Document:

EX-10.16

Exhibit 10.16

PIPER JAFFRAY COMPANIES

2009 Compensation and Benefits for Non-Employee Directors

	 	 	 	 	 	 	 	 	 
	 	 	Amount	 	Objective	 	Time and Terms of Payment
	Annual Cash Retainer

	 	$	50,000	 	 	Consideration for
Board and committee
service for the
current calendar
year
	 	Paid on the first business day in
January. For directors joining the Board
after January in any year, a pro rata
amount will be paid on the date the
director is elected to the Board based on
the number of days during which the
director will serve on the Board during
that year.
	 
	 	 	 	 	 	 	 	 
	Additional Annual

Cash Retainer for
Lead
 Director and

Committee

Chairpersons

	 	$8,000 Lead Director

$8,000-Audit

$5,000-Others
	 	Consideration for
service as lead
director or
committee
chairperson for the
current calendar
year
	 	Paid on the first business day in January.
	 
	 	 	 	 	 	 	 	 
	Initial Equity Grant

	 	500 Shares
	 	Establish PJC
equity interest
upon initial
election to the
Board to align
director and
shareholder
interests
	 	Shares of PJC common stock granted on the
date of the director’s initial election
or appointment to the Board.
	 
	 	 	 	 	 	 	 	 
	Annual Equity Grant

	 	1,000 Shares
	 	Incentive
compensation for
continuing service
on the Board and
enhanced alignment
of director and
shareholder
interests
	 	Shares of PJC common stock granted on the
date of the annual meeting of
shareholders to any director whose
service on the Board will continue
following the annual meeting. For
directors joining the Board after the
annual meeting in any year, an equity
award will be granted on the date the
director is elected to the Board covering
a pro rata number of shares based on the
number of days during which the director
will serve on the Board during that year.
	 
	 	 	 	 	 	 	 	 
	Deferral Opportunity

	 	Up to $58,000

Up to 1,000 shares
	 	Increase equity

stake by directors
	 	Annual opportunity to participate in the
Amended and Restated Piper Jaffray
Companies Deferred Compensation Plan for
Non-Employee Directors, permitting
deferral into phantom stock units of all
or a portion of the director’s annual
cash compensation for service as a Piper
Jaffray Companies director, and deferral
of any shares granted in consideration of
the director’s service as a director. To
participate in any year, irrevocable
election must be made by December 31 of
the preceding year for continuing
directors and on the date of initial
election or appointment to the Board for
new directors. Annual opportunity to
change the subsequent year’s election.
The deferral date for the cash retainer
is the first business day in January each
year; the deferral date for the equity
grant is the date of the annual meeting
of shareholders each year.
	 
	 	 	 	 	 	 	 	 
	Charitable Gift

Matching Program

	 	Up to $1,500
	 	Encourage
charitable giving
	 	Pursuant to the Piper Jaffray Gift
Matching Program, Piper Jaffray will
match directors’ gifts to eligible
organizations dollar for dollar from a
minimum of $50 up to an aggregate maximum
of $1,500 per year (the same terms and
conditions as are applicable to
employees).
	 
	 	 	 	 	 	 	 	 
	Reimbursement of
Out-of-Pocket
Expenses	 	In addition to the foregoing, non-employee directors will be reimbursed for reasonable
out-of-pocket expenses incurred in connection with their service on the Board and Board
committees.EX-10(T)

Exhibit 10.t

POLARIS INDUSTRIES INC.

STOCK OPTION AGREEMENT

			
	 	 	 
	[NAME]
	 	[SSN:                     ]          

In accordance with the terms of the Polaris Industries Inc. 2007 Omnibus Incentive Plan (the
“Plan”), Polaris Industries Inc. (the “Company”), as determined by and through the Compensation
Committee of the Company’s Board of Directors, hereby grants to you (the “Participant”), subject to
the terms and conditions set forth in this Stock Option Agreement (including Annex A hereto and all
documents incorporated herein by reference) the right and option (the “Option”) to purchase from
the Company shares of its common stock, $.01 par value, as set forth below:

	 	 	 
	Number of shares of Common Stock
for which the Option is
exercisable:
	 	 
	 
	 	 
	Date of Grant:
	 	 
	 
	 	 
	Option Price:

	 	$
	 
	 	 
	Vesting:

	 	In accordance with Section 3 of Annex A.
	 
