Document:

exv10w74

Exhibit 10.74

WebMD, LLC

111 Eighth Avenue

New York, NY 10011

212-624-3700

As of December 14, 2008

Steven Zatz, M.D.

c/o WebMD Health Corp.

111 Eighth Avenue

New York, NY 10011-5201

Dear Steve:

     The purpose of this letter amendment is to amend the letter agreement between you and WebMD
Health Corp. (previously known as WebMD Health Holdings, Inc., the “Company”) dated as of
July 14, 2005 (the “Agreement”) in a manner intended to bring the Agreement into compliance
with Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations
issued thereunder. Accordingly, your execution of this letter amendment indicates your agreement
to the amendment of the Agreement as set forth below:

	 	1.	 	Section 2(b) is amended by deleting the last sentence thereof.
	 
	 	2.	 	Section 6 is amended in its entirety to read as follows:

     “6. Termination of Employment. (a) In the event of the termination of
your employment by the Company without Cause or by you for Good Reason (as such
terms are defined on Annex A attached hereto) prior to the fourth anniversary of the
Effective Date, subject to Section 6(b) below and your continued compliance with the
Trade Secret & Proprietary Information Agreement, you will be entitled: (i) to
continue to receive, as severance, the Base Salary in effect on the date hereof for
a period of one year (the “Severance Period”), payable as set forth in Section 6(c)
below, (ii) if such termination occurs after the end of a calendar year but before
the payment of a bonus for such prior year, you shall be entitled to the bonus that
you would have received for such year at the time that bonuses are paid to other
executive officers of the Company, but in no event later than December 31 of the
year in which your employment terminates and (iii) if you timely elect to continue
your health coverage through COBRA, the Company shall pay that portion of the COBRA
premium that it would pay if you were an active employee with the same type of
coverage through the Severance Period or, if earlier, until you are eligible for
comparable coverage with a subsequent employer, in each case. In addition, in the
event of the termination of your employment by the Company without Cause or by you
for

 

 

Good Reason prior to the fourth anniversary of the Effective Date, 25% of the
New Stock Option shall continue to vest and remain outstanding as if you remained in
the employ of the Company through the vesting date following the date of
termination, subject to your execution of the release described below in Section
6(b) and your continued compliance with the Trade Secret & Proprietary Information
Agreement. In the event of termination of your employment for any other reason, you
shall receive compensation earned through the date of termination and your rights
with respect to options and restricted stock will be as specified in the applicable
option or restricted stock agreements.

     (b) In order to receive any of the benefits described in Section 6(a) under
this Agreement (the “Severance Benefits”), you must (i) execute and deliver
to the Company a release of claims satisfactory to the Company (but which will not
require release of any Company payments due to you that are otherwise payable at the
date of termination of this Agreement) within the time prescribed therein but in no
event later than fifty (50) days of the date of your termination of employment and
(ii) not revoke such release pursuant to any revocations rights afforded by law.
The Company shall provide to you the form of release no later than three (3) days
following your termination of employment. If you do not timely execute and deliver
to the Company such release, or if you execute such release but revoke it, no
Severance Benefits shall be paid.

     (c) The Severance Benefits described in Section 6(a)(i) above shall be paid,
minus applicable deductions, including deductions for tax withholding, in equal
payments on the regular payroll dates during the one-year period following your
termination of employment. Commencement of payments of the Severance Benefits
described in Section 6(a)(i) shall begin on the first payroll date that occurs in
the month that begins at least 60 days after the date of your termination of
employment, but which may be accelerated by no more than 30 days (the “Starting
Date”) provided that you have satisfied the requirements of Section 6(b) of this
Agreement. The first payment on the payment Starting Date shall include those
payments that would have previously been paid if the payments of the Severance
Benefits described in Section 6(a)(i) had begun on the first payroll date following
your termination of employment. This timing of the commencement of benefits is
subject to Section 12 below.

     (d) For purposes of this Agreement, “termination of employment” shall mean a
“separation of service” as defined in Section 409A of the Internal Revenue Code of
1986, as amended, (the “Code”) and Treasury Regulations Section 1.409A-1(h)
without regard to the optional alternative definitions available thereunder.

     (e) All Severance Benefits shall be completed by, and no further Severance
Benefits shall be payable after, December 31 of the second taxable year following
the year in which your termination of employment occurs.

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     (f) Your entitlement to the payments of the Severance Benefits described in
Section 6(a)(i) shall be treated as the entitlement to a series of separate payments
for purposes of Section 409A of the Code.”

	 	3.	 	A new Section 12 is hereby inserted after Section 11 to read as follows:

     “12. Section 409A.

     (a) Potential Six-Month Delay. Notwithstanding any other provisions of
this Agreement, any payment of the Severance Benefits under this Agreement that the
Company reasonably determines is subject to Section 409A(a)(2)(B)(i) of the Code
shall not be paid or payment commenced until the later of (i) six (6) months after
the date of your termination of employment (or, if earlier, your death) and (ii) the
Starting Date. On the earliest date on which such payments can be commenced without
violating the requirements of Section 409A(a)(2)(B)(i) of the Code, you shall be
paid, in a single cash lump sum, an amount equal to the aggregate amount of all
payments delayed pursuant to the preceding sentence.

     (b) Savings Clause. It is intended that any amounts payable under this
Agreement shall either be exempt from or comply with Section 409A of the Code
(including Treasury regulations and other published guidance related thereto) so as
not to subject you to payment of any additional tax, penalty or interest imposed
under Section 409A of the Code. The provisions of this Agreement shall be construed
and interpreted to avoid the imputation of any such additional tax, penalty or
interest under Section 409A of the Code yet preserve (to the nearest extent
reasonably possible) the intended benefit payable to you. Notwithstanding the
foregoing, the Company makes no representation or warranty and shall have no
liability to you or to any other person if any of the provisions of this Agreement
are determined to constitute deferred compensation subject to Section 409A, but that
do not satisfy an exemption from, or the conditions of, that section.”

	 	4.	 	The definition of Good Reason in Annex A of the Agreement is amended in its
entirety to read as follows:
	 
	 	 	 	“A termination of employment by you for “Good Reason” means your resignation
of employment within one year of the occurrence (without your written consent) of
any of the following conditions or events: (i) any material reduction in your base
salary, (ii) a material reduction in your authority with the Company, (iii) any
material breach by the Company of this Agreement; provided, however, that none of
the foregoing conditions or events shall constitute Good Reason unless (A) you shall
have provided written notice to the Company within ninety (90) days after the
occurrence of such condition or event describing the condition or event claimed to
constitute Good Reason and (B) the Company shall have failed to remedy the condition
or event within thirty (30) days of its receipt of such written notice.”

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	 	 	 	Except as set forth herein, the Agreement remains in full force and effect.

	 	 	 	 	 
	 	Sincerely,

 	 
	 	By:  	/s/ Douglas W. Wamsley
 	 
	 	 	Name:  	Douglas W. Wamsley 	 
	 	 	Title:  	Executive Vice President 	 
	 

	 	 	 	 	 

	Agreed to:

	 	/s/ Steven Zatz
 

Steven Zatz, M.D.
	 	 

