EX-10.4








    EXHIBIT 10.4



 




    POLARIS
    INDUSTRIES INC.

    LONG TERM INCENTIVE PLAN



 




    As
    Amended and Restated

    Effective January 22, 2009



 



    1. Purpose.  The Polaris Industries
    Inc. Long Term Incentive Plan is intended to increase incentives
    for Eligible Employees 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 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 January 22, 2009.



 



    2. Definitions.  As used herein,
    the terms set forth below shall have the following respective
    meanings:



 



    (a) “Board” means the Board of Directors
    of the Company.



 



    (b) “Business Criteria” means the business
    criteria listed in Section 6 of this Plan.



 



    (c) “Code” means the Internal Revenue Code
    of 1986, as amended from time to time.



 



    (d) “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.



 



    (e) “Company” means Polaris Industries
    Inc., a Minnesota corporation, and its successors and assigns.



 



    (f) “Effective Date” means January 1,
    2004.



 



    (g) “Eligible Employee” means any employee
    of the Company designated by the Committee as an Eligible
    Employee.



 



    (h) “Incentive Compensation Award” means
    an incentive compensation award payable under this Plan.



 



    (i) “Incentive Compensation Award Period”
    means, with respect to an Incentive Compensation Award, as
    determined by the Committee, the three consecutive calendar
    years beginning on or after the Effective Date with respect to
    which such Incentive Compensation Award is to be paid.



 



    (j) “Participant” means, with respect to
    an Incentive Compensation Award Period, the Eligible Employees
    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.



 



    (k) “Performance Objective” means the
    performance objective or objectives established pursuant to
    Section 5 of the Plan.



 



    (l) “Plan” means the Polaris Industries
    Inc. Long Term Incentive Plan, as it may be amended from time to
    time.



 



    3. 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.



 



    4. 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) and 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. 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 payable to a
    Participant may be denominated in cash and, pursuant to terms
    established by the Committee, at the election of a Participant
    may be adjusted to reflect changes in the market price of the
    Company’s common stock during an Incentive Compensation
    Award Period, provided that all amounts paid under the Plan
    shall be paid in cash.



 



    6. Business Criteria.  The Business
    Criteria will include specified levels of one or more of the
    following:



 


	 	 	 
	

    Operating Income


	
 
	
    Net Income

	

    Pre-Tax Income


	
 
	
    Customer Retention

	

     Cash Flow


	
 
	
    Return on Investment

	

    Return on Capital


	
 
	
    Revenue

	

    Return on Invested Capital


	
 
	
    Revenue Growth

	

    Return on Equity


	
 
	
    Total Shareholder Return

	

    Return on Assets


	
 
	
    Stock Price

	

    Return on Sales


	
 
	
    Market Share

	

    Expense Targets


	
 
	
    Productivity Targets

	

    Customer Satisfaction


	
 
	
    Earnings Per Share

	

    Sales


	
 
	
    Earnings Per Share Growth

	

    Sales Growth


	
 
	
    Economic Value Added









 



    The above terms shall have the same meaning as in the
    Company’s financial statements, or if the terms are not
    used in the Company’s financial statements, as applied
    pursuant to generally accepted accounting principles, or as used
    in the Company’s industry, as applicable. As determined by
    the Committee, the Business Criteria shall be applied
    (i) in absolute terms or relative to one or more other
    Business Criteria, other companies or indices and (ii) to a
    business unit, geographic region, one or more separately
    incorporated entities, or the Company as a whole).



 



    7. Incentive Compensation Award
    Certification.  The Committee shall certify in
    writing prior to payment of the Incentive Compensation Award
    that the Performance Objective has been attained and the
    Incentive Compensation Award is payable. With respect to
    Committee certification, approved minutes of the meeting in
    which the certification is made shall be treated as written
    certification.



 



    8. Maximum Incentive Compensation Award
    Payable.  The maximum amount payable with
    respect to an Incentive Compensation Award to any Participant is
    200% of such Participant’s base salary (up to a maximum of
    base salary of $1,000,000).



 



    9. Extraordinary or Unusual
    Events.  The Committee may, in its discretion,
    disregard the impact of any extraordinary or unusual event (in
    accordance with generally accepted accounting procedures) in
    determining whether a Performance Objective has been obtained or
    may make appropriate adjustments in any Performance Objective to
    reflect such extraordinary or unusual event.



 



    10. Discretion to Reduce
    Awards.  The Committee, in its sole and
    absolute discretion, may reduce the amount of any award
    otherwise payable to a Participant.



