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                                                                   EXHIBIT 10(b)





                  POLARIS SUPPLEMENTAL RETIREMENT/SAVINGS PLAN















                             EFFECTIVE JULY 1, 1995


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                  POLARIS SUPPLEMENTAL RETIREMENT/SAVINGS PLAN

                             Effective July 1, 1995
                (Reflecting Changes Effective December 31, 1996)

                                TABLE OF CONTENTS

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<S>     <C>                                                                                                    <C>
ARTICLE 1.  DEFINITIONS.........................................................................................  1

         1.1      Account.......................................................................................  1
         1.2      Additional Credits............................................................................  1
         1.3      Administrator.................................................................................  1
         1.4      Affiliated Company............................................................................  1
         1.5      Board of Directors............................................................................  1
         1.6      Change of Control.............................................................................  1
         1.7      Code..........................................................................................  2
         1.8      Committee.....................................................................................  2
         1.9      Compensation..................................................................................  2
         1.10     Corporation"..................................................................................  2
         1.11     Corporation Voting Securities.................................................................  2
         1.12     Deferrals shall mean the amounts credited to a Member's Account under Section 3.3.............  2
         1.13     Deferral Agreement............................................................................  2
         1.14     Deferral Percentage...........................................................................  2
         1.15     Distribution Option(s)........................................................................  2
         1.16     Effective Date................................................................................  2
         1.17     Eligible Executive............................................................................  2
         1.18     Exchange Act..................................................................................  2
         1.19     Member........................................................................................  2
         1.20     Participating Company.........................................................................  3
         1.21     Plan..........................................................................................  3
         1.22     Plan Sponsor..................................................................................  3
         1.23     Savings Plan..................................................................................  3
         1.24     Valuation Date................................................................................  3

ARTICLE 2.  MEMBERSHIP AND DEFERRAL AGREEMENTS..................................................................  3
         2.1      In General....................................................................................  3
         2.2      Modification of Initial Deferral Agreement....................................................  3
         2.3      Termination of Membership; Re-employment......................................................  4
         2.4      Change in Status..............................................................................  4

ARTICLE 3.  DEFERRALS...........................................................................................  4
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<S>     <C>                                                                                                    <C>
         3.1      Filing Requirements...........................................................................  4
         3.2      Deferral Agreement............................................................................  4
         3.3      Crediting of Deferrals........................................................................  5
         3.4      Changing Deferrals............................................................................  5
         3.5      Certain Additional Credits....................................................................  5

ARTICLE 4.  MAINTENANCE OF ACCOUNTS.............................................................................  5
         4.1      Accounts......................................................................................  5
         4.2      Deemed Investments............................................................................  5
         4.3      Statement of Accounts.........................................................................  6
         4.4      Vesting of Account............................................................................  6

ARTICLE 5.  PAYMENT OF BENEFITS.................................................................................  6
         5.1      Commencement of Payment.......................................................................  6
         5.2      Method of Payment.............................................................................  7
         5.3      Hardship Withdrawal...........................................................................  7
         5.4      Designation of Beneficiary....................................................................  8
         5.5      Special Distribution Rules....................................................................  8
         5.6      Status of Account Pending Distribution........................................................  8
         5.7      Change of Control.............................................................................  9

ARTICLE 6.  AMENDMENT OR TERMINATION............................................................................  9
         6.1      Right to Terminate............................................................................  9
         6.2      Right to Amend................................................................................  9
         6.3      Uniform Action................................................................................  9

ARTICLE 7.  GENERAL PROVISIONS..................................................................................  9
         7.1      No Funding....................................................................................  9
         7.2      No Contract of Employment..................................................................... 10
         7.3      Withholding Taxes............................................................................. 10
         7.4      Nonalienation................................................................................. 10
         7.5      Administration................................................................................ 10
         7.6      Construction.................................................................................. 11
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                                  INTRODUCTION

                  This Polaris Supplemental Retirement/Savings Plan (the "Plan")
originally became effective July 1, 1995. On December 31, 1996, Polaris
Industries Partners L.P., a Delaware limited partnership, and the original
sponsor of the Plan, was merged with and into Polaris Industries Inc., a
Delaware corporation, which then became the new sponsor of the Plan. The Plan
was amended effective December 31, 1996 to reflect this merger.