Date: December 16, 2008

4exv4w1

Exhibit 4.1

POLARIS INDUSTRIES INC.

and

WELLS FARGO BANK, NATIONAL ASSOCIATION

Rights Agent

AMENDED AND RESTATED RIGHTS AGREEMENT

Dated as of APRIL 29, 2010

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Section 1.
	 	Certain Definitions	 	 	1	 
	Section 2.
	 	Appointment of Rights Agent	 	 	5	 
	Section 3.
	 	Issue of Right Certificates	 	 	5	 
	Section 4.
	 	Form of Right Certificates	 	 	6	 
	Section 5.
	 	Countersignature and Registration	 	 	7	 
	Section 6.
	 	Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	 	 	7	 
	Section 7.
	 	Exercise of Rights; Purchase Price; Expiration Date of Rights	 	 	8	 
	Section 8.
	 	Cancellation and Destruction of Right Certificates	 	 	9	 
	Section 9.
	 	Availability of Preferred Shares	 	 	9	 
	Section 10.
	 	Preferred Shares Record Date	 	 	10	 
	Section 11.
	 	Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights	 	 	10	 
	Section 12.
	 	Certificate of Adjusted Purchase Price or Number of Shares	 	 	17	 
	Section 13.
	 	Consolidation, Merger, Statutory
Share Exchange or Sale or Transfer of Assets or Earning Power	 	 	18	 
	Section 14.
	 	Fractional Rights and Fractional Shares	 	 	20	 
	Section 15.
	 	Rights of Action	 	 	21	 
	Section 16.
	 	Agreement of Right Holders	 	 	21	 
	Section 17.
	 	Right Certificate Holder Not Deemed a Shareholder	 	 	22	 
	Section 18.
	 	Concerning the Rights Agent	 	 	22	 
	Section 19.
	 	Merger or Consolidation or Change of Name of Rights Agent	 	 	23	 
	Section 20.
	 	Duties of Rights Agent	 	 	23	 
	Section 21.
	 	Change of Rights Agent	 	 	25	 
	Section 22.
	 	Issuance of New Right Certificates	 	 	26	 
	Section 23.
	 	Redemption and Termination	 	 	26	 
	Section 24.
	 	Exchange	 	 	27	 
	Section 25.
	 	Notice of Certain Events	 	 	28	 
	Section 26.
	 	Notices	 	 	29	 
	Section 27.
	 	Supplements and Amendments	 	 	29	 
	Section 28.
	 	Successors	 	 	29	 
	Section 29.
	 	Benefits of this Agreement	 	 	29	 
	Section 30.
	 	Severability	 	 	30	 
	Section 31.
	 	Governing Law	 	 	30	 
	Section 32.
	 	Counterparts	 	 	30	 
	Section 33.
	 	Descriptive Headings	 	 	30	 
	 
	 	 	 	 	 	 
	 
	 	Signatures	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Exhibit A — Certificate of
Designations, Preferences and Rights of Series A Junior Participating Preferred Stock	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Exhibit B — Form of Right Certificate	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Exhibit C — Summary of Rights to Purchase Preferred Shares	 	 	 	 

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AMENDED AND RESTATED RIGHTS AGREEMENT

     This AMENDED AND RESTATED RIGHTS AGREEMENT (the “Agreement”), is made as of April 29, 2010 by
and between Polaris Industries Inc., a Minnesota corporation (the “Company”), and Wells Fargo Bank,
National Association (fka Norwest Bank Minnesota, N.A.), as Rights Agent (the “Rights Agent”, which
term shall include any successor Rights Agent hereunder).

     The Board of Directors of the Company authorized and declared a dividend of one preferred
share purchase right (individually a “Right” and collectively the “Rights”) for each Common Share
(as hereinafter defined) of the Company outstanding as of the Close of Business (as hereinafter
defined) on June 1, 2000 (the “Record Date”), each Right representing the right to purchase one
one-hundredth of a Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and further authorized and directed the issuance of one Right with
respect to each Common Share that becomes outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).

     The Board of Directors of the Company has determined that it is desirable and in the best
interests of the Company and its shareholders to amend and restate the original Rights Agreement
dated as of May 18, 2000 by and between the Company and the Rights Agent to, among other things,
extend the Final Expiration Date and change the Purchase Price consistent therewith.

     Accordingly, in consideration of the premises and the mutual agreements herein set forth, the
parties hereby agree as follows:

     Section 1. Certain Definitions. For purposes of this Agreement, the following terms
have the meanings indicated:

     (a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or
which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
Common Shares of the Company then outstanding, but shall not include (i) the Company, (ii) any
wholly owned Subsidiary (as such term is hereinafter defined) of the Company, (iii) any employee
benefit plan of the Company or any wholly owned Subsidiary of the Company, or (iv) any Person
holding Common Shares for or pursuant to the terms of any such plan (each of (i) through (iv) an
“Exempt Person”). An entity other than the Company or any wholly owned Subsidiary of the Company
holding Common Shares for or pursuant to the terms of an employee benefit plan of the Company or of
any wholly owned Subsidiary of the Company and in addition being the Beneficial Owner of Common
Shares that are not held for or pursuant to the terms of any such plan shall be deemed to
constitute an Acquiring Person, notwithstanding anything herein stated, if, but only if, it,
together with its Affiliates and Associates, shall be the Beneficial Owner of 15% or more,
exclusive of those Common Shares held by it for or pursuant to the terms of any such plan, of the
Common Shares then outstanding. Notwithstanding the foregoing, no Person shall become an
“Acquiring Person” as the result of an acquisition of Common Shares by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of shares
beneficially owned by

 

 

such Person to 15% or more of the Common Shares of the Company then outstanding; provided,
however, that if a Person, together with all Affiliates and Associates of such Person, shall become
the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding by reason
of share acquisitions by the Company and shall, after such share acquisitions by the Company,
become the Beneficial Owner of any additional Common Shares of the Company, then such Person shall
be deemed to be an “Acquiring Person.” Further, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an “Acquiring Person,” as defined
pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such
Person promptly divests, or promptly enters into an agreement with, and satisfactory to, the
Company, in its sole discretion, to divest (without exercising or retaining any power, including
voting power, with respect to such shares) a sufficient number of Common Shares (or securities
convertible into, exchangeable into or exercisable for Common Shares) so that such Person would no
longer shall be the Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding, then such Person shall not be deemed to be an “Acquiring Person” for any purposes of
this Agreement.

     (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), as in effect on the date of this Agreement.

     (c) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially
own” or have “beneficial ownership” of any securities:

     (i) which such Person or any of such Person’s Affiliates or Associates beneficially
owns, directly or indirectly, including without limitation securities with respect to which
such Person or any of such Person’s Affiliates or Associates has “beneficial ownership”
pursuant to Rule 13d-3 under the Exchange Act;

     (ii) which such Person or any of such Person’s Affiliates or Associates has, directly
or indirectly (A) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights (other than these Rights), warrants or options,
or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, or to have beneficial ownership of, securities tendered pursuant to
a tender or exchange offer made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement or understanding,
whether or not in writing; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations promulgated under the
Exchange Act and (2) is not then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report);

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     (iii) which are beneficially owned, directly or indirectly, by any other Person (or any
Affiliates or Associates thereof) with which such Person (or any of such Person’s Affiliates
or Associates) has any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to Section 1(c)(ii)(A)) or disposing of any
securities of the Company; or

