Edgar Filing: POLARIS INDUSTRIES INC/MN

2015ProxyStatement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

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Polaris Industries Inc.
(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Polaris Industries Inc.

2100 Highway 55

Medina, Minnesota 55340

763-542-0500

Fax: 763-542-0599

March 13, 2015

Dear Fellow Shareholder:

The Board of Directors of Polaris Industries Inc. (“Polaris”) joins me in extending a cordial invitation to attend our 2015 Annual Meeting of Shareholders which will be held at the Arrowwood Resort & Conference Center, 1405 U.S. 71, Okoboji, IA 51355, on Thursday, April 30, 2015 at 9:00 a.m. local time.

In addition to voting on the matters described in the accompanying Notice of Annual Meeting and Proxy Statement, we will review Polaris’ 2014 business and discuss our direction for the coming years. There will also be an opportunity, after conclusion of the formal business of the meeting, to discuss other matters of interest to you as a shareholder.

Again this year, we will be using the “Notice and Access” method of furnishing proxy materials to you over the Internet. We believe that this process will provide you with a convenient and quick way to access your proxy materials and vote your shares, while allowing us to reduce the environmental impact of our Annual Meeting and the costs of printing and distributing the proxy materials. On or about March 13, 2015, we will mail to many of our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our Proxy Statement and Annual Report and vote electronically over the Internet. The Notice also contains instructions on how to receive a paper copy of your proxy materials. We will not be mailing the Notice to shareholders who previously elected to receive paper copies of the proxy materials, but rather will mail those shareholders a full set of the proxy materials.

It is important that your shares be represented at the meeting whether or not you plan to attend in person. Please vote electronically over the Internet or, if you receive a paper copy of the proxy card by mail, by telephone or by returning your signed proxy card in the envelope provided. If you do attend the meeting and desire to vote in person, you may do so by following the procedures described in the Proxy Statement even though you have previously sent a proxy.

We hope that you will be able to attend the meeting and we look forward to seeing you.

Sincerely,

Scott W. Wine

Chairman of the Board and Chief Executive Officer

Enclosures

POLARIS INDUSTRIES INC.

2100 Highway 55

Medina, Minnesota 55340

March 13, 2015

________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

________________

Polaris Industries Inc. will hold its 2015 Annual Meeting of Shareholders at the Arrowwood Resort & Conference Center, 1405 U.S. 71, Okoboji, IA 51355, on Thursday, April 30, 2015. The meeting will begin at 9:00 a.m. local time. The proxy materials were either made available to you over the Internet or mailed to you beginning on or about March 13, 2015. At the meeting, our shareholders will be asked to:


1.	Elect three Class III directors for three-year terms ending in 2018.


2.	Approve the Amended and Restated 2007 Omnibus Incentive Plan.


3.	Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2015.


4.	Submit an advisory vote to approve the compensation of our Named Executive Officers (as described in the accompanying Proxy Statement).


5.	Act on any other matters that may properly come before the meeting.

The Board recommends that shareholders vote FOR each of the following:


1.	The director nominees named in the accompanying Proxy Statement.


2.	The approval of the Amended and Restated 2007 Omnibus Incentive Plan.


3.	The ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2015.


4.	The advisory vote to approve the compensation of our Named Executive Officers.

Only shareholders of record at the close of business on March 2, 2015 may vote at the Annual Meeting or any adjournment thereof.

By Order of the Board of Directors

/s/ Stacy L. Bogart

Stacy L. Bogart

Vice President-General Counsel and Secretary

YOUR VOTE IS IMPORTANT

Whether or not you plan to attend the meeting, we urge you to vote as soon as possible via the Internet as described in the Notice. If you received a copy of the proxy card by mail, you may vote by Internet or telephone as instructed on the proxy card, or you may sign, date and mail the proxy card in the envelope provided.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

2015 ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON APRIL 30, 2015.

Our Proxy Statement for the 2015 Annual Meeting of Shareholders, our Annual Report to Shareholders for the fiscal year ended December 31, 2014 and our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 are available at https://materials.proxyvote.com/731068.

TABLE OF CONTENTS



Questions and Answers About the Annual Meeting and Voting	1
Security Ownership of Certain Beneficial Owners and Management	5
Corporate Governance	7
Board Leadership Structure	7
Risk Oversight	7
Board Diversity	7
Corporate Governance Guidelines and Independence	8
Code of Business Conduct and Ethics	8
Hedging and Pledging Policy	8
Communications with the Board	8
Board Meetings	9
Committees of the Board and Meetings	9
Certain Relationships and Related Transactions	11
Compensation Committee Interlocks and Insider Participation	12
Section 16(a) Beneficial Ownership Reporting Compliance	12
Proposal 1 – Election of Directors	13
General Information	13
Information Concerning Nominees and Directors	14
Compensation Discussion and Analysis	18
Executive Summary	18
Objectives of Polaris’ Compensation Program	19
Executive Compensation Program Components	20
Determining Executive Compensation	22
2014 Compensation Determinations for the Named Executive Officers	23
Overview of 2015 Executive Compensation Program	28
Other Executive Compensation Arrangements, Policies and Practices	29
Compensation Committee Report	32
Compensation Risk Assessment	32
Executive Compensation	33
Summary Compensation Table	33
All Other Compensation Table	34
Grants of Plan-Based Awards in 2014	35
Additional Information About Plans and Agreements Affecting Reported Compensation	35
Outstanding Equity Awards at 2014 Fiscal Year-End	38
Option Exercises and Stock Vested in 2014	40
Nonqualified Deferred Compensation in 2014	40
Potential Payments Upon Termination or Change-in-Control	42
Severance Arrangements with Named Executive Officers	42
Equity Award Agreements	44
Payments Made Upon Retirement	44
Non-Compete and Non-Solicitation Agreements	45
Potential Payments to Named Executive Officers Upon Termination	45
Potential Payments to Mr. Wine	46
Potential Payments to Messrs. Malone, Pucel, Longren and Morgan	47
Director Compensation	48
Non-Employee Directors – Outstanding Equity Awards at Fiscal Year-End	48
Equity Compensation Plan Information	50
Proposal 2 - Approval of the Amended and Restated 2007 Omnibus Incentive Plan	51
Proposal 3 – Ratification of Selection of Independent Registered Public Accounting Firm	59
Audit Committee Report	60
Fees Paid to Independent Registered Public Accounting Firm	61
Proposal 4 – Advisory Vote on Approval of the Compensation of the Company’s Named Executive Officers	62
Other Matters	63
Submission of Shareholder Proposals and Nominations	63
Additional Information	63

POLARIS INDUSTRIES INC.

2100 Highway 55

Medina, Minnesota 55340

________________

PROXY STATEMENT

________________

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING


Q:	Who can vote?

You can vote if you were a shareholder at the close of business on the record date of March 2, 2015. There were a total of 66,517,560 shares of our common stock outstanding on March 2, 2015. The Notice of Internet Availability of Proxy Materials (the “Notice”), this Proxy Statement and any accompanying proxy card, along with the 2014 Annual Report to Shareholders and the 2014 Annual Report on Form 10-K, were first made available to you beginning on or about March 13, 2015. The Proxy Statement summarizes the information you need to vote at the Annual Meeting.


Q:	What am I voting on?


A:	You are voting on:


•	Election of three nominees as Class III directors for three-year terms ending in 2018. The Board of Directors’ nominees for Class III are Annette K. Clayton, Kevin M. Farr and John P. Wiehoff.


•	Approval of the Amended and Restated 2007 Omnibus Incentive Plan (the "Omnibus Plan") to increase the reserve for all awards under the plan by 7,500,000 shares.


•	Ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2015.


•	Advisory vote to approve the compensation of our Named Executive Officers (as defined below).


Q:	How does the Board recommend I vote on the proposals?


A:	The Board is soliciting your proxy and recommends you vote FOR the director nominees, FOR the approval of the Omnibus Plan, FOR the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2015 and FOR the advisory vote to approve the compensation of our Named Executive Officers.


Q:	Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a paper copy of the proxy materials?

“Notice and Access” rules adopted by the United States Securities and Exchange Commission (the “SEC”) permit us to furnish proxy materials, including this Proxy Statement and our Annual Report for 2014, to our shareholders by providing access to such documents on the Internet instead of mailing printed copies. Most shareholders will not receive printed copies of the proxy materials unless they request them. Instead, the Notice, which was mailed to most of our shareholders, will instruct you as to how you may access and review all of the proxy materials on the Internet. The Notice also instructs you as to how you may submit your proxy on the Internet. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting such materials in the Notice. Any request to receive proxy materials by mail will remain in effect until you revoke it.


Q:	How many shares must be voted to approve each proposal?

Quorum. A majority of the outstanding shares of our common stock represented in person or by proxy is necessary to constitute a quorum for the transaction of business at the Annual Meeting. As of the record date, 66,517,560 shares of our common stock were issued and outstanding. A majority of those shares, or 33,258,781 shares of our common stock, will constitute a quorum for the purpose of electing directors, adopting proposals and submitting advisory votes at the Annual Meeting. If you submit a valid proxy or attend the Annual Meeting, your shares will be counted to determine whether there is a quorum.

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Vote Required. Proposal 1: Directors are elected by a plurality of the votes cast. A plurality means that the nominees with the greatest number of votes are elected as directors up to the maximum number of directors to be chosen at the meeting. Abstentions and broker non-votes will have no effect on the voting for the election of directors. Our Corporate Governance Guidelines require that any director who fails to receive a majority of the votes cast "for" and "against" his or her election in an uncontested election must promptly tender his or her resignation. In that event, the Corporate Governance and Nominating Committee must make a recommendation to the Board on whether to accept or reject the tender of resignation. The Board, after taking into account the recommendation, must publicly disclose its decision and rationale within 90 days after the election. The director who failed to receive a majority vote will not participate in the decision.

Proposals 2 and 3: The proposals to approve the Omnibus Plan and to ratify the selection of the Company’s independent registered public accounting firm will be determined by the affirmative vote of the holders of a majority of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote, assuming the presence of a quorum (provided that the number of shares voted in favor of such proposals constitutes more than 25% of the outstanding shares of our common stock).

Proposal 4: We will consider the shareholders to have approved the compensation of our Named Executive Officers if there are more votes cast “FOR” the proposal than “AGAINST.” The advisory vote to approve the compensation of our Named Executive Officers is not binding on the Board, but the Compensation Committee will consider the shareholders’ advisory input when establishing compensation for our Named Executive Officers in future years.


Q:	What is the effect of broker non-votes and abstentions?

A “broker non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received voting instructions from the beneficial owner. If a broker returns a “non-vote” proxy indicating a lack of authority to vote on a proposal, then the shares covered by such a “non-vote” proxy will be deemed present at the meeting for purposes of determining a quorum, but not present for purposes of calculating the vote with respect to that particular proposal. Nominees will not have discretionary voting power with respect to any matter to be voted upon at the Annual Meeting other than the ratification of the selection of our independent registered public accounting firm. Broker non-votes will generally have no effect in determining whether any proposals to be voted on at the Annual Meeting are approved, although if a quorum for the Annual Meeting could not be established without including broker non-votes, then the broker non-votes required to establish the minimum quorum would have the same effect as votes against the proposal to approve the amendment and restatement of the Omnibus Plan.

A properly executed proxy marked “ABSTAIN” with respect to a proposal will be counted for purposes of determining whether there is a quorum and will be considered present in person or by proxy and entitled to vote on that proposal, but will not be deemed to have been voted in favor of such proposal. Abstentions will therefore have the same effect as voting against the proposals to approve the Omnibus Plan and to ratify the selection of our independent registered public accounting firm. Abstentions will have no effect on the advisory vote to approve the compensation of our Named Executive Officers.


Q:	How will the proxies vote on any other business brought up at the meeting?


A:	By submitting your proxy, you authorize the proxies to use their judgment to determine how to vote on any other matter brought before the Annual Meeting. We do not know of any other business to be considered at the Annual Meeting.

The proxies’ authority to vote according to their judgment applies only to shares you own as the shareholder of record.


Q:	How do I cast my vote?


A:	If you are a shareholder whose shares are registered in your name, you may vote your shares in person at the Annual Meeting or by using one of the three following methods:


•	Vote by Internet by following the instructions for Internet voting shown on the Notice, or if you requested printed proxy materials or you receive a paper copy of the proxy card, by following the instructions provided with your proxy materials and on your proxy card.

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If you elected to receive printed proxy materials, you may also:


•	Vote by phone following the instructions for telephone voting provided with your printed proxy materials and on your proxy card.


•	Vote by completing, signing, dating and mailing the proxy card in the envelope provided. If you vote by phone or Internet, please do not mail your proxy card.

If you are a street-name shareholder (meaning that your shares are registered in the name of your bank or broker), you will receive instructions from your bank, broker or other nominee describing how to vote your shares.

Whichever method you use, the proxies identified on the proxy will vote the shares of which you are the shareholder of record in accordance with your instructions. If you submit a proxy without giving specific voting instructions, the proxies will vote those shares as recommended by the Board.


Q:	Can I vote my shares by filling out and returning the Notice?


A:	No. The Notice identifies the items to be voted on at the Annual Meeting, but you cannot vote by marking the Notice and returning it. The Notice provides instructions on how to vote by Internet, by requesting and returning a paper proxy card or voting instruction card, or by submitting a ballot in person at the meeting.


Q:	Can I revoke or change my vote?


A:	You can revoke your proxy at any time before it is voted by:


•	Submitting a new proxy with a more recent date than that of the first proxy given by (1) following the telephone voting instructions or (2) following the Internet voting instructions or (3) completing, signing, dating and returning a new proxy card to us; or


•	Giving written notice before the vote at the meeting to our Secretary, stating that you are revoking your proxy.

Unless you decide to vote your shares in person, you should revoke your prior proxy in the same way you initially submitted it - that is, by telephone, Internet or mail.


Q:	Who will count the votes?


A:	Broadridge Financial Solutions, our independent proxy tabulator, will count the votes. A representative of Broadridge Financial Solutions and Sean Bagan, our Treasurer, will act as inspectors of election for the meeting.


Q:	Is my vote confidential?


A:	All proxies and all vote tabulations that identify an individual shareholder are confidential. Your vote will not be disclosed, except:


•	To allow Broadridge Financial Solutions to tabulate the vote;


•	To allow Sean Bagan, our Treasurer, and a representative of Broadridge Financial Solutions to certify the results of the vote; and


•	To meet applicable legal requirements.


Q:	What shares are included on my proxy?