                  This Plan is generally intended to provide certain executives
who participate in the Polaris Industries Inc. 401(k) Retirement/Savings Plan
(the "Savings Plan") with an opportunity to defer a portion of their
compensation until their retirement or other termination of employment and to
have employer contributions credited as if such employee contributions had been
made under the Savings Plan in order to restore contributions lost because of
the application of Section 401(a)(17) of the Internal Revenue Code of 1986, as
amended, to the Savings Plan. The Plan is unfunded and is maintained by Polaris
Industries Inc. and Affiliated Companies and their respective successors
primarily for the purpose of providing deferred compensation for a select group
of management or highly-compensated employees.


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                             ARTICLE 1. DEFINITIONS

         1.1 "Account" shall mean the bookkeeping account maintained for each
Member to record his Deferrals and Additional Credits, as adjusted pursuant to
Article 4. The Administrator may establish such sub-accounts within a Member's
Account as it deems necessary to implement the provisions of the Plan.

         1.2 "Additional Credits" shall mean amounts credited to the Account of
a Member pursuant to Section 3.5.

         1.3 "Administrator" shall mean the Plan Sponsor.

         1.4 "Affiliated Company" shall mean the Corporation and any
corporation, partnership or other entity directly or indirectly controlled by
the Corporation.

         1.5 "Board of Directors" or "Board" shall mean the Board of Directors
of the Corporation.

         1.6 "Change of Control" shall mean any of the following:

         (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 (i) persons who were members of the Board of
         Directors on July 1, 1995 and (ii) 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 of
         Directors consisted of persons who were members of the Board of
         Directors on July 1, 1995; 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 (i) and/or (ii) 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 (i) (persons described or deemed described in clauses (i) and/or
         (ii) are referred to herein as "Incumbent Directors"); or

         (b) The acquisition in one or more transactions, other than from the
         corporation, by any individual, entity or group (within the meaning of
         Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial
         ownership (within the meaning of Rule 13d-3 promulgated under the
         Exchange Act) of a number of Corporation Voting Securities equal to or
         greater than 35% of Corporation Voting Securities 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
         Corporation; (y) a reorganization, merger or consolidation of the
         Corporation unless, following such reorganization, merger or
         consolidation, (A) the Corporation is the surviving entity resulting
         from such reorganization, merger or consolidation or (B) at least


<PAGE>



         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 Corporation unless, following such sale or
         disposition, at least one-half of the Board of Directors of the
         transferee consists of Incumbent Directors.

         1.7 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

         1.8 "Committee" shall mean the Compensation Committee of the Board of
Directors.

         1.9 "Compensation" shall mean the compensation of an Eligible Executive
as defined for purposes of the Savings Plan, determined prior to any Deferrals
under Article 3, to the extent that such compensation exceeds the limit on
compensation imposed by Section 401(a)(17) of the Code.

         1.10 "Corporation" shall mean Polaris Industries Inc., a Minnesota
corporation, and any successor thereto by merger, purchase or otherwise.

         1.11 "Corporation Voting Securities" shall mean the combined voting
power of all outstanding voting securities of the Corporation entitled to vote
generally in the election of the Board of Directors.

         1.12 "Deferrals" shall mean the amounts credited to a Member's Account
under Section 3.3.

         1.13 "Deferral Agreement" shall mean a completed agreement between an
Eligible Executive and a Participating Company of which he is an employee under
which the Eligible Executive agrees to defer Compensation under the Plan. The
Deferral Agreement shall be on a form prescribed by the Plan Sponsor and shall
include any amendments, attachments or appendices.

