SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Section 240.14a-12
ARCTIC CAT INC.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ARCTIC CAT INC.
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 9, 2001
---------------
Notice is hereby given that the Annual Meeting of Shareholders of Arctic
Cat Inc. (the "Company") will be held at 601 Brooks Avenue South, Thief River
Falls, Minnesota 56701, on Thursday, August 9, 2001 at 4:00 p.m. for the
following purposes:
1. To elect two directors to serve a three-year term.
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on June 15, 2001 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting. Since it is important that your shares be
represented at the Annual Meeting, whether or not you personally plan to attend,
you are requested to sign, date and return your proxy card promptly in the
enclosed envelope. If you are a record holder, you may also submit your proxy by
telephone or through the Internet by following the instructions on the proxy
card. If you own shares in "street name," i.e. through a broker, you should
follow the instructions provided by the broker. Returning your signed proxy or
submitting your proxy by telephone or through the Internet will not prevent you
from voting in person at the Annual Meeting, should you desire to do so.
By Order of the Board of Directors,
/s/ Timothy C. Delmore
Timothy C. Delmore,
SECRETARY
Thief River Falls, Minnesota
July 5, 2001
- --------------------------------------------------------------------------------
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND
RETURN YOUR PROXY ON THE ENCLOSED PROXY CARD WHETHER OR NOT YOU EXPECT TO ATTEND
IN PERSON. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE
IN PERSON IF THEY SO DESIRE.
- --------------------------------------------------------------------------------
ARCTIC CAT INC.
601 BROOKS AVENUE SOUTH
THIEF RIVER FALLS, MN 56701
---------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 9, 2001
---------------
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Arctic Cat Inc., a Minnesota corporation
(the "Company"), of proxies for the Annual Meeting of Shareholders of the
Company to be held at 601 Brooks Avenue South, Thief River Falls, MN 56701, on
Thursday, August 9, 2001 at 4:00 p.m. Central Daylight Time, or any adjournment
or adjournments thereof. This Proxy Statement and the enclosed proxy card are
being mailed to shareholders on or about July 5, 2001.
The Company's Annual Report for the fiscal year ended March 31, 2001,
including audited financial statements, is being mailed to shareholders
concurrently with this Proxy Statement.
The total number of shares outstanding and entitled to vote at the meeting
as of June 15, 2001 consists of 16,276,722 shares of $.01 par value Common Stock
(excluding 7,560,000 shares of Class B Common Stock which do not vote with the
Common Stock in the general election of directors; see "Election of Directors").
Each share of Common Stock is entitled to one vote and there is no cumulative
voting. Only shareholders of record at the close of business on June 15, 2001
will be entitled to vote at the Annual Meeting.
Proxies may be sent to the Company using the enclosed proxy card, or by
record holders by submitting a proxy by telephone or through the Internet, as
permitted by Minnesota law. Shares represented by proxies properly signed, dated
and returned, or submitted by telephone or through the Internet, will be voted
at the Annual Meeting in accordance with the instructions set forth therein. If
a proxy is properly signed, or submitted by telephone or through the Internet,
but contains no instructions, the shares represented thereby will be voted FOR
the director nominees and at the discretion of the proxyholders as to any other
matters which may properly come before the Annual Meeting.
The presence in person or by proxy of a majority of the voting power of
shares entitled to vote at the Annual Meeting will constitute a quorum for the
transaction of business. An item of business will be approved if it receives the
affirmative vote of the holders of a majority of the shares present and entitled
to vote on that item of business. Abstentions will be treated as shares present
and entitled to vote for purposes of determining the presence of a quorum and in
tabulating votes cast on proposals presented to shareholders. Consequently,
abstentions (or "withhold authority" as to directors) will have the same effect
as a negative vote. If a broker indicates on a proxy that it does not have
authority to vote on an
1
item of business, the shares represented by the proxy will not be considered
present and entitled to vote and, therefore, will have no effect on the outcome
of the vote.
Each proxy may be revoked at any time before it is voted by executing and
returning a proxy bearing a later date, by giving written notice of revocation
to the Secretary of the Company or by attending the Annual Meeting and voting in
person. To revoke a proxy previously submitted by telephone or through the
Internet, the shareholder could also simply vote again at a later date using the
same procedures in which case the later vote will be recorded and the earlier
vote revoked. Record holders wishing to vote by telephone or through the
Internet should note that they must do so before noon (Central Standard Time) on
Wednesday, August 8, 2001. After that time, telephone and Internet voting will
not be permitted and a shareholder wishing to vote, or revoke an earlier proxy
after such time must submit a signed proxy card or vote in person.
PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to the Company's Restated Articles of Incorporation, the Board of
Directors is divided into three classes of directors, each director serving a
three-year term. Each year only one class of directors is subject to a
shareholder vote, and, generally, one-third of the directors belong to each
class. This year, the Board of Directors is seeking shareholder election of two
directors: John C. Heinmiller and Christopher A. Twomey, incumbent directors
whose terms expire this year. If elected, Messrs. Heinmiller's and Twomey's
terms will expire in 2004.
In addition, in accordance with a Stock Purchase Agreement dated July 18,
1988 between Suzuki Motor Corporation ("Suzuki") and the Company pursuant to
which Suzuki purchased 7,560,000 shares (as adjusted for subsequent stock
splits) of the Company's Class B Common Stock (constituting all outstanding
shares of Class B Common Stock), Suzuki is entitled to elect one member of the
Board of Directors.
The Board of Directors has nominated for election the persons named below.
It is intended that proxies will be voted for such nominees. The Company
believes that the nominees named below will be able to serve; but should any of
them be unable to serve as a director, the persons named in the proxies have
advised that they will vote for the election of such substitute nominee as the
Board may propose.
The name and age of the nominees and the other directors and their
principal occupations are set forth below, based upon information furnished to
the Company by the nominees and directors. Unless otherwise indicated, each of
the directors has held their respective identified positions for more than the
past five years.
