exv10wqq







 




    Exhibit 10.qq



 




    POLARIS
    INDUSTRIES INC.

    



 




    2003
    NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

    





    As
    Amended and Restated on January 20, 2010



 



    1. Purpose.  The Polaris Industries
    Inc. 2003 Non-Employee Director Stock Option Plan (the
    “Plan”) is hereby established to grant to non-employee
    directors of Polaris Industries Inc. (the “Company”)
    an opportunity to acquire Common Stock, par value $.01 per
    share, of the Company (“Common Stock”) and to create
    an incentive for such persons to serve on the Board of Directors
    of the Company and to contribute to its long-term growth and
    profitability. The Plan was approved by the Board of Directors
    of the Company on January 23, 2003 and shall become
    effective on the date it is approved by the Company’s
    shareholders (the “Effective Date”).



 



    Masculine terms used herein may be read as feminine, singular
    terms as plural and plural terms as singular, as necessary to
    give effect to the Plan.



 



    2. Eligibility.  Each member of the
    Board of Directors of the Company who is not an officer or
    full-time salaried employee of the Company or one of its
    subsidiaries shall be eligible to participate in the Plan. Each
    such person is referred to in this Plan as a
    “Participant.”



 



    3. Administration.  The Plan shall
    be administered by the Compensation Committee (the
    “Committee”) of the Board of Directors of the Company.
    The Committee shall have the sole and absolute power, authority
    and discretion to interpret the Plan, to prescribe, amend and
    rescind rules and regulations to further the purposes of the
    Plan, and to make all other determinations necessary for the
    administration of the Plan. All such actions by the Committee
    shall be final and binding. To the extent permitted by law,
    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. Common Stock Subject to
    Plan.  There shall be reserved for issue upon
    the exercise of options granted under the Plan
    100,000 shares of Common Stock. The number and kind of
    shares available for issuance under the Plan are subject to
    adjustment in accordance with the provisions of Section 8
    hereof. If any stock option shall cease to be exercisable in
    whole or in part for any reason, the shares of Common Stock
    which were covered by such stock option but as to which the
    stock option had not been exercised shall again be available
    under the Plan. Shares issuable under the Plan shall be made
    available from authorized and unissued or previously issued and
    outstanding shares of Common Stock reacquired by the Company.



 



    5. Grants and Terms of
    Options.  Options granted under this Plan
    shall be non-qualified stock options, i.e. they shall not be
    intended to qualify as incentive stock options within the
    meaning of Section 422 of the Internal Revenue Code of
    1986, as amended. Each option granted under the Plan shall be
    evidenced by a stock option agreement between the person to whom
    such option is granted and the Company or such other
    documentation as the Committee shall deem appropriate. Such
    stock option agreement shall provide that the option is subject
    to the following terms and conditions and to such other terms
    and conditions not inconsistent therewith as the Committee may
    deem appropriate in each case:



 



    (a) Option Exercise Price.  The
    exercise price to be paid for each share of Common Stock upon
    the exercise of an option shall be 100% of the fair market value
    of the shares on the date the option is granted. As used in this
    Plan, the term “date the option is granted” means the
    date as of which the option is granted in accordance with
    Section 5(b). Fair market value of the shares shall mean,
    as of any applicable date, the closing price, regular way, of
    the Common Stock on the New York Stock Exchange, or if no such
    reported sale of the Common Stock shall have occurred on such
    date, on the next preceding date on which there was such a
    reported sale.



 



    (b) Annual Option Grants.  On the
    date of each Annual Meeting of Shareholders of the Company
    (“Annual Meeting”) that occurs after the Effective
    Date, each Participant who is first elected at such meeting or
    who is continuing as a director after such meeting shall receive
    an option grant for 2,000 shares of Common Stock.



 



    (c) Discretionary Grants.  In
    addition to the automatic annual grants of options provided for
    in subsection (b) above, the Committee shall have the
    discretion, in special circumstances as determined by the
    Committee, to grant















 







    options to Participants upon the terms and conditions of this
    Plan. The maximum number of options that can be granted to any
    Participant in any single discretionary grant shall not exceed
    20,000 shares.



