times the “base amount” as defined in Section 280G of the
Code, less One Dollar ($1.00), or (ii) the payments hereunder were not
reduced. If reducing the payments hereunder would result in a greater after-tax
amount to Executive, such lesser amount shall be paid to Executive. If not
reducing the payments hereunder would result in a greater after-tax amount to
Executive, such payments shall not be reduced. The determination by the
Accounting Firm shall be binding upon the Company and Executive subject to the
application of Section 9(k)(ii) hereof.

 

(ii)                                  As
a result of uncertainty in the application of Sections 280G of the Code, it is
possible that excess parachute payments will be paid when such payment would
result in a lesser after-tax amount to Executive; this is not the intent hereof.
In such cases, the payment of any excess parachute payments will be void ab
initio as regards any such excess. Any excess will be treated as an
overpayment by the Company to Executive. Executive will return the overpayment
to the Company, within fifteen (15) business days of any determination by the
Accounting Firm that excess parachute payments have been paid when not so
intended, with interest at an annual rate equal to the rate provided in Section 1274(d) of
the Code (or 120% of such rate if the Accounting Firm determines that such rate
is necessary to avoid an excise tax under Section 4999 of the Code) from
the date Executive received the excess until it is repaid to the Company.

 

(iii)                               All
fees, costs and expenses (including, but not limited to, the cost of retaining
experts) of the Accounting Firm shall be borne by the Company and the Company
shall pay such fees, costs, and expenses as they become due. In performing the
computations required hereunder, the Accounting Firm shall assume that taxes
will be paid for state and federal purposes at the highest possible marginal
tax rates which could be applicable to Executive in the year of receipt of the
payments, unless Executive agrees otherwise.

 

10.                                 Return
Of Property. Upon termination of Executive’s employment with the Company,
Executive shall deliver promptly to the Company all records, files, manuals,
books, forms, documents, letters, memoranda, data, customer lists, tables,
photographs, video tapes, audio tapes, computer disks and other computer
storage media, and copies thereof, that are the property of the Company, or
that relate in any way to the business, products, services, personnel,
customers, prospective customers, suppliers, practices, or techniques of the
Company, and all other property of the Company (such as, for example,
computers, cellular telephones, pagers, credit cards, and keys), whether or not
containing Confidential Information, that are in Executive’s possession or
under Executive’s control.

 

11.                                 Remedies.
Executive acknowledges that it would be difficult to fully compensate the
Company for monetary damages resulting from any breach by Executive of the
provisions of Sections 5, 6, and 7 hereof. Accordingly, in the event of any
actual or threatened breach of any such provisions, the Company shall, in
addition to any other remedies it may have, be entitled to injunctive and
other equitable relief to enforce such provisions, and such relief may be
granted without the necessity of proving actual monetary damages.

 

12

 

12.                                 Termination of Prior Agreement. The parties agree that simultaneously with
the execution of this Agreement on the Effective Date, the Prior Agreement
shall terminate and be of no further force or effect.

 

13.                                 Taxes.
This Agreement is intended to satisfy the requirements of Section 409A(a)(2),
(3) and (4) of the Internal Revenue Code of 1986, as amended (“Code”),
including current and future guidance and regulations interpreting such
provisions. To the extent that any provision of this Agreement fails to satisfy
those requirements, the provision shall automatically be modified in a manner
that, in the good-faith opinion of the Company, brings the provisions into
compliance with those requirements while preserving as closely as possible the
original intent of the provision and this Agreement. In particular, and without
limiting the preceding sentence, if Executive is a “specified employee” under Section 409A(a)(2)(B)(i) of
the Code, then any payment under this Agreement that is treated as deferred
compensation under Section 409A of the Code shall be delayed until the
date which is six months after the date of “separation from service” under the
Code (without interest or earnings).

 

14.                                 Miscellaneous.

 

(a)                                  Governing
Law. This Agreement shall be governed by, subject to, and construed in
accordance with the laws of the State of Minnesota without regard to conflict
of law principles. Any action relating to this Agreement shall only be brought
in a court of competent jurisdiction in the State of Minnesota, and the parties
consent to the jurisdiction, venue and convenience of such courts.