2
DIRECTOR
NAME, AGE AND PRINCIPAL OCCUPATION SINCE
---------------------------------- --------
NOMINATED FOR A TERM ENDING IN 2004:
[PHOTO] JOHN C. HEINMILLER, 47, Chief Financial Officer of St. Jude 1999
Medical, Inc. (a medical products company) since 1998;
President of F3 Corporation (an asset management company)
from June 1997 to April 1998; Vice President Finance of Daig
Corporation (a medical products company) from March 1995 to
May 1997; Vice President-Finance of Lifecore Biomedical,
Inc. (a medical products company) from October 1991 to
February 1995; Director of Lifecore Biomedical, Inc.
[PHOTO] CHRISTOPHER A. TWOMEY, 53, President and Chief Executive 1987
Officer of the Company since January 1986; executive officer
of the Company in various capacities since 1983; Director of
The Toro Company since 1997.
OTHER DIRECTORS WHOSE TERMS OF OFFICE WILL CONTINUE AFTER THE
ANNUAL MEETING AND WHOSE TERMS EXPIRE IN 2002:
[PHOTO] ROBERT J. DONDELINGER, 65, Co-owner and Chairman of the 1983
Board of Northern Motors (a General Motors dealership),
Thief River Falls, MN.
[PHOTO] WILLIAM I. HAGEN, 63, Retired; Co-owner and Vice President 1983
of North Star Transport, Inc. (a nationwide trucking
company), Eagan, MN, from its inception to June 1998; owner
and operator of a farm in northern Minnesota.
3
[PHOTO] KENNETH J. ROERING, 59, Professor of Marketing and Pillsbury 1996
Company -- Paul S. Gerot Chair in Marketing in the Carlson
School of Management at the University of Minnesota since
1981; Director of Transport Corporation of America, Inc.
OTHER DIRECTORS WHOSE TERM OF OFFICE WILL CONTINUE AFTER THE
ANNUAL MEETING AND WHOSE TERMS EXPIRE IN 2003:
[PHOTO] WILLIAM G. NESS, 63, Chairman of the Board of Directors of 1983
the Company; Director of Northern Woodwork (a specialty
furniture manufacturer), Thief River Falls, MN; Director of
Northern State Bank, Thief River Falls, MN, Itasca Bemidji,
Inc., Bemidji, MN, and May Corporation, Minneapolis, MN.
[PHOTO] GREGG A. OSTRANDER, 48, Chairman of the Board of Directors, 1995
President and Chief Executive Officer of Michael Foods, Inc.
(a food processing manufacturer) since 1993; President of
Swift-Eckrich Prepared Foods Co. (a food manufacturer) from
1985 to 1993; Director of The Hain-Celestial Group, Inc.
DIRECTOR ELECTED BY CLASS B COMMON STOCK:
[PHOTO] KATSUMI TAKATA, 51, Director of Suzuki Motor Corporation; 2001
Senior General Manager of Overseas Motorcycle/Marine & Power
Products Marketing Division, Suzuki Motor Corporation,
Hamamatsu, Japan, since April 2001; General Manager of
Overseas Motorcycle Marketing Department from October 1995
to March 2001; President of Suzuki Italia SPA, Italy, from
December 1989 to October 1995.
4
VOTE REQUIRED. The affirmative vote of a majority of the shares of Common
Stock represented at the Annual Meeting in person or by proxy and entitled to
vote is required for the election of the nominees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES.
---------------
DIRECTOR EMERITUS. Mr. Lowell T. Swenson retired as a director in 1998.
Recognizing Mr. Swenson's long-standing contributions to the Company and
exemplary service throughout his 15-year term as a director, as well as his
service in the snowmobile industry for more than thirty years, the Board of
Directors determined that the Company would benefit from a continued association
with Mr. Swenson and appointed him a Director Emeritus upon his retirement. As a
Director Emeritus, Mr. Swenson is invited to attend all Board meetings, but he
is not entitled to vote at such meetings and does not have responsibility for
the Board's actions. He is also not entitled to compensation paid to outside
directors of the Company but is reimbursed out-of-pocket expenses incurred in
attending Board meetings and is entitled to indemnification in his role as a
Director Emeritus.
MEETINGS. During fiscal 2001, the Board of Directors met five times and
acted twice by written action. Each director attended more than 75% of the
meetings of the Board of Directors and any committee on which he served, except
Mr. Kaito, the former director elected by Suzuki, who did not attend any
meetings during fiscal 2001.
BOARD COMMITTEES. The Board has appointed a Compensation Committee, an
Audit Committee and a Nominating Committee. The Compensation Committee, which
currently consists of Messrs. Dondelinger (Chair), Hagen, Heinmiller and
Ostrander, met two times during fiscal 2001. The Compensation Committee assists
in defining the Company's compensation policies and administering its
compensation plans, reviews management's recommendations and makes its own
recommendations to the Board with respect to officers' and key employees'
salaries, bonuses and stock option grants, reviews and approves the Company's
retirement plans and employee benefits and reviews management succession plans.
The Board of Directors has established a Stock Grant Subcommittee of the
Compensation Committee, currently composed of Messrs. Ostrander, Hagen and
Heinmiller, for the purpose of granting awards under the Company's 1989 Stock
Option Plan and the 1995 Stock Plan.
The Audit Committee, which currently consists of Messrs. Roering (Chair),
Dondelinger, Hagen and Heinmiller, met three times during the last fiscal year.
The Audit Committee reviews and recommends to the Board the independent auditors
to be selected, meets with the Company's independent auditors and
representatives of management to review the internal and external financial
reporting of the Company, reviews the scope of the independent auditors'
examination and audit procedures to be utilized, considers comments by the
auditors regarding internal controls and accounting procedures and management's
response to those comments and approves any material non-audit services to be
provided by the Company's independent auditors. A report of the Audit Committee
is contained in this Proxy Statement. The Audit Committee Charter adopted by the
Board in June 2000 is attached to this Proxy Statement as Appendix A. All
members of the Company's Audit Committee are independent as defined by the rules
of the National Association of Securities Dealers (NASD) for companies listed on
the Nasdaq National Market.
