Exhibit 10.ff
EXECUTION COPY
GOLDMAN SACHS & CO. | 85 BROAD STREET | NEW YORK, NEW YORK 10004 | TEL:
212-902-1000
Opening Transaction

     
To:
  Polaris Industries Inc.
 
  2100 Highway 55
 
  Medina, MN 55340
 
   
From:
  Goldman, Sachs & Co.
 
   
Subject:
  Accelerated Share Buyback
 
   
Ref. No:
  As provided in the Supplemental Confirmation
 
   
Date:
  December 5, 2006

          This master confirmation (“Master Confirmation”) dated as of
December 5, 2006 is intended to supplement the terms and provisions of certain
Transactions (each, a “Transaction”) entered into from time to time between
Goldman, Sachs & Co. (“GS&Co.”) and Polaris Industries Inc., a Minnesota
Corporation (“Counterparty”). This Master Confirmation, taken alone, is neither
a commitment by either party to enter into any Transaction nor evidence of a
Transaction. The terms of any particular Transaction shall be set forth in a
Supplemental Confirmation in the form of Annex A hereto, which references this
Master Confirmation (the “Supplemental Confirmation”). This Master Confirmation
and each Supplemental Confirmation together shall constitute a “Confirmation” as
referred to in the Agreement specified below.
          The definitions and provisions contained in the 2002 ISDA Equity
Derivatives Definitions (the “Equity Definitions”), as published by the
International Swaps and Derivatives Association, Inc., are incorporated into
this Master Confirmation. This Master Confirmation and each Supplemental
Confirmation evidence a complete binding agreement between the Counterparty and
GS&Co. as to the subject matter and terms of each Transaction to which this
Master Confirmation and the related Supplemental Confirmation relate and shall
supersede all prior or contemporaneous written or oral communications with
respect thereto.
          This Master Confirmation and each Supplemental Confirmation
supplement, form a part of, and are subject to an agreement in the form of the
1992 ISDA Master Agreement (Multicurrency-Cross Border) (the “Agreement”) as if
GS&Co. and Counterparty had executed the Agreement on the date of this Master
Confirmation (but without any Schedule except for (i) the election of Loss and
Second Method for purposes of Section 6(e) of the Agreement, New York law
(without regard to the conflicts of law principles) as the governing law and US
Dollars (“USD”) as the Termination Currency, (ii) the election that subparagraph
(ii) of Section 2(c) will not apply to Transactions, (iii) the replacement of
the word “third” in the last line of Section 5(a)(i) with the word “first”,
(iv) the election that the “Cross Default” provisions of Section 5(a)(vi) shall
apply to Counterparty, with a “Threshold Amount” of USD0; provided however, that
the words “or becoming capable at such time of being declared” shall be deleted
from clause (i) of such Section 5(a)(vi), and (v) “Specified Indebtedness” of
Counterparty shall mean any obligation (whether present or future, contingent or
otherwise, as principal or surety or otherwise) under the Credit Agreement dated
December 4, 2006 by and among Polaris Industries Inc., a Minnesota corporation,
as borrower, certain subsidiaries of the borrower as guarantors, the lenders
identified therein, Bank of America, N.A., as administrative agent and issuing
lender, U.S. Bank N.A. and The Royal Bank of Canada as syndication agents and
The Bank of Tokyo-Mitsubishi, Ltd., Chicago Branch as documentation agent, or
any successor or substitute agreement therefor, any other credit agreement
entered into by Counterparty during the term of any Transaction hereunder and
any bond, note or debenture sold by Counterparty during the term of any
Transaction hereunder).
          All provisions contained or incorporated by reference in the Agreement
shall govern this Master Confirmation and each Supplemental Confirmation
relating to a Transaction except as expressly modified herein or in the related
Supplemental Confirmation.

 

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          If, in relation to any Transaction to which this Master Confirmation
and related Supplemental Confirmation relate, there is any inconsistency between
the Agreement, this Master Confirmation, any Supplemental Confirmation and the
Equity Definitions, the following will prevail for purposes of such Transaction
in the order of precedence indicated: (i) such Supplemental Confirmation; (ii)
this Master Confirmation; (iii) the Agreement; and (iv) the Equity Definitions.
          1. On the Clearance System Business Day following the Trade Date for
each Transaction (the “Initial Settlement Date”), GS&Co. will deliver to
Counterparty a number of Shares equal to the Number of Shares for the relevant
Transaction, and Counterparty will pay to GS&Co. cash in immediately available
funds in an amount to be specified in the Supplemental Confirmation (the
“Initial Purchase Price”) equal to the product of the Initial Share Price (as
set forth below) and the Number of Shares; provided that, if GS&Co. is unable to
borrow or otherwise acquire a number of Shares equal to the Number of Shares for
delivery to Counterparty on the Initial Settlement Date, the parties may agree
that there will be more than one Initial Settlement Date such that the total
number of Shares delivered to Counterparty and the total amount paid by
Counterparty equal the Number of Shares and the Initial Purchase Price,
respectively. If there is more than one Initial Settlement Date for a
Transaction, then on the final Initial Settlement Date for such Transaction, the
parties shall supplement the Supplemental Confirmation for such Transaction to
memorialize the Initial Settlement Dates, the number of Shares delivered on each
Initial Settlement Date, the portion of the Initial Purchase Price paid on each
Initial Settlement Date, the Initial Share Price, the Initial Purchase Price
and, if the Number of Shares and the Counterparty Additional Payment Amount
(each as defined below) for such Transaction are reduced pursuant to the
provision to the definitions of such terms set forth in Annex A, the final
Number of Shares and Counterparty Additional Payment Amount.
          The additional terms of each Transaction set forth below are intended
to be in substance and effect an adjustment to the Initial Purchase Price.
Solely for the purposes of the Equity Definitions, each Transaction shall be
treated as if it were a Share Forward Transaction. However, the parties
acknowledge that the Transaction is a Share buyback transaction and is not
intended to effect a net issuance of shares or raise equity capital for
Counterparty. Set forth below are the terms and conditions which, together with
the terms and conditions set forth in each Supplemental Confirmation (in respect
of each relevant Transaction), shall govern each such Transaction.

          General Terms:    
 
       
 
  Trade Date:   For each Transaction, as set forth in the Supplemental
Confirmation.
 
       
 
  Seller:   Counterparty
 
       
 
  Buyer:   GS&Co.
 
       
 
  Shares:   Common Stock, $0.01 par value, of Counterparty (Ticker: PII)
 
       
 
  Number of Shares:   For each Transaction, as set forth in the Supplemental
Confirmation.
 
       
 
  Initial Share Price:   For each Transaction, as set forth in the Supplemental
Confirmation.
 
       
 
  Forward Price:   For each Transaction, the Initial Share Price for such
Transaction.
 
       
 
  Prepayment:   Not Applicable
 
       
 
  Variable Obligation:   Not Applicable
 
       
 
  Exchange:   New York Stock Exchange
 
       
 
  Related Exchange(s):   All Exchanges

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  Market Disruption Event:   The definition of “Market Disruption Event” in
Section 6.3(a) of the Equity Definitions is hereby amended by replacing the
words “at any time during the one-hour period that ends at the relevant
Valuation Time” in the third line thereof with the words “at any time on any
Scheduled Trading Day during the Valuation Period or” after the word “material”.
 