A:	Your proxy will represent all shares registered to your account in the same social security number and address, including any full and fractional shares you own under the Omnibus Plan or the Polaris Employee Stock Purchase Plan, as well as shares you own through the Polaris Employee Stock Ownership Plan and the Polaris 401(k) Retirement Savings Plan.


Q:	What happens if I don’t vote shares that I own?


A:	For shares registered in your name. If you do not vote shares that are registered in your name by voting in person at the Annual Meeting or by proxy through the Internet, telephone or mail as described on the Notice, the Internet voting site or, if you requested printed proxy materials or receive a paper copy of the proxy card, by following the instructions

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therein, your shares will not be counted in determining the presence of a quorum or in determining the outcome of the vote on the proposals presented at the Annual Meeting.

For shares held in street name. If you hold shares through a broker, you will receive voting instructions from your broker. If you do not submit voting instructions to your broker and your broker does not have discretion to vote your shares on a particular matter, then your shares will not be counted in determining the outcome of the vote on that matter at the Annual Meeting. See effect of “broker non-votes” as described above. Your broker will not have discretion to vote your shares for any matter to be voted upon at the Annual Meeting other than the ratification of the selection of our independent registered public accounting firm. Accordingly, it is important that you provide voting instructions to your broker for the matters to be voted upon at the Annual Meeting.

For shares held in certain employee plans. If you hold shares in the Polaris Employee Stock Ownership Plan or the Polaris 401(k) Retirement Savings Plan and you do not submit your voting instructions by proxy through the mail, telephone or Internet as described on the proxy card, those shares will be voted in the manner described in the following two questions.


Q:	How are common shares in the Polaris Employee Stock Ownership Plan voted?

If you hold shares of common stock through the Polaris Employee Stock Ownership Plan, your proxy card will instruct the trustee of the plan how to vote the shares allocated to your plan account. If you do not return your proxy card (or you submit it with an unclear voting designation or with no voting designation at all), then the plan trustee will vote the shares in your account in proportion to the instructions actually received by the trustee from participants who give voting instructions. Votes under the Polaris Employee Stock Ownership Plan receive the same confidentiality as all other votes.


Q:	How are common shares in the Polaris 401(k) Retirement Savings Plan voted?

If you hold shares of our common stock through the Polaris 401(k) Retirement Savings Plan, your proxy card will instruct the trustee of the plan how to vote the shares allocated to your plan account. If you do not return your proxy card (or you submit it with an unclear voting designation or with no voting designation at all), then the shares in your account will not be voted. Votes under the Polaris 401(k) Retirement Savings Plan receive the same confidentiality as all other votes.


Q:	What does it mean if I get more than one Notice or proxy card?


A:	Your shares are probably registered in more than one account. You should provide voting instructions for all Notices and proxy cards you receive.


Q:	How many votes can I cast?


A:	You are entitled to one vote per share on all matters presented at the meeting.


Q:	When are shareholder proposals and nominees due for the 2016 Annual Meeting of Shareholders?


A:	If you want to submit a shareholder proposal or nominee for the 2016 Annual Meeting of Shareholders, you must submit the proposal in writing to our Corporate Secretary, Polaris Industries Inc., 2100 Highway 55, Medina, Minnesota 55340, so it is received by the relevant date set forth below under “Submission of Shareholder Proposals and Nominations. ”


Q:	How is this proxy solicitation being conducted?

We engaged D.F. King & Co., Inc. to assist in the distribution of proxy materials and the solicitation of votes for a fee of $16,000, plus out-of-pocket expenses. We will pay for the cost of soliciting proxies and we will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to our shareholders. In addition, some of our employees may solicit proxies. D.F. King & Co., Inc. and employees may solicit proxies in person, by telephone and by mail. Our employees will not receive special compensation for these services, which the employees will perform as part of their regular duties.

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SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of February 20, 2015 by each person known to us who then beneficially owned more than 5% of the outstanding shares of common stock, each director, each nominee for director, each Named Executive Officer named in the Summary Compensation Table appearing below and all current executive officers and directors as a group. As of February 20, 2015, there were 66,531,403 shares of common stock outstanding. Except as otherwise indicated, the named beneficial owner has sole voting and investment powers with respect to the shares held by such beneficial owner. The table also includes information with respect to common stock equivalents and deferred stock units credited as of February 20, 2015 to the accounts of each director as described in this Proxy Statement under the heading “Director Compensation.”



Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class	Common Stock Equivalents(12)	Deferred Stock Units(13)
Wells Fargo & Company(1)	4,981,541	7.5%
BlackRock, Inc.(2)	4,141,743	6.2%
The Vanguard Group(3)	4,087,469	6.1%
Polaris Industries Inc. Employee Stock Ownership Plan(4)	3,924,960	5.9%
Scott W. Wine(5)(6)	626,331	*
Chairman of the Board and Chief Executive Officer
Michael W. Malone(6)(7)	224,025	*
Vice President – Finance and Chief Financial Officer
Kenneth J. Pucel(8)	50,000	*
Executive Vice President – Global Operations, Engineering & Lean
David C. Longren(6)(9)	152,854	*
Vice President – Off-Road Vehicles and ORV Engineering
Bennett J. Morgan(6)(10)	638,335	*
President and Chief Operating Officer
Annette K. Clayton	0	*	29,054	19,172
Director
Brian C. Cornell	0	*	1,708	2,467
Director
Kevin M. Farr	0	*	1,000	955
Director
Gary E. Hendrickson	0	*	3,605	5,474
Director
Bernd F. Kessler	0	*	6,758	8,200
Director
R. M. (Mark) Schreck	480	*	41,873	19,172
Director
John P. Wiehoff	0	*	18,261	16,213
Director
All directors and current executive officers as a group (20 persons)(5)-(11)	2,108,276	3.2%	102,259	71,653

____________

* Indicates ownership of less than 1%.

(1)

The address for Wells Fargo & Company and its subsidiaries (collectively, "Wells Fargo") is 420 Montgomery Street, San Francisco, CA 94104. Wells Fargo has sole voting power with respect to 975 shares, shared power to vote with respect to 4,751,012 shares, sole dispositive power with respect to 975 shares, and shared dispositive power with respect to 4,971,001 shares. This information was reported on a Schedule 13G/A filed by Wells Fargo with the SEC on February 5, 2015, and is as of December 31, 2014.


(2)	The address for BlackRock, Inc. and its affiliates (collectively, “BlackRock”) is 40 East 52nd Street, New York, NY 10022. BlackRock, an investment advisor, has sole voting power with respect to 3,812,920 shares and sole dispositive

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power with respect to 4,141,743 shares. This information was reported on a Schedule 13G/A filed by BlackRock with the SEC on February 9, 2015, and is as of December 31, 2014.

(3)

The address for The Vanguard Group and its subsidiaries (collectively, “Vanguard”) is 100 Vanguard Boulevard, Malvern, PA 19355. Vanguard has sole voting power with respect to 60,500 shares, shared voting power with respect to 0 shares, sole dispositive power with respect to 4,033,400 shares and shared dispositive power with respect to 54,069 shares. This information was reported on a Schedule 13G/A filed by Vanguard with the SEC on February 11, 2015, and is as of December 31, 2014.


(4)	The address for the Polaris Industries Inc. Employee Stock Ownership Plan (the "ESOP") is 2100 Highway 55, Medina, MN 55340. The ESOP has shared voting and shared dispositive power with respect to 3,924,960 shares. This information was reported on a Schedule 13G/A filed by the ESOP with the SEC on February 6, 2015, and is as of December 31, 2014.


(5)	Includes 12,000 restricted shares of common stock awarded to Mr. Wine under the Omnibus Plan in January 2011. The 12,000 unvested restricted shares granted to Mr. Wine become freely tradable over the next year, provided that he continues to be an employee.


(6)	Includes shares which could be purchased by the indicated person upon the exercise of vested options within 60 days after February 20, 2015: Mr. Wine, 376,500 shares; Mr. Malone, 84,000 shares; Mr. Longren, 125,500 shares; Mr. Morgan, 467,500 shares; and all executive officers combined, 1,246,500 shares.


(7)	Includes 20,994 shares which are held in a revocable trust in the name of Mr. Malone’s spouse.


(8)	Includes 50,000 restricted shares of common stock awarded to Mr. Pucel under the Omnibus Plan in December 2014. All of the 50,000 unvested restricted shares granted to Mr. Pucel become freely tradable in various tranches over the next three years, provided that he continues to be an employee.

(9)

Includes 21,000 restricted shares of common stock awarded to Mr. Longren under the Omnibus Plan, of which 6,000 restricted shares become freely tradable only if we achieve certain financial targets, provided that he continues to be an employee, and 15,000 restricted shares, which become freely tradable in two equal tranches in 2017 and 2018, provided that he continues to be an employee. Also includes 1,991 shares held by Mr. Longren in the ESOP, over which he holds shared voting power, and 616 shares held by Mr. Longren’s child, as to which beneficial ownership is disclaimed.

(10)

Includes 15,000 restricted shares of common stock awarded to Mr. Morgan under the Omnibus Plan in January 2015. All of the 15,000 restricted shares become freely tradable only if we achieve certain financial targets, provided Mr. Morgan continues to be an employee. Also includes 6,041 shares held by Mr. Morgan in the ESOP, over which he holds shared voting power, 16,145 shares which are held in a revocable trust in the name of Mr. Morgan’s spouse, and 1,030 shares held by Mr. Morgan’s children, as to which beneficial ownership is disclaimed.


(11)	Includes 160,000 aggregate restricted shares of common stock awarded to current executive officers as a group under the Omnibus Plan. All of the 160,000 restricted shares become freely tradable only if the holders continue to be employees for specified periods of time and, in some cases, if specified performance goals are satisfied.

(12)

Represents the number of common stock equivalents credited as of February 20, 2015 to the accounts of each non-employee director and the accompanying dividend equivalent units, as maintained by us under the Polaris Industries Inc. Deferred Compensation Plan for Directors. A director will receive one share of common stock for every common stock equivalent and dividend equivalent unit held by that director upon his or her termination of service as a member of the Board or upon a change of control of our Company.


(13)	Represents the number of deferred stock units awarded to each of the non-employee directors under the Omnibus Plan and the accompanying dividend equivalent units. A director will receive one share of common stock for every deferred stock unit and dividend equivalent unit upon his or her termination of service as a director or upon a change in control of our Company.

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CORPORATE GOVERNANCE

Board Leadership Structure

Mr. Wine has been our Chairman since January 31, 2013, and holds the titles of Chairman and Chief Executive Officer ("CEO"). The Board believes that the interests of having a unified leadership structure with the positions of Chairman and CEO being held by the same person is currently appropriate for our Company. Our Corporate Governance Guidelines provide that if the CEO is also the Chairman of the Board, the Chair of the Corporate Governance and Nominating Committee, who is an independent director, will serve as the Lead Director. Mr. Wiehoff is our Lead Director, and his responsibilities as Lead Director include:


•	Preside over all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors;


•	Serve as a liaison between the Chairman and the independent directors;


•	In consultation with the Chairman, approve:


•	Key information sent to the Board;


•	Meeting agendas for the Board; and


•	Meeting schedules to assure that there is sufficient time for discussion of all agenda items;


•	Have the authority to call meetings of the independent directors;


•	If requested by major shareholders, ensure his/her availability for consultation and direct communication;


•	Conduct and facilitate annual Board self-evaluation;


•	Communicate with CEO about strategic business issues and governance process or board relationships; and


•	Coordinate with the Compensation Committee on CEO evaluation.

The Board believes that its independent Board committees and Lead Director provide appropriate independent Board leadership and oversight.

Risk Oversight

Our Audit Committee is primarily responsible for regularly reviewing and discussing with management our major financial risk exposures and the steps management has taken to monitor and control such exposures, including management’s guidelines and policies with respect to risk assessment and risk management. When the Board deems it appropriate, responsibility of oversight of a specific risk is assigned to another one of the Board’s committees.

We engage in an Enterprise Risk Management (“ERM”) process. The ERM process consists of periodic risk assessments performed by various functional management groups during the year. At least twice a year, executive management presents these assessments to the Audit Committee to ensure that the process is sound and complete, oversight is appropriate, and the risks and risk assessments are thoroughly reviewed. In addition, the Audit Committee reports regularly to the full Board, which also considers our risk profile. While our management is responsible for day-to-day risk management identification and mitigation, the Board, directly and through its committees, oversees the execution of the ERM process. We believe this division of responsibilities is the most effective approach for addressing the risks facing our Company and that our Board leadership structure supports this approach.

Board Diversity

The Corporate Governance and Nominating Committee is responsible for identifying individuals who it considers qualified to become Board members. In furtherance of this duty, the Corporate Governance and Nominating Committee considers, as required by its charter, the Board’s overall balance of diversity of perspectives, backgrounds and experiences, although it does not have a formal policy regarding the consideration of diversity of Board members. The Corporate Governance and Nominating Committee views diversity broadly and evaluates a wide range of criteria as it makes its selections, including functional areas of experience, educational background, employment experience and leadership performance. The Corporate Governance and Nominating Committee also assesses those intangible factors it deems necessary to develop a heterogeneous and cohesive Board such as integrity, judgment, intelligence, and the willingness and ability of the candidate to devote adequate time to Board duties for a sustained period.

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Our Board and each of its committees engage in an annual self-evaluation process. As part of that process, directors provide feedback on whether the Board is meeting its diversity objectives and how the composition of the Board should be altered in order to enhance its value to our Company and shareholders.

Corporate Governance Guidelines and Independence

Our Board has adopted Corporate Governance Guidelines, which may be viewed online on our website at www.polaris.com. Under our Corporate Governance Guidelines, which adopt the current standards for “independence” established by the New York Stock Exchange (“NYSE”), a majority of the members of the Board must be independent as determined by the Board. In making its determination of independence, among other things, the Board must have determined that the director has no material relationship with the Company either directly or indirectly as a partner, shareholder or officer of an organization that has a relationship with us. The Board of Directors has determined that Ms. Clayton and Messrs. Cornell, Farr, Hendrickson, Kessler, Schreck and Wiehoff are independent. Mr. Wine, our Chairman and CEO, is the only director who is not independent.