     (iv) which are the subject of a derivative transaction to which the Company is not a
party entered into by such Person or any of such Person’s Affiliates or Associates, or
derivative security not issued by the Company acquired by such Person or such Person’s
Affiliates or Associates, which gives such Person or any Affiliate or Associate thereof the
economic equivalent of ownership of an amount of such securities due to the fact that the
value of the derivative is explicitly determined by reference to the price or value of such
securities, without regard to whether (A) such derivative conveys any voting rights in such
securities to such Person or any Affiliate or Associate thereof, (B) the derivative is
required to be, or capable of being, settled through delivery of such securities, or (C)
such Person or any Affiliate or Associate thereof may have entered into other transactions
that hedge the economic effect of such derivative; provided, however, that
solely in the case of this paragraph (iv), the Board of Directors of the Company shall be
empowered to determine (which determination of the Board of Directors of the Company shall
be conclusive and binding on such Person, the Rights Agent, the holders of the Rights and
all other Persons, and which determination solely in the case of this proviso to this
paragraph (iv) may be made effective retroactively as of a past date) that beneficial
ownership by such Person of such Common Shares that are the subject of such derivative
transaction or derivative securities pursuant to the operation of this paragraph (iv) would
be inappropriate to constitute beneficial ownership of such Common Shares for purposes of
this Agreement, and upon such a determination, such Common Shares shall not be deemed to be
beneficially owned by such Person pursuant to this paragraph (iv); and provided,
further, that in order for a determination pursuant to the foregoing proviso in this
paragraph (iv) to be effective, such determination must be made within 10 calendar days
after the date on which the Board of Directors of the Company becomes aware of beneficial
ownership by such Person of such Common Shares that are the subject of such derivative
transaction or derivative securities. In determining the amount of Common Shares deemed
beneficially owned by virtue of the operation of this paragraph (iv), the subject Person
shall be deemed to beneficially own (without duplication) the amount of Common Shares that
is synthetically owned pursuant to such derivative transactions or such derivative
securities, or, if the amount of Common Shares that is synthetically owned pursuant to the
derivative transactions or such derivative securities is not readily apparent, the subject
Person shall be deemed to beneficially own an amount of Common Shares as determined by the
Board of Directors of the Company (which determination of the Board of Directors of the Company shall be conclusive and
binding on such Person, the Rights Agent, the holders of the Rights and all other Persons);

3

 

provided, however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, or to have beneficial ownership of, any security (1) solely because such security
as been tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s
Affiliates or Associates until such tendered security is accepted for payment or exchange, or (2)
if the agreement, arrangement or understanding to vote such security (x) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (y) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report) as being beneficially owned by such Person.

     Notwithstanding anything in these definitions of Beneficial Ownership, beneficially own or
beneficial ownership to the contrary, the phrase “then outstanding,” when used with reference to a
Person’s Beneficial Ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to own beneficially hereunder.

     (d) “Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which
banking institutions in the State of Minnesota are authorized or obligated by law or executive
order to close.

     (e) “Close of Business” on any given date shall mean 5:00 P.M., Minneapolis, Minnesota time on
such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M.,
Minneapolis, Minnesota on the next succeeding Business Day.

     (f) “Common Shares” when used with reference to the Company shall mean the shares of common
stock, par value $.01 per share, of the Company. “Common Shares” when used with reference to any
Person other than the Company shall mean the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.

     (g) “Distribution Date” shall have the meaning set forth in Section 3 hereof.

     (h) “Final Expiration Date” shall have the meaning set forth in Section 7 hereof.

     (i) “Person” shall mean any individual, partnership, firm, limited liability company,
corporation or other entity, and shall include any successor (by merger or otherwise) of such
entity.

     (j) “Preferred Shares” shall mean shares of Series A Junior Participating Preferred Stock, par
value $.01 per share, of the Company having the rights and preferences set forth in the Certificate
of Designations, Preferences and Rights attached to this Agreement as Exhibit A.

     (k) “Redemption Date” shall have the meaning set forth in Section 7 hereof.

     (l) “Shares Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, a report filed pursuant to

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Section 13(d) of the Exchange Act or any successor statute) by the Company or an Acquiring Person that an
Acquiring Person has become such.

     (m) “Subsidiary” of any Person shall mean any corporation or other entity of which a majority
of the voting power of the voting equity securities or other equity interests entitled to vote in
the election of directors (or Persons with comparable responsibilities if the entity has no
directors) is beneficially owned, directly or indirectly, by such Person, or otherwise controlled
by such Person.

     Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent
to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders of the Common Shares) in
accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days’ prior written notice to the Rights Agent. The Rights
Agent shall have no duty to supervise, and shall in no event be liable, for the acts or omissions
of any such co-Rights Agent.

     Section 3. Issue of Right Certificates.

     (a) Until the earlier of (i) the Shares Acquisition Date or (ii) the Close of Business on the
tenth business day (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by
any Person (other than an Exempt Person) of, or of the first public announcement of the intention
of any Person (other than an Exempt Person) to commence, a tender or exchange offer the
consummation of which would result in any Person (other than an Exempt Person) becoming the
Beneficial Owner of Common Shares aggregating 15% or more of the then outstanding Common Shares
(including any such date that is after the date of this Agreement and prior to the issuance of the
Rights; the earlier of such dates being herein referred to as the “Distribution Date”), (x) the
Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the transfer of Common
Shares. Notwithstanding anything stated in this Section 3, the Distribution Date shall in no event
occur until the authority of the Board of Directors of the Company to redeem the Rights pursuant to
Section 23(b), as such Section may be amended pursuant to Section 27, shall have terminated. As
soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, postage-prepaid mail, to each record holder of Common Shares as of
the Close of Business on the Distribution Date, at the address of such holder shown on the records
of the Company, one or more Right Certificates, in substantially the form of Exhibit B hereto (a
“Right Certificate”), evidencing one Right for each Common Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.

     (b) A Summary of Rights to Purchase Preferred Shares, as amended (the “Summary of Rights”), is
set forth in Exhibit C hereto. With respect to certificates for Common Shares outstanding as of
the Record Date, until the Distribution Date (or the earlier Redemption Date or

5

 

Final Expiration
Date), the Rights will be evidenced by such certificates registered in the names of the holders
thereof. Until the Distribution Date (or the earlier Redemption Date or Final Expiration Date),
the surrender for transfer of any certificate for Common Shares outstanding on the Record Date,
with or without a copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.

     (c) Certificates for Common Shares which become outstanding (including, without limitation,
reacquired Common Shares referred to in the last sentence of this paragraph (c)) after the Record
Date but prior to the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the
following legend:

This certificate also evidences and entitles the holder hereof to certain rights
(the “Rights”) as set forth in an Amended and Restated Rights Agreement between
Polaris Industries Inc. and Well Fargo Bank, National Association (fka Norwest Bank
Minnesota, N.A.), originally dated as of May 18, 2000, as amended and restated as of
April 29, 2010 (the “Amended and Restated Rights Agreement”), the terms of which
(including restrictions on the transfer of such Rights) are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of Polaris Industries Inc. Under certain circumstances, as set forth in the
Amended and Restated Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. Polaris
Industries Inc. will mail to the holder of this certificate a copy of the Amended
and Restated Rights Agreement without charge after receipt of a written request
therefore. Under certain circumstances, as set forth in the Amended and Restated
Rights Agreement, Rights that are or were issued to any Person who becomes an
Acquiring Person, or any Affiliate or Associate thereof (as such terms are defined
in the Amended and Restated Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder thereof, may become null and void.

With respect to such certificates containing the foregoing legend, until the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date, the Rights associated with the
Common Shares represented by such certificates shall be evidenced by such certificates alone, and
the surrender for transfer of any such certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby. In the event that the Company purchases or
acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares which are no longer
outstanding.

     Section 4. Form of Right Certificates. The Right Certificates (and the forms of
election to purchase Preferred Shares and of assignment to be printed on the reverse thereof) shall
be substantially the same as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement, or as may be
required

6

 

to comply with any applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange or automated quotation system on which the Rights
may from time to time be listed, or to conform to usage. Subject to the provisions of Sections 11
and 22 hereof, the initial Right Certificates shall entitle the holders thereof to purchase such
number of one one-hundredths of a Preferred Share as shall be set forth therein at the price per
one one-hundredth of a Preferred Share set forth therein (the “Purchase Price”), but the amount and
type of securities purchasable upon the exercise of each Right shall be subject to adjustment as
provided herein.

     Section 5. Countersignature and Registration.