       
 
  Counterparty Additional Payment Amount:   For each Transaction, as set forth
in the Supplemental Confirmation.
 
        Valuation:    
 
       
 
  Valuation Period:   Each Scheduled Trading Day during the period commencing on
and including the first Scheduled Trading Day following the final Initial
Settlement Date, to and including the Valuation Date (but excluding any day(s)
on which the Valuation Period is suspended in accordance with Section 5 herein).
 
       
 
      Notwithstanding anything to the contrary in the Equity Definitions, to the
extent that any Scheduled Trading Day in the Valuation Period is a Disrupted
Day, the Calculation Agent may postpone the Valuation Date. In such event, the
Calculation Agent must determine whether (i) such Disrupted Day is a Disrupted
Day in full, in which case such Disrupted Day shall not be included for purposes
of determining the Settlement Price, or (ii) such Disrupted Day is a Disrupted
Day only in part, in which case the VWAP Price for such Disrupted Day shall be
determined by the Calculation Agent based on Rule 10b-18 eligible transactions
in the Shares on such Disrupted Day effected before the relevant Market
Disruption Event occurred and/or after the relevant Market Disruption Event
ended, and the weighting of the VWAP Prices for the relevant Scheduled Trading
Days during the Valuation Period shall be adjusted by the Calculation Agent for
purposes of determining the Settlement Price, with such adjustments based on,
among other factors, the duration of any Market Disruption Event and the volume,
historical trading patterns and price of the Shares.
 
       
 
      If a Disrupted Day occurs during the Valuation Period, and each of the
nine immediately following Scheduled Trading Days is a Disrupted Day, then the
Calculation Agent, in its good faith and commercially reasonable discretion, may
either (i) deem such ninth Scheduled Trading Day to be an Exchange Business Day
and determine the VWAP Price for such ninth Scheduled Trading Day and adjust the
weighting of the VWAP Prices for the relevant Scheduled Trading Days during the
Valuation Period as it deems appropriate for purposes of determining the
Settlement Price based on, among other factors, the duration of any Market
Disruption Event and the volume, historical trading patterns and price of the
Shares or (ii) disregard such day for purposes of determining the Settlement
Price and further postpone the Valuation Date as it deems appropriate to
determine the VWAP Price.

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  Valuation Date:   For each Transaction, the Scheduled Valuation Date set forth
in the Supplemental Confirmation (as the same may be postponed in accordance
with the provisions hereof); provided that GS&Co. shall have the right to
designate any date (the “Accelerated Valuation Date”) on or after the First
Acceleration Date to be the Valuation Date by providing notice to Counterparty
of any such designation on such Accelerated Valuation Date; provided further,
that if GS&Co. provides notice to Counterparty of such designation prior to 9:30
a.m. New York City time on any date, then the Valuation Date shall be the
Exchange Business Day immediately preceding such Accelerated Valuation Date.
 
       
 
  First Acceleration Date:   For each Transaction, as set forth in the
Supplemental Confirmation.
 
        Settlement Terms:    
 
       
 
  Settlement Currency:   USD
 
       
 
  Settlement Method Election:   Applicable; provided that (a) Section 7.1 of the
Equity Definitions is hereby amended by deleting the word “Physical” in the
sixth line thereof and replacing it with the words “Net Share” and (b) in the
event that GS&Co. would be obligated to deliver to the Counterparty any Shares
under Net Share Settlement, Cash Settlement shall be applicable in lieu of Net
Share Settlement.
 
       
 
  Electing Party:   Counterparty
 
       
 
  Settlement Method Election Date:   The earlier of (i) the fifth Scheduled
Trading Day immediately prior to the originally scheduled Valuation Date and
(ii) the Accelerated Valuation Date, as the case may be.
 
       
 
  Default Settlement Method:   Cash Settlement
 
       
 
  Forward Cash Settlement Amount:   An amount in the Settlement Currency equal
to the sum of (a) the Number of Shares multiplied by an amount equal to (i) the
Settlement Price minus (ii) the Forward Price plus (b) the Counterparty
Additional Payment Amount.
 
       
 
  Settlement Price:   The arithmetic mean of the VWAP Prices of the Shares for
each Scheduled Trading Day in the Valuation Period minus the Settlement Price
Adjustment Amount.
 
       
 
  Settlement Price Adjustment Amount:   For each Transaction, as set forth in
the Supplemental Confirmation.
 
       
 
  VWAP Price:   For any Exchange Business Day, as determined by the Calculation
Agent based on the New York Stock Exchange 10b-18 Volume Weighted Average Price
per Share for the regular trading session (including any extensions thereof) on
such Exchange Business Day (without regard to pre-open or after hours trading
outside of such regular trading session for such Exchange Business Day), as
published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the
end of any extension of the regular trading session) on such

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      Exchange Business Day, on Bloomberg page “PII.N <Equity> AQR_SEC” (or any
successor thereto). For purposes of calculating the VWAP Price, the Calculation
Agent will include only those trades that are reported during the period of time
during which Counterparty could purchase its own shares under Rule 10b-18(b)(2)
and pursuant to the conditions of Rule 10b-18(b)(3), each under the Exchange Act
(as defined herein) (such trades, “Rule 10b-18 eligible transactions”).
 
       
 
  Counterparty’s Contact Details for Purpose of Giving Notice:   To be provided
by Counterparty
 
       
 
  GS&Co.’s Contact Details for Purpose of Giving Notice:   Telephone No.:
(212) 902-8996
 
      Facsimile No.: (212) 902-0112
 
      Attention: Equity Operations: Options and Derivatives
 
       
 
      With a copy to:
 
      Tracey McCabe
 
      Equity Capital Markets
 
      One New York Plaza
 
      New York, NY 10004
 
      Telephone No.: (212) 357-0428
 
      Facsimile No.: (212) 902-3000
 
        Net Share Settlement:    
 
       
 
  Net Share Settlement Procedures:   Net Share Settlement shall be made in
accordance with the procedures attached hereto as Annex B.
 
       
 
  Net Share Settlement Price:   The Relevant Price on the Net Share Valuation
Date, as reduced by the per Share amount of the underwriting discount and/or
commissions agreed to pursuant to the equity underwriting agreement contemplated
by the Net Share Settlement Procedures.
 
       
 
  Valuation Time:   As provided in Section 6.1 of the Equity Definitions;
provided that Section 6.1 of the Equity Definitions is hereby amended by
inserting the words “Net Share Valuation Date,” before the words “Valuation
Date” in the first and third lines thereof.
 
       
 
  Net Share Valuation Date:   The Exchange Business Day immediately following
the Valuation Date.
 
       
 
  Net Share Settlement Date:   The third Exchange Business Day immediately
following the Valuation Date.
 
       
 
  Reserved Shares:   Initially, 15,000,000 Shares. The Reserved Shares may be
increased or decreased in a Supplemental Confirmation.
 
       
 
  Relevant Price:   As provided in Section 1.23(b) of the Equity Definitions;
provided that Section 1.23(b) of the Equity Definitions is hereby amended by
replacing each occurrence therein of “the Valuation Date or Averaging Date, as
the case may be,” with the term “such day.”

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          Share Adjustments:    
 
       
 
  Potential Adjustment Event:   Notwithstanding anything to the contrary in
Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not
constitute a Potential Adjustment Event.
 
