Exhibit 10.1
EMPLOYMENT
AGREEMENT
THIS AGREEMENT
, is made and entered into as of
this 25th day of August 2008, by and between Arctic
Cat Inc. (the “Company”) and Claude J. Jordan (the
“Executive”).
W I T N E S S E T H:
WHEREAS , the Company
desires to retain the services of Executive in the capacity of
President and Chief Operating Officer, and Executive desires to
accept such employment, subject to the supervision of the Chief
Executive Officer of the Company and the further terms and
conditions set forth herein.
WHEREAS , the Company
and Executive acknowledge that they have also entered into a Change
of Control Agreement of even date herewith, and that such Change of
Control Agreement shall supersede this Agreement and understanding
between the parties with respect to termination upon a
“Change of Control” as defined therein and any
compensation paid to Executive upon such termination.
NOW, THEREFORE
, in consideration of the mutual
covenants contained herein, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I.
DEFINITIONS
1.1
EXECUTIVE means Claude J. Jordan.
1.2
COMPANY means Arctic Cat Inc. and all of its subsidiary and
affiliated entities and their divisions which now exist or may
exist in the future.
1.3
ARCTIC CAT PRODUCTS means any goods or services which the
Executive or those under his direct or indirect supervision
designed, developed, marketed, promoted, sold, serviced, or
provided on behalf of the Company during the last two years in
which the Executive was employed by the Company.
1.4
COMPETITIVE PRODUCTS means any product, product line or
service (including any component thereof or research to develop
information useful in connection with a product or service) that is
being designed, developed, manufactured, marketed, or sold by the
Company, or with respect to which the Company has acquired
Confidential Information which it intends to use in the design,
development, manufacture, marketing, or sale of a product or
service.
1.5
CUSTOMER means any person or entity (regardless of the legal
form of the entity) with whom or with which Executive or those
under his direct or indirect supervision, had any direct or
indirect contact on behalf of the Company in connection with Arctic
Cat Products. Without limiting the generality of the foregoing, the
term Customer includes, but is not limited to, dealers,
vendors, suppliers, and sponsors.
1.6
CONFLICTING ORGANIZATION means any person or entity
(regardless of its legal form) which is engaged in, or about to
become engaged in, research or development, production, marketing
or selling a Competitive Product, including the Executive if he is
engaged in business for himself.
1.7
DISABILITY has two different meanings in this
Agreement. For purposes of benefits due under any
Company-sponsored disability insurance policy (whether short-term,
long-term, or any applicable salary continuation policy provided
during any elimination period), the definition of Disability shall
conform to the definition provided in such policy. For
purposes of any payment made to Executive in excess of the benefits
due under any such Company-sponsored disability insurance policy,
the definition of Disability shall be at least as restrictive as
the applicable definition provided in Code
Section 409A.
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1.8
INVENTION means all inventions, discoveries, ideas,
processes, writings, designs, developments, and improvements,
whether or not protectible under the applicable patent, trademark
or copyright statutes, of the Executive while employed by the
Company.
1.9
CONFIDENTIAL INFORMATION means any information or
compilation of information that the Executive learns or develops
during the course of Executive’s employment by the Company
that derives independent economic value from not being generally
known, or readily ascertainable by proper means, by other persons
who can obtain economic value from its disclosure or use. It
includes, but is not limited to, trade secrets and may relate to
such matters as research and development, engineering, drawings and
specifications, strategic plans, business methods, non-public
financial information, proprietary information pertaining to
vendors and customers, product improvement efforts, manufacturing
processes, management systems, sales and marketing plans and
information, contracts, and pricing.
ARTICLE II.
EMPLOYMENT AND TERM
2.1
EMPLOYMENT. Upon the terms and subject to the
conditions set forth in this Agreement, the Company hereby employs
Executive as President and Chief Operating Officer or in such other
capacity as may be determined from time to time by the Board of
Directors of the Company, and Executive hereby accepts such
employment.