     (a) The Right Certificates shall be executed on behalf of the Company by its Chairman of the
Board, Chief Executive Officer, President, Chief Financial Officer, any Vice President, or its
Treasurer, either manually or by facsimile signature. The Right Certificates shall be
countersigned either manually or by facsimile signature, by the Rights Agent and shall not be valid
for any purpose unless countersigned. In case any officer of the Company who shall have signed any
of the Right Certificates shall cease to be such officer of the Company before countersignature by
the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such an officer.

     (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its
principal office, books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the Right Certificates and the date of each
of the Right Certificates.

     Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates.

     (a) Subject to the provisions of Section 14 hereof, at any time after the Close of Business on
the Distribution Date, and at or prior to the Close of Business on the earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof or that
have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon the Rights Agent
shall, subject to Section 14 hereof, countersign and deliver to the Person entitled thereto a Right

7

 

Certificate or Right Certificates, as the case may be, as so requested. The Company may require
payment by the registered holder of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or exchange of Right
Certificates. Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have duly completed and executed the form of assignment on the form of
assignment on the reverse side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of such Right
Certificate or Affiliates or Associates thereof as the Company shall reasonably request.

     (b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the
Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor
to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.

     Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.

     (a) Except as provided in Section 11(a)(ii), the registered holder of any Right Certificate
may exercise the Rights evidenced thereby (except as otherwise provided herein) in whole or in part
at any time after the Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly completed and executed, to the Rights Agent
at the principal office of the Rights Agent, together with payment of the Purchase Price for each
one one-hundredth of a Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on April 29, 2020 (the “Final Expiration Date”), (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof (the “Redemption Date”), or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof.

     (b) The Purchase Price for each one one-hundredth of a Preferred Share purchasable pursuant to
the exercise of a Right shall initially be $250.00 (Two Hundred Fifty dollars), shall be subject to
adjustment from time to time as provided in Section 11 or 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) below.

     (c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of
election to purchase duly completed and executed, accompanied by payment of the Purchase Price for
the shares to be purchased and an amount equal to any applicable transfer tax required to be paid
by the holder of such Right Certificate in accordance with Section 9 hereof by cash, certified
check, cashier’s check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent (or make available, if the Rights
Agent is the transfer agent for the shares) of the Preferred Shares certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) if the Company shall have elected to deposit the total
number of Preferred Shares issuable upon exercise of the Rights under this Agreement with a

8

 

depository agent, requisition from the depository agent depository receipts representing such
number of one one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be deposited by the
transfer agent with the depository agent) and the Company hereby directs the depository agent to
comply with such request, (ii) when appropriate, requisition from the Company the amount of cash to
be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depository receipts, cause the same to be delivered
to or upon the order of the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after receipt, deliver such
cash for fractional interests in shares to or upon the order of the registered holder of such Right
Certificate.

     (d) In case the registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to the registered holder of
such Right Certificate or to such holder’s duly authorized assigns, subject to the provisions of
Section 14 hereof.

     (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless such registered holder
shall have (i) duly completed and executed the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of such
Right Certificate or Affiliates or Associates thereof as the Company shall reasonably request.

     Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Right Certificates, after any retention period
required by the Securities and Exchange Commission has lapsed, and in such case shall deliver a
certificate of destruction thereof to the Company.

     Section 9. Availability of Preferred Shares.

     (a) The Company covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding Rights.

     (b) At such time, if any, and so long as the Preferred Shares issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company shall use its best efforts to

9

 

cause, from and after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon such exercise.

     (c) The Company covenants and agrees that it will take all such action as may be necessary to
ensure that all Preferred Shares delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such Preferred Shares (subject to payment of the Purchase Price and any
applicable transfer taxes), be duly and validly authorized and issued and fully paid and
nonassessable shares.

     (d) The Company further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Preferred Shares upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the issuance or delivery
of certificates or depository receipts for the Preferred Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue
or to deliver any certificates or depository receipts for Preferred Shares upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been established to the Company’s
reasonable satisfaction that no such tax is due.

     Section 10. Preferred Shares Record Date. Each person in whose name any certificate
for Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon which the
Preferred Shares transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate as such
shall not be entitled to any rights of a holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.

     Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights. The Purchase Price, the number and kind of shares covered by each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

(a)(i) In the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller
number of Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification in connection
with a consolidation, merger or statutory share exchange in which the Company is the

10

 

continuing, surviving or acquiring corporation), except as otherwise provided in this
Section 11 (a), the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of capital stock issuable on such date pursuant to the
exercise of the Rights, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the Purchase Price
(and any applicable transfer taxes), the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such date and at a time
when the Preferred Shares transfer books of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which would require
adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).

     (ii) Subject to Section 24 of this Agreement, in the event any Person, alone or
together with its Affiliates and Associates, becomes an Acquiring Person, proper provision
shall be made so that each holder of a Right, except as provided below, shall thereafter
have a right to receive, upon exercise thereof by payment of the amount equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share
for which a Right would otherwise be then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share for which a Right would
otherwise be then exercisable and (y) dividing that product by 50% of the then current per
share market price of the Company’s Common Shares (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such event; provided, however, that if the
transaction that would otherwise give rise to the foregoing adjustment is also subject to
the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall
apply and no adjustment shall be made pursuant to this Section 11(a)(ii); and provided
further that the adjustment set forth in this Section 11(a)(ii) shall be effective only at
and after the time at which the authority of the Board of Directors of the Company to redeem
the Rights pursuant to Section 23(b), as such Section may be amended pursuant to Section 27,
shall have terminated.

     Notwithstanding the foregoing, in the event any Person shall become an Acquiring
Person, any Rights that are or, after becoming an Acquiring Person, were beneficially owned
by an Acquiring Person (or any Associate or Affiliate of such Acquiring Person), shall
become null and void at the time of such event without any further action, and no holder of
such Rights shall thereafter have any right to exercise such Rights or any other rights
whatsoever with respect to such Rights, whether under any provision of this Agreement or
otherwise. No Right Certificate shall be issued pursuant to Section 3 hereof that
represents Rights beneficially owned by an Acquiring Person or any Associate or Affiliate of
any Acquiring Person whose Rights would be void pursuant to the preceding sentence; no Right
Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or any

11

 

Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person or
any Associate or Affiliate thereof whose Rights would be void pursuant to the preceding
sentence shall be canceled. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any
holder of a Right Certificate or other Person as a result of its failure in good faith to
make any determinations with respect to an Acquiring Person or its Affiliates or Associates.

     (iii) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the
Company may, if the Company’s Board of Directors determines that such action is necessary or
appropriate and not contrary to the interest of holders of Rights (and, in the event that
the number of Common Shares which are authorized by the Company’s Articles of Incorporation
but not outstanding or reserved for issuance for purposes other than upon exercise of the
Rights are not sufficient to permit the exercise in full of the Rights, or if any necessary
regulatory approval for such issuance has not been obtained by the Company): (A) determine
the excess of (1) the value of the Common Shares issuable upon the exercise of a Right (the
“Current Value”) over (2) the Purchase Price (such excess, the “Spread”) and (B) with
respect to each Right, make adequate provision to substitute in whole or in part for such
Common Shares, upon exercise of the Rights, (including, without limitation, full payment of the Purchase Price) (1) cash, (2) a reduction in the Purchase Price, (3)
other equity securities of the Company (including, without
limitation, shares or units of shares of any series of preferred stock which the Board of Directors of the Company has
deemed to have the same value as Common Shares (such shares or units of shares of preferred
stock are herein called “common share equivalents”)), except to the extent that the Company
has not obtained any necessary shareholder or regulatory approval for such issuance, (4)
debt securities of the Company, except to the extent that the Company has not obtained any
necessary shareholder or regulatory approval for such issuance, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to the Current Value, where
such aggregate value has been determined by the Board of Directors of the Company based upon
the advice of a nationally recognized investment banking firm selected by the Board of
Directors of the Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days following
the later of (x) the first occurrence of a Distribution Date and (y) the date on which the
Company’s right of redemption pursuant to Section 23(b) expires (the later of (x) and (y)
being referred to herein as the “Trigger Date”), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available), except to the extent that the
Company has not obtained any necessary shareholder or regulatory approval for such issuance,
and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Board of Directors of the Company shall determine in good faith that it is
likely that sufficient additional Common Shares could be authorized for issuance upon
exercise in full of the Rights or that any necessary regulatory approval for such issuance
will be obtained, the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Trigger Date, in order that the
Company may seek shareholder approval for the authorization of such additional shares or