       
 
  Extraordinary Dividend:   For any calendar quarter, any dividend or
distribution on the Shares with an ex-dividend date occurring during such
calendar quarter (other than any dividend or distribution of the type described
in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) or (B) of the Equity
Definitions) (a “Dividend”) the amount or value of which (as determined by the
Calculation Agent), when aggregated with the amount or value (as determined by
the Calculation Agent) of any and all previous Dividends with ex-dividend dates
occurring in the same calendar quarter, exceeds the Ordinary Dividend Amount.
 
       
 
  Ordinary Dividend Amount:   For each Transaction, as set forth in the
Supplemental Confirmation.
 
       
 
  Method of Adjustment:   Calculation Agent Adjustment
 
        Extraordinary Events:    
 
        Consequences of Merger Events:    
 
       
 
  (a)     Share-for-Share:   Modified Calculation Agent Adjustment
 
       
 
  (b)     Share-for-Other:   Cancellation and Payment
 
       
 
  (c)     Share-for-Combined:   Component Adjustment
 
       
 
  Determining Party:   GS&Co.
 
        Tender Offer:   Applicable; provided, however, that the references in
the third line of Section 12.1(d) of the Equity Definitions to 10% shall be
deleted and replaced with 20%.
 
        Consequences of Tender Offers:    
 
       
 
  (a)     Share-for-Share:   Modified Calculation Agent Adjustment
 
       
 
  (b)     Share-for-Other:   Cancellation and Payment
 
       
 
  (c)     Share-for-Combined:   Component Adjustment
 
       
 
  Determining Party:   GS&Co.
 
        Nationalization, Insolvency or Delisting:   Cancellation and Payment;
provided that in addition to the provisions of Section 12.6(a)(iii) of the
Equity Definitions, it shall also constitute a Delisting if the Exchange is
located in the United States and the Shares are not immediately re-listed,
re-traded or re-quoted on any of the New York Stock Exchange, the American Stock
Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or their
respective successors); and if the Shares are immediately re-listed, re-traded
or re-quoted on any such exchange or

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      quotation system, such exchange or quotation system shall be deemed to be
the Exchange.

Notwithstanding anything to the contrary in the Equity Definitions, if, as a
result of a Merger Event, a Tender Offer, a Nationalization, an Insolvency or a
Delisting, Cancellation and Payment applies to one or more Transactions
hereunder (whether in whole or in part), an Additional Termination Event shall
be deemed to occur (with the Transactions (or portions thereof) to which
Cancellation and Payment applies being the Affected Transactions, Counterparty
being the sole Affected Party and the Early Termination Date being the date on
which such Transactions would be cancelled pursuant to Article 12 of the Equity
Definitions), and, in lieu of Sections 12.7 and 12.8 of the Equity Definitions,
Section 6 of the Agreement shall apply to such Affected Transactions.

          Additional Disruption Events:    
 
       
 
  (a)      Change in Law:   Applicable
 
       
 
  (b)      Insolvency Filing:   Applicable
 
       
 
  (c)      Loss of Stock Borrow:   Applicable; provided that
Sections 12.9(a)(vii) and 12.9(b)(iv) of the Equity Definitions are amended by
deleting the words “at a rate equal to or less than the Maximum Stock Loan Rate”
and replacing them with “at a rate of return equal to or greater than minus 100
basis points”.
 
       
 
             Hedging Party:   GS&Co.
 
       
 
             Determining Party:   GS&Co.

Notwithstanding anything to the contrary in the Equity Definitions, if, as a
result of an Additional Disruption Event, any Transaction is cancelled or
terminated, an Additional Termination Event shall be deemed to occur (with such
terminated Transaction(s) being the Affected Transaction(s), Counterparty being
the sole Affected Party and the Early Termination Date being the date on which
such Transaction(s) would be cancelled or terminated pursuant to Article 12 of
the Equity Definitions), and, in lieu of Sections 12.7 and 12.8 of the Equity
Definitions, Section 6 of the Agreement shall apply to such Affected
Transaction(s).

          Non-Reliance:   Applicable
 
        Agreements and Acknowledgements Regarding Hedging Activities:  
Applicable
 
        Additional Acknowledgements:   Applicable
 
        Net Share Settlement Upon Early Termination:   Counterparty shall have
the right, in its sole discretion, in lieu of making any payment required to be
made by it (the “Early Termination Amount”) pursuant to Sections 6(d) and 6(e)
of the Agreement following the occurrence of an Early Termination Date in
respect of the Transaction (other than any Early Termination Date occurring as a
result of a Share-for-Other or Share-for-Combined Merger Event or Tender Offer
in respect of the portion of the consideration for the Shares consisting of
cash), elect to settle its obligation to pay the Early Termination Amount in
Shares in accordance with the terms, and subject to the conditions, for Net
Share Settlement herein by giving written notice to GS&Co. of such election on
the day that the notice fixing an Early Termination Date is

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      effective. If Counterparty elects Net Share Settlement under such
circumstances: (a) the Net Share Valuation Date shall be the Early Termination
Date, which shall be either the Exchange Business Day that such notice is
effective or the first Exchange Business Day immediately following the Exchange
Business Day that such notice is effective, (b) the Net Share Settlement Date
shall be deemed to be the Exchange Business Day immediately following the Early
Termination Date and (c) all references to Forward Cash Settlement Amount in
Annex B hereto shall be deemed references to the Early Termination Amount.
 
        Transfer:   Notwithstanding anything to the contrary in the Agreement,
GS&Co. may assign, transfer and set over all rights, title and interest, powers,
privileges and remedies of GS&Co. under any Transaction, in whole or in part, to
an affiliate of GS&Co. whose obligations are guaranteed by The Goldman Sachs
Group, Inc. without the consent of Counterparty.
 
        GS&Co. Payment Instructions:   Chase Manhattan Bank New York
 
      For A/C Goldman, Sachs & Co.
A/C # 930-1-011483
ABA: 021-000-021
 
        Counterparty Payment Instructions:   To be provided by Counterparty

          2. Calculation Agent: GS&Co.
          3. Representations, Warranties and Covenants of GS&Co. and
Counterparty.
          (a) Each party represents and warrants that it (i) is an “eligible
contract participant”, as defined in the U.S. Commodity Exchange Act, as amended
and (ii) is entering into each Transaction hereunder as principal (and not as
agent or in any other capacity, fiduciary or otherwise) and not for the benefit
of any third party.
          (b) Each party acknowledges that the offer and sale of each
Transaction to it is intended to be exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), by virtue of
Section 4(2) thereof and the provisions of Regulation D promulgated thereunder
(“Regulation D”). Accordingly, each party represents and warrants to the other
that (i) it has the financial ability to bear the economic risk of its
investment in each Transaction and is able to bear a total loss of its
investment, (ii) it is an “accredited investor” as that term is defined under
Regulation D, (iii) it will purchase each Transaction not with a view to
distribution or resale thereof in a manner that would violate the Securities
Act, and (iv) the disposition of each Transaction is restricted under this
Master Confirmation, the Securities Act and state securities laws.
          3A. Additional Representations and Warranties of GS&Co. GS&Co.
represents, warrants and covenants to Counterparty that:
          (a) With respect to the purchase of Shares in connection with any
Transaction (other than any purchases made by GS&Co. in connection with dynamic
hedge adjustments of GS&Co.’s exposure to such Transaction as a result of any
equity optionality contained in such Transaction) during the Valuation Period
for such Transaction, it will use good faith efforts to (i) effect such
purchases in a manner so that, if such purchases were made by the Counterparty,
they would meet the requirements of paragraphs (b)(2), (3) and (4) of
Rule 10b-18 under the Exchange Act and (ii) effect calculations in respect
thereof as if such paragraphs applied to GS&Co. (taking into account any
applicable Securities and Exchange Commission no-action letters as appropriate
and subject to any delays between execution and reporting of a trade of the
Shares on the Exchange and other circumstances beyond GS&Co.’s control) to the
extent that it uses the number of Shares so purchased or the purchase price of
any such purchase of Shares to determine terms of such Transaction.