 



    (d) Period of Option.  Options
    granted hereunder shall have a term of ten (10) years from
    the date of grant; provided, however, that, in the event of the
    termination of the Participant’s service on the Board of
    Directors (“Termination of Service”), such term shall
    be determined in accordance with Section 7.



 



    (e) Vesting and Exercisability of
    Options.  Each option granted under this Plan
    shall become vested and exercisable as of the earliest to occur
    of (i) the Annual Meeting next following the Annual Meeting
    as of which such option was granted, (ii) a Change in
    Control (as defined below) or (iii) the termination of the
    Participant’s service on the Board of Directors at or after
    age sixty-five (65) or as a result of the term limits
    applicable to members of the Board of Directors of the Company
    (“Retirement”) or (iv) the termination of the
    Participant’s service on the Board of Directors prior to
    age sixty-five (65) if the Participant has served on the Board
    of Directors for a period of ten (10) years or more
    (“Early Retirement”). Options shall be exercisable
    following cessation of a Participant’s service on the Board
    of Directors only to the extent provided in Section 7. The
    term “Change in Control” means any of the events set
    forth below:



 



    (A) Any election has occurred of persons to the Board of
    Directors that causes at least one-half of the Board of
    Directors to consist of persons other than (x) persons who
    were members of the Board of Directors on January 23, 2003
    and (y) persons who were nominated for election by the
    Board of Directors as members of the Board of Directors at a
    time when more than one-half of the members of the Board
    consisted of persons who were members of the Board of Directors
    on January 23, 2003; provided, however, that any person
    nominated for election by the Board of Directors at a time when
    at least one-half of the members of the Board of Directors were
    persons described in clauses (x) and/or (y) or by
    persons who were themselves nominated by such Board of Directors
    shall, for this purpose, be deemed to have been nominated by a
    Board of Directors composed of persons described in clause (x)
    (persons described or deemed described in clauses (x)
    and/or (y) are referred to herein as “Incumbent
    Directors”); or



 



    (B) The acquisition in one or more transactions, other than
    from the Company, by any individual, entity or group (within the
    meaning of Section 13(d)(3) or 14(d)(2) of the Securities
    Exchange Act of 1934, as amended) of beneficial ownership
    (within the meaning of
    Rule 13d-3
    promulgated under the Securities Exchange Act of 1933, as
    amended) of a number of voting securities of the Company equal
    to or greater than 35% of the voting securities of the Company
    unless such acquisition has been approved by the Incumbent
    Directors as an acquisition not constituting a Change in Control
    for purposes hereof; or



 



    (C) Any of the following: (x) a liquidation or
    dissolution of the Company; (y) a reorganization, merger or
    consolidation of the Company unless, following such
    reorganization, merger or consolidation, (1) the Company is
    the surviving entity resulting from such reorganization, merger
    or consolidation or (2) at least one-half of the Board of
    Directors of the entity resulting from such reorganization,
    merger or consolidation consists of Incumbent Directors; or
    (z) a sale or other disposition of all or substantially all
    of the assets of the Company unless, following such sale or
    disposition, at least one-half of the Board of Directors of the
    transferee consists of Incumbent Directors.



 



    (f) Method of Exercise of
    Options.  Full payment for shares of Common
    Stock purchased upon the exercise of a stock option shall be
    made at the time the option is exercised in whole or in part.
    Payment of the purchase price shall be made in cash or in such
    other form as the Committee may approve in the applicable award
    agreement, including, without limitation, payment in accordance
    with a cashless exercise program under which, if so instructed
    by the Participant, shares may be issued directed to the
    participant’s broker or dealer upon receipt of the purchase
    price in cash from the broker or dealer, or by the delivery to
    the Company by the Participant of shares of Common Stock that
    have been held by the participant for at least six months prior
    to exercise of the option, valued at the fair market value of
    such shares on the date of exercise. No shares of Common Stock
    shall be issued to the Participant until such payment has been
    made, and a Participant shall have none of the rights of a
    stockholder with respect to options held except to the extent
    such options have been exercised. The tax liability associated
    with the exercise of a stock option under this Plan shall,
    unless the Committee determines otherwise, be the sole
    responsibility of the Participant.



