Share-Based Compensation

3 Months Ended

Mar. 31, 2013

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Share-Based Compensation

NOTE 2. Share-Based Compensation

The amount of compensation cost for share-based awards to be recognized during a period is based on the portion of the awards that are ultimately expected to vest. The Company estimates stock option forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company analyzes historical data to estimate pre-vesting forfeitures and records share compensation expense for those awards expected to vest.

Total share-based compensation expenses were as follows (in thousands):

	Three months ended March 31,
	2013		2012
Option plan	$	5,124	$	4,101
Other share-based awards	10,132		18,926
Total share-based compensation before tax	15,256		23,027
Tax benefit	5,698		8,607
Total share-based compensation expense included in net income	$	9,558	$	14,420

In addition to the above share-based compensation expense, Polaris sponsors a qualified non-leveraged employee stock ownership plan (“ESOP”). Shares allocated to eligible participants’ accounts vest at various percentage rates based on years of service and require no cash payments from the recipient.

At March 31, 2013, there was $82,004,000 of total unrecognized share-based compensation expense related to unvested share-based equity awards. Unrecognized share-based compensation expense is expected to be recognized over a weighted-average period of 1.98 years. Included in unrecognized share-based compensation is approximately $50,642,000 related to stock options and $31,362,000 for restricted stock.