12

 

take action to obtain such regulatory approval (such period, as it may be extended, the
“Substitution Period”). To the extent that the Company determines that some action need be
taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to the second paragraph of Section 11(a)(ii) hereof, that such
action shall apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares, to take any action to obtain any required
regulatory approval and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Shares shall be the current per share market
price (as determined pursuant to Section 11(d) hereof) of the Common Shares on the Trigger
Date and the value of any “common stock equivalent” shall be deemed to have the same value
as the Common Shares on such date.

     (b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares (“equivalent preferred shares”)) or
securities convertible into Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares) less than the then
current per share market price of the Preferred Shares (as determined pursuant to Section 11(d)
hereof) on such record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Preferred Shares outstanding on such record
date plus the number of Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase at such current per
share market price and the denominator of which shall be the number of Preferred Shares outstanding
on such record date plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the convertible securities so to
be offered are initially convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of the Rights. Preferred Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been fixed.

     (c) In case the Company shall fix a record date for the making of a distribution to all
holders of the Preferred Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation or in a

13

 

statutory share exchange) of evidences of indebtedness or cash or non-cash assets (other than a
regular quarterly cash dividend or a dividend payable in Preferred Shares) or subscription rights
or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Shares (as determined pursuant to Section 11(d)
hereof) on such record date, less the fair market value (as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the evidences of indebtedness or cash or non-cash assets so to be
distributed on, or of such subscription rights or warrants applicable to, one Preferred Share and
the denominator of which shall be such current per share market price of the Preferred Shares.
Such adjustments shall be made successively whenever such a record date is fixed; and in the event
that such distribution is record date had not so made, the Purchase Price shall again be adjusted
to be the Purchase Price which would then be in effect if such not been fixed.

(d)(i) For the purpose of any computation hereunder, the “current per share market price” of
any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall be
deemed to be the average of the daily closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in shares of such
Security or securities convertible into such Security (other than the Rights), or (B) any
subdivision, combination or reclassification of such Security, and prior to the expiration
of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or admitted to trading or, if
the Security is not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System (“NASDAQ”) or such other system then in use, or, if on any
such date the Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market in the
Security selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Security, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company shall be used in lieu of
the closing price for such date. The term “Trading Day” shall mean a day on which the
principal national securities exchange on which the Security is listed or admitted to
trading is open for the

14

 

transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day. Except as provided
in Section 11(d)(ii) with respect to Preferred Shares, if on any such day the Security is
not publicly held or no professional market maker is making a market in the Security, the
fair value of such Security on such day as determined in good faith by the Board of
Directors of the Company (whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights)
shall be used in lieu of the closing price for such day.

     (ii) For the purpose of any computation hereunder, the “current per share market price”
of the Preferred Shares shall be determined in accordance with the method set forth in
Section 11(d)(i). If the Preferred Shares are not publicly traded, the “current per share
market price” of the Preferred Shares shall be conclusively deemed to be the current per
share market price of the Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither the Common Shares
nor the Preferred Shares are publicly held or so listed or traded, “current per share market
price” shall mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights.

     (e) Anything herein to the contrary notwithstanding, except as provided in the third sentence
of this Section 11(e), no adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that
any adjustments which by reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one one-millionth of a Preferred Share or
one ten-thousandth of a Common Share or any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section
11 shall be made no later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the Final Expiration Date.

     (f) If as a result of an adjustment made pursuant to Section 11(a) or Section 13(a), the
holder of any Right thereafter exercised shall become entitled to receive any shares of capital
stock of the Company other than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred
Shares contained in Section 11(a) through (c), inclusive, and Section 11(e), and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares shall apply on like terms to any
such other shares.

     (g) All Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.

15

 

     (h) Unless the Company shall have exercised its election as provided in Section 11(i),
upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b)
and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths
of a Preferred Share (calculated to the nearest one one-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one one-hundredths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

     (i) The Company may elect on or after the date of any adjustment of the Purchase Price to
adjust the number of Rights, in substitution for any adjustment in the number of one one-hundredths
of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the
Right Certificates have been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the Right Certificates
held by such holders prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the public announcement.

     (j) Irrespective of any adjustment or change in the Purchase Price or the number of one
one-hundredths of a Preferred Share issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the Purchase Price and the
number of one one-hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.

     (k) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares and other capital stock or
securities of the

16

 

Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to
such adjustment; provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder’s right to receive such additional shares upon
the occurrence of the event requiring such adjustment.

     (l) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that it in its sole discretion shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred Shares, (ii) issuance
wholly for cash of any Preferred Shares at less than the current market price, (iii) issuance
wholly for cash of Preferred Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred Shares
or (v) issuance of rights, options or warrants referred to hereinabove in Section 11(b), hereafter
made by the Company to holders of its Preferred Shares shall not be taxable to such shareholders.

     (m) Anything in this Agreement or the Rights notwithstanding, in the event that at any time
after the date of this Agreement and prior to the Distribution Date, the Company shall (i) declare
or pay any dividend on the Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or otherwise than by payment
of dividends in Common Shares) into a greater or lesser number of Common Shares, then in any such
case (x) the number of one one-hundredths of a Preferred Share purchasable after such event upon
proper exercise of each Right shall be determined by multiplying the number of one one-hundredths
of a Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such event and the denominator
of which is the number of Common Shares outstanding immediately after such event, and (y) each
Common Share outstanding immediately after such event shall have issued with respect to it that
number of Rights which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(m) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is
effected. If an event occurs which would require adjustment under both Section 11(a)(ii) and this
Section 11(m), the adjustment provided for in this Section 11(m) shall be in addition to, and shall
be made prior to, any adjustment required pursuant to Section 11(a)(ii).

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 or 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Shares or
the Preferred Shares a copy of such certificate and (c) if such adjustment is made after the
Distribution Date, mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 25 hereof.

17

 

     Section 13. Consolidation, Merger, Statutory Share Exchange or Sale or Transfer of Assets
or Earning Power.

     (a) In the event that, on or after the Distribution Date or within 15 days prior thereto,
directly or indirectly:

     (i) the Company shall consolidate with, or merge with and into, any other Person, and
the Company shall not be the continuing or surviving corporation of such consolidation or
merger;

     (ii) any Person shall consolidate with the Company, or merge with and into the Company
and the Company shall be the continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger, all or part of the outstanding
Common Shares shall be changed into or exchanged for stock or other securities of any other
Person (or the Company), money or any other property (except as the result of the exercise
of statutory dissenters’ rights); or

     (iii) the Company shall effect a statutory share exchange with the outstanding Common
Shares of the Company being exchanged for stock or other securities of any other Person,
cash or other property;

     (iv) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or a series of related transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company or
one or more of its wholly owned Subsidiaries);

then, and in each such case in clause (i) through (iv), proper provision shall be made so
that:

     (A) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof by payment of the
amount equal to the product of the number of one one-hundredths of a Preferred Share
which would otherwise be issuable upon exercise of a Right and the then current
Purchase Price in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable Common Shares of the Principal Party (as
hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or adverse claims, as shall be equal to the result obtained by x)
multiplying the then current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right would otherwise be exercisable, and (y) dividing
that product by 50% of the then current per share market price of the Common Shares
of such Principal Party (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, exchange, sale or transfer;

18

 

     (B) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale, exchange or transfer, all the
obligations and duties of the Company pursuant to this Agreement;

     (C) the term “Company” shall thereafter be deemed to refer to such Principal
Party; and

     (D) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Common Shares to permit the exercise
of all outstanding Rights) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights.