The Nominating Committee, which currently consists of Messrs. Ostrander
(Chair), Ness, Roering and Twomey, met once during the last fiscal year. The
primary functions of the Nominating Committee
5
are to review and make recommendations to the Board with respect to the size,
composition, retention, tenure and retirement policies of the Board of
Directors; determine and recommend to the Board the criteria to be used in
evaluating the qualifications of Director candidates; approve the selection
process that produces qualified Director candidates; review the qualifications
of candidates for Board membership and approve and recommend to the Board of
Directors the slate of Director candidates to be proposed for election to the
Board of Directors; establish and implement a process for annually evaluating
the performance of the Board and provide feed-back to the Board on its
performance; review developments in corporate governance pertaining to Board
membership and advise the Board on such matters; and establish and maintain a
training program for new Directors and programs for improving current Director
performance. Upon recommendation of the Nominating Committee, the Board of
Directors has established a policy that a Director shall retire as of the Annual
Meeting of Shareholders following such Director's 72nd birthday.
Shareholders wishing to recommend candidates for Board membership should
submit the recommendations in writing to the Secretary of the Company at least
ninety (90) days prior to the meeting date corresponding to the previous year's
Annual Meeting, with the submitting shareholder's name and address and pertinent
information about the proposed nominee similar to that set forth for the
nominees named herein. The Nominating Committee will consider candidates
recommended by shareholders in light of the Committee's established criteria for
Director candidates. A shareholder intending to nominate an individual as a
Director at an Annual Meeting, rather than recommend the individual to the
Company for consideration as a nominee, must comply with the advance notice
requirements set forth in the Company's Bylaws. The Company's Bylaws provide
that any shareholder entitled to vote generally in the election of Directors may
nominate one or more persons for election as Directors provided that such
shareholder has provided written notice of such intention to the Secretary of
the Company. Such notice must be given not less than sixty (60) days nor more
than ninety (90) days prior to the meeting date corresponding to the previous
year's Annual Meeting. Shareholders intending to nominate a Director should
contact the Company's Secretary for a copy of the relevant procedure.
REMUNERATION OF DIRECTORS. All non-employee directors other than the
representative of Class B Common Stock currently receive $4,500 per quarter,
$1,000 per meeting attended in person, $500 per meeting attended telephonically
and $750 per committee meeting ($1,250 for committee chair). If committee
meetings occur the same day as regular Board meetings, the directors are paid
for up to two committee meetings that day, in addition to out-of-pocket expenses
incurred on behalf of the Company. In addition, pursuant to the Company's 1995
Stock Plan, each non-employee director automatically receives on the date of
election or re-election as a director, or appointment as a director by action of
the Board during the period between shareholder meetings, and on the date of
each subsequent annual or special shareholder meeting at which action is taken
to elect any director if the non-employee director's term is not up for election
that year and the non-employee director is serving an unexpired term (provided
that the non-employee director has served for at least six months), an option to
purchase 6,000 shares of the Company's Common Stock at an option price equal to
the fair market value of the Company's Common Stock on the date the option is
granted. These options will have terms expiring five years following termination
of service as a director and will be exercisable at any time following the date
of grant. The 1989 Stock Option Plan and the 1995 Stock Plan also permit
granting of additional or alternative options to directors at the discretion of
the Board. The director elected by the holder of Class B Common Stock is
reimbursed for out-of-pocket expenses incurred on behalf of the Company and does
not receive the fees described above.
6
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table shows, for fiscal years 2001, 2000 and 1999, the cash
compensation paid by the Company, as well as certain other compensation paid or
accrued for those years, to Christopher A. Twomey, the Company's Chief Executive
Officer, and to each of the four other most highly compensated executive
officers of the Company.
SUMMARY COMPENSATION TABLE
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
--------------------- ---------------------
SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS UNDERLYING OPTIONS(#) COMPENSATION(1)
- ----------------------------- ---- -------- -------- --------------------- ---------------
Christopher A. Twomey 2001 $376,500 $245,553 80,000 $5,434
President and Chief 2000 292,000 233,880 80,000 5,368
Executive Officer 1999 225,000 180,000 70,000 4,800
Timothy C. Delmore 2001 $187,000 $ 81,876 35,000 $5,010
Chief Financial Officer 2000 159,000 78,012 35,000 5,001
and Secretary 1999 130,000 89,300 45,000 4,500
Ronald G. Ray 2001 $170,000 $ 61,350 25,000 $4,950
Vice President -- 2000 150,000 81,072 25,000 4,938
Manufacturing 1999 130,000 89,300 45,000 4,500
Ole E. Tweet 2001 $160,000 $ 54,541 25,000 $4,950
Vice President -- 2000 140,000 76,267 25,000 4,938
New Product Development 1999 120,000 85,000 45,000 4,431
Roger H. Skime 2001 $145,000 $ 59,928 25,000 $4,950
Vice President -- 2000 133,000 76,704 25,000 4,987
Research and Development 1999 120,000 79,000 45,000 4,500
- ------------------------
(1) Represents amount contributed by the Company to the individual's 401(k)
retirement plan account.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of its
executive officers which provide, among other things, for a lump-sum cash
severance payment to each such executive equal to approximately three times the
executive's average annual compensation over the preceding five years plus
certain fringe benefits under certain circumstances following a "change in
control" of the Company. In general, a "change in control" would occur when
there has been any change in the controlling persons reported in the Company's
proxy statement, when 20% or more of the Company's outstanding voting stock is
acquired by any person, when current members of the Board of Directors or their
successors elected or nominated by such members cease to constitute at least 75%
of the Board of Directors, when the Company merges or consolidates with or sells
substantially all its assets to any person or entity, or when the Company's
shareholders approve a plan of liquidation or dissolution of the Company. The
employment agreements also prohibit disclosure of confidential information
concerning the Company and require disclosure and assignment of inventions,
discoveries and other works relating to the executive's employment. If a "change
in control" had occurred at the end of fiscal 2001 and the executive's
employment was terminated, the following executive officers would have received
the amounts indicated, which includes deemed compensation during the preceding
five years from the
7
exercise of stock options: Mr. Twomey, $1,468,349; Mr. Delmore, $678,842;
Mr. Ray, $652,850; Mr. Tweet, $604,409; and Mr. Skime, $607,408.