 

(b)                                 Jurisdiction
and Law. Executive and the Company consent to jurisdiction of the courts of
the State of Minnesota and/or the federal district courts, District of
Minnesota, for the purpose of resolving all issues of law, equity, or fact,
arising out of or in connection with this Agreement. Any action involving
claims of a breach of this Agreement shall be brought in such courts. Each
party consents to personal jurisdiction over such party in the state and/or
federal courts of Minnesota and hereby waives any defense of lack of personal
jurisdiction or forum non conveniens. Venue, for
the purpose of all such suits, shall be in Hennepin County, State of Minnesota.

 

(c)                                  Entire
Agreement. This Agreement contains the entire agreement of the parties
relating to Executive’s employment with the Company and supersedes all prior
agreements and understandings with respect to such subject matter, and the
parties hereto have made no agreements, representations or warranties relating
to the subject matter of this Agreement that are not set forth herein.

 

(d)                                 Amendments.
No amendment or modification of this Agreement shall be deemed effective unless
made in writing and signed by the parties hereto.

 

(e)                                  No
Waiver. No term or condition of this Agreement shall be deemed to have been
waived, except by a statement in writing signed by the party against whom
enforcement of the waiver is sought. Any written waiver shall not be deemed a
continuing

 

13

 

waiver unless
specifically stated, shall operate only as to the specific term or condition
waived and shall not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.

 

(f)                                    Assignment.
This Agreement shall not be assignable, in whole or in part, by either party
without the prior written consent of the other party, except that the Company
may, without the consent of Executive, assign its rights and obligations under
this Agreement (i) to any entity with which the Company may merge or
consolidate, or (ii) to any corporation or other person or business entity
to which the Company may sell or transfer all or substantially all of its
assets; provided that such assignee is a successor in interest to the Company’s
business and assumes all obligations of the Company under this Agreement. After
any such assignment by the Company, the Company shall be discharged from all
further liability hereunder and such assignee shall thereafter be deemed to be
the “Company” for purposes of all terms and conditions of this Agreement,
including this Section 14.

 

(g)                                 Counterparts.
This Agreement may be executed in any number of counterparts, and such
counterparts executed and delivered, each as an original, shall constitute but
one and the same instrument.

 

(h)                                 Severability.
Subject to Section 6(f) hereof, to the extent that any portion of any
provision of this Agreement shall be invalid or unenforceable, it shall be
considered deleted herefrom and the remainder of such provision and of this
Agreement shall be unaffected and shall continue in full force and effect. The
parties agree to negotiate in good faith to replace any provision deleted as a
result of this Section 14(h) with a valid and enforceable provision
intended to have a substantially similar economic effect.

 

(i)                                     Survival.
The terms and conditions set forth in Sections 4, 5, 6, 7, 8, 10, 11, 12, 13
and 14 of this Agreement, and any other provision that continues by its terms,
shall survive expiration of the Term or termination of Executive’s employment
for any reason.

 

(j)                                     Captions
and Headings. The captions and paragraph headings used in this Agreement are
for convenience of reference only and shall not affect the construction or
interpretation of this Agreement or any of the provisions hereof.

 

* * * * *

 

[Remainder of this page intentionally left
blank.]

 

14

 

IN
WITNESS WHEREOF, Executive and the Company have executed this Agreement as of
the date set forth in the first paragraph.

 

	
   

  	
  GANDER
  MOUNTAIN COMPANY

  
	
   

  	
   

  
	
   

  	
  180 East Fifth
  Street

  
	
   

  	
  Suite 1300

  
	
   

  	
  St. Paul, MN
  55101

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [NAME
  OF EXECUTIVE]

  
	
   

  	
   

  
	
   

  	
  [ADDRESS OF
  EXECUTIVE]

  
					

 

[signature page to
Employment Agreement]EXHIBIT 10.1

 

SEVERANCE
AGREEMENT AND RELEASE

 

This Severance
Agreement and Release (the “Agreement”) is made by and between Franklin Foster
(“Mr. Foster”) and Marten Transport Ltd. (“Marten”) (Mr. Foster and
Marten are collectively referred to as the “Parties” in this Agreement).

