Polaris 2010 Annual Report Download - page 69

The following assumptions were used to estimate the weighted average fair value of options of $18.60, $5.89,
and $9.09 granted during the years ended December 31, 2010, 2009, and 2008, respectively:
2010 2009 2008
For the Year
Ended December 31,
Weighted-average volatility ....................................... 48% 42% 31%
Expected dividend yield .......................................... 3.0% 6.6% 3.7%
Expected term (in years) ......................................... 5.1 5.7 5.7
Weighted average risk free interest rate .............................. 2.5% 2.2% 2.7%
The total intrinsic value of options exercised during the year ended December 31, 2010 was $49,626,000. The
total intrinsic value of options outstanding and exercisable at December 31, 2010, 2009, and 2008 was $40,795,000,
$25,962,000, and $6,405,000, respectively. The total intrinsic value at each of December 31, 2010, 2009 and 2008 is
based on the Company’s closing stock price on the last trading day of the applicable year for in-the-money options.
The following table summarizes restricted stock activity for the year ended December 31, 2010:
Shares
Outstanding
Weighted
Average
Grant Price
Balance as of December 31, 2009............................... 124,967 $39.06
Granted ................................................ 25,954 57.90
Vested ................................................. (9,967) 48.15
Canceled/Forfeited .......................................... (12,500) 31.73
Balance as of December 31, 2010............................... 128,454 $42.87
Expected to vest as of December 31, 2010 ........................ 128,454 $42.87
The total intrinsic value of restricted stock expected to vest as of December 31, 2010 was $10,022,000. The
total intrinsic value at December 31, 2010 is based on the Company’s closing stock price on the last trading day of
the year. The weighted average fair values at the grant dates of grants awarded under the Restricted Stock Plan for
the years ended December 31, 2010, 2009, and 2008 were $57.90, $35.67, and $39.21, respectively.
Employee Savings Plans
Polaris sponsors a qualified non-leveraged employee stock ownership plan (“ESOP”) under which a maximum
of 3,600,000 shares of common stock can be awarded. The shares are allocated to eligible participants accounts
based on total cash compensation earned during the calendar year. Shares vest immediately and require no cash
payments from the recipient. Participants may instruct Polaris to pay respective dividends directly to the participant
in cash or reinvest the dividends into the participants ESOP accounts. Substantially all employees are eligible to
participate in the ESOP, with the exception of Company officers. Total expense related to the ESOP was $8,123,000,
$0, and $6,706,000, in 2010, 2009 and 2008, respectively. In 2009, the Company suspended its annual contribution
of shares into the ESOP as a cost reduction measure; however, contributions were made again in 2010. As of
December 31, 2010 there were 2,475,000 shares vested in the plan.
Polaris sponsors a 401(k) retirement savings plan under which eligible United States employees may choose to
contribute up to 50 percent of eligible compensation on a pre-tax basis, subject to certain IRS limitations. The
Company matches 100 percent of employee contributions up to a maximum of five percent of eligible compen-
sation. Matching contributions were $7,073,000, $6,827,000, and $7,251,000, in 2010, 2009 and 2008, respectively.
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POLARIS INDUSTRIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)