The Company has also entered into employment agreements with each of its
executive officers pursuant to which they will receive upon termination of
employment, other than by the Company for "cause," for a twelve-month period,
(i) with respect to Mr. Twomey, an amount equal to his average annual cash
compensation over the five-year period immediately preceding the date of
termination plus $157,500, and with respect to the other executive officers, an
amount equal to their average annual salary over the three-year period
immediately preceding the date of termination, and (ii) the employee benefits
received prior to termination. The employment agreements also restrict each
executive officer from certain competitive employment following termination and
prohibit disclosure of confidential information concerning the Company. If the
named executive officers had been terminated at the end of the last fiscal year
for a reason other than cause, they would have received the following amounts
pursuant to the employment agreements: Mr. Twomey, $648,587; Mr. Delmore,
$158,667; Mr. Ray, $150,000; Mr. Tweet, $140,000; and Mr. Skime, $132,667.
STOCK OPTIONS
The following table contains information concerning individual grants of
stock options during the last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-----------------------------------------------------------------
PERCENT OF TOTAL MARKET
OPTIONS OPTIONS GRANTED TO PRICE GRANT DATE
GRANTED EMPLOYEES IN EXERCISE ON GRANT EXPIRATION PRESENT VALUE
NAME (#)(1) FISCAL YEAR PRICE ($) DATE ($) DATE ($)(2)
- ---- ------- ------------------ --------- -------- ---------- -------------
Christopher A. Twomey 80,000 33% 12.06 12.06 8/3/10 $395,064
Timothy C. Delmore 35,000 14% 12.06 12.06 8/3/10 $143,780
Ronald G. Ray 25,000 10% 12.06 12.06 8/3/10 $111,161
Ole E. Tweet 25,000 10% 12.06 12.06 8/3/10 $111,161
Roger H. Skime 25,000 10% 12.06 12.06 8/3/10 $111,161
- -----------------------
(1) Becomes exercisable with respect to one-third of the shares of Common Stock
subject to the option on August 3, 2001, 2002 and 2003.
(2) Based upon the Black-Scholes valuation method. Assumptions used include an
expected term of eight years, risk-free interest rate of 6.2%, dividend
yield of 2% and historical volatility of 35%.
8
The following table contains information concerning the exercise of options
during fiscal 2001 and the value of options previously granted under the
Company's Stock Option Plans which were held by the named individuals at the end
of the last fiscal year.
FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END(#) OPTIONS AT FY-END(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------------- ----------- ----------- ------------- ----------- -------------
Christopher A. Twomey -- -- 327,277 167,333 $1,353,029 $500,972
Timothy C. Delmore 8,888 8,888 126,536 73,333 $ 446,853 $218,515
Ronald G. Ray 8,888 8,888 122,752 56,667 $ 462,773 $173,485
Ole E. Tweet 8,888 8,888 117,352 56,667 $ 387,497 $173,485
Roger H. Skime 14,738 43,988 111,502 56,667 $ 342,510 $173,485
- ------------------------
(1) Based on a market price of $13.69 per share of Common Stock on March 30,
2001.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executives are generally made by
the four-member Compensation Committee of the Board consisting of Messrs.
Dondelinger, Hagen, Heinmiller and Ostrander. All decisions by the Compensation
Committee relating to the compensation of the Company's executive officers were
during fiscal 2001 reviewed by the full Board. Pursuant to SEC rules designed to
enhance disclosure of companies' policies with regard to executive compensation,
set forth below is a report submitted by the Compensation Committee addressing
the Company's compensation policies for fiscal 2001 as they affected Mr. Twomey
and Messrs. Delmore, Ray, Tweet and Skime, the four executive officers other
than Mr. Twomey who, for fiscal 2001, were the Company's most highly paid
executive officers whose compensation exceeded $100,000 (collectively with Mr.
Twomey, the "Named Executives"). The following report shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 (the "1933
Act") or the Securities Exchange Act of 1934 (the "1934 Act"), except to the
extent that the Company specifically incorporates this information by reference,
and shall not otherwise be deemed filed under the 1933 Act or the 1934 Act.
COMPENSATION PHILOSOPHY. The Company has three basic objectives for its
executive compensation program: payment for performance; attraction and
retention of executives who contribute to the long-term success of the Company;
and alignment of the interests of management with those of the shareholders. The
Company's executive compensation program is a target-based performance incentive
plan intended to enhance the linkage between pay and performance.
BASE PAY. In order to assure the Company's ability to attract and retain
qualified executives, the Compensation Committee believes that base pay must be
in the 40-50th percentile range compared to national market data. In the past
three years, including during fiscal 2001, the Company has raised base pay, but
not necessarily total compensation, for executives based on an evaluation in
1999 by Towers Perrin, a nationally recognized compensation advisory firm, that
the Company's base pay for executives at that time was in all cases below the
25th percentile.
ANNUAL INCENTIVE AWARDS. Each executive is eligible to receive annual cash
incentive awards based on corporate and individual performance. The annual
incentive program awards each Named Executive
9
a percentage of base salary with 80% of the award tied to the Company's earnings
and 20% tied to the individual's performance. With regard to the portion of the
annual incentive tied to the Company's earnings, the Board of Directors annually
establishes an earnings target, a minimum earnings threshold below which an
annual incentive will not be paid, and a maximum incentive level. In addition,
measurable individual performance goals are established annually for each
executive and incentive awards are paid based on individual accomplishments. The
Compensation Committee believed that placing a meaningful portion of an
executive's overall compensation at total risk, based on the Company's earnings
and the individual's performance, is the best way to focus attention on the
short and intermediate-term goals of the Company and encourage high levels of
performance from each executive.
LONG-TERM INCENTIVES. Aligning the interests of management with those of
shareholders is accomplished through longer term incentives directly related to
the improvement in long-term shareholder value. The Compensation Committee
believes this is accomplished with the award of stock options to the Named
Executives and other key personnel. Stock options, in amounts tied to salary
levels, are awarded annually, consistent with the Company's objective to include
in total compensation a long-term equity interest for executive officers with
greater opportunity for reward if long-term performance is sustained. Stock
options have value for the executive officers only if the price of the Company's
stock appreciates in value from the date of grant. Shareholders also benefit
from such stock price appreciation. The Compensation Committee believes that
stock options encourage and reward effective management which, in turn, results
in the long-term corporate financial success as measured by stock price
appreciation.