	 	 
	Expiration Date:

	 	Close of business on
	 
	 	 
	Exercise Period:

	 	Date of Vesting through Expiration Date

Further terms and conditions of the grant are set forth in Annex A hereto, which is an integral
part of this Stock Option Agreement.

All terms, provisions and conditions applicable to the Option set forth in the Plan and not set
forth herein are hereby incorporated by reference herein. To the extent any provision hereof is
inconsistent with a provision of the Plan, the provisions of the Plan will govern. The Participant
hereby acknowledges the receipt of a copy of this Stock Option Agreement, including Annex A hereto,
and a copy of the Plan, and agrees to be bound by all the terms and provisions hereof and thereof.

IN WITNESS WHEREOF, the Company has caused this Stock Option Agreement to be executed by its Vice
President-Finance, Chief Financial Officer and Secretary, and the Participant has executed this
Stock Option Agreement, both effective as of the Date of Grant.

	 	 	 
	 

	 	POLARIS INDUSTRIES INC.
	 
	 	 
	 

	 	
	 

	 	Michael W. Malone
	 

	 	Vice President-Finance, Chief Financial Officer and
Secretary

	 	 	 	 	 
	Agreed:
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	Participant	 	 
	Dated:
	 	 
	 	 
	Attachment:    Annex A	 	 

 

 

ANNEX A

NONQUALIFIED STOCK OPTION

     I am pleased to inform you that you are the recipient of a stock option award under the
Polaris Industries Inc. 2007 Omnibus Incentive Plan (the “Plan”).

     This stock option award was approved by the Compensation Committee of the Board of Directors
of the Company (the “Committee”). Section 6.2 of the Plan provides that all stock option awards
under the Plan be made pursuant to an award agreement between the recipient and the Company. This
Annex A, together with the cover sheet hereto, sets forth a Stock Option Agreement (“Agreement”) to
confirm and formalize your agreement with the Company with respect to your stock option award and
is entered into under and pursuant to all of the terms and provisions of the Plan. In conformity
with the Plan, you and the Company agree as follows:

	 	1.	 	Subject to the terms and conditions of this Agreement and the Plan, the Company
hereby grants to you the right and option to purchase from the Company up to, but not
exceeding in the aggregate, the number of shares of the Common Stock, par value $.01
per share (“Common Stock”) of the Company set forth on the cover sheet to this
Agreement (the “Option”), at an exercise price of $     per share (the “Exercise
Price”) and for the period (the “Option Term”) beginning on ___ (the “Date of
Grant”) and ending on ___ (unless earlier terminated in accordance with Paragraph 6
of this Agreement). The Exercise Price set forth herein equals the Fair Market Value,
as defined in the Plan, on the Date of Grant, of the shares of Common Stock subject to
the Option.
	 
	 	2.	 	This Agreement grants to you a nonqualified stock option.
	 
	 	3.	 	The Option granted to you hereunder shall (a) become exercisable (“vest”) with
respect to 50% of the shares of Common Stock subject to this Option on the second
anniversary of the Date of Grant and (b) shall vest with respect to the remaining 50%
of the shares of Common Stock subject to this Option on the fourth anniversary of the
Date of Grant (each of such dates referred to herein as a “Vesting Date”). Once the
Option has vested, it may be exercised, in whole or in part, at any time and from time
to time during the remainder of the Option Term except as set forth herein.
	 
	 	 	 	Notwithstanding the foregoing, the Option shall vest and become immediately
exercisable upon a “Change in Control” of the Company. A “Change in Control” shall
be deemed to have occurred if:

     (a) Any election has occurred of persons to the Board of Directors of
the Company (the “Board”) that causes at least one-half of the Board to
consist of persons other than (x) persons who were members of the Board on
January 1, 2009 and (y) persons who were nominated for election by the Board
as members of the Board at a time when more than one-half of the members of
the Board consisted of persons who were members of the Board on January 1,
2009; provided, however, that any person nominated for election by the Board
at a time when at least one-half of the members of the Board were persons
described in clauses (x) and/or (y) or by persons who were themselves
nominated by such Board shall, for this purpose, be deemed to have been
nominated by a Board 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

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     (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 (the
“Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of a number of Company Voting Securities
(as defined below) equal to or greater than 35% of the Company Voting
Securities unless such acquisition has been designated 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, (A) the
Company is the surviving entity resulting from such reorganization, merger
or consolidation or (B) 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.