The Board based its independence determinations, in part, upon a review by the Corporate Governance and Nominating Committee and the Board of certain transactions between the Company and companies with which certain of our directors have relationships, each of which was made in the ordinary course of business, at arm’s length, at prices and on terms customarily available to unrelated third party vendors or customers generally, in amounts that are not material to our business or the business of such unaffiliated corporation, and in which the director had no direct or indirect personal interest, nor received any personal benefit. Specifically, such transactions reviewed by the Corporate Governance and Nominating Committee and the Board included: (a) ordinary course of business purchases by us from C. H. Robinson Worldwide, where Mr. Wiehoff is, and during fiscal 2014 was, the CEO, in the aggregate amount of approximately $11,313,120; (b) ordinary course of business purchases by us from Donaldson Company Inc., where Mr. Wiehoff is, and during fiscal 2014 was, a director, in the aggregate amount of approximately $277,103; and (c) ordinary course of business purchases by us from The Valspar Corporation, where Mr. Hendrickson is, and during fiscal 2014 was, the CEO and Chairman of the Board, in the aggregate amount of approximately $98,617. In all cases, the payments were less than the greater of $1,000,000 or 2% of the recipients’ gross revenues. Accordingly, a majority of our Board is considered to be independent. Additionally, all current members of our Audit, Compensation and Corporate Governance and Nominating Committees are considered to be independent.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics applicable to all employees, including our CEO, our Chief Financial Officer (“CFO”) and all other executive officers, and the Board. A copy of the Polaris Code of Business Conduct and Ethics is available on our website at www.polaris.com.

Hedging and Pledging Policy

We adopted a policy that prohibits Directors and executive officers from engaging in hedging transactions with respect to the Company stock. We also adopted a policy that permits Directors and executive officers to pledge Company stock as collateral for a loan only if it is pre-approved by the Company's General Counsel or Chief Financial Officer. The Director or executive officer must clearly demonstrate the financial capacity to repay the loan without resorting to the pledged securities.

Communications with the Board

Under our Corporate Governance Guidelines, a process has been established by which shareholders and other interested parties may communicate with members of the Board. Any shareholder or other interested party who desires to communicate with the Board, individually or as a group, may do so by writing to the intended member or members of the Board, c/o Corporate Secretary, Polaris Industries Inc., 2100 Highway 55, Medina, Minnesota 55340.

All communications received in accordance with these procedures will be reviewed initially by the office of our Corporate Secretary to determine that the communication is a message to one or more of our directors and will be relayed to the appropriate director or directors unless the Corporate Secretary determines that the communication is an advertisement or other promotional material. The director or directors who receive any such communication will have discretion to determine

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whether the subject matter of the communication should be brought to the attention of the full Board or one or more of its committees and whether any response to the person sending the communication is appropriate.

Board Meetings

During 2014, the full Board met four times. Each of the in-person meetings was preceded and/or followed by an executive session of the Board without management in attendance, chaired by Mr. Wiehoff. Each of our directors attended at least 75% percent of the meetings of the Board and any committee on which that director served in 2014. The Board also took action in writing eight times in 2014. We do not maintain a formal policy regarding the Board’s attendance at annual shareholder meetings; however, Board members are expected to regularly attend all Board meetings and meetings of the committees on which they serve as well as the annual shareholder meetings. All then-current members of the Board attended our 2014 Annual Meeting.

Committees of the Board and Meetings

The Board has designated four standing committees. The Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee and the Technology Committee each operate under a written charter, which is available on our website at www.polaris.com. The current membership of each committee and its principal functions, as well as the number of times it met during 2014, are described below.

Audit Committee

Members:

Kevin M. Farr, Chair

Bernd F. Kessler

R.M. (Mark) Schreck

John P. Wiehoff

All members of the Audit Committee have been determined to be “independent” and “financially literate” by the Board in accordance with our Corporate Governance Guidelines, SEC rules and the applicable listing requirements of the NYSE. Additionally, Messrs. Farr, Kessler and Wiehoff have each been determined by the Board to be an “Audit Committee Financial Expert” as that term has been defined by the SEC. None of the members of the Audit Committee currently serve on the audit committees of more than three public companies.

Functions:

The Audit Committee assists the Board in fulfilling its fiduciary responsibilities by overseeing our financial reporting and public disclosure activities. The Audit Committee’s primary purposes and responsibilities are to:


•	Assist the Board of Directors in its oversight of (a) the integrity of our financial statements, (b) the effectiveness of internal control over financial reporting, (c) our compliance with legal and regulatory requirements, (d) the independent auditor’s performance, qualifications and independence, and (e) the responsibilities, performance, budget and staffing of our internal audit function;


•	Prepare the Audit Committee Report that appears later in this Proxy Statement;


•	Serve as an independent and objective party to oversee our financial reporting process and internal control system; and


•	Provide an open avenue of communication among the independent auditor, financial and senior management, the internal auditors and the Board.

The Audit Committee, in its capacity as a committee of the Board, is directly responsible for the appointment, compensation and oversight of the work of any independent registered public accounting firm employed by us (including resolution of any disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work or performing other audit, review or attest services for us, and each such independent registered public accounting firm reports directly to the Audit Committee. This committee met nine times during 2014.

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Compensation Committee

Members:

Gary E. Hendrickson, Chair

Annette K. Clayton

Brian C. Cornell

All members of the Compensation Committee have been determined to be “independent” by the Board in accordance with our Corporate Governance Guidelines and the applicable listing requirements of the NYSE.

Functions:

The Compensation Committee’s duties and responsibilities include, among other things, the responsibility to:


•	Assist the Board in establishing a philosophy and policies regarding executive and director compensation;


•	Provide oversight to the administration of our director and executive compensation programs;


•	Administer our stock option, restricted stock and other equity-based and cash incentive plans;


•	Review and approve the compensation of directors, executive officers and senior management;


•	Review and discuss the Compensation Discussion and Analysis that appears later in this Proxy Statement and prepare any report on executive compensation required by the rules and regulations of the SEC or other regulatory body, including the Compensation Committee Report that appears later in this Proxy Statement; and


•	Review the process for managing executive development and succession, assist the Board in management development and succession planning and review with the CEO the confidential written procedure for the timely and efficient transfer of his or her responsibilities in the event of his or her sudden incapacitation or departure.

The Compensation Committee has the resources and appropriate authority to discharge its duties and responsibilities, including the authority to retain independent counsel and other independent experts or consultants. The committee has the sole authority to select, retain and terminate a compensation consultant and to approve the consultant’s fees and other retention terms. The committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the committee. In particular, the committee may delegate the approval of certain transactions to a subcommittee consisting solely of members of the committee who are (i) “Non-Employee Directors” for the purposes of Rule 16b-3 of the Securities Exchange Act, as in effect from time to time, and/or (ii) “outside directors” for the purposes of Section 162(m) of the Internal Revenue Code (“Section 162(m)”), as in effect from time to time.

The Compensation Committee engaged Towers Watson to act as its compensation consultant beginning in May 2013. The Compensation Committee uses its compensation consultant in an advisory role for various technical, analytical, and plan design issues related to compensation and benefit programs. The compensation consultant does not recommend or determine compensation for any of our executives, which role is reserved to the Compensation Committee. The Compensation Committee provides the material elements of the instructions to the compensation consultant with respect to the performance of its duties under the engagement. For 2014, the Compensation Committee instructed Towers Watson to (a) collect market information on a variety of executive pay and design issues, including the types and amounts of compensation paid to executives at similarly situated companies; (b) assist in the design and review of programs such as our long-term incentive plan and annual cash incentive plan that affect the compensation of executives and other employees; (c) consult on various technical issues related to compensation and benefits; and (d) review and assist the Compensation Committee and our CEO in the development of offer letters to newly hired senior executives from time to time. When necessary, the compensation consultant works with management to fully understand the details of various compensation programs and the underlying business and human resources issues they address. The Compensation Committee has assessed the independence of Towers Watson pursuant to the rules of the SEC and concluded no conflict of interest exists that would prevent the independent representation of the Compensation Committee. We used Towers Watson for non-executive compensation surveys in 2014 for which it was paid less than $20,000.

The Compensation Committee works with our CEO, our President and Chief Operating Officer, our Executive Vice President – Global Operations, Engineering and Lean, and our Vice President – Human Resources in determining the base salary and annual and long-term incentive targets and opportunities for our executive officers, but in each case not including that officer’s own compensation arrangements. The Compensation Committee also has the power to delegate the approval of grants of certain equity awards. The Compensation Committee has delegated to our CEO the authority to approve of the issuance of a limited number of equity awards in connection with the employment of new non-executive employees and

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the promotion, retention or outstanding achievements of current non-executive employees. The Compensation Committee met five times during 2014 and took action in writing once.

Corporate Governance and Nominating Committee

Members:

John P. Wiehoff, Chair

Gary E. Hendrickson

Bernd F. Kessler

R. M. (Mark) Schreck

All members of the Corporate Governance and Nominating Committee have been determined to be “independent” by the Board in accordance with our Corporate Governance Guidelines and the applicable listing requirements of the NYSE.

Functions:

The Corporate Governance and Nominating Committee provides oversight and guidance to the Board to ensure that the membership, structure, policies and processes of the Board and its committees facilitate the effective exercise of the Board’s role in the governance of our Company. The committee reviews and evaluates the policies and practices with respect to the size, composition and functions of the Board, evaluates the qualifications of possible candidates for the Board and recommends the nominees for directors to the Board for approval. The committee will consider individuals recommended by shareholders for nomination as a director, applying the standards described in the Corporate Governance and Nominating Committee Charter. The committee also is responsible for recommending to the Board any revisions to our Corporate Governance Guidelines. This committee met three times during 2014 and took action in writing once.

Technology Committee

Members:

R. M. (Mark) Schreck, Chair

Annette K. Clayton

Brian C. Cornell

Kevin M. Farr

Bernd F. Kessler

Scott W. Wine

Functions:

The Technology Committee provides oversight of our product plans, technology development and related business processes. The committee reviews (a) product and technology development plans to ensure the continuous flow of innovative, differentiated, leadership products in the markets we currently serve; (b) plans for growth through new products serving adjacent markets; (c) new technology development and plans for insertion of new technology into the long-range product plan; (d) major competitive moves and our response plan; (e) the adequacy of the processes, tools, facilities and technology leadership of our product and technology development; (f) the costs, benefits and risks associated with major product development programs and related facility investments; (g) plans to address changing regulatory requirements; (h) strategic sourcing plans for products and technology; and (i) quality initiatives to ensure that the quality of our products meets or exceeds customer expectations. This committee met two times during 2014.

Certain Relationships and Related Transactions

During 2014, we did not engage in any transactions with related persons that are required to be described in this Proxy Statement pursuant to applicable SEC regulations.

Our written Related-Person Transactions Policy, which is applicable to all of our directors, nominees for directors, executive officers and 5% shareholders and their respective immediate family members, prohibits “related-person transactions” unless approved or ratified by the Corporate Governance and Nominating Committee.

Matters considered to be a related-person transaction subject to the policy include any transaction in which we are directly or indirectly a participant and the amount involved exceeds or reasonably can be expected to exceed $120,000, and in which

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a director, nominee for director, executive officer or 5% shareholder, or any of their respective family members, has or will have a direct or indirect material interest.

Any potential related-person transaction that is raised will be analyzed by the General Counsel, in consultation with management and with outside counsel, as appropriate, to determine whether the transaction or relationship constitutes a related-person transaction requiring compliance with the policy. The potential related-person transaction and the General Counsel’s conclusion and the analysis thereof are also to be reported to the chair of the Corporate Governance and Nominating Committee.

The Corporate Governance and Nominating Committee shall review the material facts of all related-person transactions that require the committee’s approval and either approve or disapprove of the related person transaction. If advance committee approval of a related-person transaction is not feasible, then the related-person transaction shall be considered and, if the committee determines it to be appropriate, ratified at the committee’s next regularly scheduled meeting. Any related-person transaction that is not approved or ratified, as the case may be, shall be voided, terminated or amended, or such other actions shall be taken, in each case as determined by the committee, so as to avoid or otherwise address any resulting conflict of interest.

Compensation Committee Interlocks and Insider Participation

All current members of the Compensation Committee are considered independent under our Corporate Governance Guidelines. During fiscal year 2014, none of our executive officers served on the compensation committee (or its equivalent) or board of directors of another entity whose executive officers served on our Compensation Committee or Board.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires our directors and executive officers to file initial reports of ownership and reports of changes of ownership of our common stock with the SEC. Executive officers and directors are required to furnish us with copies of all Section 16(a) reports that they file. To our knowledge, based solely upon a review of the reports filed by the executive officers and directors during 2014 and written representations that no other reports were required, we believe that, during the year ended December 31, 2014, all filing requirements applicable to our directors, executive officers and 10% beneficial owners, if any, were complied with on a timely basis, except that we failed to timely file a Form 4 to report the sale of 15,000 shares of common stock by Suresh Krishna on November 3, 2014.

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PROPOSAL 1 — ELECTION OF DIRECTORS

General Information

The Board is divided into three classes. The members of one class are elected at each annual meeting of shareholders to serve three-year terms. The Class III directors currently serving on the Board, whose terms expire at the 2015 Annual Meeting, are Ms. Annette K. Clayton, Mr. Kevin M. Farr and Mr. John P. Wiehoff.

Upon the recommendation of the Corporate Governance and Nominating Committee of the Board, the Board proposes that the following nominees be elected as Class III directors for three-year terms expiring in 2018:

Annette K. Clayton

Kevin M. Farr

John P. Wiehoff

Each of the nominees currently serves as a member of the Board. The persons named in the proxy intend to vote your proxy for the election of each of the three nominees, unless you indicate on the proxy that your vote should be withheld from any or all of the nominees. If you are voting by telephone or on the Internet, you will be told how to withhold your vote from some or all of the nominees. Each nominee elected as a director will continue in office until his or her successor has been elected, or until his or her death, resignation or retirement.

We expect each nominee standing for election as a director to be able to serve if elected. If any nominee is not able to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees designated by the Board, unless an instruction to the contrary is indicated on the proxy. There are no family relationships between or among any of our executive officers, directors or director nominees.

The Board, upon recommendation of the Corporate Governance and Nominating Committee, unanimously recommends a vote FOR the election of these nominees as directors.

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Information Concerning Nominees and Directors

Our directors bring a broad range of leadership and experience to the boardroom and regularly contribute to the dialogue involved in effectively overseeing and guiding our business and affairs. Other than our CEO, all of the members of the Board are independent. Though the members of the Board have been selected to provide a wide range of viewpoints, the atmosphere of our Board is collegial. Preparation, engagement and participation are expected from our directors. We insist on high personal and professional ethics, integrity and values. All of our current directors and the director nominees satisfy such requirements. The Board has adopted Corporate Governance Guidelines, which are observed by all directors. With a diverse mix of experience, backgrounds and skill sets, the Board believes it is well positioned to represent the best interests of the shareholders. The principal occupation, specific experience, qualifications, attributes or skills and certain other information about the nominees and other directors whose terms of office continue after the Annual Meeting are set forth on the following pages.