         1.14 "Deferral Percentage" shall mean a percentage of an Eligible
Executive's Compensation elected in a Salary Deferral Agreement, pursuant to
Section 3.1 hereof, and shall be a whole percentage not in excess of five
percent (5%) or such other percentage as the Committee may determine from time
to time.

         1.15 "Distribution Option(s)" shall mean the election by the Member of
the event triggering the commencement of distribution and the method of
distribution. Distribution Option elections shall be made on the Eligible
Executive's initial Deferral Agreement.

         1.16 "Effective Date" shall mean July 1, 1995 or with respect to the
Eligible Executives of a company which adopts the Plan, the date such company
becomes a Participating Company.

         1.17 "Eligible Executive" shall mean an employee of a Participating
Company whose


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annual Compensation is in excess of the limitation in effect under Section
401(a)(17) of the Code; provided, however, only those employees considered to be
a select group of management or highly compensated shall be Eligible Executives
under this Plan.

         1.18 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         1.19 "Member" shall mean, except as otherwise provided in Article 2,
each Eligible Executive who has executed an initial Deferral Agreement as
described in Section 2.1.

         1.20 "Participating Company" shall mean the Corporation, the Plan
Sponsor and any other Affiliated Company which is designated for participation
in the Plan in accordance with Section 7.5(b).

         1.21 "Plan" shall mean this Polaris Supplemental Retirement/Savings
Plan, as amended from time to time.

         1.22 "Plan Sponsor" shall mean Polaris Industries Inc., a Delaware
corporation and a wholly-owned subsidiary of the Corporation, and any successor
thereto by merger, purchase or otherwise.

         1.23 "Savings Plan" shall mean the Polaris Industries Inc. 401(k)
Retirement/Savings Plan, as amended from time to time.

         1.24 "Valuation Date" shall mean each of the valuation dates under the
Savings Plan.


                 ARTICLE 2. MEMBERSHIP AND DEFERRAL AGREEMENTS

         2.1 In General:

                  (a) An Eligible Executive shall become a Member as of the date
                  he files his initial Deferral Agreement with the
                  Administrator. However, such Deferral Agreement shall be
                  effective for purposes of deferring Compensation only as
                  provided in Article 3.

                  (b) A Deferral Agreement shall be in writing and properly
                  completed upon a form approved by the Administrator, which
                  shall be the sole judge of the proper completion thereof. Such
                  Agreement shall provide for the deferral of Compensation,
                  shall specify the Distribution Options, and may include such
                  other provisions as the Administrator deems appropriate. A
                  Deferral Agreement shall not be revoked or modified with
                  respect to the allocation of prior deferrals. Distribution
                  Options elected may not be modified or revoked except as
                  provided in Section 5.1.

                  (c) As a condition for membership the Administrator may
                  require such other information as it deems appropriate.


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         2.2 Modification of Initial Deferral Agreement: A Member may elect to
change, modify or revoke a Deferral Agreement as follows:

                  (a) A Member may change the rate of his Deferrals, or suspend
         his Deferrals on account of severe financial hardship, as provided in
         Article 3.

                  (b) A Member may change the event entitling him to
         distribution, as designated on his election of Distribution Options, as
         provided in Section 5.1(b)(i).

                  (c) A Member may change the event entitling him to
         distribution as designated on his election of Distribution Options,
         subject to the six percent (6%) penalty described in Section
         5.1(b)(ii).

         2.3 Termination of Membership; Re-employment:

                  (a) Membership shall cease, subject to Section 2.4, upon a
                  Member's termination of employment. Membership shall be
                  continued during a leave of absence approved by the Eligible
                  Executive's Participating Company.