 



    11. Active Employment
    Requirement.  Except as provided below, an
    Incentive Compensation Award shall be paid for an Incentive
    Compensation Award Period only to a Participant who is actively
    employed by the Company (or on approved vacation or other
    approved leave of absence) throughout the Incentive Compensation
    Award Period and who is employed by the Company on the date the
    Incentive Compensation Award is paid. To the extent consistent
    with the deductibility of awards under Section 162(m) of
    the Code and regulations thereunder, the Committee may in its
    sole discretion grant an Incentive Compensation Award for the
    Incentive Compensation




    

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    Award Period to a Participant who is first employed or who is
    promoted to a position eligible to become a Participant under
    this Plan during the Incentive Compensation Award Period, or
    whose employment is terminated during the Incentive Compensation
    Award Period because of the Participant’s retirement under
    the Company’s 401(k) plan, death, or because of disability
    as defined in Section 22(e)(3) of the Code. In such cases
    of active employment for part of an Incentive Compensation Award
    Period, a pro rata Incentive Compensation Award may be paid for
    the Incentive Compensation Award Period.



 



    12. Payment and Deferrals of Incentive Compensation
    Award.  An Incentive Compensation Award shall
    be paid to the Participant for the Incentive Compensation Award
    Period as provided in this Plan. The Company shall pay the
    Incentive Compensation Award to the Participant in such form as
    the Committee may determine and at such time as the Committee
    may determine after the Committee certifies that the Incentive
    Compensation Award is payable as provided in Section 7, but
    no later than March 15th of the year following the
    year in which the Incentive Compensation Award Period ends. In
    the event of the Participant’s death, any Incentive
    Compensation Award shall be paid to the Participant’s
    spouse or, if there is no surviving spouse, the
    Participant’s estate. Payments under this Section shall
    operate as a complete discharge of the Committee and the
    Company. The Company shall deduct from any Incentive
    Compensation Award paid under the Plan the amount of any taxes
    required to be withheld by the federal or any state or local
    government.



 



    The Committee may, in its sole and absolute discretion, permit a
    Participant elect to defer receipt of such Incentive
    Compensation Award in accordance with the terms of the Polaris
    Industries Inc. Supplemental Retirement/Savings Plan.



 



    13. Shareholder Approval.  No
    Incentive Compensation Award shall be payable under this Plan
    unless the Plan is disclosed to and approved by the shareholders
    of the Company in accordance with Section 162(m) of the
    Code and regulations thereunder.



 



    14. Limitation of Rights.  Nothing
    in this Plan shall be construed to (a) give any employee of
    the Company any right to be awarded any Incentive Compensation
    Award other than that set forth herein, as determined by the
    Committee; (b) give a Participant any rights whatsoever
    with respect to shares of common stock of the Company;
    (c) limit in any way the right of the Company to terminate
    an employee’s employment with the Company at any time for
    any reason or no reason; (d) give a Participant or any
    other person any interest in any fund or in any specific asset
    or assets of the Company; or (e) be evidence of any
    agreement or understanding, express or implied, that the Company
    will employ an employee in any particular position or at any
    particular rate of remuneration.



 



    15. Non-Exclusive Arrangement.  The
    adoption and operation of this Plan shall not preclude the Board
    or the Committee from approving other short-term incentive
    compensation arrangements for the benefit of individuals who are
    Participants hereunder as the Board or Committee, as the case
    may be, deems appropriate and in the best interests of the
    Company.



 



    16. Nonassignment.  The right of a
    Participant to the payment of any Incentive Compensation Award
    under the Plan may not be assigned, transferred, pledged, or
    encumbered, nor shall such right or other interests be subject
    to attachment, garnishment, execution, or other legal process.



 



    17. Amendment or Termination of the
    Plan.  The Board may amend or terminate the
    Plan at any time, except that no amendment or termination shall
    be made that would impair the rights of any Participant to an
    Incentive Compensation Award that would be payable were the
    Participant to terminate employment on the effective date of
    such amendment or termination, unless the Participant consents
    to such amendment or termination. The Plan shall automatically
    terminate on December 31, 2014 unless sooner terminated by
    action of the Board or extended with the approval of the Board
    and the Company’s shareholders.



 



    18. Governing Law.  The validity,
    construction, interpretation, administration and effect of the
    Plan and of its rules and regulations, and rights relating to
    the Plan, shall be determined solely in accordance with the laws
    of the State of Minnesota, other than the conflict of law
    provisions of such laws.




    

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