If a shareholder wishes to have the Corporate Governance and Nominating Committee consider a candidate for nomination as a director, the shareholder’s notice must include the information specified in our bylaws, including the shareholder’s name and address, the information required to be disclosed by the SEC’s proxy rules, a written consent of the candidate to be named in the proxy statement and to serve as a director if elected, specified information regarding the shareholder’s interests in our capital stock, and the representations specified in our bylaws. The Corporate Governance and Nominating Committee will evaluate recommended nominees based on the factors identified in the Corporate Governance and Nominating Committee Charter, a copy of which is available on our website at www.polaris.com. Alternatively, shareholders may directly nominate a person for election to our Board by complying with the procedures set forth in our bylaws, any applicable rules and regulations of the SEC and any applicable laws.

Director Nominees — Class III (Term Ending 2018)



	Annette K. Clayton	Director since 2003
	Ms. Clayton, 51, has been the Chief Supply Chain Officer for Schneider Electric since May 2011, where she leads a 12 billion euro global supply chain operation comprised of 80,000 employees, more than 250 manufacturing factories and over 100 distribution centers. She oversees Customer Satisfaction & Quality, Safety, Environment and Real Estate, and is a member of the Executive Committee. From 2006 to 2011, Ms. Clayton led Dell Inc.'s supply chain transformation and oversaw the global manufacturing and fulfillment operations. She was responsible for the commercial order management and customer care operations in sixteen countries. From 1983 to 2006, she worked for General Motors Corporation in senior management positions in engineering and production, including President, Saturn Corporation, as a member of the North American Strategy Board, and Vice President, Quality. As President of Saturn Corporation, Ms. Clayton gained experience leading a large corporation, which included overseeing strategic direction and financial accountability as well as profit and loss responsibility. With many years of experience running large scale supply chain manufacturing companies with global presence, Ms. Clayton brings to the Board expertise in supply chain, supply chain strategy, global expansion and various channel expansions, including the consumer durables area. Ms. Clayton also has many years of experience in engineering, production and manufacturing. Ms. Clayton is a member of our Compensation Committee and our Technology Committee.

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	Kevin M. Farr	Director since 2013
	Mr. Farr, 57, has been the Executive Vice President and Chief Financial Officer of Mattel, Inc., a worldwide leader in the design, manufacture and marketing of toys and family products, since February 2000, where he is responsible for Mattel’s worldwide financial operations, as well as strategic planning; corporate development, including mergers and acquisitions; information technology; corporate communications; and government affairs. Prior to being named CFO in 2000, Mr. Farr served as Senior Vice President and Corporate Controller from September 1996 to February 2000. From 1991 to 1996, he served in various roles in Tax, including Vice President, Tax from 1993 to 1996. He joined Mattel in 1991 as Director of Taxes. Prior to Mattel, Mr. Farr spent 10 years with PricewaterhouseCoopers. He serves on the Corporate Advisory Board of the Marshall School of Business at the University of Southern California. He previously served on the Beckman Coulter Board from 2004 to 2011. With many years of experience in executive leadership roles, Mr. Farr brings to the Board expertise in financial operations, business development and corporate strategy. As a past director for a public company, Mr. Farr also provides significant board experience. Mr. Farr is the Chair of our Audit Committee and a member of our Technology Committee.



	John P. Wiehoff	Director since 2007
	Mr. Wiehoff, 53, has been Chief Executive Officer and Chairman of the Board of C.H. Robinson Worldwide since 2007 and Chief Executive Officer of that company since May 2002, following a three-year succession process during which he was named President in 1999. He has been a member of the C.H. Robinson Board of Directors since December 2001. He was Vice President and Chief Financial Officer from June 1998 to December 1999. Previous positions with C.H. Robinson include Treasurer and Corporate Controller. Prior to joining C.H. Robinson in 1992, he was employed by Arthur Andersen LLP. Mr. Wiehoff also serves on the Board of Directors of Donaldson Company, Inc. Mr. Wiehoff is our Lead Director, is a member of our Audit Committee and serves as the Chair of our Corporate Governance and Nominating Committee. Mr. Wiehoff is an experienced financial leader with skills necessary to serve on our Audit Committee. His previous position as Chief Financial Officer of C.H. Robinson and employment at Arthur Andersen make him a valuable asset to our Board of Directors, Corporate Governance and Nominating Committee and Audit Committee, and his exposure to complex financial issues with large corporations makes him a skilled advisor. His expertise as a chief executive officer and expertise in logistics adds significant value to the Board.

Directors Continuing in Office — Class I (Term Ending 2016)



	Brian C. Cornell	Director since 2012
	Mr. Cornell, 54, has been the Chairman of the Board and Chief Executive Officer of Target Corporation since August 2014, is responsible for Target's global business, including over 1,900 stores and Target.com, and more than 361,000 employees. Prior to joining Target, Mr. Cornell was the Chief Executive Officer of Pepsico Americas Foods at Pepsico, Inc. since March 2012. He served as the Chief Executive Officer and President of Sam's Club and Executive Vice President of Wal-Mart Stores Inc. from April 2009 to January 2012. From June 2007 to April 2009, Mr. Cornell served as the Chief Executive Officer of Michaels Stores Inc. He served as the Chief Marketing Officer and Executive Vice President of Safeway Inc. from April 2004 to June 2007. Mr. Cornell is a former member of the Board of Directors at Centerplate, Inc., OfficeMax Inc., Kirin-Tropicana Inc., and The Home Depot, Inc. He also serves on the Board of Visitors for the U.C.L.A. Anderson School of Management, the YMCA of Greater New York and the Grocery Manufacturers Association. Mr. Cornell serves on our Compensation Committee and Technology Committee. Mr. Cornell’s experience as Chief Executive Officer provides expertise in corporate leadership as well as significant experience in consumer products marketing and general management.

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	Bernd F. Kessler	Director since 2010
	Mr. Kessler, 56, was the Chief Executive Officer of SRTechnics AG from January 2008 through January 2010. SRTechnics is a privately-held aircraft, component and engine service provider with facilities located in Switzerland, Ireland, Great Britain, France, Spain, Malta and China. From September 2004 through October 2007, Mr. Kessler was the President and Chief Executive Officer of MTU Aero Engines AG, in Munich, Germany, an aero engine design, development, manufacturing and service company, where he was instrumental in preparing the company for a successful initial public offering on the Frankfurt Stock Exchange. Prior to September 2004, Mr. Kessler held management and executive positions for 20 years at Honeywell International, Inc. and its preceding company AlliedSignal Corp. Among other roles, he led Honeywell’s Aerospace aftermarket services business with 27 facilities around the world. Mr. Kessler also serves on the Board of JorAMCo Ltd. in Amman, Jordan, Flowcastings GmbH in Trebur, Germany and Zitec GMBH in Plettling, Germany. Mr. Kessler is a member of our Audit Committee, Corporate Governance and Nominating Committee, and our Technology Committee. Mr. Kessler is based in Europe and has extensive experience in international management and mergers and acquisitions. Through his employment at Honeywell International, Mr. Kessler obtained skills in talent and organization development, engineering and operations management and the ability to build strong and lasting customer relationships. He is recognized as an industry leader in the global aerospace and defense markets, which will be helpful as we strive to grow our military and international business. His experience in operations, service and global business are expected to be a key asset to us as we continue to increase our sales globally and strive to increase operational efficiency.



	Scott W. Wine	Director since 2008
	Mr. Wine, 47, has been the Chief Executive Officer of Polaris since September 1, 2008, and was appointed as a member of our Board of Directors on October 23, 2008. He was elected Chairman of the Board on January 31, 2013. Prior to joining Polaris, Mr. Wine served for sixteen months as President of Fire Safety Americas, the Fire & Security Division of United Technologies Corporation, and prior to that time, held senior leadership positions at Danaher Corp. from 2003 to 2007, serving as President of its Jacob Vehicle Systems and Veeder-Root subsidiaries. Mr. Wine served as a Supply Officer in the U.S. Navy for seven years, and then held a number of operations and executive positions, both international and domestic, with AlliedSignal Corp.’s Aerospace Division, which became Honeywell International, Inc. after a 1999 merger with Honeywell, Inc. He currently serves as a member of the Board of Directors of US Bancorp, Terex Corporation, Greater Twin Cities United Way, and is a member of our Technology Committee. As a proven leader with considerable experience across a variety of industries and three respected international companies, Mr. Wine has a track record of producing outstanding results. He also brings to the Board extensive expertise in mergers and acquisitions in the U.S., Europe and Asia. Mr. Wine’s knowledge of all aspects of the Company’s business as its CEO, combined with his drive for innovation and excellence, position him well to serve as Chairman of the Board and a Board member. Mr. Wine plays a key role in facilitating the communication and the flow of information between management and the directors on a regular basis.

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Directors Continuing in Office — Class II (Term Ending 2017)



	Gary E. Hendrickson	Director since 2011
	Mr. Hendrickson, 58, has been the President and Chief Executive Officer of The Valspar Corporation, a global paints and coatings manufacturer, since June 2011 and was its President and Chief Operating Officer from February 2008 to June 2011. From 2005 to February 2008, Mr. Hendrickson served as the Senior Vice President responsible for several significant business divisions and President, Asia Pacific of The Valspar Corporation and was the Group Vice President, Global Wood Coatings and President, Asia Pacific of The Valspar Corporation from 2004 to 2005. Prior to that, he served as Corporate Vice President and President, Asia Pacific of The Valspar Corporation from 2001 to 2004. He has been a member of the Board of Directors of The Valspar Corporation since 2009, and was named Chairman of the Board in 2012. Mr. Hendrickson serves as the Chair of our Compensation Committee and is also a member of our Corporate Governance and Nominating Committee. Mr. Hendrickson’s experience as president and chief executive officer of a global company provides expertise in corporate leadership and development and execution of business growth strategy. Mr. Hendrickson also brings to the Board significant global experience and knowledge of competitive strategy and international competition. As a past director for other public companies, Mr. Hendrickson also provides significant board experience.



	R. M. (Mark) Schreck	Director since 2000
	Mr. Schreck, 70, is a licensed professional engineer and retired Vice President, Technology, General Electric Company. He recently retired from the University of Louisville Speed School of Engineering, where he served as an academic program director until 2014, and consults through his business, RMS Engineering, LLC. Mr. Schreck also serves as a director of the Kentucky Science and Technology Corporation, a private, nonprofit organization. Mr. Schreck serves as the Chair of our Technology Committee and is also a member of our Audit Committee and our Corporate Governance and Nominating Committee. He has over 35 years of experience in engineering and product development as well as in large scale manufacturing processes. He also brings knowledge of the latest practices in technology and innovation to our boardroom. Mr. Schreck’s expertise in consumer durables design and manufacturing makes him a key contributor to our Board in the product area and as the Chair of the Technology Committee.

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COMPENSATION DISCUSSION AND ANALYSIS

The following discussion and analysis describes our compensation objectives and policies and the compensation awarded to the following executive officers (the “Named Executive Officers”) during 2014:


•	Scott W. Wine, Chairman of the Board and Chief Executive Officer (“CEO”);


•	Michael W. Malone, Vice President – Finance and Chief Financial Officer (“CFO”);


•	Kenneth J. Pucel, Executive Vice President – Global Operations, Engineering and Lean (“EVP”), who began employment with the Company on December 1, 2014;


•	David C. Longren, Vice President – Off-Road Vehicles and ORV Engineering (“VP-ORV”); and


•	Bennett J. Morgan, President and Chief Operating Officer (“COO”).

Executive Summary

In determining compensation for 2014, the Compensation Committee applied the same standard as in prior years in which it considered the economic outlook at the beginning of 2014 coupled with our compensation philosophy of paying for superior performance. In approving compensation payments and awards based on our actual 2014 financial and operating performance, the Compensation Committee took into account a number of key record business results, including the following:


•	For the fifth consecutive year, we achieved record sales, with 2014 sales of $4,479.6 million representing a 19% increase over 2013.


•	Net income from continuing operations per diluted share increased to a record amount for the fifth consecutive year, from $5.40 to $6.65, a 23% increase over 2013.


•	Net income from continuing operations increased to a record amount for the fifth consecutive year, from $381.1 million to $454.0 million, or 19% over 2013.


•	Our operating income as a percentage of sales increased from 15.3% to 16.0% in 2014.

Additionally, because significant portions of our executive compensation program are equity-based, the amount of compensation ultimately realized by our Named Executive Officers is closely linked to the performance of our common stock, which is reflected in the following chart, which compares our annualized total shareholder return to that of the members of our 2014 Peer Group listed on page 23:



	Annualized Total Shareholder Return⁽¹⁾
Percentile	1-Year	3-Year	5-Year
25^th Percentile⁽²⁾	-14%	17%	14%
Median⁽²⁾	2%	24%	21%
75^th Percentile⁽²⁾	12%	30%	27%
Polaris Industries	5%	42%	50%
Polaris Percentile	66%	91%	100%

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⁽¹⁾	1-Year, 3-Year and 5-Year Total Shareholder Return are annualized total shareholder rates of return reflecting the stock price appreciation plus reinvestment of dividends, as of December 31, 2014.


⁽²⁾	These percentiles represent Total Shareholder Return of the members of our 2014 Peer Group.

The Compensation Committee intends that our executive compensation program be market competitive, fairly reflect our performance over time and align the interests of our executive officers with the interests of our shareholders. Consistent with these principles, the Compensation Committee generally sets base salaries for our executive officers at the market median, adjusted for various factors described below, and generally sets annual and long-term incentive compensation

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between the market median and 75th percentile, with the specific target level determined in part based on a review of our financial performance over the previous year as well as individual performance. To assist in determining appropriate target levels, the Compensation Committee reviews year over year financial performance metrics of our peer group, such as: revenue, net income, operating income, operating margin, return on invested capital, and total shareholder return. The incentive compensation amount actually paid upon the completion of a performance period may be higher or lower than the target amount based on actual performance of the Company and the individual over the specified performance period.

Based upon its assessment of our overall strong growth and financial performance, combined with a review of the economic environment, competitive trends, our internal operating plans and internal pay equity considerations, the Compensation Committee made the following decisions regarding compensation for our Named Executive Officers:

Base Salaries


•	Mr. Wine received a 2.6% increase in his annual base salary in 2014 to $975,000, to bring his base salary near the market median and to reward him once again for our exceptional performance during 2013.


