Employee Savings Plans

12 Months Ended

Dec. 31, 2012

Employee Savings Plans

Note 3. Employee Savings Plans

Employee Stock Ownership Plan (ESOP): Polaris sponsors a qualified non-leveraged ESOP under which a maximum of 7,200,000 shares of common stock can be awarded. The shares are allocated to eligible participants accounts based on total cash compensation earned during the calendar year. Grants of shares vest equally after two and three years of service and require no cash payments from the recipient. Participants may instruct Polaris to pay respective dividends directly to the participant in cash or reinvest the dividends into the participants ESOP accounts. Substantially all employees are eligible to participate in the ESOP, with the exception of Company officers. Total expense related to the ESOP was $7,380,000, $7,011,000, and $8,123,000, in 2012, 2011 and 2010, respectively. As of December 31, 2012 there were 4,508,000 shares vested in the plan.

401(k) Retirement Plan: Polaris sponsors a 401(k) retirement savings plan under which eligible United States employees may choose to contribute up to 50 percent of eligible compensation on a pre-tax basis, subject to certain IRS limitations. The Company matches 100 percent of employee contributions up to a maximum of five percent of eligible compensation. All contributions vest immediately. Matching contributions were $9,318,000, $8,456,000, and $7,073,000, in 2012, 2011 and 2010, respectively.

Supplemental Executive Retirement Plan (SERP): Polaris sponsors a SERP that provides executive officers of the Company an alternative to defer portions of their salary, cash incentive compensation, and Polaris matching contributions. The deferrals and contributions are held in a rabbi trust and are invested in funds to match the liabilities of the plan. The assets are recorded as trading assets. The assets of the rabbi trust are included in other long-term assets on the consolidated balance sheets and the SERP liability is included in other long-term liabilities on the consolidated balance sheets. The asset and liability balance are both $15,872,000 and 3,639,000 at December 31, 2012, and 2011, respectively.