                  (b) Upon re-employment as an Eligible Executive, a former
                  Member may become a Member again as follows:

                           (i)      in the case of a former Member who prior to
                                    reemployment received the balance in his
                                    Account, by executing a Deferral Agreement
                                    under Section 2.1 as though for all purposes
                                    of the Plan the Affiliated Companies had
                                    never employed the former Member;

                           (ii)     in the case of a former Member who prior to
                                    reemployment did not receive the balance in
                                    his Account, by executing a Deferral
                                    Agreement under Section 2.1; provided his
                                    Distribution Options and beneficiary
                                    designation shall remain in effect.

         2.4 Change in Status: In the event that a Member ceases to be an
Eligible Executive with respect to Deferrals but continues to be employed (other
then with respect to payroll deductions effected prior to such cessation of
Eligible Executive status) by an Affiliated Company, his Deferrals and
Additional Credits shall thereupon be suspended until such time as he shall once
again become an Eligible Executive. All other provisions of his Deferral
Agreement shall remain in force and he shall continue to be a Member of the
Plan.

                              ARTICLE 3. DEFERRALS

         3.1 Filing Requirements:

                  (a) An individual who is an Eligible Executive immediately
                  prior to the Effective Date may file a Deferral Agreement with
                  the Administrator, within such



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                  period prior to the Effective Date and in such manner as the
                  Administrator may prescribe.

                  (b) An individual who becomes an Eligible Executive on or
                  after the Effective Date may file a Deferral Agreement with
                  the Administrator during the calendar month he becomes an
                  Eligible Executive, in such manner as the Administrator may
                  prescribe.

                  (c) An Eligible Executive who fails to file a Deferral
                  Agreement with the Administrator as provided in Sections
                  3.1(a) and 3.1(b) may file a Deferral Agreement in any
                  subsequent month of December for the next calendar year.

         3.2 Deferral Agreement: An Eligible Executive's Deferral Agreement
shall authorize a reduction in his base pay with respect to his Deferrals under
the Plan. The Agreement shall be effective for payroll periods beginning on or
after the later of: (a) the Effective Date; or (b) the first day of the month
following the date the Deferral Agreement is filed with the Administrator in
accordance with Section 3.1. Paychecks applicable to said payroll periods shall
be reduced accordingly.

         3.3 Crediting of Deferrals:

                  (a) On each Valuation Date following the effective date of an
                  Eligible Executive's Deferral Agreement, his Account shall be
                  credited with an amount of Deferral, if any, for each payroll
                  period ending within the month in which such Valuation Date
                  occurs, as he elects in his Deferral Agreement.

                  (b) An Eligible Executive shall not be entitled to make
                  Deferrals on or after attaining the age, if any, which he has
                  designated under Section 5.1(a) for the purpose of commencing
                  distribution of his Account.

         3.4 Changing Deferrals:

                  (a) An Eligible Executive's election on his Deferral Agreement
                  of the rate at which he authorizes Deferrals under the Plan
                  shall remain in effect in subsequent calendar years unless he
                  files with the Administrator an amendment to his Deferral
                  Agreement modifying or revoking such election. The amendment
                  shall be filed by December 31 and shall be effective for
                  payroll periods beginning on or after the following January 1.

                  (b) Notwithstanding Section 3.4(a), an Eligible Executive may,
                  in the event of a severe financial hardship, request a
                  suspension of his Deferrals under the Plan. The request shall
                  be made in a time and manner determined by the Administrator,
                  and shall be effective as of such date as the Administrator
                  prescribes. The Administrator shall apply standards, to the
                  extent applicable, identical to those described in Section 5.3
                  in making its determination. The Eligible Executive may apply
                  to the Administrator to resume his Deferrals with respect to
                  payroll periods


                                       5
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                  beginning on or after the January 1 following the date of
                  suspension, in a time and manner determined by the
                  Administrator; provided, that the Administrator shall approve
                  such resumption only if the Administrator determines that the
                  Eligible Executive is no longer incurring such hardship.