•	Messrs. Malone, Longren, and Morgan received 5.6%, 11.9% and 4.3% base salary increases, respectively, generally to maintain or improve their base salary positions with respect to the market median, to reward them for their contributions and exceptional performance during 2013 and, in Mr. Longren's case, to recognize a promotion he received during the year.

Annual Cash Incentives


•	Annual cash incentives to the Named Executive Officers under our Annual Incentive Compensation Plan (the “Senior Executive Plan”) for 2014 paid above the target amount under the plan as adjusted net income per diluted share exceeded target by 5.2%.

Long-Term Incentives


•	Long-term incentives in the form of Performance Restricted Stock Units (PRSUs) granted in 2012 to the Named Executive Officers under the 2012-2014 performance period were earned at the maximum level, reflecting superior performance against goals during a three-year period in which our share price increased 124% from $69.67 to $156.00.


•	We granted performance restricted stock unit awards to our Named Executive Officers in 2014 in which the number of units that may be earned will be determined by the degree to which the Company satisfies specified performance goals over a three-year (2014-2016) performance period.


•	We granted annual stock option awards to the Named Executive Officers as a group consistent with our past practice, taking into consideration our exceptional performance in recent years.

•

In December 2014, Mr. Pucel commenced his employment with us filling a newly formed Executive Vice President of Global Operations, Engineering and Lean position following a stellar 25 year career with a leading medical solutions company. In connection with his commencement of employment, we granted Mr. Pucel a 50,000 share restricted stock award and a 45,000 share stock option award as a hiring incentive and to recognize the value of comparable equity awards he forfeited when he terminated employment with his prior employer in order to join Polaris.


•	In connection with his promotion, we granted Mr. Longren a 15,000 share restricted stock award as an additional retention incentive and to recognize him for his exceptional performance leading our off-road vehicle business.

Shareholder Approval of our Executive Compensation Program

In deciding to structure our executive compensation program for 2015 and 2014 in a manner similar to that utilized during 2013, 2012 and 2011, our Compensation Committee took into account the fact that the holders of over 98% of the shares voted at our 2014, 2013 and 2012 Annual Meetings of shareholders approved, on an advisory basis, the compensation of our Named Executive Officers as disclosed in the Proxy Statement for each of those Annual Meetings. During these years, our compensation philosophy has remained consistent and the design of our compensation programs has not changed in any significant manner.

Objectives of Polaris’ Compensation Program

Our executive compensation philosophy aligns executive compensation decisions with our desired business direction,

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strategy and performance. The primary objectives and priorities of the compensation program for our Named Executive Officers are the following:


•	Pay for Performance: Emphasize variable compensation that is tied to our financial and stock price performance in an effort to generate and reward superior individual and collective performance;


•	Shareholder Alignment: Link executives’ incentive goals with the interests of our shareholders, provide equity-based forms of compensation and establish specific stock ownership guidelines for employees in key management positions throughout our Company;


•	Long-Term Success: Support and reward executives for consistent performance over time and achievement of our long-term strategic goals; and


•	Retention: Attract and retain highly qualified executives whose abilities are critical to our success and competitive advantage.

To achieve these objectives, we have designed an executive compensation program that is significantly weighted towards long-term goals. This approach aids us in the retention of executive officers and assures that the interests of our executive officers and shareholders are aligned. Although the program emphasizes performance-based and equity-based compensation as a percentage of total direct compensation (base salary and annual and long-term incentives), we do not, however, have specific policies governing the allocation of the total direct compensation opportunity among its various components. The following table illustrates the percentage of total direct compensation opportunity for each Named Executive Officer for 2014 represented by each compensation component:



	2014 Compensation Allocation Relative to Total Direct Compensation
Name	Base Salary (%)	Bonus (%)	Annual Senior Executive Plan (%)	Target Performance Restricted Stock Units (%)	Grant Date Fair Value – Stock Options (%)	Time Based Restricted Stock (%)
Scott W. Wine	11	0	15	28	46	0
Michael W. Malone	22	0	20	22	36	0
Kenneth J. Pucel⁽¹⁾	0	8	0	4	16	72
David C. Longren⁽¹⁾	9	6	8	8	13	56
Bennett J. Morgan	17	0	18	24	41	0

____________


(1)	The allocations for Mr. Pucel and Mr. Longren reflect the special equity awards each received during the year and in Mr. Pucel's case, the fact that his employment with us commenced on December 1, 2014.

Executive Compensation Program Components

The components of our Named Executive Officers’ compensation are summarized below. All of the components, individually and collectively, are provided for the general purpose of providing a competitive compensation program that will enable us to meet our objective of attracting and retaining highly qualified executives. The more specific reasons for providing each component and each component’s key features are summarized below.

Base Salary

Purpose:


•	Provide a fixed level of compensation on which executive officers can rely

Key Features:


•	Salary levels set based on an assessment of:


•	Level of responsibility


•	Experience and time in position


•	Individual performance


•	Future potential

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•	Salary level relative to market median


•	Internal pay equity considerations


•	Salary levels are reviewed annually by the Compensation Committee and adjusted as appropriate

Annual Cash Incentive

Purpose:


•	Provide explicit incentives to achieve or exceed annual budgeted earnings per share objectives


•	Link pay to performance


•	Align performance objectives with interests of our shareholders

Key Features:


•	Target incentive opportunity expressed as a percentage of executive officer’s base salary, based on responsibilities of position, expected level of contribution and consideration of market data


•	Maximum potential payouts established for purposes of Section 162(m) based on attainment of specified levels of financial performance


•	Actual payouts may be less than or equal to maximum potential payouts based on degree to which financial performance objectives are achieved and on consideration of other Company, business unit and individual performance factors, and are determined by the Compensation Committee

Long-Term Incentives (Stock Options, Restricted Stock Units and Restricted Stock)

Purpose:


•	Provide executive officers with incentives to achieve multi-year financial and operational objectives


•	Link pay to financial, operational and stock price performance


•	Align executive officers’ interests with the interests of our shareholders

Key Features:


•	Equity based performance awards (PRSUs) are earned based on the degree to which specified financial objectives are attained over a three-year performance period


•	Target incentive opportunity based on responsibilities of position, expected level of contribution and consideration of market data


•	Stock options provide value to executive officers only if stock price increases over the stock option term, generally ten years


•	Restricted stock vests upon attainment of specified multi-year financial objectives and/or completion of a specified period of employment


•	All grants are approved by the Compensation Committee


•	Actual earned shares is determined by the Compensation Committee

Benefits and Perquisites

Purpose:


•	Provide an overall compensation package that is competitive with those offered by companies with whom we compete for executive talent


•	Provide a level of retirement income and promote retirement savings in a tax-efficient manner

Key Features:


•	Participation in 401(k) plan and health and welfare plans on same terms as employees generally


•	Executive officers may participate in a non-qualified supplemental retirement savings plan and will receive an employer match up to 5% on base salary and Senior Executive Plan deferral contributions when their 401(k) participation has been limited by IRS annual contribution rules


•	Perquisites described on page 30

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Post-Employment Compensation (Severance and Change in Control Arrangements)

Purpose:


•	Enable executive officers to evaluate potential transactions focused on shareholder interests


•	Provide continuity of management


•	Provide a bridge to next professional opportunity in the event of an involuntary termination

Key Features:


•	Double-trigger change in control severance arrangements


•	Single-trigger accelerated vesting of equity awards upon change in control


•	Severance for termination by the Company without cause (or for good reason resignation by the CEO)


•	Non-compete and non-solicitation restrictions following termination of employment

Determining Executive Compensation

The Process Followed by the Compensation Committee

The Compensation Committee is responsible for the review and approval of all aspects of our executive compensation program. The Compensation Committee meets in January or February of each year to: (i) establish the annual base salary and annual incentive compensation opportunity for each of the executive officers for the current year; (ii) determine the actual annual incentive compensation to be paid to each executive officer for services provided during the prior year; (iii) establish plan targets and performance measures for the three-year performance period beginning on January 1 of the current year for long-term incentive awards; (iv) determine the number of PRSUs earned, if any, under the long-term incentive program three-year performance period ended on the immediately preceding December 31st; and (v) determine stock option awards and any other equity-based awards to be granted to executive officers.

When making individual compensation decisions for the executive officers, the Compensation Committee takes many factors into account. These factors include subjective and objective considerations of each individual’s skills, performance and level of contribution towards desired business objectives, our overall performance, retention concerns, the individual’s tenure and experience with our Company and in his or her current position, the recommendations of management, the individual’s current and historical compensation, the Compensation Committee’s compensation philosophy, and comparisons to other comparably situated executive officers (both those of the Company and those of the peer group companies). The Compensation Committee’s process utilizes input, analysis and review from a number of sources, including our management, other independent directors of the Board, the Compensation Committee’s independent compensation consultant, and market studies and other comparative compensation information as discussed below.

The Compensation Committee uses this information in conjunction with its own review of the various components of our executive compensation program to determine the base salary and annual and long-term incentive targets and opportunities of the executive officers as a group and individually.

Role of Executive Officers in Determining Compensation

The Compensation Committee meets with our CEO annually to review the performance of our other executive officers. The meeting includes an in-depth review of each executive officer, achievement of individual performance objectives established at the beginning of the year and individual contributions towards achievement of our business goals. A summary of the performance review is presented to the full Board each year.

The Compensation Committee considers input from our CEO, COO, EVP, CFO, and VP–Human Resources ("VP-HR") when developing and selecting metrics and performance objectives for our Senior Executive Plan and long-term incentive program, and evaluating performance against such pre-established metrics and objectives. The Compensation Committee also receives recommendations from our CEO, with the assistance of our VP–HR (for executive officers other than himself), regarding base salary amounts, annual and long-term incentive award amounts and equity-based incentive awards for our other executive officers. In determining the CEO’s compensation, the Compensation Committee considers comparative compensation information and input from its independent compensation consultant and our VP–HR.

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Role of the Compensation Consultant

Towers Watson provides the Compensation Committee with an annual compensation market analysis for the executive officers and directors; makes recommendations on the executive pay programs; reviews, participates and comments on executive and board compensation matters; and provides updates on regulatory changes in compensation related issues and other developments and trends in executive compensation.

Market Competitiveness Review

The compensation consultant and the Compensation Committee periodically review the composition of the peer group of companies about which competitive compensation data is obtained. For purposes of setting 2014 compensation, our peer group of companies was established in July 2013. Both management and the Compensation Committee believe that this peer group of 24 companies (the “Peer Group”) provided a robust statistical set of compensation data to serve as a basis for 2014 compensation decisions. In connection with compensation decisions made for 2014, Towers Watson utilized compensation data from the Towers Watson 2013 General Industry Executive Compensation Database and our Peer Group companies. Fiscal 2013 revenue for the Peer Group ranged from $0.7 billion to $7.5 billion. Our annual sales for 2013 approximated the 46th percentile and our market capitalization on December 31, 2014 approximated the 80th percentile of the Peer Group companies. The companies comprising the Peer Group used to establish the 2014 compensation opportunities of the executive officers are listed below:



Terex Corporation Borg Warner, Inc. Jarden Corporation Mattel, Inc. Harley-Davidson, Inc. SPX Corporation	The Timken Company Flowserve Corporation Pentair, Ltd. Hasbro Inc. The Valspar Corporation Brunswick Corporation	Thor Industries, Inc. Regal-Beloit Corporation Snap-On, Inc. Leggett & Platt, Incorporated Pall Corporation Kennametal Inc.	Donaldson Company, Inc. Gardner Denver, Inc. The Toro Company IDEX Corporation H.B. Fuller Company Arctic Cat, Inc.

The reports furnished by compensation consultants provide the Compensation Committee with market information at the median and 75th percentiles for each executive officer position and pay component, and for total direct compensation, and compare the actual and target compensation provided and intended to be provided to each executive officer to the market amounts, which reflect an averaging of the peer group data and the data contained in the surveys utilized. This market information is an important element reviewed by the Compensation Committee, which generally intends to target base salaries for our executive officers at the market median for comparable positions as set forth in the report. However, for an executive officer who is new in his or her position and job-level, the Compensation Committee’s philosophy is to set a base salary below the market median, and to move it toward the median over an appropriate period of time, assuming performance warrants such increases. The elements of annual and long-term incentive opportunities of total direct compensation are generally set between the market median and the 75^thpercentile for each component, with the specific target level determined in part based on a review of our performance over the previous year. The Compensation Committee can and does, however, use discretion to adjust a component of pay, or total direct compensation generally, above or below these ranges to recognize the specific circumstances of individual executive officers.

2014 Compensation Determinations for the Named Executive Officers

2014 Base Salaries

The Summary Compensation Table on page 33 sets forth the actual base salary earned by each of our Named Executive Officers during 2014. Base salary increases went into effect on April 1 for all employees, including the Named Executive Officers.

The following table summarizes the annualized base salaries as established by the Compensation Committee for Messrs. Wine, Malone and Morgan in January 2014, for Mr. Pucel at the time he was hired and for Mr. Longren following increases in January 2014 from $335,000 to $360,000 and to $375,000 in August 2014, at the time of his promotion.

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Name	Annualized Base Salary 2014 ($)	Percentage Increase (%)
Scott W. Wine	975,000	2.6
Michael W. Malone	475,000	5.6
Kenneth J. Pucel	570,000	N/A
David C. Longren	375,000	11.9
Bennett J. Morgan	600,000	4.3

The base salary increases for Messrs. Wine, Malone, Longren and Morgan bring their respective base salaries close to the market median and were intended to reward them for their role in our performance during 2014. The base salary for Mr. Pucel was established in negotiations in connection with the commencement of his employment with us.

2014 Annual Incentive Compensation

Senior Executive Plan. Our Named Executive Officers and other members of senior management selected by the Compensation Committee are eligible to earn annual cash incentive compensation under our Senior Executive Plan, rather than under our broad-based annual profit sharing plan. Cash incentives to participants in the Senior Executive Plan are payable only if and to the degree we achieve an annual financial performance objective determined by the Compensation Committee.

The Senior Executive Plan for 2014 was structured in a manner similar to that in place for 2013. As in previous years, the Compensation Committee selected earnings from continuing operations per diluted share as the performance metric to be used for purposes of the Senior Executive Plan because: (i) it is a well-understood financial measure that is communicated in the public disclosure of our financial results; (ii) it is the same metric used for purposes of determining payouts under our broad-based annual profit sharing plan; and (iii) the Compensation Committee believes that this financial measure significantly influences our stock price performance and its use effectively aligns the interests of executive officers and shareholders.

