Polaris 2011 Annual Report Download - page 74

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 13,500,000 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 106,000 deferred stock
units to its non-employee directors under the Omnibus Plan since 2007 (16,000, 20,000 and 32,000 in 2011, 2010
and 2009, 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 16,400,000 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 1,400,000 shares of common stock
could be issued to substantially all Polaris employees. Options with respect to 1,350,800 shares of common stock
were granted under this plan during 1999 at an exercise price of $7.89 and of the options initially granted under
the Broad Based Plan, an aggregate of 1,036,800 vested in March 2002. This plan and any outstanding options
expired in 2009.
Under the Restricted Plan, a maximum of 4,700,000 shares of common stock could be awarded as an
incentive to certain employees with no cash payments required from the recipient. The majority of the
outstanding awards contain restrictions which lapse after a two to four year period if Polaris achieves certain
performance measures.
Under the Director Stock Option Plan, nonqualified stock options for a maximum of 400,000 shares of
common stock could be issued to non-employee directors. Each non-employee director as of the date of the
annual shareholders meetings through 2006 was granted an option to purchase 8,000 shares of common stock at a
price per share equal to the fair market value as of the date of grant. Options became exercisable as of the date of
the next annual shareholders meeting following the date of grant and must be exercised no later than 10 years
from the date of grant.
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 receive annual grants of common stock
equivalents and may also elect to receive additional 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 248,900 equivalents have been earned and an additional
200,400 shares have been issued to retired directors as of December 31, 2011. As of December 31, 2011 and
2010, Polaris’ liability under the plan totaled $13,933,000 and $8,992,000, respectively.
Polaris maintains a Long Term Incentive Plan 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 employees
of outstanding competence and ability with no cash payments required from the recipient. The awards are paid in
cash and are based on certain Company performance measures that are measured over a period of three
consecutive calendar years. At the beginning of the plan cycle, participants have the option to receive a cash
value at the time of awards or a cash value tied to Polaris stock price movement over the three year plan cycle. At
December 31, 2011 and 2010, Polaris’ liability under the plan totaled $93,765,000 and $49,745,000, respectively.
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