     (b) “Principal Party” shall mean:

     (i) in the case of any transaction described in clauses (i), (ii) or (iii) of the first
sentence of Section 13(a), the Person (including, without limitation, the Company as
successor thereto or as the surviving corporation) that is the issuer of any securities into
which Common Shares of the Company are converted in such merger, consolidation or exchange,
or if no securities are so issued, the Person that is the other party to such merger,
consolidation or exchange; and

     (ii) in the case of any transaction described in clause (iv) of the first sentence of
Section 13(a), the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions;

provided, however, that in any such case, (1) if the Common Shares of such Person are not at
such time or have not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Shares of which are and have been so registered, “Principal Party”
shall refer to such other Person, and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which are and have
been so registered, “Principal Party” shall refer to whichever of such Persons is the issuer
of the Common Shares having the greatest aggregate market value.

     (c) The Company shall not consummate any event described in clauses (i), (ii), (iii) or (iv)
of the first sentence of Section 13(a) unless the Principal Party shall have a sufficient number of
authorized, unissued and unreserved Common Shares which have not been issued or are held in
treasury to permit the exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of any event described
in clauses (i), (ii), (iii) or (iv) of the first sentence of Section 13(a), the Principal Party
will:

19

 

     (i) prepare and file a registration statement under the Securities Act of 1933 (the
“Securities Act”), with respect to the Rights and the securities purchasable upon exercise
of the Rights, on an appropriate form, and use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (1) the date as of which the Rights are no longer exercisable for such
securities or (2) the Final Expiration Date;

     (ii) take such action as may be appropriate under, or to ensure compliance with, the
securities or “blue sky” laws of the various states in connection with the exercisability of
the Rights; and

     (iii) deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates, which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.

     (d) The Company shall not enter into any transaction of the kind referred to in this Section
13 if at the time of such transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the benefits intended to be afforded by the
Rights.

     (e) The provisions of this Section 13 shall similarly apply to successive mergers,
consolidations, exchanges, sales or other transfers.

     Section 14. Fractional Rights and Fractional Shares.

     (a) The Company shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Right Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14(a), the current market value of
a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional market maker making a
market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a market in the

20

 

Rights, the fair value of the Rights on such date as determined in good faith by the Board of
Directors of the Company shall be used.

     (b) The Company shall not be required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of
the Rights or to distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depository receipts, pursuant to an appropriate agreement
between the Company and a depository selected by it; provided, that such agreement shall provide
that the holders of such depository receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares represented by such
depository receipts. In lieu of fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Preferred Share. For the purposes of this
Section 14(b), the current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.

     (c) The holder of a Right by the acceptance of the Right expressly waives any right to receive
any fractional Rights or any fractional shares upon exercise of a Right (except as provided above).

     Section 15. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or
of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in such holder’s own behalf and for such holder’s own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, such holder’s right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and injunctive relief against
actual or threatened violations of the obligations of any Person subject to, this Agreement.

     Section 16. Agreement of Right Holders. Every holder of a Right, by accepting the
same, consents and agrees with the Company and the Rights Agent and with every other holder of a
Right that:

     (a) prior to the Distribution Date, the Rights will be transferable only in connection with
the transfer of the Common Shares;

21

 

     (b) after the Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer;

     (c) the Company and the Rights Agent may deem and treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to the contrary;

     (d) the Company may issue Rights after the Effective Date but prior to the Distribution Date,
and in certain instances after the Distribution Date, as provided in this Agreement; and

     (e) notwithstanding anything in this Agreement or the Rights to the contrary, the Company, the
Rights Agent and the Board of Directors of the Company shall not have any liability to any holder
of a Right or other Person as a result of the inability of the Company or the Rights Agent to
perform any of its obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute, rule, regulation
or executive order promulgated or enacted by any governmental authority prohibiting or otherwise
restraining performance of such obligation.

     Section 17. Right Certificate Holder Not Deemed a Shareholder. No holder, as such,
of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of the Preferred Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such,
any of the rights of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.

     Section 18. Concerning the Rights Agent.

     (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without gross negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the

22

 

acceptance and administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.

     (b) The Rights Agent shall be protected and shall incur no liability for, or in respect of any
action taken, suffered or omitted by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper
or document believed by it to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.

     Section 19. Merger or Consolidation or Change of Name of Rights Agent.

     (a) Any corporation into which the Rights Agent or any successor Rights Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust powers of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties hereto; provided that
such corporation would be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. If at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.

     (b) In case at any time the name of the Rights Agent shall be changed and at such time any of
the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates shall have the full force provided in the Right Certificates and
in this Agreement.

     Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement
upon the following terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:

     (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the opinion of such counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with
such opinion.

23

 

     (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter (including, without limitation, the identity of
any Acquiring Person and the determination of the “current per share market price”) be proved or
established by the Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President,
the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon such certificate.

     (c) The Rights Agent shall be liable hereunder to the Company and any other Person only for
its own gross negligence, bad faith or willful misconduct.

     (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.

     (e) The Rights Agent shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Section 3, 11, 13, 23 or 24, or the ascertaining
of the existence of facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.

     (f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.

     (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Financial Officer, any Vice President, the Secretary or
the Treasurer of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or suffered by it in
good

24

 

faith in accordance with instructions of any such officer or for any delay in acting while
waiting for those instructions.

     (h) The Rights Agent and any shareholder, director, officer or employee of the Rights Agent
may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.

     (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection and continued
employment thereof.

     (j) No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights or powers if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.

     Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing
mailed to the Company and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and, if such notice is after the Distribution Date, to the holders of
the Right Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Shares or Preferred
Shares by registered or certified mail, and, if such notice is mailed after the Distribution Date,
to the holders of the Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit the Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be (a) a corporation organized
and doing business under the laws of the United States or of the State of Minnesota (or of any
other state of the United States so long as such corporation is authorized to do business as a
banking institution in the State of Minnesota), in good standing, that is authorized under such
laws to exercise corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50 million or (b) an affiliate of a corporation
described in clause (a). After appointment, the successor Rights Agent shall be vested

25

 

with the
same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Shares or Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.

     Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class
of shares or other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.

     Section 23. Redemption and Termination.

     (a) The Rights may be redeemed only by action of a majority of the Board of Directors of the
Company pursuant to paragraph (b) of this Section 23 and shall not be redeemed in any other manner.

     (b) The Board of Directors of the Company may, at its option, at any time prior to the earlier
of (i) such time as any Person becomes an Acquiring Person or (ii) the Close of Business on the
Final Expiration Date, redeem all but not less than all the then outstanding Rights at a redemption
price of $.001 per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”). The redemption of the Rights by the Board may be made
effective at such time, on such basis and with such conditions as the Board in its sole discretion
may establish.

     (c) Immediately upon the effectiveness of the redemption of the Rights pursuant to paragraph
(b) of this Section 23 and without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within 10 days after such action ordering the redemption of the
Rights, the Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice that is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made. Neither the Company nor any of
its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the Distribution Date.

26

 

     Section 24. Exchange.