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          (b) GS&Co. has implemented reasonable policies and procedures, taking
into account the nature of its business, to ensure that individuals making
investment decisions would not violate laws prohibiting trading on the basis of
material nonpublic information. Such individuals shall not be in possession of
material nonpublic information during all relevant times beginning at the time
this Transaction is publicly announced through and including the Valuation Date.
          4. Additional Representations, Warranties and Covenants of
Counterparty.
          As of (i) the date hereof and (ii) the period of time from the Trade
Date for each Transaction hereunder until the time that each party has fully
performed all of its obligations under such Transaction, Counterparty
represents, warrants and covenants to GS&Co. that:
          (a) the purchase or writing of any Transaction and the transactions
contemplated hereby do not and will not violate Rule 13e-1 or Rule 13e-4 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”);
          (b) it is not entering into any Transaction (i) on the basis of, and
is not aware of, any material non-public information with respect to the Shares
(ii) in anticipation of, in connection with, or to facilitate, a distribution of
its securities, a self tender offer or a third-party tender offer or (iii) to
create actual or apparent trading activity in the Shares (or any security
convertible into or exchangeable for the Shares) or to raise or depress or
otherwise manipulate the price of the Shares (or any security convertible into
or exchangeable for the Shares);
          (c) Counterparty is in compliance with its reporting obligations under
the Exchange Act and its most recent Annual Report on Form 10-K, together with
all reports subsequently filed by it pursuant to the Exchange Act, taken
together and as amended and supplemented to the date of this representation, do
not, as of their respective filing dates, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
          (d) (i) each Transaction is being entered into pursuant to a publicly
disclosed Share buy-back program; (ii) its Board of Directors has approved the
use of derivatives to effect the Share buy-back program; and (iii) Counterparty
shall immediately retire the Shares purchased under this Confirmation;
          (e) without limiting the generality of Section 13.1 of the Equity
Definitions, Counterparty acknowledges that GS&Co. is not making any
representations or warranties with respect to the treatment of any Transaction
under FASB Statements 128, 133 (as amended), 149 or 150, EITF 00-19, EITF 03-6
(or any successor issue statements) or under the Financial Accounting Standards
Board’s Liabilities & Equity Project;
          (f) Counterparty is not, and will not be, engaged in a “distribution”
of Shares or securities that are convertible into, or exchangeable or
exercisable for Shares for purposes of Regulation M promulgated under the
Exchange Act (“Regulation M”) at any time during the Relevant Period for any
Transaction unless Counterparty has provided written notice to GS&Co. of such
distribution (a “Regulation M Distribution Notice”) not later than the Scheduled
Trading Day immediately preceding the first day of the relevant “restricted
period” (as defined in Regulation M); Counterparty acknowledges that any such
notice may cause the Valuation Period to be extended or suspended pursuant to
Section 5 below; accordingly, Counterparty acknowledges that its delivery of
such notice must comply with the standards set forth in Section 6 below;
“Relevant Period” means, for any Transaction, the period commencing on the first
day of the Valuation Period and ending on the 20th Exchange Business Day
immediately following the end of the Valuation Period, or such earlier day as
elected by GS&Co. and communicated to Counterparty on such day;
          (g) it shall report each Transaction as required under Regulation S-K
and/or Regulation S-B under the Exchange Act, as applicable;
          (h) on the Trade Date for each Transaction and on each day of the
Valuation Period for such Transaction, Counterparty is not and will not be
“insolvent” (as such term is defined under Section 101(32) of the

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U.S. Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy
Code”)) and Counterparty would be able to purchase a number of Shares equal to
the Number of Shares in compliance with the laws of the jurisdiction of
Counterparty’s incorporation;
          (i) it has not and, during the Relevant Period for any Transaction,
will not enter into agreements similar to the Transactions described herein
where any initial hedge period (however defined), the valuation period (however
defined) or the relevant period (however defined) in such other transaction will
overlap at any time (including as a result of extensions in such initial hedge
period, valuation period or relevant period as provided in the relevant
agreements) with any Relevant Period under this Master Confirmation. In the
event that the initial hedge period, valuation period or relevant period in any
other similar transaction overlaps with any Relevant Period under this Master
Confirmation as a result of an extension of the Valuation Date pursuant to
Section 5 herein, Counterparty shall promptly amend such transaction to avoid
any such overlap; and
          (j) Counterparty is not and, after giving effect to any Transaction,
will not be, required to register as an “investment company” as such term is
defined in the Investment Company Act of 1940, as amended.
5. Suspension of Valuation Period.
          (a) If Counterparty concludes that it will be engaged in a
distribution of the Shares for purposes of Regulation M, Counterparty agrees
that it will, on a day no later than the Scheduled Trading Day immediately
preceding the start of the relevant restricted period, provide GS&Co. with a
Regulation M Distribution Notice. If on any Scheduled Trading Day Counterparty
delivers the Regulation M Distribution Notice in writing (and confirms by
telephone) by 8:30 a.m. New York Time (the “Notification Time”) then such notice
shall be effective as of such Notification Time. In the event that Counterparty
delivers such Regulation M Distribution Notice in writing and/or confirms by
telephone after the Notification Time, then such notice shall be effective as of
8:30 a.m. New York Time on the following Scheduled Trading Day or as otherwise
required by law or agreed between Counterparty and GS&Co. Upon the effectiveness
of such Regulation M Distribution Notice, the Valuation Period shall be
suspended and the Valuation Date shall be postponed for each Scheduled Trading
Day in such restricted period and GS&Co. shall cease effecting purchases of
Shares in connection with any Transaction during such “restricted period” (other
than any purchases made by GS&Co. in connection with dynamic hedge adjustments
of GS&Co.’s exposure to any Transaction as a result of any equity optionality
contained in such Transaction).
          (b) In the event that GS&Co. concludes, in good faith based upon the
advice of outside legal counsel, that it is appropriate with respect to any
legal, regulatory or self-regulatory requirements or related policies and
procedures (whether or not such requirements, policies or procedures are imposed
by law or have been voluntarily adopted by GS&Co.), for it to refrain from
purchasing Shares on any Scheduled Trading Day during the Valuation Period,
GS&Co. may by written notice to Counterparty elect to suspend the Valuation
Period for such number of Scheduled Trading Days as is specified in the notice.
The notice shall not specify, and GS&Co. shall not otherwise communicate to
Counterparty, the reason for GS&Co.’s election to suspend the Valuation Period.
The Valuation Period shall be suspended and the Valuation Date shall be
postponed for each Scheduled Trading Day occurring during any such suspension.
          (c) In the event that the Valuation Period is suspended pursuant to
Section 5(a) and (b) above during the regular trading session on the Exchange,
such suspension shall be deemed to be an additional Market Disruption Event, and
the second and third paragraphs under “Valuation Period” shall apply.
          6. 10b5-1 Plan. Counterparty represents, warrants and covenants to
GS&Co. that for each Transaction:
          (a) Counterparty is entering into this Master Confirmation and each
Transaction hereunder in good faith and not as part of a plan or scheme to evade
the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any
antifraud or anti-manipulation provisions of the federal or applicable state
securities laws and that it has not entered into or altered and will not enter
into or alter any corresponding or hedging transaction or position with respect
to the Shares. Counterparty acknowledges that it is the intent of the parties
that each Transaction entered into under this Master Confirmation comply with
the requirements of Rule 10b5-1(c)(1)(i)(A)