OTHER COMPENSATION PROGRAMS. The Company maintains certain broad based
employee benefit plans in which its executive officers, including the Named
Executives, have been permitted to participate, including retirement, life, and
health insurance plans. The Company's retirement plan is a 401(k) plan which
allows all eligible employees to make pre-tax contributions and in which the
Company matches employee contributions in an amount equal to the employee's
contribution up to a maximum of 3% of the employee's base salary.
MR. TWOMEY'S FISCAL 2001 COMPENSATION. Mr. Twomey's total cash compensation
for fiscal 2001, which was determined on the same basis as the other Named
Executives, was below the 25th percentile compared to national market data. His
base pay of $376,500, which was also below the 25th percentile level, will be
increased through fiscal 2002 to the 40th percentile level in order to gradually
meet the established target level established for each of the Names Executives.
Mr. Twomey's annual incentive award of $245,553 was determined in accordance
with annual incentive plan in a similar manner as the other Named Executives,
with 100% of the award tied to the Company's earnings.
SUBMITTED BY THE COMPENSATION COMMITTEE
OF THE COMPANY'S BOARD OF DIRECTORS
Robert J. Dondelinger William I. Hagen John C. Heinmiller Gregg A. Ostrander
10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As described below, Mr. Dondelinger, a director and member of the
Compensation Committee of the Board, has a relationship with an entity which
engages in certain transactions with the Company which require disclosure. See
"Certain Transactions."
CERTAIN TRANSACTIONS
Since the Company first began production in August 1983, it has purchased
all engines for its products from Suzuki pursuant to contracts which are renewed
annually and which stipulate price and general terms of delivery of engines.
During the last fiscal year, the Company paid Suzuki approximately $124,910,000
for engines, parts and tooling. Terms of the agreement were, and renewal rates
are, the subject of arms-length negotiation on terms no less favorable to the
Company than the Company could otherwise obtain.
During the last fiscal year, the Company purchased wiring harnesses from
Itasca Bemidji, Inc. ("IBI"), a company in which Mr. Ness, a director of the
Company, owns approximately 15% of the outstanding stock. During the last fiscal
year, the Company paid IBI approximately $3,381,000 for harnesses. The prices
paid by the Company were, and will continue to be, the subject of arms-length
negotiation on terms no less favorable to the Company than the Company could
otherwise obtain. During the last fiscal year, the Company also purchased
components from May Corporation, a company in which Mr. Ness is a director, and
paid approximately $228,000 for such components.
During the last fiscal year, the Company purchased certain vehicles from
Northern Motors, a General Motors dealership in which Mr. Dondelinger, a
director of the Company, is Co-Owner and Chairman of the Board. During the last
fiscal year, the Company paid Northern Motors approximately $165,479 for
vehicles. The prices paid by the Company were, and will continue to be, the
subject of arms-length negotiation on terms no less favorable to the Company
than the Company could otherwise obtain.
11
PERFORMANCE GRAPH
In accordance with the rules of the Securities and Exchange Commission, the
following performance graph compares performance of the Company's Common Stock
on the Nasdaq National Market to the S&P 500 Index and to the Automotive Index
(indicated below as the "Peer Group Index") prepared by Media General Financial
Services ("Media General"). The graph compares on an annual basis the cumulative
total shareholder return on $100 invested on March 31, 1996, and assumes
reinvestment of all dividends and has been adjusted to reflect stock splits. The
performance graph is not necessarily indicative of future investment
performance.
[PLOT POINTS CHART]
MARCH 31,
---------------------------------------------------------
1996 1997 1998 1999 2000 2001
------- ------- ------- ------- ------- -------
Arctic Cat Inc. .... $100.00 $102.39 $ 98.85 $108.27 $114.50 $155.98
Peer Group Index ... 100.00 93.24 163.56 199.77 246.10 235.01
S&P 500 Index ...... 100.00 119.82 177.34 210.07 247.77 194.06
The performance graph above shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the 1933 Act or the 1934 Act, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under the 1933 Act or the 1934 Act.
12
BENEFICIAL OWNERSHIP OF CAPITAL STOCK
The following table presents information provided to the Company as to the
beneficial ownership of the Company's capital stock as of June 15, 2001 by (i)
the only shareholders known to the Company to hold 5% or more of such stock,
(ii) each of the directors and Named Executives of the Company and (iii) all
directors and officers as a group. Unless otherwise indicated, all shares
represent sole voting and investment power.
PERCENT OF PERCENT OF
CAPITAL STOCK OUTSTANDING SHARES OUTSTANDING SHARES
BENEFICIAL OWNERS BENEFICIALLY OWNED(1) OF COMMON STOCK OF CAPITAL STOCK
- ----------------- --------------------- ------------------ ------------------
Suzuki Motor Corporation ................ 7,560,000 0% 31.7%
Hamamatsu-Nishi
P.O. Box 1, 432-91
Hamamatsu, Japan
Artisan Partners LP, et al .............. 1,623,300(2) 10.0% 6.8%
1000 North Water Street
Milwaukee, WI 53202
Dalton, Greiner, Hartman, Maher & Co .... 1,300,815(2) 8.0% 5.5%
565 Fifth Avenue
New York, NY 10017
Capital Group International, Inc. ....... 1,034,400(2) 6.4% 4.3%
11100 Santa Monica Blvd
Los Angeles, CA 90025
Dimensional Fund Advisors Inc. .......... 919,500(2) 5.6% 3.9%
1299 Ocean Avenue
Santa Monica, CA 90401
William G. Ness ......................... 160,451(3) 1.0% *
Christopher A. Twomey ................... 557,961(3) 3.3% 2.3%
Robert J. Dondelinger ................... 205,312(3) 1.3% *
William I. Hagen ........................ 345,491(3) 2.1% 1.4%
Katsumi Takata .......................... 0(4) 0 0
Gregg A. Ostrander ...................... 37,000(3) * *
Kenneth J. Roering ...................... 31,000(3) * *
John C. Heinmiller ...................... 18,000(3) * *
Timothy C. Delmore ...................... 206,125(3) 1.3% *
Roger H. Skime .......................... 237,014(3) 1.4% 1.0%
Ronald G. Ray ........................... 169,606(3) 1.0% *
Ole E. Tweet ............................ 287,469(3) 1.8% 1.2%
All Directors and Officers
as a Group (12 persons) ................. 2,350,428(3)(4) 13.4% 9.3%
- ----------------------
* Less than 1%.