     (a) The Board of Directors of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares, with each Right to be exchanged for such number of Common
Shares as shall equal the result obtained by dividing (x) the then current Purchase Price by (y)
the current per share market price of Common Shares (determined pursuant to Section 11(d) hereof)
on the date the Rights first become exercisable for Common Shares pursuant to Section 11(a)(ii)
(such number of shares being hereinafter referred to as the “Exchange Ratio”). The Exchange Ratio
shall be appropriately adjusted to reflect any stock split, stock dividend or similar transaction
affecting the Common Shares that occurs after the date the Rights first become exercisable for
Common Shares pursuant to Section 11(a)(ii). Notwithstanding the foregoing, the Board of Directors
of the Company shall not be empowered to effect such exchange at any time after any Person (other
than an Exempt Person), together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.

     (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice that is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Shares for Rights will be
effected and, in the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 11(a) (ii) hereof) held by each holder
of Rights.

     (c) In the event that there shall not be sufficient authorized, unissued and unreserved Common
Shares to permit any exchange of Rights as contemplated in accordance with this Section 24, the
Company,
at its option, may substitute Preferred Shares (or equivalent preferred shares, as such
term is defined in Section 11(b) hereof, or common share equivalents, as such term is defined
in Section 11(a)(iii)(B)(3) hereof) for Common Shares exchangeable for Rights, at the initial
rate of one one-hundredth of a Preferred Share (or equivalent preferred share) or one common share
equivalent for each Common Share, as appropriately adjusted to reflect stock splits, stock
dividends or similar transactions affecting the Common Shares that occur after the date of this
Agreement.

     (d) In the event that there shall not be sufficient Common Shares, Preferred Shares,
equivalent preferred shares or common share equivalents, authorized, unissued and unreserved to
permit the exchange of Rights as contemplated in accordance with this Section 24, the Company

27

 

shall
take all such action as may be necessary to authorize additional Common Shares or Preferred Shares,
equivalent preferred shares or common share equivalents for issuance upon exchange of the Rights.

     (e) The Company shall not be required to issue fractions of Common Shares or to distribute
certificates which evidence fractional Common Shares. In lieu of such fractional Common Shares,
the Company shall pay to the registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this paragraph (e), the
current market value of a whole Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.

     Section 25. Notice of Certain Events.

     (a) In case the Company shall propose at any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred Shares), (iv) to effect
any consolidation, merger or statutory share exchange into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in
one or more transactions, of 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares), then, in each such
case, the Company shall give to each holder of a Right Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders of the Common
Shares and/or Preferred Shares, if any such date is to be fixed, and such notice shall be so given
in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the record
date for determining holders of the Preferred Shares for purposes of such action, and in the case
of any such other action,
at least 10 days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred Shares, whichever shall
be the earlier.

     (b) In case the event set forth in Section 11(a)(ii) hereof shall occur, then the Company
shall as soon as practicable thereafter give to each holder of a Right Certificate, in accordance
with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

28

 

     Section 26. Notices. Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid, or delivered by hand or
express courier service or faxed, addressed (until another address is filed in writing with the
Rights Agent) as follows:

Polaris Industries Inc.

2100 Highway 55

Medina, Minnesota 55340

Attention: General Counsel

Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement
to be given or made by the Company or by the holder of any Right Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, or
delivered by hand or express courier service or faxed, addressed (until another address is filed in
writing with the Company) as follows:

Wells Fargo Bank, National Association

161 North Concord Exchange St.

South St. Paul, Minnesota 55075

Attention: Stock Transfer Department

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.

     Section 27. Supplements and Amendments. By action of the Board of Directors, the
Company may and the Rights Agent shall, if so directed from the Company, from time to time
supplement or amend this Agreement without the approval of any holders of Right Certificates in
order to cure any ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or to make any other provisions with
respect to the Rights which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights Agent; provided,
however, that from and after such time as any Person becomes an Acquiring Person, this Agreement
shall not be amended in any manner which would adversely affect the interests of the holders of
Rights.

     Section 28. Successors. All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.

     Section 29. Benefits of this Agreement.

     (a) Nothing in this Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right Certificates (and,

29

 

prior
to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement. This Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares).

     (b) The Board of Directors of the Company shall have the exclusive power and total and
complete authority to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or the Company or necessary or advisable in the administration of
this Agreement, including without limitation the right and power to interpret this Agreement and to
make conclusively all determinations deemed necessary or advisable for the administration of this
Agreement. All such acts, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that are done or made by
the Board of Directors of the Company in good faith shall (x) be final, conclusive and binding on
the Company, the Rights Agent and the holders of the Rights and all other parties and (y) not
subject the Board of Directors of the Company to any liability to the holders of the Rights or any
other party.

     Section 30. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

     Section 31. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of Minnesota and for
all purposes shall be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.

     Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same instrument.

     Section 33. Descriptive Headings. Descriptive headings of the several Sections of
this Agreement are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

[Signature page follows]

30

 

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as
of the day and year first above written.

	 	 	 	 	 	 
	 	 	 	 	 	 
	POLARIS INDUSTRIES INC.

	 	 	 	WELLS FARGO BANK,

NATIONAL ASSOCIATION,	 
	 
	 	 	 	 	 
	 

	 	 	 	AS RIGHTS AGENT	 
	 
	 	 	 	 	 
	/s/ Scott W. Wine

	 	 	 	/s/ Barbara M. Novak	 
	 

	 	 	 	 	 
	Scott W. Wine

	 	 	 	Barbara M. Novak	 
	Chief Executive Officer

	 	 	 	Vice President	 

 

 

Exhibit A

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

of

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

($.0l Par Value)

of

POLARIS INDUSTRIES INC.

(Pursuant to Section 302A.401 of the

Minnesota Business Corporation Act)

 

     The undersigned, Michael W. Malone, Secretary of Polaris Industries Inc., a corporation
organized and existing under the business corporation act of the State of Minnesota (hereinafter
called the “Corporation”), hereby certifies that:

     (i) the following resolutions establishing a series of junior participating preferred stock
pursuant to Chapter 302A of the Minnesota Statutes were adopted by the Board of Directors of the
Corporation at a meeting duly called and held on May 18, 2000:

     RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of
this Corporation (hereinafter called the “Board of Directors” or the “Board”) in accordance with
the provisions of the Articles of Incorporation of the Corporation, the Board of Directors hereby
creates a series of Preferred Stock, $.01 par value (the “Preferred Stock”), of the Corporation and
hereby states the designation and number of shares, and fixes the relative rights, preferences, and
limitations thereof as follows:

     Series A Junior Participating Preferred Stock:

     Section 1. Designation and Amount. The shares of such series shall be designated as
“Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of
shares constituting the Series A Preferred Stock shall be 1,000,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.

A-1

 

     Section 2. Dividends and Distributions.

     (A) Subject to the rights of the holders of any shares of any series of Preferred Stock
(or any similar stock) ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock, par value $.01 per share (the “Common Stock”), of the
Corporation, and of any other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of January, March, June and September in each
year (each such date being referred to herein as a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and
100 times the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Series A Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately prior to such
event.

     (B) The Corporation shall declare a dividend or distribution on the Series A Preferred
Stock as provided in paragraph (A) of this Section immediately after it declares a dividend
or distribution on the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date.

     (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares, unless the date of issue of such shares is prior to
the record date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or unless the date

A-2

 

of issue is a Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued by unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment thereof.

     Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall
have the following voting rights:

     (A) Subject to the provision for adjustment hereinafter set forth, each share of Series
A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to
a vote of the stockholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.

     (B) Except as otherwise provided herein, in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock, or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.

     (C) Except as set forth herein, or as otherwise provided by law, holders of Series A
Preferred Stock shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.

     Section 4. Certain Restrictions.