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and (B) and each Transaction entered into under this Master Confirmation shall
be interpreted to comply with the requirements of Rule 10b5-1(c).
          (b) Counterparty will not seek to control or influence GS&Co. to make
“purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under
any Transaction entered into under this Master Confirmation, including, without
limitation, GS&Co.’s decision to enter into any hedging transactions.
Counterparty represents and warrants that it has consulted with its own advisors
as to the legal aspects of its adoption and implementation of this Master
Confirmation and each Supplemental Confirmation under Rule 10b5-1.
          (c) Counterparty acknowledges and agrees that any amendment,
modification, waiver or termination of this Master Confirmation or the relevant
Supplement Confirmation must be effected in accordance with the requirements for
the amendment or termination of a “plan” as defined in Rule 10b5-1(c). Without
limiting the generality of the foregoing, any such amendment, modification,
waiver or termination shall be made in good faith and not as part of a plan or
scheme to evade the prohibitions of Rule 10b-5, and no such amendment,
modification, waiver or termination shall be made at any time at which
Counterparty or any officer, director, manager or similar person of Counterparty
is aware of any material non-public information regarding Counterparty or the
Shares.
          7. Counterparty Purchases. Counterparty represents, warrants and
covenants to GS&Co. that, for each Transaction, Counterparty (or any “affiliated
purchaser” as defined in Rule 10b-18 under the Exchange Act (“Rule 10b-18”))
shall not, without the prior written consent of GS&Co., directly or indirectly
purchase any Shares (including by means of a derivative instrument), listed
contracts on the Shares or securities that are convertible into, or exchangeable
or exercisable for Shares (including, without limitation, any Rule 10b-18
purchases of blocks (as defined in Rule 10b-18)) during any Relevant Period.
During this time, any such purchases by Counterparty shall be made through
GS&Co., or if not through GS&Co., with the prior written consent of GS&Co., and
in compliance with Rule 10b-18 or otherwise in a manner that Counterparty and
GS&Co. believe is in compliance with applicable requirements.
          8. Additional Termination Events. The declaration of any Extraordinary
Dividend by Counterparty during the Valuation Period for any Transaction shall
constitute an Additional Termination Event, with Counterparty as the sole
Affected Party and all Transactions hereunder as the Affected Transactions. For
the avoidance of doubt, any amount payable under Section 6(d)(ii) of the
Agreement and any Special Termination Amount (as defined below) in respect of
such Additional Termination Event shall be calculated without regard to such
Extraordinary Dividend.
          9. Automatic Termination Provisions. Notwithstanding anything to the
contrary in Section 6 of the Agreement:
          (a) If a Termination Price is specified in one or more Supplemental
Confirmations, then an Additional Termination Event with Counterparty as the
sole Affected Party and all Transactions to which such Supplemental
Confirmations relate as Affected Transactions will automatically occur without
any notice or action by GS&Co. or Counterparty if the price of the Shares on the
Exchange at any time falls below such Termination Price. The Exchange Business
Day that the price of the Shares on the Exchange at any time falls below the
Termination Price will be the “Early Termination Date” for purposes of the
Agreement.
          (b) Notwithstanding anything to the contrary in Section 6(d) of the
Agreement, following the occurrence of such an Additional Termination Event,
GS&Co. will notify Counterparty of the amount owing under Section 6(e) of the
Agreement within a commercially reasonable time period (with such period based
upon the amount of time, determined by GS&Co. (or any of its Affiliates) in its
good faith and commercially reasonable discretion, that it would take to unwind
any of its Hedge Position(s) related to the Transaction in a commercially
reasonable manner based on relevant market indicia). For purposes of the “Net
Share Settlement Upon Early Termination” provisions herein, the date that such
notice is effective shall constitute the Net Share Valuation Date and the Early
Termination Date.
          10. Special Provisions for Merger Transactions. Notwithstanding
anything to the contrary herein or in the Equity Definitions, Counterparty
shall,

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          (a) prior to the opening of trading in the Shares on any day during
any Valuation Period on which Counterparty makes, or expects to be made, any
public announcement (as defined in Rule 165(f) under the Securities Act of 1933,
as amended) of any Merger Transaction, notify GS&Co. of such public
announcement;
          (b) promptly notify GS&Co. following any such announcement that such
announcement has been made;
          (c) promptly provide GS&Co. with written notice specifying
(i) Counterparty’s average daily Rule 10b-18 Purchases (as defined in
Rule 10b-18) during the three full calendar months immediately preceding the
Announcement Date that were not effected through GS&Co. or its affiliates and
(ii) the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4)
under the Exchange Act for the three full calendar months preceding the
Announcement Date. Such written notice shall be deemed to be a certification by
Counterparty to GS&Co. that such information is true and correct. In addition,
Counterparty shall promptly notify GS&Co. of the earlier to occur of the
completion of such transaction and the completion of the vote by target
shareholders. Counterparty acknowledges that any such notice may cause the terms
of any Transaction to be adjusted or such Transaction to be terminated;
accordingly, Counterparty acknowledges that its delivery of such notice must
comply with the standards set forth in Section 6; and
          (d) GS&Co. in its sole discretion may (i) suspend the Valuation Period
and postpone the Valuation Date or (ii) treat the occurrence of such public
announcement as an Additional Termination Event with Counterparty as the sole
Affected Party and the Transactions hereunder as the Affected Transactions.
          “Merger Transaction” means any merger, acquisition or similar
transaction involving a recapitalization as contemplated by
Rule 10b-18(a)(13)(iv) under the Exchange Act.
          11. Special Calculation and Settlement Following Early Termination.
Notwithstanding anything to the contrary in this Master Confirmation or any
Supplemental Confirmation hereunder, in the event that an Early Termination Date
occurs or is designated with respect to one or more Transactions (each an
“Elected Transaction” and collectively, the “Elected Transactions”), then GS&Co.
may elect, in its sole discretion, by notice to Counterparty, to have
Counterparty deliver the Number of Early Settlement Shares to GS&Co. on the date
that such notice is effective and either (x) GS&Co. shall pay to Counterparty
the Special Termination Amount, if such amount is positive, or (y) Counterparty
shall either (1) pay to GS&Co. the absolute value of the Special Termination
Amount, if such amount is negative, or (2) elect for the provisions set forth
opposite “Net Share Settlement Upon Early Termination” to apply except that all
references in such provision to “the Early Termination Amount” shall be replaced
with references to “the Special Termination Amount”.
          To the extent that Counterparty elects to deliver Early Settlement
Shares to GS&Co. accompanied by an effective Registration Statement (as defined
in Annex B and satisfactory to GS&Co. in its sole discretion) covering such
Shares, Counterparty must be in compliance with the conditions specified in
paragraph 3 in Annex B hereto at the time of such delivery. If Counterparty
elects to deliver Unregistered Settlement Shares (as defined in Annex B) to
GS&Co., Counterparty and GS&Co. will negotiate in good faith on acceptable
procedures and documentation relating to the sale of such Unregistered
Settlement Shares. Counterparty and GS&Co. agree that the payment of the Special
Termination Amount and the delivery of the Early Settlement Shares satisfy in
full any obligation of a party to make any payments pursuant to Section 6(e) of
the Agreement or Article 12 of the Equity Definitions, as the case may be, in
respect of the Elected Transactions.
          “Number of Early Settlement Shares” means a number of Shares (“Early
Settlement Shares”) as determined by GS&Co. in a good faith and commercially
reasonable manner based on its or any of its Affiliates’ Hedge Positions with
respect to the Elected Transactions under this Master Confirmation.
          “Special Termination Amount” means the sum of (a) the product of
(i) the Number of Early Settlement Shares multiplied by (ii) a per Share price
(the “Early Termination Price”) determined by GS&Co. in a good faith and
commercially reasonable manner based on relevant market indicia, including
GS&Co.’s funding costs associated with Early Settlement Shares and costs
incurred or estimated to be incurred by GS&Co. in connection with the purchase
and sale of Shares in order to close out GS&Co.’s or any of its Affiliates’
Hedge Positions with respect to each Affected Transaction and, in the event that
Counterparty delivers Unregistered Shares