	 	 	 	As used herein, “Company Voting Securities” means the combined voting power of all
of outstanding voting securities of the Company entitled to vote generally in the
election of the Board.
	 
	 	4.	 	Except as otherwise provided in this Section 4, you may exercise the Option, in
whole or in part, by delivering to the Company a Notice of Exercise of Stock Option, in
the form set forth as Exhibit A hereto, together with (i) a check payable to the order
of the Company and/or (ii) shares of Common Stock with a stock power executed in blank,
equal in value to the Exercise Price of the shares of Common Stock being purchased.
You may not exercise the Option with respect to a fractional share of Common Stock.
Shares of Common Stock surrendered in exercise of the Option shall be valued at their
Fair Market Value, as such term is defined in the Plan, on the date of exercise. With
the approval of, and under the terms and conditions specified by, the Committee, you
also may exercise the Option in accordance with a cashless exercise program through an
approved broker or dealer. [NOTE: The preceding sentence will be replaced with the
following for awards to Section 16 insiders: “With the approval of, and under the terms
and conditions specified by, the Committee, you also may exercise the Option in
accordance with a cashless exercise program by electing to have withheld from shares
otherwise issuable to you upon exercise of the Option a number of shares of Common
Stock whose Fair Market Value, as such term is defined in the Plan, on the date of
exercise is equal to the Exercise Price of the shares of Common Stock being purchased.]
	 
	 	 	 	If permitted by the Company at the time of exercise, the Option may also be
exercised by providing a notice of exercise to a third party administrator (as the
Company’s agent) by or through any means permitted by such third party administrator
from time to time, including, without limitation, by providing notice of exercise to
the third party administrator by telephone or by using the third party
administrator’s Internet web site to provide notice of exercise, and in such event,
the notice of exercise may be provided, but shall not be required to be provided, in
writing. For purposes hereof, “third party administrator” means E*Trade Financial
Corporate Services as the Company’s third party

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	 	 	 	stock option administrator, or, as applicable, any successor third party stock
option administrator designated by the Committee. The transfer of shares of Common
Stock issuable to you in connection with the exercise of the Option may be affected
on a noncertificated basis, to the extent not prohibited by applicable law or the
rules of any stock exchange.
	 
	 	5.	 	The Company will notify you of the amount of withholding tax, if any, that must
be paid under federal and, where applicable, state and local law in connection with the
exercise of the Option. 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 tax cannot be recovered in this manner, you must, promptly upon the
receipt of such notice, remit the deficiency to the Company. In the Committee’s
discretion, you may be permitted to elect to have withheld from shares otherwise
issuable to you upon exercise of the Option, or to tender to the Company, a number of
shares of Common Stock whose Fair Market Value, as such term is defined in the Plan, on
the date of exercise equals the amount required to be withheld.
	 
	 	6.	 	If your employment by the Company and its Affiliates terminates prior to the
expiration of the Option Term and before the Option has been exercised in full, the
following rules apply:

     (a) If your employment by the Company and its Affiliates terminates on
or before one or both of the applicable Vesting Dates for any portion of the
Option issued under this Agreement for any reason other than disability
(within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986
(the “Code”)), death, or retirement on or after normal retirement age or
early retirement in accordance with the applicable retirement policy of the
Company and its Affiliates, the Option shall terminate for the unvested
portion of the Option on the date of termination of your employment and be
of no further force and effect.

     (b) If your employment by the Company and its Affiliates terminates
after one or both of the applicable Vesting Dates for any portion of the
Option issued under this Agreement for any reason other than disability
(within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986
(the “Code”)), death, or retirement on or after normal retirement age or
early retirement in accordance with the applicable retirement policy of the
Company and its Affiliates, the vested portion of the Option that has not
yet been exercised on the date of termination shall continue to be
exercisable for a period of thirty (30) days after such date, but not after
the expiration of the Option Term.

