Polaris 2010 Annual Report Download - page 66

presentation of purchases, sales, issuances and settlements within Level 3 on a gross basis rather than a net basis.
The amendments also clarify that disclosures should be disaggregated by class of asset or liability and that
disclosures about inputs and valuation techniques should be provided for both recurring and non-recurring fair value
measurements. The ASU is effective for interim and annual reporting periods beginning after December 15, 2009,
except for certain Level 3 activity disclosure requirements that will be effective for reporting periods beginning after
December 15, 2010. We have included the additional disclosure required by ASU 2010-06 in its footnotes
beginning with the 2010 first quarter.
Accounting for Transfers of Financial Assets: In December 2009, the FASB issued ASC Topic 860, “Transfers
and Servicing: Accounting for Transfers of Financial Assets.” This Topic amends the FASB Accounting Standards
Codification for Statement 166, Accounting for Transfers of Financial Assets - an amendment of FASB Statement
No. 140). ASC Topic 860 provides guidance on how to account for transfers of financial assets including
establishing conditions for reporting transfers of a portion of a financial asset as opposed to an entire asset and
requires enhanced disclosures about a transferor’s continuing involvement with transfers. The impact of adoption of
this topic was not material to us.
Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities: In December
2009, the FASB issued ASU 2009-17, “Improvements to Financial Reporting by Enterprises Involved with Variable
Interest Entities”, which amends ASC Topic 810, “Consolidation” (FASB Statement No. 167, Amendments to
FASB Interpretation No. 46(R)). ASU 2009-17 requires the enterprise to qualitatively assess if it is the primary
beneficiary of a variable-interest entity (VIE), and, if so, the VIE must be consolidated. The ASU also requires
additional disclosures about an enterprise’s involvement in a VIE. ASU 2009-17 was effective for us beginning with
our quarter ended March 31, 2010. The impact of adopting the new guidance was not material to us.
NOTE 2. Share-Based Employee Compensation
Share-based plans: Polaris maintains an Omnibus Incentive Plan (“Omnibus Plan”) under which the Company
grants long-term equity-based incentives and rewards for the benefit of its employees, directors and consultants,
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 with the
Option Plan, Restricted Plan and Broad Based Plan, the “Prior Plans”) were frozen and no further grants or awards
have since been or will be made under such plans. A maximum of 2,750,000 shares of common stock are available
for issuance under the Omnibus Plan, together with additional shares cancelled 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, the Company has granted a total of 45,000 deferred stock units to its non-
employee directors under the Omnibus Plan since 2007 (10,000, 16,000 and 11,600 in 2010, 2009 and 2008,
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.
Under the Option Plan, incentive and nonqualified stock options for a maximum of 8,200,000 shares of
common stock could be issued to certain employees. Options granted to date generally vest three years from the
award date and expire after ten years.
Under the Broad Based Plan, incentive stock options for a maximum of 700,000 shares of common stock could
be issued to substantially all Polaris employees. Options with respect to 675,400 shares of common stock were
granted under this plan during 1999 at an exercise price of $15.78 and of the options initially granted under the
Broad Based Plan, an aggregate of 518,400 vested in March 2002. This plan and any outstanding options expired in
2009.
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POLARIS INDUSTRIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)