(1) All outstanding shares of capital stock are Common Stock except shares held
by Suzuki which are all Class B Common Stock. See "Election of Directors."
(2) Based on information included in a Schedule 13G filed with the Securities
and Exchange Commission ("SEC").
13
(3) Includes the following number of shares purchasable by the indicated
individuals and group within 60 days from the date hereof pursuant to the
exercise of outstanding stock options: Mr. Ness, 47,556; Mr. Twomey,
382,612; Mr. Dondelinger, 53,721 shares; Mr. Hagen, 53,721 shares; Mr.
Ostrander, 36,000 shares; Mr. Roering, 30,000 shares; Mr. Heinmiller,
18,000 shares; Mr. Delmore, 164,870 shares; Mr. Ray, 154,418 shares; Mr.
Tweet, 149,018 shares; Mr. Skime, 143,168 shares; and all directors and
officers as a group, 1,328,083 shares. Also, Mr. Hagen's shares include
8,637 shares owned by Mr. Hagen's wife, the beneficial ownership of which
he disclaims.
(4) Excludes shares held by Suzuki Motor Corporation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon its review of Forms 3, 4 and 5 and any amendments thereto
furnished to the Company pursuant to Section 16 of the 1934 Act, the Company
believes all of such forms were filed on a timely basis by reporting persons
during fiscal year ended March 31, 2001, except that Mr. Skime filed a late Form
4 for an option exercise.
AUDITORS
Grant Thornton LLP, independent public accountants, were the auditors for
the Company for fiscal 2001. A representative of Grant Thornton LLP is expected
to be present at the Annual Meeting of Shareholders and will be available to
respond to appropriate questions. As of the date hereof, no auditing firm has
been formally selected for fiscal 2002 since the Board of Directors has
historically made such formal selection in conjunction with the Annual Meeting
of Shareholders.
AUDIT FEES
The Company paid Grant Thornton LLP an aggregate of $95,000 for the annual
audit for fiscal year 2001 and for the review of the Company's condensed
financial statements included in the Company's quarterly reports on Form 10-Q
for fiscal year 2001. The above amounts include out-of-pocket expenses incurred
by Grant Thornton LLP in connection with the provision of such services.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company paid Grant Thornton LLP an aggregate of $5,775,000 through
October 31, 2000 relating to services provided and out-of-pocket expenses
incurred in connection with the Company's information system implementation
project. On November 1, 2000, Grant Thornton LLP sold the portion of its
management consulting practice, providing these services, to Hitachi
Corporation. Subsequent to that date, additional services related to this
project were rendered by Hitachi Corporation through its subsidiary, Experio
Solutions. The audit committee of the Board of Directors has determined that the
provision of these services is compatible with maintaining the independence of
Grant Thornton LLP.
ALL OTHER FEES
The Company paid Grant Thornton LLP an aggregate of $347,000 for services
provided and out-of-pocket expenses incurred in connection with tax compliance,
accounting research and income tax reduction strategies. The audit committee of
the Board of Directors has determined that the provision of these services is
compatible with maintaining the independence of Grant Thornton LLP.
AUDIT COMMITTEE REPORT
In accordance with its written charter adopted by the Board of Directors
(set forth in Appendix A), the Audit Committee assists the Board of Directors
with fulfilling its oversight responsibility regarding
14
the quality and integrity of the accounting, auditing and financial reporting
practices of the Company. In discharging its oversight responsibilities
regarding the audit process, the Audit Committee:
(1) reviewed and discussed the audited financial statements with
management;
(2) discussed with the independent auditors the material required to be
discussed by Statement on Auditing Standards No. 61 and No. 90; and
(3) reviewed the written disclosures and the letter from the independent
auditors required by the Independence Standards Board's Standard No.
1, and discussed with the independent auditors any relationships that
may impact their objectivity and independence.
Based upon the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 2001, as filed with the Securities and Exchange
Commission.
Kenneth J. Roering (Chair)
Robert J. Dondelinger
William I. Hagen
John C. Heinmiller
SHAREHOLDER PROPOSALS
The proxy rules of the Securities and Exchange Commission permit
shareholders, after timely notice to a company, to present proposals for
shareholder action in a company's proxy statement where such proposals are
consistent with applicable law, pertain to matters appropriate for shareholder
action and are not properly omitted by corporate action in accordance with the
proxy rules. The Company's Annual Meeting of Shareholders for the fiscal year
ending March 31, 2002 is expected to be held on or about August 8, 2002 and
proxy materials in connection with that meeting are expected to be mailed on or
about June 28, 2002. Shareholder proposals prepared in accordance with the proxy
rules must be received by the Company on or before March 7, 2002. In addition,
if the Company receives notice of a separate shareholder proposal before May 11,
2002 or after June 10, 2002, such proposal will be considered untimely pursuant
to the Company's Bylaws and Rules 14a-4 and 14a-5(e) under the 1934 Act, and the
persons to be named as proxies solicited by the Board of Directors of the
Company for its 2002 Annual Meeting of Shareholders may exercise discretionary
voting power with respect to such proposal. See also "Other Matters" below.
METHOD OF PROXY SOLICITATION
The entire cost of preparing, assembling, printing and mailing the Notice
of Annual Meeting of Shareholders, this Proxy Statement, the proxy itself, and
the cost of soliciting proxies relating to the meeting will be borne by the
Company. In addition to use of the mail, proxies may be solicited by officers,
directors and other regular employees of the Company by telephone, telegraph or
personal solicitation, and no additional compensation will be paid to such
individuals. The Company will, if requested, reimburse banks, brokerage houses
and other custodians, nominees and certain fiduciaries for their reasonable
expenses incurred in mailing proxy material to their principals.
15
OTHER MATTERS
The Company's Bylaws provide that certain requirements be met in order that
business may properly come before the shareholders at the Annual Meeting. Among
other things, shareholders intending to bring business before the Annual Meeting
must provide written notice of such intent to the Secretary of the Company. Such
notice must be given not less than 60 days nor more than 90 days prior to the
meeting date corresponding with the previous year's Annual Meeting. Shareholders
desiring to bring matters for action at an Annual Meeting should contact the
Company's Secretary for a copy of the relevant procedure. Since no such notice
was received with respect to this year's Annual Meeting, no shareholders may
bring additional business before the meeting for action.