         3.5 Certain Additional Credits: On each Valuation Date, there shall be
credited to the Account of an Eligible Executive Additional Credits in an amount
equal to the Deferrals credited to such Eligible Executive's Account since the
immediately preceding Valuation Date; provided, however, that the Committee
shall have the authority and discretion to establish for any particular time
period such other formula for determining Additional Credits as it deems
appropriate.

                       ARTICLE 4. MAINTENANCE OF ACCOUNTS

         4.1 Accounts: An Account shall be established for each Member. As of
each Valuation Date, each Member's Account shall be credited with deemed
investment earnings and losses pursuant to Section 4.2.

         4.2 Deemed Investments: Each Member's Account shall be deemed to be
invested in the same manner as such Member's account under the Savings Plan is
invested; provided, however, that for any periods of time during which a Member
does not have an account under the Savings Plan, the rate of deemed investment
earnings shall be determined by the Committee. As of each Valuation Date, deemed
investment earnings and losses shall be applied to each Member's Account based
upon the performance of the applicable investment funds under the Savings Plan.

         4.3 Statement of Accounts: A statement will be sent to each Member as
to the balance of his Account at least once each calendar year.

         4.4 Vesting of Account: Each Member shall at all times be fully vested
in his Account.


                         ARTICLE 5. PAYMENT OF BENEFITS

         5.1 Commencement of Payment:

                  (a) The distribution of the Member's or former Member's
                  Account shall commence, pursuant to Section 5.2, on or after
                  the occurrence of (i), (ii), (iii) or (iv) below, as
                  designated by the Member as part of his Distribution Option
                  election:

                           (i)      either the date of the Member's termination
                                    of employment with the Affiliated Companies
                                    for any reason, whether with or without
                                    cause, or the first anniversary of such
                                    date,

                           (ii)     attainment of a designated age not earlier
                                    than age 59-1/2 nor later than age 70-1/2,



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                           (iii)    the earlier of (i) or (ii) above, or

                           (iv)     the later of (i) or (ii) above.

                  In the event a Member elects either (ii) or (iii) above, he
                  may not elect an age less than three (3) years subsequent to
                  his current age. A Member or former Member shall not change
                  his Distribution Option election of the designation of the
                  event which entitles him to distribution of his Account,
                  except as provided in Section 5.1(c) below.

                  (b) A Member or former Member may change his Distribution
                  Option election of the designation of the event which entitles
                  him to distribution of his Account under Section 5.1(a), as
                  follows:

                           (i)      A Member or former Member may make a
                                    one-time request to the Administrator to
                                    defer the Member's designated distribution
                                    event under Section 5.1(a). The requests
                                    must be filed in writing with the
                                    Administrator at least one year prior to
                                    when distribution would commence based on
                                    the current designation. The deferral
                                    requests must specify a distribution event
                                    described in Section 5.1(a), shall be
                                    subject to approval of the Administrator
                                    and, if approved, shall be effective as of
                                    the date that is one year after the request
                                    is filed with the Administrator. If the
                                    Member's current distribution event will
                                    occur upon his termination of employment and
                                    the Member's employment terminates within
                                    one year after the deferral request is made,
                                    the deferral request shall not be effective.
                                    A deferral request under this Section
                                    5.1(b)(i) shall not result in a forfeiture
                                    of the Member's or former Member's Account.

                           (ii)     Notwithstanding Section 5.1(b)(i), a Member
                                    or former Member may change his designated
                                    distribution event under Section 5.1(a), no
                                    more frequently than once in any calendar
                                    year, by filing with the Administrator an
                                    amendment to his Distribution Option
                                    election on or before December 31 (or the
                                    last preceding business day if December 31
                                    is not a weekday). The change shall be
                                    limited to those events entitling a Member
                                    to a distribution that are described in
                                    Section 5.1(a), shall be subject to approval
                                    of the Administrator and, if approved, shall
                                    be effective as of the last Valuation Date
                                    of the calendar year in which the change is
                                    filed. Unless the election complies with the
                                    requirements for a one-time deferral request
                                    under Section 5.1(b)(i), or unless the
                                    provisions of Section 5.1(d) apply, an
                                    election under this Section 5.1(b)(ii) shall
                                    result in the forfeiture of six percent (6%)
                                    of the Member's or former Member's Account,
                                    determined as of the Valuation Date upon
                                    which the election is effective.