     (c) If your employment by the Company and its Affiliates terminates on
or before one or both of the applicable Vesting Dates for any portion of the
Option issued under this Agreement by reason of early retirement in
accordance with the applicable retirement policy of the Company and its
Affiliates, the unvested portion of the Option shall terminate on the date
of termination of your employment and be of no further force and effect.

     (d) If your employment by the Company and its Affiliates terminates
after one or both of the applicable Vesting Dates for any portion of the
Option issued under this Agreement by reason of early retirement in
accordance with the

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applicable retirement policy of the Company and its Affiliates, the vested
portion of the Option that has not yet been exercised on the date of
termination shall continue to be exercisable for a period of three (3) years
after such date, but not after the expiration of the Option Term.

     (e) If your employment with the Company and its Affiliates terminates
by reason of your death: (i) if such termination takes place on or before
the one or both of the applicable Vesting Dates for any portion of the
Option issued under this Agreement, the unvested portion of the Option shall
vest immediately and become exercisable in accordance with its terms during
the period specified in clause (ii) of this Section 6(e) ; and (ii)
irrespective of whether the Option vested prior to such termination of
employment or in accordance with the immediately preceding clause (i), the
portion of the Option that has not yet been exercised shall continue to be
exercisable for a period of one (1) year following the date of termination
of employment with the Company and its Affiliates by reason of your death,
but not after the expiration of the Option Term.

     (f) If your employment with the Company and its Affiliates terminates
by reason of your disability (within the meaning of Section 22(e)(3) of the
Code) or retirement on or after normal retirement age in accordance with the
applicable retirement policy of the Company and its Affiliates: (i) if such
termination takes place on or before one or both of the applicable Vesting
Dates, the unvested portion of the Option shall vest immediately and the
unexercised portion of the Option shall become exercisable during the period
specified in clause (ii) of this Section 6(f); and (ii) irrespective of
whether the Option vested prior to such termination of employment or in
accordance with the immediately preceding clause (i), the portion of the
Option that has not yet been exercised shall continue to be exercisable for
a period of three (3) years following the date of termination of employment
with the Company and its Affiliates by reason of your disability (within the
meaning of Section 22(e)(3) of the Code) or retirement on or after normal
retirement age in accordance with the applicable retirement policy of the
Company and its Affiliates, but not after the expiration of the Option Term.

	 	7.	 	In the event of any corporate event or transaction (including, but not limited
to, a change in the shares of Common Stock of the Company or the capitalization of the
Company) such as a merger, consolidation, reorganization, recapitalization, separation,
partial or complete liquidation, stock dividend, stock split, reverse stock split,
split up, spin-off, or other distribution of stock or property of the Company,
combination of shares of Common Stock, exchange of shares of Common Stock, dividend in
kind, or other like change in capital structure, number of outstanding shares of Common
Stock or distribution (other than normal cash dividends) to shareholders of the
Company, or any similar corporate event or transaction, the Committee, in order to
prevent dilution or enlargement of your rights under this Agreement, shall make
equitable and appropriate adjustments and substitutions, as applicable, to or of the
number and kind of shares of Common Stock that may be issued under this Agreement,
and/or the Exercise Price.
	 
	 	 	 	The Committee may also make appropriate adjustments in, or modify, the terms of the
Option in connection with, or in anticipation of, any of the foregoing corporate
events or transactions, including adjustments and/or modifications of the expiration
dates of the

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	 	 	 	Option. The determination of the Committee as to the foregoing adjustments if any,
shall be conclusive and binding on you.
	 