Cash incentives to our Named Executive Officers under the Senior Executive Plan are intended to be qualified performance-based compensation for purposes of Section 162(m). For that purpose, the Compensation Committee establishes a formula to determine the maximum amount that may be paid under the Senior Executive Plan to each of our Named Executive Officers. For 2014, the maximum Section 162(m) payout established for Mr. Wine was equal to 250% of base salary, for Messrs. Malone, Longren and Morgan the maximum was equal to 200% of base salary, and was payable if adjusted earnings from continuing operations per diluted share for 2014 equaled or exceeded the threshold amount of $5.12. Mr. Pucel did not participate in the Senior Executive Plan for 2014.

The Compensation Committee has the discretion to pay incentive amounts to the Named Executive Officers under the Senior Executive Plan that are less than the maximum Section 162(m) payouts, and typically expects to exercise that discretion. In determining whether and to what degree to exercise its discretion to approve payments that are less than the maximum Section 162(m) payouts that could be made, the Compensation Committee gives primary consideration to the annual incentive amount that would be payable to the Named Executive Officers based on the application of a performance matrix described below that is utilized to determine payouts to Senior Executive Plan participants other than the Named Executive Officers and to provide guidance regarding payouts to the Named Executive Officers. The Compensation Committee may also consider factors such as: (i) corporate performance against specific strategic priorities established for the year; (ii) corporate performance relative to competitors; (iii) performance of the business unit or department for which the executive is responsible or to which the executive is assigned; and (iv) individual achievement of pre-established objectives and contributions to strengthening our business.

The performance matrix utilized by the Compensation Committee for purposes of the Senior Executive Plan for the 2014 performance period established suggested payout amounts for the Named Executive Officers (expressed as a percentage of base salary for the year in which performance occurs) that correspond to various levels of adjusted earnings from continuing operations per diluted share that we might achieve during the annual performance period. In determining the Company’s 2014 performance for purposes of the performance matrix, the Compensation Committee adjusted for certain unusual events (such as acquisitions, dispositions, restructurings, and legal settlements) which resulted in adjusted earnings from continuing operations per diluted share of $6.73 as compared to $6.65 if applying GAAP standards. The following table summarizes

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the suggested payouts under the performance matrix for 2014 for our Named Executive Officers who participated in the Senior Executive Plan during 2014:



Plan Design Performance Matrix Recommended Payouts (as a % of base salary)
Earnings from Continuing Operations per Diluted Share	Mr. Wine (%)	Mr. Morgan (%)	Mr. Malone (%)	Mr. Longren (%)
40% or more above target (maximum)	250	200	160	143
20% above target	188	150	120	107
10% above target	156	125	100	89
Target	125	100	80	71
10% below target	70	60	50	46
20% below target (threshold)	20	20	20	20
>20% below target	0	0	0	0

As disclosed in the above chart, the incremental changes above and below target disproportionately penalize the failure to achieve target level earnings. For example, if earnings from continuing operations per diluted share is 10% below target then payout for Mr. Wine is reduced by 55 percentage points while Mr. Morgan’s is reduced 40 percentage points; however, if earnings from continuing operations per diluted share is 10% above target, then payouts only increase by 31 percentage points for Mr. Wine and 25 percentage points for Mr. Morgan. To determine the range of earnings from continuing operations per diluted share to be used in 2014 in the performance matrix, the Compensation Committee reviewed the market for the products we sell, the general economic environment and our internal operating plan for the upcoming year. Consistent with our pay-for-performance philosophy, the Compensation Committee sets challenging objectives in order to focus executive officers on delivering a high level of performance. For 2014, the target level of performance as specified in the performance matrix required the Company to achieve adjusted earnings from continuing operations per diluted share of $6.40, an amount 19% greater than the $5.40 amount we achieved in 2013. For 2014, the Company attained adjusted earnings from continuing operations per diluted share of $6.73.

The percentages utilized for any participant for these purposes were based on the respective executive’s level of responsibility, expected level of contribution and the Compensation Committee’s general intention to target annual incentive compensation between the market median and 75th percentile levels for comparable positions when financial targets are achieved.

Our adjusted earnings from continuing operations per diluted share for 2014 of $6.73 per share exceeded the target level performance in the performance matrix by 5.2%. For purposes of assessing whether to pay less than the maximum Section 162(m) payout amounts, the Compensation Committee considered several factors, including the payout amounts suggested by the performance matrix for the Named Executive Officers, our financial performance and total shareholder return relative to our Peer Group, Mr. Wine’s assessment of the individual performance of the other Named Executive Officers, and the Compensation Committee’s own assessment of Mr. Wine’s individual performance. The Compensation Committee approved payouts to Messrs. Wine, Malone, and Morgan slightly below the amounts suggested by the performance matrix in light of some missed production targets. Mr. Longren's payout was adjusted slightly above the amount suggested by the performance matrix in recognition of his year over year exceptional performance in leading our off-road vehicle business.

The following table shows suggested payout as a percentage of base salary derived from the performance matrix, the actual payout as a percentage of base salary, and the the actual amount paid in March 2015 under the Senior Executive Plan for each of our Named Executive Officers:



Name	Suggested Payout as a % of Base Salary	Actual Incentive Payout as % of Base Salary	Actual Incentive Amount Paid ($)
Scott W. Wine	141.1	136.9	1,326,000
Michael W. Malone	90.3	87.9	412,000
Kenneth J. Pucel	N/A	N/A	N/A
David C. Longren	80.0	90.1	324,000
Bennett J. Morgan	112.9	110.0	653,000

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Additional Incentive and Bonus Arrangements. As part of the negotiated compensation arrangements when Mr. Pucel commenced employment with us and in light of his foregoing an annual bonus for 2014 from his former employer and maintaining a similar bonus structure as other executives, we agreed to pay him a lump sum signing bonus of $250,000 at his start date of December 1, 2014, and to pay him a guaranteed bonus of $570,000 for 2014 at the same time other executives would be paid their annual incentives under the Senior Executive Plan. During 2014, the Compensation Committee also approved a supplemental incentive bonus arrangement for Mr. Longren under which he could have received as much as $400,000 if the off-road vehicle business achieved aggressive operating profit goals for 2014 in excess of budgeted levels. Based on the 2014 operating profit performance of the off-road vehicle business, Mr. Longren was paid $250,000 at the time payments were made under the Senior Executive Plan.

2014 Long-Term Compensation

Overview. Long-term compensation awarded by the Compensation Committee in recent years has consisted of annual awards of stock options and performance-based restricted stock units (PRSUs), supplemented by awards of restricted stock from time to time on a selective and limited basis, generally in connection with promotions, individual outstanding performance, hiring of new executives and retention. All equity-based awards are granted under the Omnibus Plan.

The Compensation Committee has chosen to provide a mix of stock options and PRSUs for its long term incentive equity awards because it believes such a combination effectively aligns the financial interest of our executive officers with those of our shareholders. Stock options provide value only to the extent that the price of our common stock has appreciated over the option term, and PRSUs may be earned and settled in shares of our common stock or, if elected by the executive officer, deferred into the Supplemental Retirement/Savings Plan ("SERP"), but only if and to the extent that we achieve over a three-year performance period financial performance objectives that are believed to correlate well with stock price performance. The Compensation Committee provides a blended ratio between the types of awards with approximately 63% of the aggregate grant date fair value allocated to options and 37% to PRSUs (based on assumed target performance). The aggregate grant date fair value of the 2014 annual option and PRSU awards to Messrs. Wine and Morgan was intended to be positioned above the 75^th percentile in recognition of their leadership roles during our year over year exceptional performance as well as a retention incentive. The aggregate grant date fair value of the awards granted to Messrs. Malone and Longren was intended to be positioned near the market 75^th percentile, also in recognition of our year over year exceptional performance. Mr. Pucel's 2014 PRSU award was prorated based on his start date of December 1, 2014, and his option award reflected the negotiation of his compensation arrangements, including his forfeiting unvested options granted by his previous employer.



2014 Long Term Incentive Compensation Allocation
Name	Grant Date Fair Value of PRSUs at Target (%)	Grant Date Fair Value - Stock Options (%)
Scott W. Wine	37	63
Michael W. Malone	38	62
Kenneth J. Pucel	20	80
David C. Longren	38	62
Bennett J. Morgan	37	63

Performance Restricted Stock Unit Awards (PRSUs). PRSUs granted in 2014 may be earned during the course of the 2014-2016 performance period based on level of achievement against the performance objectives specified at the beginning of the performance period. In determining the performance objectives for the 2014 PRSU awards, the Compensation Committee evaluated the external economic environment, the anticipated demand for the products we sell and our long-term business plan. All earned PRSUs will either vest and be paid out in the form of one share for each earned and vested PRSU or, if elected by the executive officer, the receipt of the shares may be deferred such that each resulting deferred stock unit represents the right to receive one share of common stock upon the settlement date elected by the Named Executive Officer under the SERP. Amounts deemed invested in deferred stock units in the SERP may be transferred into an alternative investment account in the SERP after a period of six months and one day.

Because the compensation associated with PRSU awards is intended to be deductible under Section 162(m), the maximum number of PRSUs that may be earned over the 2014-2016 performance period by each Named Executive Officer was specified in the applicable award agreement and had a grant date fair value equal to 200% of the target level for the 2014

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awards, and the applicable performance goal will be our achievement of a 12% return on invested capital for the last year of that performance period. Because the number of PRSUs specified in each award agreement represents the maximum number that may be earned, the Compensation Committee has the discretion to determine that a lesser number of PRSUs shall be earned and vested, and expects to determine whether and to what degree a lesser number of PRSUs will be earned and vested based on the degree to which goals involving our sales, operating income as a percentage of sales, and net income from continuing operations for the last year of the 2014-2016 performance period are achieved.

For PRSU awards made during 2014, the following table summarizes the recommended PRSU threshold, target and maximum payouts for each Named Executive Officer:



PRSU Performance Period 2014-2016
Name	Threshold Stock Units (#)	Target Stock Units (#)	Maximum Stock Units (#)
Scott W. Wine	2,375	19,000	38,000
Michael W. Malone	453	3,621	7,241
Kenneth J. Pucel	354	2,835	5,670
David C. Longren	313	2,507	5,013
Bennett J. Morgan	870	6,963	13,925

For 2014 PRSU awards, return on invested capital is calculated by dividing the Company’s adjusted net income from continuing operations by the Company’s adjusted average total assets minus current liabilities. In establishing this metric, the Compensation Committee specified that adjustments will be made if certain unusual events were to occur during the performance period (such as acquisitions, dispositions, restructurings and legal settlements). If this performance goal is satisfied, the Compensation Committee expects to exercise its discretion to adjust downward the number of earned PRSUs based on the degree to which the Company has achieved additional performance goals that are a function of the level of Polaris’ 2016 sales, net income from continuing operations and operating income expressed as a percentage of sales. These additional performance goals established by the Compensation Committee at the beginning of 2014 for the final year of the 2014-2016 performance period for the purpose of calculating recommended payouts are set forth in the following table, and reflect substantial growth in each financial measure as compared to 2013 sales of $3,777.1 million, net income from continuing operations of $381.1 million and operating income as a percentage of sales of 15.3%. The relative weightings of the various additional performance goals to be used for purposes of calculating recommended payout amounts are also included in the table:



	2016 Net Income from Continuing Operations ($ millions)	Percent of Target Earned (%)	2016 Operating Income as a Percent of Sales (%)	Percent of Target Earned (%)	2016 Sales ($ millions)	Percent of Target Earned (%)
Threshold⁽¹⁾	440	25.0	15.3	12.5	4,350	12.5
Target⁽¹⁾	534	50.0	16.3	25.0	5,000	25.0
Maximum⁽¹⁾	656	100.0	17.3	50.0	5,725	50.0

____________

⁽¹⁾ Percentage earned for performance between any of the specified levels will be determined on a pro rata basis.

As an example of how Mr. Wine’s PRSUs will be determined to be earned and vested, assume that the 2016 return on invested capital is greater than 12%, that net income from continuing operations in 2016 is $534 million, operating income as a percentage of sales in 2016 is 15.3% and sales in 2016 is $5,000 million. The number of earned PRSUs that would be eligible to vest and be settled in an equal number of shares (or, if elected, deferred into the SERP) based on satisfaction of the return on invested capital performance goal is 38,000. The Compensation Committee would then expect to exercise its discretion to adjust that number downward based on the Company’s performance against the additional financial goals, and that adjusted number of earned and vested PRSUs would be determined as follows:

19,000 (# of target stock units) x (50% + 12.5% + 25%) = 16,625 units

PRSUs earned and vested or deferred by the Named Executive Officers for the 2012-2014 performance period are summarized in the Option Exercises and Stock Vested in 2014 table on page 40.

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2014 Stock Option Awards. The awards for Messrs. Wine, Malone, Longren and Morgan vest in two equal installments on the second and fourth anniversaries of the grant date and have an exercise price of $125.67 which is the fair market value of a share of our common stock on the date of the grant. Mr. Pucel's award also vests in two equal installments on the second and fourth anniversaries of the grant date and have an exercise price of $154.31, which is the fair market value of a share of our common stock on the date of the grant. The number of shares subject to each Named Executive Officer’s 2014 stock option award was as follows:



Named Executive Officer	Number of Shares Subject to Stock Option
Scott W. Wine	101,000
Michael W. Malone	19,000
Kenneth J. Pucel	45,000
David C. Longren	13,000
Bennett J. Morgan	37,000

Our stock option grant practices are designed to ensure that stock option awards approved by the Compensation Committee at its January or February meeting will have an effective grant date occurring after our release of year-end financial results. We do not engage in the backdating, cancellation or re-pricing of stock options and have not engaged in such practices in the past. The grant date for Mr. Pucel's option was his December 1, 2014 commencement of employment date.

2014 Restricted Stock Awards. Mr. Pucel was awarded 50,000 shares of time-vested restricted stock on December 1, 2014 as an incentive to join the company and in consideration of his forfeiting unvested restricted stock awards granted by his prior employer. Assuming continuous employment, 20,000, 10,000 and 20,000 shares will vest on December 1, 2015, 2016 and 2017, respectively.

Additionally, Mr. Longren was awarded 15,000 shares of time-vested restricted stock effective August 1, 2014 to recognize his exceptional performance as VP-ORV and as a retention incentive. Assuming continuous employment, 7,500 shares will vest on August 1, 2017 and the remaining 7,500 shares will vest on August 1, 2018.

Overview of 2015 Executive Compensation Program

In January 2015, our Compensation Committee determined the components, design and performance objectives of our 2015 executive compensation program.