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to GS&Co., whether GS&Co. and Counterparty have agreed on acceptable procedures
and documentation relating to such Unregistered Shares as described above and
(b) any amount owing under Section 6(e) of the Agreement, in respect of the
Elected Transactions by GS&Co. to Counterparty (expressed as a positive number)
or by Counterparty to GS&Co. (expressed as a negative number).
          12. Acknowledgments. The parties hereto intend for:
          (a) Each Transaction to be a “securities contract” as defined in
Section 741(7) of the Bankruptcy Code, a “swap agreement” as defined in
Section 101(53B) of the Bankruptcy Code and a “forward contract” as defined in
Section 101(25) of the Bankruptcy Code, and the parties hereto to be entitled to
the protections afforded by, among other Sections, Sections 362(b)(6),
362(b)(17), 362(b)(27), 362(o), 546(e), 546(g), 555, 556, 560 and 561 of the
Bankruptcy Code;
          (b) the Agreement to be a “master netting agreement” as defined in
Section 101 (38A) of the Bankruptcy Code;
          (c) a party’s right to liquidate or terminate any Transaction, net out
or offset termination values of payment amounts, and to exercise any other
remedies upon the occurrence of any Event of Default or Termination Event under
the Agreement with respect to the other party to constitute a “contractual
right” (as defined in the Bankruptcy Code);
          (d) any cash, securities or other property transferred as performance
assurance, credit support or collateral with respect to each Transaction to
constitute “margin payments” (as defined in the Bankruptcy Code); and
          (e) all payments for, under or in connection with each Transaction,
all payments for the Shares and the transfer of such Shares to constitute
“settlement payments” and “transfers” (as defined in the Bankruptcy Code).
          13. Calculations on Early Termination and Set-Off.
          (a) Notwithstanding anything to the contrary in the Agreement, the
calculation of any Settlement Amounts or Unpaid Amounts shall be calculated
separately for (A) all Terminated Transactions in the Shares of the Issuer that
qualify as equity under applicable accounting rules (collectively, the “Equity
Shares”) as determined by the Calculation Agent and (B) all other Terminated
Transactions under the Agreement including, without limitation, Transactions in
Shares other than those of the Issuer (collectively, the “Other Shares”).
          (b) The parties agree that upon the occurrence of an Event of Default
or Termination Event with respect to a party who is the Defaulting Party or an
Affected Party (“X”), the other party (“Y”) will have the right (but not be
obliged) without prior notice to X or any other person to set-off or apply any
obligation of X owed to Y (or any Affiliate of Y) (whether or not matured or
contingent and whether or not arising under the Agreement, and regardless of the
currency, place of payment or booking office of the obligation) against any
obligation of Y (or any Affiliate of Y) owed to X (whether or not matured or
contingent and whether or not arising under the Agreement, and regardless of the
currency, place of payment or booking office of the obligation). Y will give
notice to the other party of any set-off effected under this Section 13.
          Amounts (or the relevant portion of such amounts) subject to set-off
may be converted by Y into the Termination Currency at the rate of exchange at
which such party would be able, acting in a reasonable manner and in good faith,
to purchase the relevant amount of such currency. If any obligation is
unascertained, Y may in good faith estimate that obligation and set-off in
respect of the estimate, subject to the relevant party accounting to the other
when the obligation is ascertained. Nothing in this Section 13 shall be
effective to create a charge or other security interest. This Section 13 shall
be without prejudice and in addition to any right of set-off, combination of
accounts, lien or other right to which any party is at any time otherwise
entitled (whether by operation of law, contract or otherwise).”

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          (c) Notwithstanding anything to the contrary in the foregoing, GS&Co.
agrees not to set off or net amounts due from Counterparty with respect to any
Transaction against amounts due from GS&Co. to Counterparty with respect to
transactions or instruments that are not Equity Contracts. “Equity Contract”
means any transaction or instrument that does not convey rights to GS&Co. senior
to claims of common stockholders in the event of Counterparty’s bankruptcy.
          14. Payment Date Upon Early Termination. Notwithstanding anything to
the contrary in Section 6(d)(ii) of the Agreement, all amounts calculated as
being due in respect of an Early Termination Date under Section 6(e) of the
Agreement will be payable on the day that notice of the amount payable is
effective.
          15. Delivery on Initial Settlement Date. For the avoidance of doubt,
GS&Co. may satisfy its obligation to deliver Shares on any Initial Settlement
Date by making separate deliveries of Shares at more than one time on such
Initial Settlement Date, so long as the aggregate number of Shares so delivered
is equal to the Number of Shares.
          16. Credit Support Documents. The parties hereto acknowledge that no
Transaction hereunder is secured by any collateral that would otherwise secure
the obligations of Counterparty herein or pursuant to the Agreement.
          17. Claim in Bankruptcy. GS&Co. agrees that in the event of the
bankruptcy of Counterparty, GS&Co. shall not have rights or assert a claim that
is senior in priority to the rights and claims available to the shareholders of
the common stock of Counterparty.
          18. Offices.
          (a) The Office of GS&Co. for each Transaction is: One New York Plaza,
New York, New York 10004.
          (b) The Office of Counterparty for each Transaction is: 2100 Highway
55, Medina, Minnesota 55340.
          19. Governing Law. The Agreement, this Master Confirmation and each
Supplemental Confirmation and all matters arising in connection with the
Agreement, this Master Confirmation and each Supplemental Confirmation shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York (without reference to its choice of laws doctrine).
          20. Counterparts. This Master Confirmation may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Master Confirmation by signing
and delivering one or more counterparts.
          21. Arbitration.
          (a) All parties to this Confirmation are giving up the right to sue
each other in court, including the right to a trial by jury, except as provided
by the rules of the arbitration forum in which a claim is filed.
          (b) Arbitration awards are generally final and binding; a party’s
ability to have a court reverse or modify an arbitration award is very limited.
          (c) The ability of the parties to obtain documents, witness statements
and other discovery is generally more limited in arbitration than in court
proceedings.
          (d) The arbitrators do not have to explain the reason(s) for their
award.