 



    6. Nontransferability.  Options
    granted pursuant to the Plan shall be nontransferable except by
    will or the laws of descent and distribution, and shall be
    exercisable during the Participant’s lifetime only by him,
    and after his death, by his personal representative or by the
    person entitled thereto under his will or the laws of intestate
    succession.














 







    7. Termination of Service.  Upon
    termination of the Participant’s service on the Board of
    Directors for any reason, his rights to exercise options then
    held by him shall be only as follows:



 



    (a) If a Participant shall die (i) while a
    non-employee director of the Company or (ii) within the
    five (5) year period specified in Section 7(b) below
    or within the three (3) year period specified in
    Section 7(c) below or within the ninety (90) day
    period specified in Section 7(d) below, his or her
    non-vested options, if any, shall be forfeited, and his or her
    vested options may be exercised by the person or persons to whom
    the Participant’s rights under the option pass by will or
    applicable law or if no person has that right, by his executors
    or administrators, at any time, or from time to time, within one
    (1) year of the date of his death, but in no event later
    than the expiration date specified in Section 5(d).



 



    (b) If a Participant ceases to be a non-employee director
    of the Company by reason of Retirement, his or her options shall
    be deemed vested in full as of the Retirement date, and such
    vested options may be exercised at any time, or from time to
    time, within five (5) years of the date of such Retirement,
    but in no event later than the expiration date specified in
    Section 5(d).



 



    (c) If a Participant ceases to be a non-employee director
    of the Company by reason of Early Retirement, his or her options
    shall be deemed vested in full as of the Early Retirement date,
    and such vested options may be exercised at any time, or from
    time to time, within three (3) years of the date of such
    Early Retirement, but in no event later than the expiration date
    specified in Section 5(d).



 



    (d) If a Participant ceases to be a non-employee director
    of the Company for any reason other than those set forth in
    Sections 7(a), 7(b) and 7(c) above, his or her non-vested
    options shall be forfeited, and his or her vested options may be
    exercised by the person or persons to whom the
    Participant’s rights under the option pass by will or
    applicable law or if no person has that right, by his executors
    or administrators, at any time, or from time to time, within
    ninety (90) days the date of such cessation of service, but
    in no event later than the expiration date specified in
    Section 5(d).



 



    8. Adjustment of Shares.  In the
    event of any subdivision or combination of the outstanding
    shares of Common Stock, stock dividend, recapitalization,
    reclassification of shares, sale, lease or transfer of
    substantially all of the assets of the Company, substantial
    distributions to stockholders, merger, consolidation or other
    corporate transactions which would result in a substantial
    dilution or enlargement of the rights or economic benefits
    inuring to Participants hereunder, the Committee shall make such
    equitable adjustments as it may deem appropriate in the Plan and
    the outstanding stock options, including, without limitation,
    any adjustment in the total number of shares of Common Stock
    which may thereafter be available under the Plan
    and/or in
    the number of shares annually granted to Participants pursuant
    to Section 5(b) hereof.



 



    9. Securities Law
    Requirements.  The Company may require option
    holders, as a condition of either the grant or the exercise of
    an option, to represent and establish to the satisfaction of the
    General Counsel of the Company that all shares of Common Stock
    acquired upon the exercise of such option will be acquired for
    investment and not for resale. The Company may refuse to permit
    the sale or other disposition of any shares acquired pursuant to
    any such representation until it is satisfied that such sale or
    other disposition would not be in contravention of applicable
    state or federal securities law.



 



    10. 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.



 



    11. Amendment.  The Board of
    Directors may, by resolution, amend or revise the Plan, except
    that such action shall not be effective without stockholder
    approval if such stockholder approval is required by law or
    under the rules and regulations of any stock exchange or other
    securities market on which the Common Stock is listed or
    authorized for quotation. The Board of Directors may not alter
    or impair any options previously granted under the Plan without
    the consent of the holders thereof, except in accordance with
    the provisions of Section 8.



 



    12. Termination.  The Plan shall
    terminate on the tenth (10th) anniversary of the Effective Date,
    unless it is sooner terminated by the Board of Directors. The
    Board of Directors may terminate the Plan at any time, in whole
    or in part, in its sole discretion. Termination of the Plan
    shall not affect options previously granted under the Plan.



 



    13. Effective Date. The Plan shall be
    effective on the date it is approved by the Company’s
    shareholders.