                                       7

<PAGE>


                  (c) Notwithstanding anything in this Section 5.1 to the
                  contrary, a Member's Account shall be distributed upon his
                  death.

                  (d) Notwithstanding the foregoing, in its sole and absolute
                  discretion the Participating Companies may delay payment of a
                  benefit under this Plan to any Member to the extent required
                  to avoid the nondeductibility of such benefit under Section
                  162(m) of the Code; provided, however, if a Member's payment
                  is delayed, the benefit to which he is entitled will not
                  decrease after the date it would otherwise be distributed.

         5.2 Method of Payment: A Member's or former Member's Account shall be
distributed or commence to be distributed to him, or in the event of his death
to his Beneficiary, as soon as administratively practicable following the date
provided in the Member's Distribution Option elected under Section 5.1 or his
date of death, as the case may be, based upon the Member's Account as of the
Valuation Date coinciding with or immediately preceding the date of
distribution. Such distribution shall be made either (i) in a single lump sum
payment or (ii) in substantially equal monthly, quarterly or annual payments
over a period not in excess of ten (10) years. If the installment method is
elected, the Member's Account, until fully distributed, shall continue to be
credited with deemed investment earnings and losses in accordance with Section
4.2, and each installment payment shall equal a fraction of the Account balance,
as of the most recent Valuation Date, equal to one over the number of
installment payments left. A Member shall be entitled to elect the form of
distribution to him or his Beneficiary at the time of commencement of his
participation under this Plan and any such election shall be irrevocable and
never subject to change except prospectively. If a Member shall fail to make a
proper election as to the form of distribution of his Account, the Committee
shall determine the method by which such Member's Account shall be distributed
to him or his Beneficiary.

         5.3 Hardship Withdrawal:

                  (a) While employed by the Participating Companies, a Member or
                  former Member may, in the event of a severe financial
                  hardship, request a withdrawal from his Account. The request
                  shall be made in a time and manner determined by the
                  Administrator, shall not be for a greater amount than the
                  amount required to meet the financial hardship, and shall be
                  subject to approval by the Administrator.

                  (b) For purposes of this Section 5.3 financial hardship shall
                  include:

                           (i)      education of a dependent child where the
                                    Member or former Member shows that without
                                    the withdrawal under this Section the
                                    education would be unavailable to the child;

                           (ii)     illness of the Member or former Member or
                                    his dependents, resulting in severe
                                    financial hardship to the Member or former
                                    Member;


                                       8
<PAGE>





                           (iii)    the loss of the Member's or former Member's
                                    home or its contents, to the extent not
                                    reimbursable by insurance or otherwise, if
                                    such loss results in a severe financial
                                    hardship to the Member or former Member;

                           (iv)     any other extraordinary circumstances of the
                                    Member or former Member approved by the
                                    Administrator if such circumstances would
                                    result in a present or impending critical
                                    financial need which the Member or former
                                    Member is unable to satisfy with funds
                                    reasonably available from other sources.

         5.4 Designation of Beneficiary: A Member or former Member may, in a
time and manner determined by the Administrator, designate a beneficiary and one
or more contingent beneficiaries (which may include the Member's or former
Member's estate) to receive any benefits which may be payable under this Plan
upon his death. If the Member or former Member fails to designate a beneficiary
or contingent beneficiary, or if the beneficiary and the contingent
beneficiaries fail to survive the Member or former Member, such benefits shall
be paid to the Member's or former Member's estate. A Member or former Member may
revoke or change any designation made under this Section 5.4 in a time and
manner determined by the Administrator.