The Annual Report of the Company for the past fiscal year is enclosed
herewith and contains the Company's financial statements for the fiscal year
ended March 31, 2001. A copy of Form 10-K, the annual report filed by the
Company with the Securities and Exchange Commission will be furnished without
charge to any shareholder who requests it in writing from the Company, at the
address noted on the first page of this Proxy Statement.
The Board of Directors knows of no business other than that described
herein that will be presented for consideration at the Annual Meeting. If,
however, other business shall properly come before the meeting, the persons in
the enclosed form of proxy intend to vote the shares represented by said proxies
on such matters in accordance with their judgment in the best interest of the
Company.
By Order of the Board of Directors,
/s/ Timothy C. Delmore
Timothy C. Delmore,
SECRETARY
16
APPENDIX A
AUDIT COMMITTEE CHARTER
I. ORGANIZATION
1. MEMBERSHIP. The Audit Committee of the Board of Directors of this
Corporation will at all times consist of at least three directors appointed
by the Board of Directors of this Corporation, each member to serve until
his or her successor is duly elected, or until his or her earlier death,
resignation or removal by the Board of Directors.
2. QUALIFICATIONS.
(A) FINANCIAL LITERACY. All members of the Audit Committee must be
financially literate, or must be able to become financially literate
within a reasonable period after his or her appointment to the Audit
Committee. At least one member of the Audit Committee must have
accounting, finance or related financial management expertise or
experience, or related professional degree or certification.
(B) INDEPENDENCE. Except as provided in the next sentence, all members of
the Audit Committee must be independent directors (within the meaning
of the applicable rules of the National Association of Securities
Dealers, Inc. ("NASD")) and free of any relationship which, in the
opinion of the Board of Directors, would interfere with the exercise
of independent judgment of the member in carrying out the
responsibilities of a director of this Corporation. The Board of
Directors may, if necessary, appoint one member to the Audit Committee
who is not an employee of the Corporation and does not qualify under
applicable NASD rules as "independent." However, if the Board of
Directors appoints a director to the Audit Committee who is not
independent within the meaning of the rules of the NASD governing such
matters, such appointment shall be made only in strict compliance with
the rules governing appointment of non-independent members.
(C) MISCELLANEOUS. All members and prospective members must respond to
such reasonable inquiries as the Board of Directors deems appropriate
to ascertain the qualifications of a member or a prospective member of
the Audit Committee.
3. MEETINGS.
(A) FREQUENCY. The Audit Committee shall meet at least four times during
each fiscal year of this Corporation, or as frequently as the
Committee deems, in its reasonable judgment, to be appropriate during
any fiscal year.
(B) AGENDA AND NOTICE. The Chief Financial Officer (non-voting attendee)
and the Chairman of the Audit Committee shall establish the meeting
dates and the meeting agenda and send proper notice of each Audit
Committee meeting to each member prior to each meeting.
(C) CHAIR. The Board of Directors shall designate a Chair of the Audit
Committee.
A-1
II. STATEMENT OF POLICY
The Audit Committee shall assist the Board of Directors in fulfilling the
oversight responsibilities of the Board of Directors relating to corporate
accounting, financial reporting practices, and the quality and integrity of the
financial reports of this Corporation. The Audit Committee shall periodically
review the financial reports of this Corporation; the internal controls
regarding finance and accounting and compliance with applicable rules and
regulations; and the adequacy and appropriateness of the overall auditing,
accounting and financial reporting processes of this Corporation. The Audit
Committee shall foster and encourage continuous improvement of and adherence to
the Corporation's internal policies and to applicable rules and regulations that
affect auditing, accounting and financial reporting matters. The Audit Committee
shall also foster and provide open avenues of communications by and among the
Corporation's management, independent public accountants, finance department and
the Board of Directors.
III. RESPONSIBILITIES
1. SELECTION AND DISENGAGEMENT OF INDEPENDENT AUDITORS. The Audit Committee is
expected to review and recommend to the Board of Directors the independent
auditors to be selected to audit and review the financial statements of
this Corporation and its subsidiaries. The Audit Committee shall also
recommend to the Board of Directors the disengagement of previously
selected independent auditors, if the Committee determines that
disengagement is warranted, and shall provide the reasons for recommending
disengagement. Final selection and disengagement of independent auditors
shall always be made by the Board of Directors. If the Board of Directors
so determines in its sole discretion, or if required by this Corporation's
Articles or Bylaws, the selection of independent auditors shall be
submitted for ratification by this Corporation's shareholders. The Audit
Committee shall also review and approve the compensation to be paid to the
independent auditors.
2. INDEPENDENCE OF INDEPENDENT AUDITORS. The Audit Committee is expected to
confirm the independence of the independent auditors selected, including a
prior review and approval of any management, consulting or other services
and fees provided by, or paid to, the independent auditors. The Audit
Committee must confirm receipt from the independent auditors a formal
written statement delineating all relationships between this Corporation
and the independent auditors, consistent with Independence Standards Board
Standard 1. The Audit Committee must actively engage in a dialogue with the
auditors with respect to any disclosed relationships or services that may
impact the objectivity and independence of the auditors and shall take, or
recommend that the full Board of Directors take, appropriate action to
oversee the independence of the auditors.
3. ACCOUNTABILITY OF AUDITORS. The independent auditors shall be accountable
to the Audit Committee and to the full Board of Directors as
representatives of the Corporation's shareholders.
4. OPEN COMMUNICATIONS. The Audit Committee is expected to provide and
facilitate an open avenue of communications between the independent
auditors, the Board of Directors, senior management and the Corporation's
finance department. The Audit Committee shall also provide and facilitate
sufficient opportunity for the internal and independent auditors to meet
with members of the Audit Committee without members of the management
present.
5. ANNUAL REVIEW OF THIS CHARTER. The Audit Committee is expected to, at least
annually, review and reassess the adequacy of this Audit Committee Charter.