2.2
TERM. Except as otherwise provided in this
Agreement, the term of this Agreement shall commence on the date of
this Agreement, and shall continue until this Agreement is
terminated by either party pursuant to the terms hereof.
ARTICLE III.
COMPENSATION
3.1
BASE SALARY. As compensation for his services to the
Company and as compensation for his confidentiality,
non-competition and non-solicitation agreement provided in
Article IV of this Agreement, Executive shall receive an
annual base salary in the amount of Four Hundred Twenty Five
Thousand Dollars ($425,000) payable in accordance with the
Company’s regular payroll processes (the “Base
Salary”). Executive’s Base Salary shall be reviewed by
the Compensation and Human Resources Committee of the
Company’s Board of Directors on an annual basis, and such
committee may (but shall not be obligated to) adjust
Executive’s base salary by an amount as it deems appropriate
based on a review of certain benchmarking information, including
but not limited to, general industry as well as industry specific
and other peer company compensation data, as well as
recommendations from the Chief Executive Officer.
3.2
ANNUAL INCENTIVE AWARDS. In addition to the
Base Salary, Executive shall be entitled to participate in the
Company’s annual incentive program offered to the
Company’s senior executives. Executive’s annual
incentive payout shall range from zero percent (0%) to one hundred
(100%) of his Base Salary but shall not be less than $140,250 in
his first year of employment. Executive has the choice of
cash or stock the first year. The target incentive payout for
Executive shall be fifty percent (50%) of his Base Salary.
Payouts made pursuant to this Section 3.2 shall be paid no
later than two and a half (2.5) months after the end of the
Company’s fiscal year or as soon thereafter as
practicable.
3.3
LONG-TERM INCENTIVE COMPENSATION. Effective upon the
commencement of the term of this Agreement as set forth in
Section 2.2, the Board of Directors has approved grants to
Executive of: (i) 20,000 shares of restricted common stock of
the Company at fair market value; and (ii) stock options to
purchase 70,000 shares of common stock of the Company in accordance
with the Company’s 2007 Omnibus Stock and Incentive
Plan. The restricted stock and the options granted to
Executive will vest in equal installments on the first, second and
third anniversaries of the grant date. The stock options
granted to Executive will expire ten years from the grant date,
provided that the vesting of such restricted stock and stock
options will accelerate if Executive is terminated and is entitled
to the severance payments described in Section 5.5.
Additional stock options may be awarded
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annually to Executive by the Stock Grant
Subcommittee of the Compensation and Human Resources Committee of
the Company’s Board of Directors.
3.4
BENEFITS. Except as the Board of Directors may
otherwise provide, Executive shall be entitled to participate in
any retirement savings plan, profit sharing plan, life insurance,
health insurance, dental insurance, disability insurance or any
other fringe benefit plan which the Company may from time to time
make available to its salaried senior executives to the extent that
Executive’s age, tenure, and title make him eligible to
receive those benefits. In addition, Executive will be entitled to
four weeks paid vacation and access to the Company’s products
at the same or similar level as the Company’s other senior
executives. Any of such benefits may be modified or withdrawn
by the Company in its discretion during the term of this Agreement
to the extent the same are withdrawn or modified or supplemented
for other Executives similarly situated.
3.5
RELOCATION. The Company will make available to
Executive relocation benefits and prerequisites generally provided
to the Company’s senior executives other than the Chief
Executive Officer or Chief Financial Officer. The Company
will pay closing costs associated with the sale of
Executive’s home in Georgia, including realtor fees of up to
six percent (6%).
3.6
EXPENSES. The Company shall reimburse Executive for
all reasonable expenses properly incurred by Executive in the
discharge of his duties hereunder upon production of evidence
therefore.
ARTICLE IV.
