POLARIS INDUSTRIES INC.
SENIOR EXECUTIVE
ANNUAL INCENTIVE COMPENSATION PLAN
As Amended and Restated
Effective December 31, 2008
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1.
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Purpose . The Polaris Industries Inc. Senior
Executive Annual Incentive Compensation Plan is intended to provide
incentives for Eligible Senior Executives to attain and maintain
the highest standards of performance, to attract and retain key
executives of outstanding competence and ability, to stimulate the
active interest of key executives in the development and financial
success of the Company, to further align the identity of interests
of employees with those of the Company’s shareholders
generally and to reward executives for outstanding performance when
certain objectives are achieved. This amendment and restatement of
the Plan is effective as of December 31, 2008.
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2.
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Definitions . As used herein, the terms set
forth below shall have the following respective
meanings:
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(a)
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“Board”
means the Board of
Directors of the Company.
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(b)
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“Business
Criteria” means the business criteria listed
in Section 6 of this Plan.
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(c)
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“Code”
means the Internal
Revenue Code of 1986, as amended from time to time.
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(d)
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“Committee”
means the Committee
appointed by the Board to administer the Plan. The Committee shall
be constituted at all times so as to meet the outside director
requirements of Section 162(m) of the Code.
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(e)
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“Company”
means Polaris Industries
Inc., a Minnesota corporation and its successors and
assigns.
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(f)
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“Effective
Date” means January 1,
2004.
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(g)
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“Eligible Senior
Executive” means any senior executive employee
of the Company designated by the Committee as an Eligible Senior
Executive.
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(h)
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“Incentive Compensation
Award” means an incentive compensation
award payable under this Plan.
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(i)
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“Incentive Compensation Award
Period” means, with respect to an Incentive
Compensation Award, as determined by the Committee, the calendar
year beginning on or after the Effective Date with respect to which
such Incentive Compensation Award is to be determined. It is
expressly intended that any particular calendar year may be
included in the Incentive Compensation Award Period of multiple
Incentive Compensation Awards.
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(j)
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“Participant”
means, with respect to
an Incentive Compensation Award Period, the Eligible Senior
Executives selected by the Committee to be eligible to receive an
Incentive Compensation Award for such Incentive Compensation Award
Period as provided in Section 5 of this Plan.
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(k)
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“Performance
Objective” means the performance objective or
objectives established pursuant to Section 5 of the
Plan.
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(l)
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“Plan”
means the Polaris
Industries Inc. Senior Executive Annual Incentive Compensation
Plan, as it may be amended from time to time.
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3.
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Administration
. The Committee shall
interpret the Plan, prescribe, amend, and rescind rules relating to
it, select eligible Participants, and take all other actions
necessary for its administration, which actions shall be final and
binding upon all Participants. To the extent permitted by law, all
members of the Board of Directors, including the members of the
Committee, shall be indemnified and held harmless by the Company
with respect to any loss, cost, liability or expense that may be
reasonably incurred in connection with any claim, action, suit or
proceeding which arises by reason of any act or omission under the
Plan so long as such act or omission is taken in good faith and
within the scope of the authority delegated herein.
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4.
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Compliance with Sections 162(m) and
409A . The
Plan shall be administered to comply with Sections 162(m) and 409A
of the Code and regulations promulgated thereunder, and if any Plan
provision is found not to be in compliance with Sections 162(m) or
409A of the Code, the provision shall be deemed modified as
necessary to meet the requirements of Sections 162(m) and 409A of
the Code.
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5.
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Selection of Participants and
Performance Objective . Prior to the commencement of each
Incentive Compensation Award Period, or at such later time as
permitted by Section 162(m) of the Code and regulations thereunder,
the Committee shall determine in writing (i) the Participants
who shall be eligible to receive an Incentive Compensation Award
for such Incentive Compensation Award Period, (ii) the
Performance Objective, which shall consist of any one or more of
the Business Criteria, and (iii) the formula for computing the
amount of the Incentive Compensation Award payable to each
Participant if the Performance Objective is achieved, which formula
shall comply with the requirements applicable to performance-based
compensation plans under Section 162(m) of the Code. The amount of
an Incentive Compensation Award may be denominated in cash and/or
in shares of the Company’s common stock,
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