 

RECITALS

 

WHEREAS, Mr. Foster is employed by
Marten as Marten’s Vice President of Finance;

 

WHEREAS, Marten has decided to eliminate the
position of Vice President of Finance;

 

WHEREAS, the
Parties now desire to end their employment relationship on terms that are
amicable and final;

 

NOW, THEREFORE, in exchange for the mutual
promises and consideration specified in this Agreement, the sufficiency of
which is hereby acknowledged, the Parties agree as follows.

 

AGREEMENT

 

1.              Termination of
Employment. The parties agree that Mr. Foster’s employment with Marten
is terminated effective February 9, 2006.

 

2.              Payment. Upon
the execution of this Agreement, Marten shall be obligated to make a severance
payment for the benefit of Mr. Foster of $126,153.75 (representing six
months pay at full salary ($79,576.50), plus six months pay at half salary,
($39,788.25)). Marten Transport Ltd. shall also make a one time payment to Mr. Foster
in the amount of $6,789.00, representing six months of Marten’s contribution toward
Mr. Foster’s group health insurance premium plus an additional six months
contribution toward Mr. Foster’s group health insurance premium at half
the current rate. In addition Marten will assist in job placement services with
an amount of $2,000.00 all payable upon expiration of the revocation period set
forth below. The incentive payment in the amount of $39,476.00 awarded by
Marten’s compensation committee pursuant to the company’s 2005 incentive plan will
be paid upon execution of agreement.

 

All of these payments are made in lieu of
wages and therefore will be subject to withholding of state income taxes,
federal income taxes, and FICA at the rates and in the amounts required by law.

 

3.              Release. Mr. Foster hereby
releases and discharges Marten, any entity affiliated with Marten, and their
respective officers, directors, employees, agents, attorneys, successors, and
assigns (“Released Parties”), from all claims, causes of action, debts,
demands, suits, covenants, contracts, agreements, promises, omissions, and
damages and liabilities of any kind, nature and description whatsoever, whether
known or unknown, which Mr. Foster now has or may have, through the date
of his execution of this Agreement, under federal, state, or local law, ordinance,
rule, statute or regulation, including but not limited to the Age
Discrimination in Employment Act (ADEA), the Older Workers Benefits Protection
Act (OWBPA), the Wisconsin Fair Employment Act (WFEA), the Americans with
Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964, the Family
Medical leave Act, the Employee Retirement Income Security Act of 1978, and to
all common law and other claims which he may have as of the date of this
Agreement, whether legal or equitable.

 

 

This release includes all claims pertaining
to Mr. Foster’s employment relationship with Marten with the following
exceptions as required by law: claims for unemployment insurance benefits,
claims for workers compensation benefits, vested post-termination benefits under
any 401(k) or similar retirement benefit plan, COBRA benefits, the right to
enforce the terms of this Release or to challenge the knowing and voluntary
nature of this Release under the ADEA and OWBPA, the right to assert claims
that are based on events that happened after this Release becomes effective, and
his right to exercise vested stock options covering 8438 shares of common stock
for a period of 90 days after the effective employment termination date under
stock options granted prior termination of employment. Mr. Foster agrees
that Marten reserves any and all defenses which it has or might have against
any claims that he might bring. Nothing in this Release interferes with Mr. Foster’s
right to file a charge with the Equal Employment Opportunity Commission (“EEOC”),
or other local civil rights enforcement agency, or to participate in an EEOC
investigation or proceeding, but he understands and agrees that in this
release, he has waived his right to recover any individual relief or monetary
damages as a result of any filing of such charge.

 

4.               Non-Admission of Liability. This Agreement shall not in any
way be construed as an admission by Marten or any person or entity affiliated
with Marten of any liability or any wrong-doing with respect to Mr. Foster.