DUTIES OF EXECUTIVE
4.1
SERVICES; DUTIES. Executive shall have the general
duties, responsibilities and authority of a President, subject to
the power of the Chief Executive Officer and/or the Board of
Directors to expand or limit such duties, responsibilities and
authority. In addition, Executive will have specific responsibility
for all operations and departments of Company except product
validation and CFO, and functions currently reporting to CFO.
Executive agrees to loyally perform the duties assigned to
Executive from time to time, and all duties associated therewith,
to the best of Executive’s abilities, to be familiar with the
Company’s policies as they exist from time to time which
relate to Executive’s duties, and to abide by the
Company’s policies as they exist from time to
time.
4.2
CONFIDENTIALITY AND GOOD WILL. Executive acknowledges
that the Company has provided or will provide Executive with
information concerning its business, products and customers and
that the Company entrusts Executive with business relationships,
good will and Confidential Information of great value to the
Company. Executive assigns to the Company all good will which
Executive has or develops with Customers while employed by the
Company. Executive agrees that Executive shall treat all
information, business relationships, and good will entrusted to
Executive by the Company as a fiduciary, and Executive undertakes
all of the obligations of a fiduciary to maintain, protect, and
continue to develop such information, business relationships, and
good will for the benefit of the Company. All documents and
tangible items provided to Executive by the Company or created by
the Executive for use in connection with Executive’s
employment are the property of the Company and shall be held by
Executive as a fiduciary on behalf of the Company. Upon
termination of Executive’s employment for any reason,
Executive shall promptly and without the requirement of a prior
demand by the Company, return to the Company all such documents and
tangible items, together with all copies, recordings, abstracts,
notes, reproductions, or electronic versions of any kind made from
or about the documents and tangible items or the information they
contain. Executive agrees not to directly or indirectly use
or disclose any Confidential Information belonging to the Company
for the benefit of anyone other than the Company, either during or
after employment, for as long as the information remains
Confidential Information.
4.3
NON-SOLICITATION. In recognition of the importance to
the Company of its personal relationships, during and for one
(1) year following his termination of employment by the
Company, for any reason, the Executive agrees that he will not
directly or indirectly, on his own behalf or on behalf of any other
person, solicit: (i) any Customer with whom he had contact
during the two years preceding his termination of employment, for
the purpose of directly or indirectly (a) marketing,
promoting, or encouraging the use of a Competitive Product;
(a) providing advice or assistance in connection with the
marketing, promotion or use of a Competitive Product; or
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(c) attempting to interfere with, or
preventing or diverting the sale or purchase of products being
designed, developed, sold or marketed by the Company; (ii) the
services of any person who is a Company employee or agent to
terminate his or her employment or agency with the Company; or
(iii) any vendor or supplier which provides an exclusive or
unique service or product to the Company for the purpose of
obtaining similar products or services.
4.4
NON-COMPETITION. Executive agrees that during the
period of Executive’s employment with the Company and for one
(1) year following the voluntary or involuntary termination of
his employment with the Company for any reason, Executive shall
not, directly or indirectly, on his own account or in the service
of any other person, firm, corporation or other entity, be employed
by, or permit his name to be used by, or engage in or carry on
business with, or otherwise be associated in any way with, a
Conflicting Organization as a partner, shareholder, director,
officer, executive, principal, agent, associate, consultant, or in
any other capacity. This Non-Competition Covenant is
effective in each of the markets in which the Company markets,
designs, develops, promotes, sells, services, or provides the
Company products at any time during Executive’s employment
with the Company.
4.5
INVENTIONS.
(a)
Disclosure and
Assignment. Executive agrees to promptly
disclose in writing to the Company complete information concerning
each and every Invention. Executive, to the extent that he has the
legal right to do so, hereby acknowledges that any and all of said
Inventions are the exclusive property of the Company and hereby
assigns and agrees to assign to the Company any and all of
Executive’s right, title and interest in and to any and all
of such Inventions. If an Invention does not relate to the existing
or reasonably foreseeable busine
