Exhibit 10.5
 
POLARIS INDUSTRIES INC.
PERFORMANCE BASED RESTRICTED SHARE AWARD AGREEMENT
 

Participant: _____________________   SSN:_________________

 
 
In accordance with the terms of the Polaris Industries Inc. 2007 Omnibus
Incentive Plan (As Amended and Restated April 28, 2011) (the "Plan"), Polaris
Industries Inc. (the “Company”) hereby grants to you, the Participant named
above, a Performance Based Restricted Share Award involving the number of shares
of the Company’s common stock (“Shares”) set forth in the table below.  The
terms and conditions of this Award are set forth in this Agreement, consisting
of this cover page and the Award Terms and Conditions on the following pages,
and in the Plan document which is attached.  Unless the context indicates
otherwise, any capitalized term that is not defined in this Agreement shall have
the meaning set forth in the Plan as it currently exists or as it is amended in
the future.

Number of Performance Based Restricted Shares Granted:
 
_____________
Grant Date:
_____________
Initial Vesting Date:
Final Vesting Date:
_______________, if Initial Performance Goals satisfied
_______________, if Final Performance Goals satisfied
Initial Performance Period:
Final Performance Period:
Fiscal year _____
Fiscal year _____
Initial Performance Goals:
 
Final Performance Goal:
For the Initial Performance Period:
· Operating Income Margin                     ______
· Net Income                                              $___________
For the Final Performance Period:
· Operating Income Margin                     ______
· Net Income                                              $___________
 

All terms, provisions and conditions applicable to Restricted Stock Awards set
forth in the Plan and not set forth in this Agreement are incorporated by
reference into this Agreement.

By signing below, you agree to all of the terms and conditions contained in this
Agreement and in the Plan.  You acknowledge that you have received and reviewed
these documents and that they set forth the entire agreement between you and the
Company regarding your receipt of this Performance Based Restricted Share Award.

 
Agreed:
 
__________________________
Participant
Attachment:  Award Terms and Conditions
POLARIS INDUSTRIES INC.
 
 
 
Michael W. Malone
Vice President-Finance and Chief Financial Officer
 

 
 
 

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Polaris Industries Inc.
2007 Omnibus Incentive Plan
(As Amended and Restated April 28, 2011)
Performance Based Restricted Share Award Agreement

Award Terms and Conditions

1.
Award of Restricted Shares.  The Company hereby confirms the grant to you, as of
the Grant Date, of the number of Performance Based Restricted Shares identified
on the cover page of this Agreement (the "Restricted Shares"), subject to the
terms and conditions of this Agreement and the Plan.

2.
Stock Certificate Legend.  As soon as practicable after the Grant Date, the
Company shall cause one or more stock certificates representing the Restricted
Shares to be registered in your name.  Such stock certificate(s) shall be
subject to such stop-transfer orders and other restrictions as the Committee may
deem advisable under applicable federal or state securities laws, and may bear a
legend making appropriate reference to such restrictions.  In addition, each
certificate representing the Restricted Shares shall bear the following legend
(the "Agreement Legend"):

 
“The shares of stock represented by this Certificate are subject to the
restrictions on sale and transfer, whether voluntarily, involuntarily or by
operation of law, and the forfeiture conditions set forth in the Polaris
Industries Inc. 2007 Omnibus Incentive Plan and in the associated Performance
Based Restricted Share Award Agreement entered into between the registered owner
and Polaris Industries Inc.  Copies of such Agreement are on file in the offices
of Polaris Industries Inc., 2100 Highway 55, Medina, Minnesota 55340.”

3.
Escrow and Delivery of Shares.  Until the Restricted Shares vest as provided in
Section 5 of this Agreement, the certificate(s) representing the Restricted
Shares shall be held in custody by the Secretary of the Company.  Simultaneously
with the execution and delivery of this Agreement, you shall deliver to the
Company one or more stock powers endorsed in blank relating to the Restricted
Shares.  Upon vesting of all or any portion of the Restricted Shares, the
Company shall deliver or cause to be delivered to you a certificate or
certificates without the Agreement Legend for those Shares that have vested,
subject to Sections 6, 7 and 9 of this Agreement.  Upon forfeiture of all or any
portion of the Restricted Shares in accordance with Sections 6 or 9 of this
Agreement, the certificate(s) representing the forfeited Restricted Shares shall
be canceled.