 

5.               Non-disparagement. Mr. Foster
agrees that he shall not make, to any person or entity, any disparaging
statement, either orally or in writing, about Marten, any entity affiliated
with Marten, and any present or former employee, officer, or director of Marten
or any entity affiliated with Marten, nor shall Mr. Foster cause any other
person to make any such disparaging statement. Marten agrees that its officers
and directors shall not make any disparaging statement about Mr. Foster or
his former employment with Marten.

 

6.               Agreement Not to Seek Reemployment. Mr. Foster understands and agrees that his employment with
Marten shall be terminated effective February 9, 2006, that he is not now
an employee of Marten, and that he is not entitled to any reinstatement or
reemployment with Marten following his termination date. Mr. Foster
further agrees that he will not in the future seek any employment with Marten
or any entity affiliated with Marten, and that Marten may use this
agreement as the sole reason to reject any inquiry or application for
employment Mr. Foster may make.

 

7.               Covenant Not to Sue. Mr. Foster
understands and agrees that this Agreement prohibits him from initiating
or continuing any lawsuit against the Released Parties for any claim released in
paragraph 3 above, and prohibits him from recovering any amounts or obtaining
any remedy for any claim released in paragraph 3 above through an action or
proceeding brought by others. Mr. Foster understands that this covenant
not to sue does not apply to challenges to the validity of this Severance
Agreement and Release under the OWBPA. Mr. Foster represents that he has
not filed any complaints, charges, or lawsuits of any kind or nature with any
governmental agency or court related to the Released Parties. Mr. Foster
further represents and warrants that he has not assigned any claims or
authorized any other person or entity to assert any claim on his behalf against
any Released Party.

 

8.               Letter of Reference. Marten will execute a Letter of
Reference in the form attached hereto as “Exhibit A.”

 

9.               Non-admissibility. The Parties agree that this Agreement is
made in furtherance of federal and state law and that, in furtherance of public
policy and by agreement, this Agreement is not

 

 

admissible in evidence and will not be
offered as evidence in any proceeding except to enforce the terms of this
Agreement.

 

10.         Consulting an Attorney. Mr. Foster
understands that he should consult an attorney of his own choice about this
Agreement or any matter that it covers before signing this Agreement.

 

11.         Representations. By signing this Agreement Mr. Foster
represents that he has read this entire Agreement and understands all of its
terms. Mr. Foster further represents that he is of legal age and has full
legal authority to release any and all claims as specified herein and to
undertake all other obligations as specified herein. Mr. Foster warrants
that no promise or inducement has been offered to him except as set forth
herein, and that this Agreement is executed without reliance upon any statement
or representation by Marten or any of the other Released Parties.

 

12.         Twenty-One Day Consideration Period. Mr. Foster
represents and agrees that prior to the execution of this Agreement he was
fully advised to consult with an attorney to discuss all aspects of this
Agreement, and that to the extent desired, he has availed himself of that
right. Mr. Foster further represents and agrees that he has been given a
period of at least twenty-one (21) days to consider this Agreement and to the
extent he has executed this Agreement prior to the expiration of that period,
he has done so knowingly and voluntarily. He further represents and agrees that
he has read this Agreement carefully and fully understands all the provisions
of this Agreement and that he has knowingly and voluntarily entered into this
Agreement.

 

13.         Rescission Period. Mr. Foster
understands that he may revoke or rescind this Agreement within seven (7) calendar
days after signing it. To be effective, the revocation or rescission must be in
writing and delivered to Susan Deetz, Marten Transport Ltd., 129 Marten Street,
Mondovi, WI 54755, facsimile (800) 461-0377, either by hand or by facsimile,
within the seven-day rescission period.

 

14.         Effective Date. This Agreement shall become
effective as of the date Mr. Foster executes this Agreement and returns it
to Susan Deetz, Marten Transport Ltd., 129 Marten Street, Mondovi, WI 54755,
facsimile (800) 461-0377, either by hand or by facsimile, however, Martens’
obligations under paragraph 1 shall not become effective until seven (7) days
after Mr. Foster executes this Agreement, Martens’ obligations under
paragraph 1 also will not become effective if Mr. Foster exercises his
revocation or rescission rights under Paragraph 14.