         5.5 Special Distribution Rules: Notwithstanding anything to the
contrary in this Plan, if (a) a Member or former Member becomes the owner,
director or employee of a competitor of the Affiliated Companies, (b) his
employment is terminated by an Affiliated Company on account of actions by the
Member which are detrimental to the interests of the Affiliated Company, or (c)
he engages in conduct subsequent to the termination of his employment with the
Affiliated Companies which the Administrator determines to be detrimental to the
interests of an Affiliated Company, then the Administrator may, in its sole
discretion, pay the Member or former Member a single sum payment equal to the
balance in his Account. The single sum payment shall be made as soon as
practicable following the date the Member or former Member becomes an owner,
director or employee of a competitor, his termination of employment or the
Administrator's determination of detrimental conduct, as the case may be, and
shall be in lieu of all other benefits which may be payable to the Member or
former Member under this Plan.

         5.6 Status of Account Pending Distribution: Pending distribution, a
former Member's Account shall continue to be credited with earnings and losses
as provided in Section 4.2. The former Member shall be entitled to apply for
Hardship withdrawals under Section 5.3 to the same extent as if he were a Member
of the Plan.

         5.7 Change of Control: In the event a Change of Control has occurred,
each Member or former Member shall receive, and the Plan Sponsor shall pay
within 7 days of such Change of Control, a lump sum payment equal to the value
of the Member's or former Member's Accounts (determined under Article 4) as of
the Valuation Date coinciding with or next following the date of such Change of
Control. The amount of each Member's or former Member's lump sum payment shall
be determined by the Plan Sponsor's accountants after consultation with the
entity



                                       9
<PAGE>



then maintaining the Plan's records, and shall be projected, if necessary, to
such Valuation Date from the last valuation of Member's or former Member's
Accounts for which information is readily available.

                       ARTICLE 6. AMENDMENT OR TERMINATION

         6.1 Right to Terminate: Each Participating Company, by proper action of
its governing body, may, in its sole discretion, terminate this Plan and the
related Deferral Agreements at any time with respect to the Members employed by
such Participating Company. In the event the Plan and related Deferral
Agreements are terminated, each Member, former Member and beneficiary shall
receive a single sum payment equal to the balance in his Account. The single sum
payment shall be made as soon as practicable following the date the Plan is
terminated and shall be in lieu of any other benefit which may be payable to the
Member, former Member or beneficiary under this Plan.

         6.2 Right to Amend: Each Participating Company, by proper action of its
governing body, may, in its sole discretion, amend this Plan and the related
Deferral Agreements with respect to the Members employed by such Participating
Company on 30 days prior notice to the Members and, where applicable, former
Members. If any amendment to this Plan or to the Deferral Agreements shall
adversely affect the rights of a Member or former Member, such individual must
consent in writing to such amendment prior to its effective date. If such
individual does not consent to the amendment, the Plan and related Deferral
Agreements shall be deemed to be terminated with respect to such individual and
he shall receive a single sum payment of his Account as soon thereafter as is
practicable.

         6.3 Uniform Action: Notwithstanding anything in the Plan to the
contrary, any action to amend or terminate the Plan or the Deferral Agreements
must be taken in a uniform and nondiscriminatory manner.

                          ARTICLE 7. GENERAL PROVISIONS

         7.1 No Funding: Nothing contained in this Plan or in a Deferral
Agreement shall cause this Plan to be a funded retirement plan. Neither the
Member, former Member, his beneficiary, contingent beneficiaries, heirs or
personal representatives shall have any right, title or interest in or to any
funds of the Affiliated Companies on account of this Plan or on account of
having completed a Deferral Agreement. Each Member or former Member shall have
the status of a general unsecured creditor of the Affiliated Companies and this
Plan constitutes a mere promise by the Affiliated Companies to make benefit
payments in the future. The Plan Sponsor, in its sole discretion, may establish
a grantor trust, insurance contract or other investment vehicle to assist in its
meeting its obligations under this Plan; provided, that no member or beneficiary
shall at any time have any right to any portion of the assets thereof and such
assets shall at all times be subject to the claims of the creditors of the Plan
Sponsor in bankruptcy.