4.           Restrictions Applicable to Restricted Shares.

 
(a)
Beginning on the Grant Date, you shall have all rights and privileges of a
stockholder of the Company with respect to the Restricted Shares except as
follows (the “Restrictions”):

 
(i)
Dividends and other distributions paid with respect to Restricted Shares before
they vest shall be disposed of in accordance with Section 4(c);

 
(ii)
None of the Restricted Shares may be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of before they vest other than by will or the
laws of descent and distribution; and

 
(iii)
All or a portion of the Restricted Shares may be forfeited in accordance with
Section 6.

 
 
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(b)
Any attempt to dispose of Restricted Shares in a manner contrary to the
Restrictions shall be null, void and ineffective.  If and when the Restricted
Shares vest in accordance with the terms of this Agreement and the Restrictions
lapse, such shares shall no longer be considered Restricted Shares for purposes
of this Agreement.

 
(c)
You hereby irrevocably and unconditionally assign to the Company any and all
cash and non-cash dividends and other distributions paid with respect to the
Restricted Shares before they vest; provided, however, that any Shares
distributed as a dividend or otherwise with respect to the Restricted Shares
before they vest shall not be subject to such assignment, shall be considered
additional Restricted Shares subject to the same Restrictions as the underlying
Restricted Shares and shall be held as prescribed in Section 3.

5.
Vesting of Restricted Shares.  Subject to Sections 6, 9 and 10 of this
Agreement, the Restricted Shares shall vest and the Restrictions shall lapse as
provided in this Section 5.

 
(a)
All of the Restricted Shares shall vest as of the Initial Vesting Date if the
Company’s Operating Income Margin and Net Income (as defined below) for the
Initial Performance Period are equal to or greater than the Initial Performance
Goals set forth on cover page of this Agreement.

 
(b)
If the Restricted Shares do not vest as a result of achievement of the Initial
Performance Goals in accordance with Section 5(a), all of the Restricted Shares
shall vest as of the Final Vesting Date if the Company’s Operating Income Margin
and Net Income for the Final Performance Period are equal to or greater than the
Final Performance Goals set forth on the cover page of this Agreement.

 
(c)
For purposes of this Agreement, (i) “Sales,” “Operating Income Margin” and “Net
Income” shall mean the sales, operating income margin and net income,
respectively, of the Company and its Subsidiaries for the applicable fiscal year
as reported in the Company's audited financial statements for such fiscal year,
as adjusted for changes in generally accepted accounting principles or the
application of generally accepted accounting principles by the Company; and (ii)
“Operating Income Margin” shall mean the operating income of the Company and its
Subsidiaries for the applicable fiscal year expressed as a percentage of Sales
for such fiscal year.

6.
Forfeiture.  All of your rights to unvested Restricted Shares shall terminate
and such Restricted Sharers shall be forfeited to the Company effective as of
the earlier of (i) the Final Vesting Date if the Final Performance Goals have
not been achieved, or (ii) the date your employment with the Company and its
Affiliates terminates for any reason.

7.
Tax Withholding.  The Company will notify you of the amount of any federal,
state or local withholding taxes that must be paid in connection with the
vesting of the Restricted Shares (or in connection with the grant of the
Restricted Shares if you make the election described in Section 8).  The Company
may deduct such amount from your regular salary payments or other compensation
otherwise due and owing to you.  If the full amount of the withholding taxes
cannot be recovered in this manner, you must promptly remit the deficiency to
the Company upon the receipt of the Company’s notice.  If you wish to satisfy
some or all of such withholding taxes by delivering Shares you already own or by
having the Company retain a portion of the vested Restricted Shares that would
otherwise be released to you, you must make such a request in accordance with
Section 19.2 of the Plan which shall be subject to approval by the
Committee.  The Company may withhold the release to you of any and all vested
Shares to which you are otherwise entitled under this Agreement until and unless
you have satisfied the applicable tax withholding obligations.