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          (e) The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry, unless
Counterparty is a member of the organization sponsoring the arbitration
facility, in which case all arbitrators may be affiliated with the securities
industry.
          (f) The rules of some arbitration forums may impose time limits for
bringing a claim in arbitration. In some cases, a claim that is ineligible for
arbitration may be brought in court.
          (g) The rules of the arbitration forum in which the claim is filed,
and any amendments thereto, shall be incorporated into this Confirmation.
          (h) Counterparty agrees that any and all controversies that may arise
between Counterparty and GS & Co., including, but not limited to, those arising
out of or relating to the Agreement or any Transaction hereunder, shall be
determined by arbitration conducted before The New York Stock Exchange, Inc.
(“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR
decline to hear the matter, before the American Arbitration Association, in
accordance with their arbitration rules then in force. The award of the
arbitrator shall be final, and judgment upon the award rendered may be entered
in any court, state or federal, having jurisdiction.
          (i) No person shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement against
any person who has initiated in court a putative class action or who is a member
of a putative class who has not opted out of the class with respect to any
claims encompassed by the putative class action until: (i) the class
certification is denied; (ii) the class is decertified; or (iii) Counterparty is
excluded from the class by the court.
          (j) Such forbearance to enforce an agreement to arbitrate shall not
constitute a waiver of any rights under this Confirmation except to the extent
stated herein.

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     Counterparty hereby agrees (a) to check this Master Confirmation carefully
and immediately upon receipt so that errors or discrepancies can be promptly
identified and rectified and (b) to confirm that the foregoing (in the exact
form provided by GS&Co.) correctly sets forth the terms of the agreement between
GS&Co. and Counterparty with respect to any Transaction, by manually signing
this Master Confirmation or this page hereof as evidence of agreement to such
terms and providing the other information requested herein and immediately
returning an executed copy to Equity Derivatives Documentation Department,
facsimile No. 212-428-1980/83.

                  Yours sincerely,    
 
                GOLDMAN, SACHS & CO.    
 
           
 
  By:   /s/Conrad Langenegger
 
Authorized Signatory    

Agreed and accepted by:

              POLARIS INDUSTRIES INC.    
 
            By:   /s/Michael W. Malone              
 
  Name:   Michael W. Malone    
 
  Title:   Vice President—Finance, Chief    
 
      Financial Officer and Secretary    

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ANNEX A
SUPPLEMENTAL CONFIRMATION

     
To:
  Polaris Industries Inc.
 
  2100 Highway 55
 
  Medina, MN 55340
 
   
From:
  Goldman, Sachs & Co.
 
   
Subject:
  Accelerated Share Buyback
 
   
Ref. No:
  [Insert Reference No.]
 
   
Date:
  [Insert Date]

The purpose of this Supplemental Confirmation is to confirm the terms and
conditions of the Transaction entered into between Goldman, Sachs & Co.
(“GS&Co.”) and Polaris Industries Inc., a Minnesota corporation (“Counterparty”
and together with GS&Co., the “Contracting Parties”), on the Trade Date
specified below. This Supplemental Confirmation is a binding contract between
GS&Co. and Counterparty as of the relevant Trade Date for the Transaction
referenced below.
1. This Supplemental Confirmation supplements, forms part of, and is subject to
the Master Confirmation dated as of December 5, 2006 (the “Master Confirmation”)
between the Contracting Parties, as amended and supplemented from time to time.
All provisions contained in the Master Confirmation govern this Supplemental
Confirmation except as expressly modified below.
2. The terms of the Transaction to which this Supplemental Confirmation relates
are as follows:

     
Trade Date:
  [            ], 200_
 
   
Initial Share Price:
  USD[                       ] per Share; provided that if there is more than
one Initial Settlement Date, the Initial Share Price shall be the weighted
average of such price (weighted by the number of Shares delivered on the first
Initial Settlement Date) and the price or prices agreed between the parties with
respect to the Shares delivered on each additional Initial Settlement Date
(weighted in each case by the number of Shares delivered on such additional
Initial Settlement Date).
 
   
Scheduled Valuation Date:
  [                       ]
 
   
First Acceleration Date:
  [                       ] (or, if such date is not a Scheduled Trading Day,
the next following Scheduled Trading Day).
 
   
Number of Shares:
  [                       ]; provided that if GS&Co. is unable to borrow or
otherwise acquire a number of Shares equal to the Number of Shares for delivery
to Counterparty on all Initial Settlement Dates, the Number of Shares shall be
reduced to such number of Shares that GS&Co. is able to so borrow or otherwise
acquire.
 
   
Settlement Price Adjustment Amount:
  USD[       ] per Share

A-1

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Initial Purchase Price:
  [                       ]; provided that if the Number of Shares is reduced
pursuant to the proviso to “Number of Shares” above, then the Initial Purchase
Price will be reduced accordingly.
 
   
Ordinary Dividend Amount:
  For any calendar quarter, USD[            ]
 
   
[Termination Price:
  USD[            ] per Share]
 
   
[Increase/Decrease in Reserved Shares:
  [            ] Shares]
 
   
Counterparty Additional Payment Amount:
  USD[            ]; provided that if the Number of Shares is reduced pursuant
to the proviso to “Number of Shares” above, then the Counterparty Additional
Payment Amount will be reduced accordingly.

3. Counterparty represents and warrants to GS&Co. that neither it (nor any
“affiliated purchaser” as defined in Rule 10b-18 under the Exchange Act) have
made any purchases of blocks pursuant to the proviso in Rule 10b-18(b)(4) under
the Exchange Act during the four full calendar weeks immediately preceding the
Trade Date.
4. This Supplemental Confirmation may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Supplemental Confirmation by signing and delivering one or more
counterparts.
     Counterparty hereby agrees (a) to check this Supplemental Confirmation
carefully and immediately upon receipt so that errors or discrepancies can be
promptly identified and rectified and (b) to confirm that the foregoing (in the
exact form provided by GS&Co.) correctly sets forth the terms of the agreement
between GS&Co. and Counterparty with respect to this Transaction, by manually
signing this Supplemental Confirmation or this page hereof as evidence of
agreement to such terms and providing the other information requested herein and
immediately returning an executed copy to Equity Derivatives Documentation
Department, facsimile No. 212-428-1980/83.

                  Yours sincerely,    
 
                GOLDMAN, SACHS & CO.    
 