 

15.         Entire
Agreement. The Parties understand and agree that this Agreement
contains the entire agreement between them relating to the claims referenced in
this Agreement, and that this Agreement supersedes any prior agreements and
discussions relating to such matters.

 

16.       Successors and Assigns. Mr. Foster agrees that his promises in
this Agreement benefit Marten and also any successor or assignee of
Marten’s business or operations. Marten agrees that its promises in this
Agreement shall be binding on any successor or assignee of Marten’s business or
operations.

 

17.         Final and
Binding Effect and Voluntary Agreement. In entering into this
Agreement, the Parties expressly state that they have carefully read and fully
understand the terms of this Agreement, that they enter into this Agreement
knowingly, voluntarily and of their own free will. The Parties understand that
this Agreement will have a final and binding effect and that by executing this
Agreement they may be giving up legal rights. The Parties further state
that their

 

 

willingness to enter into this Agreement was
not induced by, or based upon, any representation by any other Party hereto, or
their agents or employees which is not contained in this Agreement.

 

18.         Dispute
resolution. In the event that any dispute related to this Agreement
arises between the Parties, the Parties agree to confer and attempt to resolve
such disputes for a period of thirty days before seeking any further relief. In
the event that a dispute is not resolved through such negotiations, any action
bought by either Party to enforce this Agreement shall be subject to binding
arbitration in Wisconsin before the American Arbitration Association under its
rules. The Parties agree that the arbitration award is fully enforceable.

 

19.         Severability.
The Parties understand and agree that the provisions of this
Agreement shall be deemed severable, and that the invalidity or
unenforceability of any one or more of the provisions or clauses hereof shall
not affect the validity or enforceability or the other provisions or clauses in
this Agreement.

 

20.         Modification.
This Agreement shall not be deemed or construed to have been
modified, amended, rescinded, canceled or waived, in whole or part, except by a
written instrument signed by each Party.

 

21.         Authority. Marten
represents and warrants that the person executing this Agreement on behalf of
Marten has the full power and authority to enter into Agreement and bind Marten
to this Agreement. Mr. Foster represents and warrants that he has the capacity
to act on his own behalf and on behalf of all who might claim through him to
bind them to the terms and conditions of the Agreement.

 

22.         Interpretation
and Governing law. This Agreement shall be interpreted and governed
under the laws of the State of Wisconsin, without reference to Wisconsin’s
choice of law rules.

 

23.         No
Assignment. Mr. Foster warrants
and represents that he has not heretofore assigned or transferred in any
manner, or purported to assign or transfer in any manner, to any person or entity,
any claim or portion thereof or interest therein that is the subject of this
Agreement.

 

24.         Counterparts.
This Agreement may be executed in counterparts, each of which
shall be deemed an original and said counterparts shall constitute but one and the
same original. All such counterparts may be evidenced by facsimile and
each such facsimile shall be deemed an original, shall be binding upon the
Parties for all purposes herein, and, together with any other counterpart,
shall constitute one and the same instrument.

 

25.         Full and Complete Defense. It is
specifically agreed that in the event of any legal proceeding against Marten
concerning any claim released herein, this Agreement shall serve as a full and
complete defense to any such proceeding.

 

	
   

  	
  Marten Transport Ltd.

  
	
   

  	
   

  
	
    /s/ Franklin Foster

  	
   

  	
    /s/ Robert Smith

  	
   

  
	
  Franklin
  Foster

  	
  Robert
  Smith, Chief Operating Officer

  
	
   

  	
   

  
	
    March 6, 2006

  	
   

  	
    March 6, 2006

  	
   

  
	
  Date

  	
  Date

  

 

 

EXHIBIT A

 

[EXHIBIT PROVIDED TO SEC
UPON REQUEST]

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