Polaris 2013 Annual Report Download - page 80

exchange rate in effect at the balance sheet date. Translation gains and losses are reflected as a component of
accumulated other comprehensive income in the shareholders’ equity section of the accompanying
consolidated balance sheets. Revenues and expenses in all of Polaris’ foreign entities are translated at the
average foreign exchange rate in effect for each month of the quarter. Transaction gains and losses including
intercompany transactions denominated in a currency other than the functional currency of the entity involved
are included in ‘‘other (income), net’’ in our consolidated statements of income.
Comprehensive income: Components of comprehensive income include net income, foreign currency translation
adjustments, unrealized gains or losses on derivative instruments, and unrealized gains or losses on securities
held for sale, net of tax. The Company has chosen to disclose comprehensive income in a separate
consolidated statements of comprehensive income.
New accounting pronouncements: There are no new accounting pronouncements that are expected to have a
significant impact on Polaris’ consolidated financial statements.
Subsequent events: The Company has evaluated events subsequent to the balance sheet date through the date
the consolidated financial statements have been filed. There were no other subsequent events that required
recognition or disclosure in the consolidated financial statements.
Note 2. Share-Based Compensation
Share-based plans. The Company grants long-term equity-based incentives and rewards for the benefit of its
employees and directors under the shareholder approved Polaris Industries Inc. 2007 Omnibus Incentive Plan
(as amended) (the ‘‘Omnibus Plan’’), which were previously provided under several separate incentive and
compensatory plans. Upon approval by the shareholders of the Omnibus Plan in April 2007, the Polaris
Industries Inc. 1995 Stock Option Plan (‘‘Option Plan’’), the 1999 Broad Based Stock Option Plan (‘‘Broad
Based Plan’’), the Restricted Stock Plan (‘‘Restricted Plan’’) and the 2003 Non-Employee Director Stock
Option Plan (‘‘Director Stock Option Plan’’ and collectively the ‘‘Prior Plans’’) were frozen and no further
grants or awards have since been or will be made under such plans. A maximum of 13,500,000 shares of
common stock are available for issuance under the Omnibus Plan, together with additional shares canceled or
forfeited under the Prior Plans.
Stock option awards granted to date under the Omnibus Plan generally vest two to four years from the award
date and expire after ten years. In addition, since 2007, the Company has granted a total of 129,000 deferred
stock units to its non-employee directors under the Omnibus Plan (12,000, 12,000 and 16,000 in 2013, 2012
and 2011, respectively) which will be converted into common stock when the director’s board service ends or
upon a change in control. Restricted shares awarded under the Omnibus Plan to date generally contain
restrictions which lapse after a two to four year period if Polaris achieves certain performance measures.
The Option Plan, which is frozen, was used to issue incentive and nonqualified stock options to certain
employees. Options granted to date generally vest three years from the award date and expire after ten years.
The Director Stock Option Plan, which is frozen and contains no unexercised awards as of December 31,
2013, was used to issue nonqualified stock options to non-employee directors.
Under the Polaris Industries Inc. Deferred Compensation Plan for Directors (‘‘Director Plan’’), members of
the Board of Directors who are not Polaris officers or employees may annually elect to receive common stock
equivalents in lieu of director’s fees, which will be converted into common stock when board service ends. A
maximum of 500,000 shares of common stock has been authorized under this plan of which 117,000
equivalents have been earned and an additional 357,000 shares have been issued to retired directors as of
December 31, 2013. As of December 31, 2013 and 2012, Polaris’ liability under the plan totaled $17,031,000
and $19,699,000, respectively.
Polaris maintains a long term incentive program under which awards are issued to provide incentives for
certain employees to attain and maintain the highest standards of performance and to attract and retain
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