           
 
  By:        
 
     
 
Authorized Signatory    

          Agreed and accepted by:    
 
        POLARIS INDUSTRIES INC.    
By:
       
 
 
 
Name:    
 
  Title:    

A-2

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ANNEX B
NET SHARE SETTLEMENT PROCEDURES
          1. The following Net Share Settlement Procedures shall apply to the
extent that Net Share Settlement applies under the Master Confirmation:
          2. Net Share Settlement shall be made by delivery on the Net Share
Settlement Date of a number of Shares satisfying the conditions set forth in
paragraph 3 below with a value equal to the Forward Cash Settlement Amount (the
“Registered Settlement Shares”), with such Shares’ value based on the Net Share
Settlement Price, or a number of Shares not satisfying such conditions with a
value equal to the Forward Cash Settlement Amount (the “Unregistered Settlement
Shares”), with such Shares’ value based on the value thereof to GS&Co. (which
value shall take into account a commercially reasonable illiquidity discount),
in each case as determined by the Calculation Agent.
          3. Counterparty may only deliver Registered Settlement Shares pursuant
to paragraph 2 above if:
          (a) a registration statement covering public resale of the Registered
Settlement Shares by the GS&Co. (the “Registration Statement”) shall have been
filed with, and declared effective by, the Securities and Exchange Commission
under the Securities Act on or prior to the date of delivery, and no stop order
shall be in effect with respect to the Registration Statement; a printed
prospectus relating to the Registered Settlement Shares (including any
prospectus supplement thereto, the “Prospectus”) shall have been delivered to
GS&Co., in such quantities as GS&Co. shall reasonably have requested, on or
prior to the date of delivery;
          (b) the form and content of the Registration Statement and the
Prospectus (including, without limitation, any sections describing the plan of
distribution) shall be satisfactory to GS&Co.;
          (c) as of or prior the date of delivery, GS&Co. and its agents shall
have been afforded a reasonable opportunity to conduct a due diligence
investigation with respect to Counterparty customary in scope for underwritten
offerings of equity securities and the results of such investigation are
satisfactory to GS&Co., in its discretion; and
          (d) as of the date of delivery, an agreement (the “Underwriting
Agreement”) shall have been entered into with GS&Co. in connection with the
public resale of the Registered Settlement Shares by GS&Co. substantially
similar to underwriting agreements customary for underwritten offerings of
equity securities, in form and substance satisfactory to GS&Co., which
Underwriting Agreement shall include, without limitation, provisions
substantially similar to those contained in such underwriting agreements
relating to the indemnification of, and contribution in connection with the
liability of, GS&Co. and its affiliates.
          4. If Counterparty delivers Unregistered Settlement Shares pursuant to
paragraph 2 above:
          (a) all Unregistered Settlement Shares shall be delivered to GS&Co.
(or any affiliate of GS&Co. designated by GS&Co.) pursuant to the exemption from
the registration requirements of the Securities Act provided by Section 4(2)
thereof;
          (b) as of or prior to the date of delivery, GS&Co. and any potential
purchaser of any such shares from GS&Co. (or any affiliate of GS&Co. designated
by GS&Co.) identified by GS&Co. shall be afforded a commercially reasonable
opportunity to conduct a due diligence investigation with respect to
Counterparty customary in scope for private placements of equity securities
(including, without limitation, the right to have made available to them for
inspection all reasonably available financial and other records, pertinent
corporate documents and other information reasonably requested by them); and

B-1

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          (c) as of the date of delivery, Counterparty shall enter into an
agreement (a “Private Placement Agreement”) with GS&Co. (or any affiliate of
GS&Co. designated by GS&Co.) in connection with the private placement of such
shares by Counterparty to GS&Co. (or any such affiliate) and the private resale
of such shares by GS&Co. (or any such affiliate), substantially similar to
private placement purchase agreements customary for private placements of equity
securities, in form and substance commercially reasonably satisfactory to
Counterparty and GS&Co., which Private Placement Agreement shall include,
without limitation, provisions substantially similar to those contained in such
private placement purchase agreements relating to the indemnification of, and
contribution in connection with the liability of, GS&Co. and its affiliates, and
shall provide for the payment by Counterparty of all out of pocket fees and
expenses in connection with such resale, including the reasonable out of pocket
fees and expenses of counsel for GS&Co., and shall contain representations,
warranties and agreements of Counterparty reasonably necessary or advisable to
establish and maintain the availability of an exemption from the registration
requirements of the Securities Act for such resales.
          5. GS&Co., itself or through an affiliate (the “Selling Agent”) or any
underwriter(s), will sell all, or such lesser portion as may be required
hereunder, of the Registered Settlement Shares or Unregistered Settlement Shares
and any Makewhole Shares (as defined below) (together, the “Settlement Shares”)
delivered by Counterparty to GS&Co. pursuant to paragraph 6 below commencing on
the Net Share Settlement Date and continuing until the date on which the
aggregate Net Proceeds (as such term is defined below) of such sales, as
determined by GS&Co., is equal to the Forward Cash Settlement Amount (such date,
the “Final Resale Date”). If the proceeds of any sale(s) made by GS&Co., the
Selling Agent or any underwriter(s), net of any fees and commissions (including,
without limitation, underwriting or placement fees) customary for similar
transactions under the circumstances at the time of the offering, together with
out of pocket carrying charges and expenses incurred in connection with the
offer and sale of the Shares (including, but without limitation to, the covering
of any over-allotment or short position (syndicate or otherwise)) (the “Net
Proceeds”) exceed the Forward Cash Settlement Amount, GS&Co. will refund, in
U.S. Dollars, such excess to Counterparty on the date that is three (3) Business
Days following the Final Resale Date, and, if any portion of the Settlement
Shares remains unsold, GS&Co. shall return to Counterparty on that date such
unsold Shares.
          6. If the Calculation Agent determines that the Net Proceeds received
from the sale of the Registered Settlement Shares or Unregistered Settlement
Shares or any Makewhole Shares, if any, pursuant to this paragraph 6 are less
than the Forward Cash Settlement Amount (the amount in U.S. Dollars by which the
Net Proceeds are less than the Forward Cash Settlement Amount being the
“Shortfall” and the date on which such determination is made, the “Deficiency
Determination Date”), Counterparty shall on the Exchange Business Day next
succeeding the Deficiency Determination Date (the “Makewhole Notice Date”)
deliver to GS&Co., through the Agent, a notice of Counterparty’s election that
Counterparty shall either (i) pay an amount in cash equal to the Shortfall on
the day that is one (1) Business Day after the Makewhole Notice Date, or
(ii) deliver additional Shares. If Counterparty elects to deliver to GS&Co.
additional Shares, then Counterparty shall deliver additional Shares in
compliance with the terms and conditions of paragraph 3 or paragraph 4 above, as
the case may be (the “Makewhole Shares”), on the first Clearance System Business
Day which is also an Exchange Business Day following the Makewhole Notice Date
in such number as the Calculation Agent reasonably believes would have a market
value on that Exchange Business Day equal to the Shortfall. Such Makewhole
Shares shall be sold by GS&Co. in accordance with the provisions above; provided
that if the sum of the Net Proceeds from the sale of the originally delivered
Shares and the Net Proceeds from the sale of any Makewhole Shares is less than
the Forward Cash Settlement Amount then Counterparty shall, at its election,
either make such cash payment or deliver to GS&Co. further Makewhole Shares
until such Shortfall has been reduced to zero.
          7. Notwithstanding the foregoing, in no event shall the number of
Settlement Shares, be greater than the Reserved Shares minus the amount of any
Shares actually delivered under any other Transaction(s) under this Master
Confirmation (the result of such calculation, the “Capped Number”). Counterparty
represents and warrants (which shall be deemed to be repeated on each day that a
Transaction is outstanding) that the Capped Number is equal to or less than the
number of Shares determined according to the following formula:

B-2

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A – B

         
 
  Where   A = the number of authorized but unissued shares of the Issuer that
are not reserved for future issuance on the date of the determination of the
Capped Number; and
 
       
 
      B = the maximum number of Shares required to be delivered to third parties
if Counterparty elected Net Share Settlement of all transactions in the Shares
(other than Transactions in the Shares under this Master Confirmation) with all
third parties that are then currently outstanding and unexercised.

B-3