         7.2 No Contract of Employment: The existence of this Plan or of a
Deferral Agreement does not constitute a contract for continued employment
between an Eligible Executive or a Member and an Affiliated Company. The
Affiliated Companies reserve the right



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to modify an Eligible Executive's or Member's remuneration and to terminate an
Eligible Executive or a Member for any reason and at any time, notwithstanding
the existence of this Plan or of a Deferral Agreement.

         7.3 Withholding Taxes: All payments under this Plan shall be net of an
amount sufficient to satisfy any federal, state or local withholding tax
requirements.

         7.4 Nonalienation: The right to receive any benefit under this Plan may
not be transferred, assigned, pledged or encumbered by a Member, former Member,
beneficiary or contingent beneficiary in any manner and any attempt to do so
shall be void. No such benefit shall be subject to garnishment, attachment or
other legal or equitable process without the prior written consent of the
Affiliated Companies.

         7.5 Administration:

                  (a) This Plan shall be administered by the Committee. Certain
                  administrative functions, as set forth in the Plan, shall be
                  the responsibility of the Administrator. The Administrator
                  shall interpret the Plan, establish regulations to further the
                  purposes of the Plan and take any other action necessary to
                  the proper operation of the Plan in accordance with guidelines
                  established by the Committee or, if there are no such
                  guidelines, consistent with furthering the purpose of the
                  Plan.

                  (b) The Corporation, by proper action of the Board, in its
                  sole discretion and upon such terms as it may prescribe, may
                  permit any Affiliated Company to participate in the Plan.

                  (c) Prior to paying any benefit under this Plan, the
                  Administrator may require the Member, former Member,
                  beneficiary or contingent beneficiary to provide such
                  information or material as the Administrator, in its sole
                  discretion, shall deem necessary for it to make any
                  determination it may be required to make under this Plan. The
                  Administrator may withhold payment of any benefit under this
                  Plan until it receives all such information and material and
                  is reasonably satisfied of its correctness and genuineness.

                  (d) The Administrator shall provide adequate notice in writing
                  to any Member, former Member, beneficiary or contingent
                  beneficiary whose claim for benefits under this Plan has been
                  denied, setting forth the specific reasons for such denial. A
                  reasonable opportunity shall be afforded to any such Member,
                  former Member, beneficiary or contingent beneficiary for a
                  full and fair review by the Administrator of its decision
                  denying the claim. The Administrator's decision on any such
                  review shall be final and binding on the Member, former
                  Member, beneficiary or contingent beneficiary and all other
                  interested persons.

                  (e) All acts and decisions of the Administrator shall be final
                  and binding upon all Members, former Members, beneficiaries,
                  contingent beneficiaries and employees of the Affiliated
                  Companies.


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         7.6 Construction

                  (a) The Plan is intended to constitute an unfunded deferred
                  compensation arrangement for a select group of management or
                  highly compensated employees and all rights hereunder shall be
                  governed by and construed in accordance with the laws of the
                  State of Minnesota to the extent not preempted by federal law.

                  (b) The masculine pronoun shall mean the feminine wherever
                  appropriate.

                  (c) The captions inserted herein are inserted as a matter of
                  convenience and shall not affect the construction of the Plan.


                                           POLARIS INDUSTRIES INC.
                                           a Delaware corporation


                                           By:     /s/  W. Hall Wendel, Jr.
                                               ---------------------------------
                                               W. Hall Wendel, Jr., its Chairman
                                               and Chief Executive Officer





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