 
 
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8.
83(b) Election.  You may make and file with the Internal Revenue Service an
election under Section 83(b) of the Code with respect to the grant of the
Restricted Shares, electing to include in your gross income as of the Grant Date
the Fair Market Value of the Restricted Shares as of the Grant Date.  You shall
promptly provide a copy of such election to the Company.  If you make and file
such an election, you shall make such arrangements in accordance with Section 7
as are satisfactory to the Committee to provide for the payment of all
applicable withholding taxes.

9.
Compensation Recovery.  This Award and any shares or cash received in settlement
thereof shall be subject to (i) the Company’s Policy Regarding Executive
Incentive Compensation Recoupment as in effect from time to time, including any
amendments or revisions thereto adopted by the Board or the Committee in
response to the requirements of Section 10D of the Exchange Act and the rules
promulgated by the Securities and Exchange Commission and the Nasdaq Stock
Market thereunder; and (ii) forfeiture to or reimbursement of the Company under
the circumstances and to the extent provided in Section 304 of the
Sarbanes-Oxley Act of 2002 if you are one of the individuals expressly subject
to such Section 304 or if you knowingly or grossly negligently engaged in the
misconduct, or knowingly or grossly negligently failed to prevent the misconduct
which resulted in material noncompliance by the Company with any financial
reporting requirement under the securities laws and as a result of which the
Company was required to prepare an accounting restatement.

10.
Change in Control.  If a Change in Control of the Company occurs before the
Final Vesting Date and while you continue to be employed by the Company or any
of its Affiliates, this Award shall be dealt with as provided in Article 11 of
the Plan.

11.
Governing Plan Document.  This Agreement and Award are subject to all the
provisions of the Plan, and to all interpretations, rules and regulations which
may, from time to time, be adopted and promulgated by the Committee pursuant to
the Plan.  If there is any conflict between the provisions of this Agreement and
the Plan, the provisions of the Plan will govern.

12.
Binding Effect and Assignment.  This Agreement shall be binding upon and inure
to the benefit of your heirs and representatives and the assigns and successors
of the Company, but neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to transfer or pledge by you.

13.
Entire Agreement; Amendment; Severability.  This Agreement and the Plan and any
Non-Competition Agreement and Confidentiality Agreement between you and the
Company dated as of the Grant Date embody the entire understanding of the
parties regarding the subject matter hereof and shall supersede all prior
agreements and understandings, oral or written, between the parties with respect
thereto.  Except as otherwise provided in Section 17.4 of the Plan, no change,
alteration or modification of this Agreement may adversely affect in any
material way your rights under this Agreement without your prior written
consent.  If any provision of this Agreement or the application of any provision
hereof is declared to be illegal, invalid, or otherwise unenforceable by a court
of competent jurisdiction, the remainder of this Agreement shall not be affected
thereby.

14.
Certain References.  References to you in any provision of this Agreement under
circumstances where the provision should logically be construed to apply to your
executors or administrators, or to the person or persons to whom all or any
portion of the Restricted Shares may be transferred by will or the laws of
descent and distribution, shall be deemed to include such person or persons.

 
 
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15.
Notices.  Every notice or other communication relating to this Agreement shall
be in writing and shall be mailed to or delivered to the party for whom it is
intended at such address as may from time to time be designated by it in a
notice mailed or delivered to the other party as herein provided; provided,
however, that unless and until some other address be so designated, all notices
or communications by you to the Company shall be mailed or delivered to the
Company at its office at 2100 Highway 55, Medina, Minnesota  55340, and all
notices or communications by the Company to you may be given to you personally
or may be mailed to you at the address indicated in the Company's records as
your most recent mailing address.

By signing the cover page of this Agreement, you agree to all the terms and
conditions described above and in the Plan document.
 
 
 
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