2015 Base Salaries

The Compensation Committee approved the following annualized base salaries for the Named Executive Officers for 2015, which adjustments shall become effective April 1, 2015:



Name	Annualized Base Salary 2015 ($)	Percentage Increase (%)
Scott W. Wine	985,000	1.0
Michael W. Malone	490,000	3.2
Kenneth J. Pucel	600,000	5.3
David C. Longren	400,000	6.7
Bennett J. Morgan	630,000	5.0

2015 Annual Incentive Compensation

The Senior Executive Plan for 2015 has been structured in a manner generally similar to that in place for 2014 and prior years. Earnings from continuing operations per diluted share was again designated as the financial metric to be used for purposes of the performance matrix and establishing the maximum Section 162(m) payout amounts, and the earnings performance to be achieved for a target-level payout in the performance matrix was set at a level appreciably higher than our actual 2014 performance. Threshold level payouts of 20% of base salary under the performance matrix were again set at 80% of target-level earnings performance, however, a maximum payout level of 200% of target-level payouts was

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established at 121% of target-level earnings performance to more reasonably motivate our Named Executive Officers to achieve stretch performance levels. For purposes of maintaining deductibility of annual incentive compensation under Section 162(m), the maximum Section 162(m) payout amounts for the Named Executive Officers were set at 200% (250% for Mr. Wine) of base salary if a specified level of earnings from continuing operations per diluted share objective were achieved. As in the past, the performance matrix is expected to be used by the Compensation Committee to guide the exercise of its discretion as to whether and to what degree it will reduce annual incentive payouts below the level of the maximum Section 162(m) payout amounts. In determining the Company’s performance for purposes of the performance matrix and the maximum Section 162(m) payout amounts, the Compensation Committee will adjust to take into account certain unusual events such as acquisitions, dispositions, restructurings, and legal settlements.

2015 Long-Term Compensation

Performance Restricted Stock Units. The 2015 long-term incentive awards have been structured in a manner similar to that in place for 2014. For the 2015-2017 performance period, the Compensation Committee has granted PRSUs, some or all of which may be earned at the end of the performance period and will either be paid out in the form of one share for each earned and vested PRSU or, if elected by the executive officer, the receipt of shares may be deferred into the SERP. For PRSU awards made during 2015, the following table summarizes the recommended PRSU threshold, target and maximum payouts for each Named Executive Officer:



PRSU Performance Period 2015-2017
Name	Threshold Stock Units (#)	Target Stock Units (#)	Maximum Stock Units (#)
Scott W. Wine	2,472	19,778	39,556
Michael W. Malone	443	3,546	7,092
Kenneth J. Pucel	750	6,002	12,004
David C. Longren	341	2,728	5,456
Bennett J. Morgan	853	6,820	13,640

2015 Stock Option Awards. The Compensation Committee also awarded stock options to the Named Executive Officers effective January 28, 2015. The stock options granted have a ten-year life, vest in two equal installments on the second and fourth anniversaries of the date of grant, and have an exercise price of $146.63 per share, the fair market value of a share of our common stock on the date of the grant. The number of shares subject to the stock options granted was as follows:



Named Executive Officer	2015 Stock Options Granted
Scott W. Wine	85,000
Michael W. Malone	15,000
Kenneth J. Pucel	26,000
David C. Longren	12,000
Bennett J. Morgan	29,000

Mr. Morgan was also granted a 15,000 share performance based restricted stock award on January 28, 2015. Assuming continued employment, 50% of the shares will vest on December 31, 2016 if return on invested capital equals or exceeds 12% for fiscal year 2016 and 50% of the shares will vest on December 31, 2017 if return on invested capital equals or exceeds 12% for fiscal 2017.

Other Executive Compensation Arrangements, Policies and Practices

Health, Welfare and Retirement Benefits

We provide a full range of benefits to our Named Executive Officers, including the standard medical, dental and disability benefits generally available to our employees. We also sponsor a qualified 401(k) Plan in which our Named Executive Officers may participate on the same general basis as our employees, and which allows participants to make plan contributions on a pre-tax basis and to which we make Company-matching contributions dollar-for-dollar with employee contributions up to 5% of covered compensation.

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Because the application of the annual compensation limit under Section 401(a)(17) of the Internal Revenue Code ("Code") prevents our senior executives from fully contributing to the 401(k) Plan and receiving the full Company match, we have adopted a SERP intended to restore contributions lost because of the application of this annual compensation limit. The SERP provides executives who participate in the 401(k) Plan, including the Named Executive Officers, with the opportunity to defer up to net 100% of their base salary and up to 100% of amounts payable under the Senior Executive Plan, PRSU awards and the cash-based Long-Term Incentive Plan (under which awards are not currently being made) by making contributions to the SERP. Typically, base salary and Senior Executive Plan deferral contributions are matched by the Company as if they had been made under the 401(k) Plan on a dollar-for-dollar basis up to 5% of covered compensation. The SERP is provided to assist executives in accumulating funds on a tax-advantaged basis for retirement and is consistent with observed competitive practices of similarly situated companies.

We do not maintain a defined benefit pension plan or a defined benefit supplemental pension plan for our executive officers.

Perquisites

We provide a limited number of perquisites and personal benefits to our executive officers, generally in an effort to remain competitive with similarly situated companies. These perquisites and personal benefits consist of:


•	Reimbursement of club entrance/initiation fees and monthly club dues;


•	Reimbursement of tax, estate and financial planning fees;


•	Supplemental family medical and dental coverage up to $50,000 a year through the Exec-U-Care program, which covers annual expenses not covered under the basic medical and dental benefit plans that are available to Company employees generally, and reimbursement of the cost of annual physicals at the Mayo Clinic for each executive officer and spouse; and


•	Temporary use of Polaris products to encourage a first-hand understanding of the riding experience of our customers and to provide executive officers with an opportunity to evaluate product design and efficiency, along with related parts, garments and accessories.

Severance Arrangements

We have entered into severance arrangements with the executive officers, which provide for certain benefits in the event an executive officer is involuntarily terminated without cause, terminated in connection with a change in control or, in the case of our CEO, if he terminates his employment for good reason. The severance arrangements with our CEO and EVP were established as part of the negotiations of their initial employment terms. The severance arrangements are intended to:


•	Allow executive officers to weigh potential transactions focused on shareholder interests and not personal interests;


•	Provide executive officers with a measure of security in the event of an actual or potential change in corporate ownership or control; and


•	Provide executive officers with a bridge to their next professional opportunity.

The severance arrangements are described in more detail beginning on page 42 under the caption entitled “Potential Payments Upon Termination or Change-in-Control.”

Clawback Policy

Under our “clawback” policy, the Company may require reimbursement or cancellation of cash-based or equity-based incentive compensation awarded to any of our executive officers subject to Section 16 of the Securities Exchange Act if we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement, and if the award or payout was predicated upon the achievement of financial results that were restated. The policy applies to awards granted after November 1, 2010 and calls for the reimbursement or cancellation of the amount of the award or payout, net of taxes, in excess of what would have been granted or paid based on the actual results unless the Compensation Committee determines in its discretion that a lesser amount to be reimbursed or canceled is appropriate under the circumstances.

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Deductibility of Compensation

Section 162(m) generally does not allow a publicly held company to take a tax deduction for compensation of more than $1 million paid in any taxable year to certain “covered employees” unless such compensation is considered “performance-based.” For purposes of Section 162(m), the group of “covered employees” consists of a company’s chief executive officer and its three other most highly compensated executive officers, other than the chief financial officer. The Compensation Committee generally intends to comply with the requirements of Section 162(m) with respect to compensation in excess of $1 million paid under the Senior Executive Plan, the Omnibus Plan and any other incentive arrangement in order to qualify such compensation as “performance-based” and therefore deductible under Section 162(m). However, the Compensation Committee has and may elect to provide compensation that is not deductible under Section 162(m) when necessary to achieve its compensation objectives.

Stock Ownership Guidelines

The Compensation Committee believes that an important means of aligning the interests of our executive officers, including our Named Executive Officers, with the interests of our shareholders is to ensure that they own significant amounts of our common stock. On January 29, 2014, the Compensation Committee adopted new stock ownership guidelines and changed from a requirement to hold a fixed number of shares to a more common requirement to hold shares with a value equal to or exceeding a multiple of salary as set forth in the table below. Each executive officer is expected to satisfy the stock ownership guidelines within four years following the date he or she becomes an executive officer. Executive officers are prohibited from entering into hedging transactions and are subject to restrictions on pledging Company stock as discussed on page 8.

The following chart sets forth the stock ownership of each of our Named Executive Officers relative to the stock ownership guidelines:



Name	Stock Ownership Guidelines (as a multiple of base salary)	Stock Ownership Guideline Met?
Scott W. Wine	7x	Yes
Michael W. Malone	4x	Yes
Kenneth J. Pucel	4x	Yes
David C. Longren	2x	Yes
Bennett J. Morgan	4x	Yes

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COMPENSATION COMMITTEE REPORT

The Compensation Committee assists the Board in establishing a philosophy and policies regarding executive and director compensation, provides oversight of the administration of our director and executive compensation programs and administers our equity-based compensation plans, reviews the compensation of directors, Named Executive Officers and senior management, and prepares any report on executive compensation required by the rules and regulations of the SEC or other regulatory body, including this Compensation Committee Report.

In performing its oversight responsibilities, the Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on the review and discussions, we have recommended to the Board that the Compensation Discussion and Analysis be included in the Proxy Statement for the 2015 Annual Meeting of Shareholders.

COMPENSATION COMMITTEE

Gary E. Hendrickson, Chair

Annette K. Clayton

Brian C. Cornell

Compensation Risk Assessment

Management conducted a risk assessment of our employee compensation policies and practices, including those that apply to our executive officers. Management reviewed our compensation plans, program design and existing practices as well as global and local compensation policies, programs and practices applicable to all employees. Management then analyzed the likelihood and magnitude of potential risks, focusing on whether any of our compensation policies and practices varied significantly from our overall risk and reward structure, whether any such policies and practices incentivized individuals to take risks that were inconsistent with our goals, and whether any such policies and practices have resulted in establishing an inappropriate balance between short-term and long-term incentive arrangements.

Management discussed the findings of the risk assessment with the Compensation Committee. Based on the assessment, we have concluded that our compensation policies and practices are aligned with the interests of shareholders, appropriately reward pay for performance and do not create risks that are reasonably likely to have a material adverse effect on the Company.

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EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table shows, for the fiscal years ended December 31, 2012, 2013, and 2014, the annual compensation paid to or earned by our Named Executive Officers.



Name and Principal Position	Year	Salary ($)(1)	Bonus ($)(2)	Stock Awards ($)(3)	Option Awards ($)(4)	Non-Equity Incentive Plan Compensation ($)(5)	All Other Compensation ($)(6)	Total($)
Scott W. Wine	2014	968,654	0	2,387,730	3,999,085	1,326,000	132,235	8,813,704
Chairman and	2013	941,250	0	1,143,734	4,933,032	1,393,050	153,880	8,564,946
Chief Executive Officer	2012	915,000	0	999,974	4,166,388	1,546,350	158,676	7,786,388
(Principal Executive Officer)
Michael W. Malone	2014	468,654	0	454,988	752,303	412,000	63,624	2,151,569
Vice President–Finance and	2013	443,750	0	340,008	907,920	417,125	64,945	2,173,748
Chief Financial Officer	2012	414,615	0	316,023	879,571	500,000	73,970	2,184,179
(Principal Financial Officer)
Kenneth J. Pucel(7)	2014	43,846	820,000	8,152,969	1,767,258	0	2,379	10,786,452
Executive Vice President–
Global Operations,
Engineering and Lean
David C. Longren(7)	2014	359,769	0	2,517,592	514,734	574,000	49,530	4,015,625
Vice President–Off-Road
Vehicles and ORV
Engineering
Bennett J. Morgan	2014	593,654	0	874,977	1,465,011	653,000	91,497	3,678,139
President and Chief	2013	562,500	0	525,011	1,815,840	665,000	95,922	3,664,273
Operating Officer	2012	507,500	0	460,031	1,735,995	800,000	98,167	3,601,693


(1)	Amounts shown in this column include elective contributions under the 401(k) Plan and SERP for Messrs. Wine, Malone, Longren and Morgan in the amount of $491,635, $32,433, $101,796, and $37,644, respectively.


(2)	The amount shown in this column for Mr. Pucel represents a signing bonus of $250,000 paid upon commencement of his employment on December 1, 2014, and a guaranteed annual incentive for 2014 of $570,000 paid in early 2015.

(3)

Amounts shown in this column represent the aggregate grant date fair value of PRSUs granted to each of our Named Executive Officers, and the grant date fair value of restricted stock awards granted to certain Named Executive Officers, in the fiscal years indicated. The calculation of the grant date fair value amounts for PRSU awards assumes target-level performance against the specified PRSU financial goals and is calculated in accordance with FASB ASC Topic 718 based on the closing market price of our common stock on the applicable measurement date for the award. If instead the amounts were calculated assuming maximum-level performance, the grant date fair value of the 2014 PRSU awards would have been as follows: for Mr. Wine, $4,775,460; for Mr. Malone, $909,976; for Mr. Pucel; $874,938; for Mr. Longren; $629,984, and for Mr. Morgan; $1,749,955. The actual value ultimately realized by our Named Executive Officers with respect to these PRSU will depend on our actual performance against the specified financial goals and the market value of our common stock on the last day of the performance period, and may differ substantially from the grant date fair values shown. The time-based restricted stock awards reported in this column reflect the aggregate grant date fair value of the restricted shares granted in 2014 to Messrs. Pucel and Longren computed in accordance with FASB ASC Topic 718, based on the closing market price of our common stock on the grant date. Additional information regarding the 2014 stock awards is set forth below under the caption “Grants of Plan-Based Awards in 2014” on page 35.

(4)

Amounts shown in this column represent the grant date fair value of stock option awards granted to each of our Named Executive Officers in the fiscal years indicated. Grant date fair value is calculated in accordance with the requirements of FASB ASC Topic 718 using the Black-Scholes method. The assumptions used in determining the grant date fair value of the awards are set forth in Note 2 to the financial statements contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

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(5)	Amounts shown in this column represent payments under the Senior Executive Plan, and, in 2014, under a supplemental incentive arrangement for Mr. Longren, and are reported for the year in which the related services were performed and the incentive amounts earned. Additional information about these payments is set forth under the caption “2014 Annual Incentive Compensation” on page 24.

(6)

Amounts shown in this column include Company matching contributions to the 401(k) Plan and SERP, life insurance premiums and the aggregate incremental cost to us of the following perquisites: club dues, financial planning and tax preparation services, Exec-U-Care supplemental health and dental coverage, annual physicals, the use of Company products and the receipt of related parts, garments and accessories. These perquisites are described in further detail under the caption “Perquisites” on page 30. Additional detail regarding the components of the amounts shown for 2014 for each of our Named Executive Officers is provided below in the “All Other Compensation Table.”