	 	8.	 	Nothing contained in this Agreement or in the Plan shall be deemed to confer
upon you any right to prevent or to approve or vote upon any of the corporate actions
described in Section 7. The existence of the Option granted in this Agreement shall
not affect in any way the right or the power of the Company or its shareholders to make
or authorize any or all adjustments, recapitalizations, reorganizations or other
changes in the Company’s capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or prior
preference stocks ahead of or affecting the Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale or transfer of all or any part
of its assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
	 
	 	9.	 	Whenever you are referred to in any provision of this Agreement under
circumstances where the provision should logically be construed to apply to the
executors, the administrators, or the person or persons to whom the Option may be
transferred by will or by the laws of descent and distribution, such references will be
deemed to include such person or persons.
	 
	 	10.	 	You may not transfer the Option granted under this Agreement otherwise than by
will or the laws of descent and distribution and only you may exercise the Option
during your lifetime. No assignment or transfer of the Option granted under this
Agreement, or of the rights represented thereby, whether voluntary or involuntary, by
the operation of law or otherwise (except by will or the laws of descent and
distribution), shall vest in the assignee or transferee any interest or right herein
whatsoever, but immediately upon any such assignment or transfer the Option shall
terminate and become of no further effect.
	 
	 	11.	 	You shall not be deemed for any purpose to be a shareholder of the Company in
respect of shares of Common Stock as to which the Option has not been exercised as
provided in this Agreement.
	 
	 	12.	 	Nothing in this Agreement or the Plan shall confer upon you any right to
continue in the employ of the Company or shall affect the right of the Company to
terminate your employment with or without cause.
	 
	 	13.	 	Notwithstanding any other provision of this Agreement, no exercise of the
Option or issuance of shares of Common stock pursuant to this Agreement shall be
effective if (i) the shares of Common Stock reserved under the Plan are not subject to
an effective registration statement at the time of such exercise or issuance, or
otherwise eligible for an exception from registration, or (ii) such exercise or
issuance would violate any applicable securities or other law or regulation or a
Company trading policy. The Company shall in no event be obligated to register any
securities pursuant to the Securities Act of 1933 (as the same shall be in effect from
time to time) or to take any other affirmative action in order to cause the exercise of
the Option or the issuance of the shares of Common Stock pursuant thereto to comply
with any law or regulation of any governmental authority.
	 
	 	14.	 	No amounts of income received by you pursuant to this Agreement shall be
considered compensation for purposes of any pension or retirement plan, insurance plan
or any other employee benefit plan of the Company unless otherwise provided in such
plan.

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	 	15.	 	If the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any financial
reporting requirement under the securities laws, if you knowingly or grossly
negligently engaged in the misconduct, or knowingly or grossly negligently failed to
prevent the misconduct, or if you are one of the individuals subject to automatic
forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, you shall forfeit and
return to the Company any shares of Common Stock issued to you pursuant to the exercise
of the Option during the twelve (12) month period following the first public issuance
or filing with the United States Securities and Exchange Commission (whichever just
occurred) of the financial document embodying such financial reporting requirement.
	 
	 	16.	 	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.
	 
	 	17.	 	This Agreement shall be construed, governed, and interpreted under the laws of
the State of Minnesota, except the conflicts of laws provisions thereof.
	 
	 	18.	 	This Agreement embodies the entire understanding of the parties hereof, and
supersedes all other oral or written agreements or understandings between you and the
Company regarding the subject matter hereof. No change, alteration or modification
hereof may be made except in a writing, signed by each of the parties hereto.
	 
	 	19.	 	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.
	 
	 	20.	 	This Agreement shall be binding upon and inure to the benefit of any successor
or successors of the Company and your heirs and personal representatives.

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EXHIBIT A

NOTICE OF EXERCISE OF STOCK OPTION

     Pursuant to the provisions of the Stock Option Agreement entered into as of [___] between
Polaris Industries Inc. (the “Company”) and me (the “Agreement”), I hereby exercise the
nonqualified stock option granted under the terms of the Agreement to the extent of
___ shares of the Common Stock of the Company. I deliver to the Company herewith the
following in payment for such shares:

	 	§ 	 	$                     in cash
	 
	 	§ 	 	Stock certificates for                     shares of Common Stock
	 
	 	§ 	 	Other consideration:                      (i.e. cashless exercise, if
approved by the Company)

	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

Optionee (Print Name)
	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 

Signature
	 	 
	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

 
 

Address
	 	  
	 
	 	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 

Social Security Number

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