A-2
6. ANNUAL AUDIT REVIEW. The Audit Committee is expected to review with
management and the independent auditors the Corporation's financial
statements (including footnotes) for each fiscal year, together with the
independent auditor's audit and audit report thereon. In performing such
review, the Audit Committee shall review the scope of the audit, the audit
procedures utilized, any difficulties or disputes encountered during the
audit, any changes in accounting practices or principles, and any other
matters related to the conduct of the audit brought to the Audit
Committee's attention by management or the independent auditors, or which
are raised by members of the Audit Committee. In connection with the annual
reviews, the Audit Committee shall inquire about and review with management
and the independent auditors any significant risks or exposures faced by
the Corporation and discuss with management the steps taken to minimize
such risk or exposure. Such risks and exposures include, but are not
limited to, threatened and pending litigation, claims against the
Corporation, tax matters, regulatory compliance and correspondence from
regulatory authorities, environmental exposure, and rules and regulations
governing internal controls and financial reporting.
7. QUARTERLY REVIEWS. The Audit Committee is expected to review with
management and the independent auditors the Corporation's financial
statements for each quarter prior to their filing with the U.S. Securities
and Exchange Commission, together with the independent auditors review
thereon pursuant to professional standards and procedures for conducting
such reviews, as established by generally accepted auditing standards. In
connection with the quarterly reviews, the Audit Committee shall inquire
about and review with management and the independent auditors any
significant risks or exposures faced by the Corporation and discuss with
management the steps taken to minimize such risk or exposure.
8. REVIEW OF INTERNAL CONTROLS. The Audit Committee is expected to consider
and review with management and the independent auditors the adequacy of
this Corporation's internal controls, including information systems control
and security and bookkeeping controls. The Audit Committee shall also
review in this regard any findings and recommendations of the independent
auditors, including their management letters.
9. REVIEW AUDIT SCOPE. The Audit Committee is expected to consider and review
with management and the independent auditors the scope of the audit for the
current fiscal year and the plan of the independent auditors in conducting
the audit.
10. AUDIT COMMITTEE REPORT. The Audit Committee shall prepare an Audit
Committee Report for inclusion in this Corporation's Proxy Statement for
each annual meeting of shareholders occurring after December 15, 2000
pursuant to the rules governing such Reports.
11. LEGAL COMPLIANCE; INVESTIGATIONS. In connection with the annual and
quarterly reviews, the Audit Committee is expected to inquire about and
review with management any legal and regulatory matters that may have a
material impact on the Corporation's financial statements or financial
reporting practices. The Audit Committee shall have the authority to
initiate and conduct investigations to matters within the scope of the
Audit Committee's responsibilities.
12. LEGAL COUNSEL AND OTHER EXPERTS. The Audit Committee may consult with the
Corporation's legal counsel at such times as the Audit Committee deems
appropriate. The Audit Committee shall have the authority to engage
independent counsel or accountants or other experts to assist it in the
performance of its duties or the conduct of any investigation the Audit
Committee has undertaken.
A-3
13. REPORTS TO THE BOARD OF DIRECTORS. The Audit Committee is expected to
report regularly to the Board of Directors of the Corporation regarding the
meetings of the Audit Committee with such recommendations to the Board of
Directors as the Audit Committee deems appropriate. The Audit Committee
shall keep minutes of its meetings and submit such minutes to the Board of
Directors.
14. OTHER RESPONSIBILITIES. The Audit Committee is expected to perform such
other duties as may be required by law or requested by the Board of
Directors or deemed appropriate by the Audit Committee. Any member of the
Audit Committee or management of this Corporation is authorized to certify
to the NASD this Corporation's compliance with rules governing audit
committees in such form as the NASD may prescribe.
This Audit Committee Charter was approved by the Board of Directors of this
Corporation on June 12, 2000.
A-4
ARCTIC CAT INC.
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, AUGUST 9, 2001
4:00 P.M.
ARCTIC CAT INC.
601 BROOKS AVENUE SOUTH
THIEF RIVER FALLS, MN 56701
ARCTIC CAT INC.
601 BROOKS AVENUE SOUTH
THIEF RIVER FALLS, MN 56701 PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON AUGUST 9, 2001 OR ANY ADJOURNMENT OR ADJOURNMENTS THEREOF.
The shares of stock of Arctic Cat Inc. you hold will be voted as you specify
on the reverse side.
By signing the proxy, you revoke all prior proxies and appoint William G. Ness
and Christopher A. Twomey as proxies (each with the power to act alone and with
the power of substitution and revocation) to vote your shares as you designate
on the matters shown on the reverse side and any other matters which may come
before the Annual Meeting and all adjournments.
SEE REVERSE FOR VOTING INSTRUCTIONS.
--------------------
COMPANY #
CONTROL #
--------------------
THERE ARE THREE WAYS TO VOTE YOUR PROXY
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
TELEPHONE AND INTERNET VOTING ARE PERMITTED UNDER MINNESOTA LAW.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK *** EASY *** IMMEDIATE
* Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 p.m. on August 8, 2001.
* You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
* Follow the simple instructions the Voice provides you.
VOTE BY INTERNET -- http://www.eproxy.com/acat/ -- QUICK *** EASY *** IMMEDIATE
* Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12:00 p.m. on August 8, 2001.
* You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above to obtain your records and create an
electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to Arctic Cat Inc., c/o Shareowner Services(SM),
P.O. Box 64873, St. Paul, MN 55164-0873.
IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD.
[ARROW] PLEASE DETACH HERE [ARROW]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1.
1. Election of directors: 01 John C. Heinmiller [ ] Vote FOR [ ] Vote WITHHELD
02 Christopher A. Twomey all nominees from all nominees
(except as marked)
____________________________________________
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, | |
WRITE THE NUMBER(S) OF THE NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) |____________________________________________|
2. The proxies are authorized to vote in their discretion upon such other business as may properly come before the
meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR PROPOSAL ONE
AND, IN THE DISCRETION OF THE PROXIES, ON ANY OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING.
Address Change? Mark Box [ ]
Indicate changes below: Date ___________________________, 2001
____________________________________________
| |
| |
|____________________________________________|
Signature(s) in Box
Please sign exactly as your name(s) appear
on Proxy. If held in joint tenancy, all
persons must sign. Trustees, administrators,
etc., should include title and authority.
Corporations should provide full name of
corporation and title of authorized officer
signing the proxy.