(7)	Messrs. Pucel and Longren first became Named Executive Officers in 2014.

All Other Compensation Table

The following table provides additional information on the amounts reported in the All Other Compensation column of the Summary Compensation Table for 2014.



	2014 Amount of All Other Compensation ($)
	S. Wine		M. Malone		K. Pucel		D. Longren		B. Morgan
Financial Planning (Reimbursement)	$	0	$	10,000	$	0	$	10,000	$	12,250
Club Monthly Dues (Reimbursement)	8,846		191		0		1,069		8,525
Life Insurance Policy Premiums	546		546		546		546		546
Exec-U-Care Premiums	3,961		6,821		0		2,802		4,734
Annual Physicals (Executive and Spouse)	1,427		2,619		0		0		0
401(k) Plan Matching Contributions by Company	13,000		13,000		0		13,000		13,000
SERP Matching Contributions by Company	103,258		30,424		0		17,593		48,827
Use of Polaris Products⁽¹⁾	0		0		0		0		0
Polaris Parts, Garments and Accessories	1,197		23		1,833		4,520		3,615
Total	$	132,235	$	63,624	$	2,379	$	49,530	$	91,497

____________

(1)

Each year, the CEO is provided with the use of 16 Polaris products, the President and COO and EVP are provided with the use of up to 12 Polaris products and other executive officers are provided with use of up to eight Polaris products. The products used by our executive officers are either returned to the Company or purchased at a price greater than cost at the end of a defined usage period. We sell the returned products to dealers at an amount greater than the cost of such products to the Company. As a result, there is no aggregate incremental cost to the Company associated with such use.

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GRANTS OF PLAN-BASED AWARDS IN 2014

The following table summarizes each grant of an equity or non-equity incentive award during 2014 to each of our Named Executive Officers.



			Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1)			Estimated Future Payouts Under Equity Incentive Plan Awards(2)			All Other Stock Awards: Number of Shares of Stock or Units (#)	All Other Option Awards: Number of Securities Under-lying Options (#)	Exercise or Base Price of Option Awards ($/Sh)	Grant Date Fair Value of Stock and Option Awards ($)(3)
Name	Grant Date	Approve Date	Threshold ($)	Target ($)	Max ($)	Threshold (#)	Target (#)	Max (#)
Name	Grant Date	Approve Date	Threshold ($)	Target ($)	Max ($)	Threshold (#)	Target (#)	Max (#)
Scott W.	1/29/14	1/29/14	193,731	1,210,817	2,421,635
Wine	1/29/14	1/29/14				2,375	19,000	38,000				2,387,730
	1/29/14	1/29/14								101,000	125.67	3,999,085
Michael W.	1/29/14	1/29/14	93,731	374,923	937,308
Malone	1/29/14	1/29/14				453	3,621	7,241				454,988
	1/29/14	1/29/14								19,000	125.67	752,303
Kenneth J.	12/1/14	10/22/14				354	2,835	5,670				437,469
Pucel	12/1/14	10/22/14							50,000			7,715,500
	12/1/14	10/22/14								45,000	154.31	1,767,258
David C.	1/29/14	1/29/14	71,954	266,229	719,539
Longren	1/29/14	1/29/14				313	2,507	5,013				314,992
	8/1/14	7/23/14							15,000			2,202,600
	1/29/14	1/29/14								13,000	125.67	514,734
Bennett J.	1/29/14	1/29/14	118,731	593,654	1,187,308
Morgan	1/29/14	1/29/14				870	6,963	13,925				874,977
	1/29/14	1/29/14								37,000	125.67	1,465,011

(1)

Amounts in these columns represent potential payouts under the Senior Executive Plan, which is our annual cash incentive plan, based on the achievement of specified financial and other goals. The threshold payouts are 20% of base salary and the target payouts range from 74% to 125% of base salary among our Named Executive Officers. The maximum payouts represent the maximum Section 162(m) payout amounts, which for Mr. Wine is 250% of base salary, and for Messrs. Malone, Longren, and Morgan is 200% of base salary. See “2014 Annual Incentive Compensation” on page 24. These estimated payout amounts are based on each Named Executive Officer’s salary for the year in which performance occurs. The actual amount earned in 2014 by each Named Executive Officer (and paid in March 2015) under the Senior Executive Plan is shown in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. Mr. Pucel did not participate in the 2014 Senior Executive Plan.

(2)

Amounts in these columns for each Named Executive Officer represent the number of PRSUs that may be earned and vested or deferred based on the degree to which the financial goals are attained. The threshold number of units that may be earned is 12.5% of target, and the maximum Section 162(m) number of units that may be earned is 200% of target. The target number of units for each individual is based on a specified dollar amount for that Named Executive Officer converted into stock units at a price of $125.67 (Mr. Pucel's award will convert into stock units at a price of $154.31), the closing market price of a share of common stock at the applicable measurement date for the award.

(3)

Each amount reported in this column represents the grant date fair value of the applicable award. The calculation of the grant date fair value of the PRSU awards discussed in note (2) is based upon our assessment of the most probable outcome of the respective performance conditions. The actual amounts that will be received by our Named Executive Officers with respect to these performance-based awards will be determined at the end of the performance period based upon our actual performance, which may differ from the performance that was deemed probable at the date of grant.

Additional Information About Plans and Agreements Affecting Reported Compensation

The following additional information is provided regarding various plans and agreements that affect the compensation information disclosed in the Summary Compensation Table and the Grants of Plan-Based Awards in 2014 table above.

Offer Letters

We entered into an offer letter agreement with Mr. Pucel in connection with his hiring that provides for an annual base

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salary, subject to annual review, and generally provides for ongoing participation in incentive compensation, equity-based compensation and benefit plans. Mr. Pucel's letter agreement also provided for payment of a signing bonus that would be repayable on pro rata basis if he were to resign within twenty-four months.

Incentive Plan Awards

Senior Executive Plan. Annual cash incentive compensation awards are made to each of our Named Executive Officers and other eligible employees pursuant to the shareholder-approved Senior Executive Plan. The Senior Executive Plan provides for the payment of awards to participants selected by the Compensation Committee to the degree we, or any subsidiary, business unit or geographic region thereof, achieves performance objectives specified by the Compensation Committee at the beginning of a calendar year performance period. The performance objectives are to be based on one or more shareholder-approved business criteria specified in the Senior Executive Plan. In establishing our performance goals, the Compensation Committee provides that adjustments will be made for specified unusual events such as acquisitions, dispositions, restructurings and legal settlements. Although all awards are payable in cash, they may be denominated in cash and/or in units with a value equivalent to a share of our common stock. The maximum amount payable to any participant under the Senior Executive Plan for any one-year performance period is $2,500,000. The Senior Executive Plan is to be administered by the Compensation Committee in a manner intended to qualify awards as “performance-based compensation” for purposes of Section 162(m).

Additional information about Senior Incentive Plan awards made in 2014 to our Named Executive Officers, including the performance objectives established by the Compensation Committee and the determination of amounts to be paid, is provided under the caption “2014 Annual Incentive Compensation” on page 24. The estimated threshold, target and maximum payments under the Senior Executive Plan for 2014 are reflected in the “Estimated Potential Payouts Under Non-Equity Incentive Plan Awards” columns in the Grants of Plan-Based Awards in 2014 table above. The amounts actually paid in connection with Senior Executive Plan awards during each of the years 2012-2014 are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 33.

Equity-Based Awards

Performance Restricted Stock Units. PRSU awards are made to each of our Named Executive Officers and other eligible employees pursuant to the shareholder-approved Omnibus Plan. Performance-based awards under the Omnibus Plan are to be administered by the Compensation Committee in a manner intended to qualify awards as “performance-based compensation” for purposes of Section 162(m). The PRSU awards to participants selected by the Compensation Committee will be earned to the degree that we, or any subsidiary, business unit or geographic region thereof, achieve performance objectives specified by the Compensation Committee at the beginning of a three consecutive calendar year performance period. The performance objectives are to be based on one or more shareholder-approved business criteria specified in the Omnibus Plan. In establishing our performance goals, the Compensation Committee provides that adjustments will be made for specified unusual events such as acquisitions, dispositions, restructurings and legal settlements.

Each PRSU will be paid out in the form of one share for each PRSU determined by the Compensation Committee to have been earned and vested over the applicable performance period. If elected by the Named Executive Officer, the receipt of a share in payment of each earned unit may be deferred into the SERP such that each resulting deferred stock unit represents the right to receive one share of common stock upon the settlement date elected by the Named Executive Officer under the SERP. Amounts deemed invested in deferred stock units in the SERP may be transferred into an alternative investment account in the SERP after a period of six months and one day. Additional information about PRSU awards made in 2014 to our Named Executive Officers for the 2014-2016 performance period, including the performance objectives established by the Compensation Committee, is provided under the caption “2014 Long-Term Compensation” on page 26. The estimated threshold, target and maximum awards for the 2014-2016 performance period and the grant date fair value of such awards are shown in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns in the Grants of Plan-Based Awards in 2014 table above.

PRSU awards granted in 2013 for the 2013-2015 performance period, were structured in the same manner as PRSU awards granted in 2014, with the maximum number of PRSUs subject to each award capable of being earned if we achieve a 12% return on invested capital for the last year of that performance period. The Compensation Committee does, however, have the discretion to determine that a lesser number of PRSUs shall be earned, and expects to exercise that discretion based

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on the degree to which goals involving our sales, operating income as a percentage of sales, and net income from continuing operations for the last year of the 2013-2015 performance period are achieved, as summarized in the following table:



	2015 Net Income from Continuing Operations ($ millions)	Percent of Target Earned (%)	2015 Operating Profit as a Percent of Sales (%)	Percent of Target Earned (%)	2015 Revenue ($ millions)	Percent of Target Earned (%)
Threshold⁽¹⁾	362	25.0	15.0	12.5	3,500	12.5
Target⁽¹⁾	438	50.0	16.0	25.0	3,925	25.0
Maximum⁽¹⁾	540	100.0	17.0	50.0	4,875	50.0

____________

⁽¹⁾ Percentage earned for performance between any of the specified levels will be determined on a pro rata basis.

For PRSU awards granted in 2012 for the 2012-2014 performance period, we achieved 42% return on invested capital, well above the 12% threshold required to earn the maximum number of PRSUs subject to the awards. We also achieved performance in excess of the maximum level of performance specified for the revenue, operating income as a percentage of sales, and net income from continuing operations goals set forth in the table below that had been established to guide the Compensation Committee’s discretion as to whether or not a lesser number of PRSUs would be considered earned and vested. As a result of this performance, the Compensation Committee determined that the maximum number of PRSU awards would be earned for the 2012-2014 performance period, and the amounts earned by the Named Executive Officers are summarized in the Option Exercises and Stock Vested in 2014 table on page 40.



	2014 Net Income from Continuing Operations ($ millions)	Percent of Target Earned (%)	2014 Operating Profit as a Percent of Sales (%)	Percent of Target Earned (%)	2014 Revenue ($ millions)	Percent of Target Earned (%)
Threshold⁽¹⁾	263	25.0	13.5	12.5	2,900	12.5
Target⁽¹⁾	320	50.0	14.5	25.0	3,275	25.0
Maximum⁽¹⁾	393	100.0	15.5	50.0	4,050	50.0

____________

⁽¹⁾ Percentage earned for performance between any of the specified levels will be determined on a pro rata basis.

Stock Options. Stock option awards granted under the Omnibus Plan during 2014 to employees of our Company, including our Named Executive Officers, have an exercise price equal to 100% of the fair market value of a share of our common stock on the date of grant. Each stock option granted to Messrs. Wine, Malone, Pucel, Longren and Morgan in 2014 vests and becomes exercisable as to 50% of the shares subject to the option on each of the second and fourth anniversaries of the date of grant and has a 10-year term. The vested portion of an option may be exercised while the participant is employed by the Company, and ordinarily for 30 days (36 months in the case of retirement or for the full term of the option in the case of Mr. Pucel's retirement) after employment ends (unless employment is terminated for cause). If, however, employment ends due to disability or retirement, an option will fully vest and will remain exercisable for three years after the date employment ends (or for the full term of the option in the case of Mr. Pucel's retirement) or for one year in the case of death. In no event will an option be exercisable beyond the end of its original term. If a participant’s employment ends for any reason other than normal retirement, death or disability, the unvested portion of any outstanding option will terminate at the time the participant’s employment ends. Upon a change in control of our Company, each outstanding option will become immediately vested and exercisable in full.

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OUTSTANDING EQUITY AWARDS AT 2014 FISCAL YEAR-END

The following table sets forth information concerning unexercised stock option awards, unvested restricted stock awards, and unvested PRSU awards for each of the Named Executive Officers as of December 31, 2014.



	Option Awards				Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(13) ($)
Scott W. Wine	120,000		22.545	09/01/2018
	75,000		10.030	02/10/2019
	65,000	65,000(1)	38.460	01/31/2021
	90,000	90,000(2)	65.570	02/01/2022
		163,000(3)	86.450	01/30/2023
		101,000(4)	125.670	01/29/2024
					24,000(5)	3,629,760

							26,460(6)	4,001,810
							38,000(7)	5,747,120
Michael W. Malone	50,000		22.330	02/01/2020
	25,000	25,000(1)	38.460	01/31/2021
	19,000	19,000(2)	65.570	02/01/2022
		30,000(3)	86.450	01/30/2023
		19,000(4)	125.670	01/29/2024

							7,866(6)	1,189,654
							7,241(7)	1,095,129
Kenneth J. Pucel		45,000(8)	154.31	12/01/2024
					50,000(9)	7,562,000
							5,670(10)	857,531
David C. Longren	4,000		24.440	12/22/2015
	12,000		23.330	01/29/2017
	16,000		21.785	01/31/2018
	40,000		9.900	02/02/2019
	34,000		22.330	02/01/2020
	18,000	18,000(1)	38.460	01/31/2021
	12,500	12,500(2)	65.570	02/01/2022
		22,000(3)	86.450	01/30/2023
		13,000(4)	125.670	01/29/2024
							6,000(11)	907,440
					15,000(12)	2,268,600

							4,662(6)	705,081
							5,013(7)	758,166
Bennett J. Morgan	25,000		21.785	01/31/2018
	50,000		13.635	10/23/2018
	105,000		9.900	02/02/2019
	120,000		22.330	02/01/2020