     (A) Whenever quarterly dividends or other dividends or distributions payable on the
Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and

A-3

 

until all
accrued and unpaid dividends and distributions, whether or not declared, on shares of Series
A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

     (i) declare or pay dividends, or make any other distributions, on any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;

     (ii) declare or pay dividends, or make any other distributions, on any shares
of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;

     (iii) redeem or purchase or otherwise acquire for consideration shares of any
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series A Preferred
Stock; or

     (iv) redeem or purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with the Series
A Preferred Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.

     (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.

     Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation shall become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions
and restrictions on issuance set forth herein, in the Articles of Incorporation, or in any other
Certificate of Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.

     Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution
or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of
stock

A-4

 

ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock
shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment, provided that the
holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except distributions made, ratably on
the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which
the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

     Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other property, then in
any such case each share of Series A Preferred Stock shall at the same time be similarity exchanged
or changed into an amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

     Section 8. No Redemption. The shares of Series A Preferred Stock shall not be
redeemable.

     Section 9. Rank. The Series A Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any other class of the
Corporation’s Preferred Stock.

A-5

 

     Section 10. Amendment. If any shares of the Series A Preferred Stock are
outstanding, the Articles of Incorporation of the Corporation shall not be amended in any manner
which would materially alter or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at
least a majority of the outstanding shares of Series A Preferred Stock, voting together as a single
class.

     (ii) That these resolutions have been adopted in accordance with the requirements of, and
pursuant to, Chapter 302A of the Minnesota Statutes and shall be effective when filed with the
Minnesota Secretary of State.

     IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation
by its Secretary this 18th day of May, 2000.

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Michael W. Malone 	 
	 	Secretary 	 
	 

A-6

 

Exhibit B

FORM OF RIGHT CERTIFICATE

			
	 	 	 
	Certificate No. R-
	 	           Rights

NOT EXERCISABLE AFTER 5:00 p.m., MINNEAPOLIS, MINNESOTA ON APRIL 29, 2020 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE AMENDED AND RESTATED RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS THAT TERM IS
DEFINED IN THE AMENDED AND RESTATED RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID.

Right Certificate

POLARIS INDUSTRIES INC.

     This certifies that                               , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of May 18, 2000, as amended and
restated as of April 29, 2010 (the “Amended and Restated Rights Agreement”), between Polaris
Industries Inc., a Minnesota corporation (the “Company”), and Wells Fargo Bank, National
Association (fka Norwest Bank Minnesota, N.A.) (the “Rights Agent”), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the Amended and Restated Rights
Agreement) and prior to 5:00 P.M., Minneapolis, Minnesota, on April 29, 2020 at the principal
office of the Rights Agent, or at the office of its successor as Rights Agent, one one-hundredth of
a fully paid non-assessable share of Series A Junior Participating Preferred Stock, par value $.01
per share (the “Preferred Shares”), of the Company, at a purchase price of $250.00 (Two Hundred
Fifty dollars) per one one-hundredth of a Preferred Share (the “Purchase Price”), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a
Preferred Share which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of                     , 20      based on the
Preferred Shares as constituted at such date. As provided in the Amended and Restated Rights
Agreement, the Purchase Price and the number of one one-hundredths of a Preferred Share which may
be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.

B-1

 

     This Right Certificate is subject to all of the terms, provisions and conditions of the
Amended and Restated Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Amended and Restated Rights
Agreement reference is hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Amended and Restated Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned offices of the Rights Agent.

     In the event that any Person shall become an Acquiring Person (as such terms are defined in
the Amended and Restated Rights Agreement), any Rights evidenced by this Right Certificate that are
or, after becoming an Acquiring Person, were beneficially owned by any Acquiring Person or an
Associate or Affiliate of such Acquiring Person (as such terms are defined in the Amended and
Restated Rights Agreement) shall be null and void.

     This Right Certificate, with or without other Right Certificates, upon surrender at the
principal office of the Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not exercised.

     Subject to the provisions of the Amended and Restated Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of $.001 per Right or
(ii) may be exchanged in whole or in part for the Company’s Common Stock.

     No fractional Preferred Shares will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be evidenced by depository receipts),
but in lieu thereof a cash payment may be made, as provided in the Amended and Restated Rights
Agreement. The Board of Directors of the Company and the Company shall not have any liability to
any person as a result of the redemption or exchange of the Rights pursuant to the provisions of
the Amended and Restated Rights Agreement.

     No holder of this Right Certificate shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall anything contained in the
Amended and Restated Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in the Amended and Restated Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the Amended and Restated Rights
Agreement.

     This Right Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned, manually or by facsimile signature, by the Rights Agent.

B-2

 

WITNESS the manual or facsimile signature of the proper officer of the Company. Dated as of
                    , 20     .

	 	 	 	 	 
	 	POLARIS INDUSTRIES INC.

 	 
	 	By:  	 	 
	 	 	Its: 	 
	 	 	 	 

	 	 	 	 	 
	Countersigned:

WELLS FARGO BANK, NATIONAL ASSOCIATION,
AS RIGHTS AGENT

 	 
	By:  	 	 
	 	Its: 	 
	 	 	 	 

B-3

 

Form of Reverse Side of Right Certificate

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Right Certificate.)

			
	FOR VALUE RECEIVED	 	 

			
	hereby sells, assigns and transfers unto	 	 

 
(Please print name and address of transferee)

this Right Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint                                Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power of substitution.

Dated:                               ,                

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 

Signature Medallion Guaranteed:

          Signatures must be medallion guaranteed by a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United States.

 

          The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being transferred to an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Amended and Restated Rights Agreement).

	 	 	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 

B-4

 

Form of Reverse Side of Right Certificate — continued

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise Rights represented by the Right Certificate.)

To: POLARIS INDUSTRIES INC.

          The undersigned hereby irrevocably elects to exercise                                Rights
represented by this Right Certificate to purchase the Preferred Shares (or other securities, if
any) issuable upon the exercise of such Rights and requests that certificates for such Preferred
Shares be issued in the name of:

Please insert social security

or other identifying number

 

 
(Please print name and address)

If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new
Right Certificate for the remaining of such Rights shall be registered in the name of and delivered
to:

Please insert social security

or other identifying number

 

 
(Please print name and address)

Dated:                               ,                

	 	 	 	 	 
	 	
 	 
	 	Signature 	 
	 	 	 

Signature Medallion Guaranteed:

     Signatures must be medallion guaranteed by a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United States.

B-5

 

Form of Reverse Side of Right Certificate — continued

     The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being transferred to an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Amended and Restated Rights Agreement).

	 	 	 	 	 
	 	 	 
	 	
 	 
	 	Signature 	 

NOTICE

     The signature in the Form of Assignment or Form of Election to Purchase, as the case may be,
must conform to the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.

     In the event the certification set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent will
deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Amended and Restated Rights
Agreement) and such Assignment or Election to Purchase will not be honored.

B-6

 

Exhibit C

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED SHARES

OF

POLARIS INDUSTRIES INC.

Introduction

     On May 18, 2000, the Board of Directors of Polaris Industries Inc. (the “Company”), initially
declared a dividend of one preferred share purchase right (a “Right”) per share for each
outstanding share of common stock, par value $.01 (the “Common Shares”), of the Company. The
dividend was paid on June 1, 2000 (the “Record Date”) to shareholders of record at the close of
business on that date. The description and terms of the Rights were originally set forth in a
Rights Agreement, dated as of May 18, 2000, between the Company and Wells Fargo Bank, National
Association (fka Norwest Bank Minnesota, N.A.), as Rights Agent (the “Rights Agent”). The Rights
were extended by an Amended and Restated Rights Agreement dated as of April 29, 2010 (the “Amended
and Restated Rights Agreement”).

     The description that follows of the terms of the Amended and Restated Rights Agreement and of
the Rights issued thereunder is a general description only and does not purport to be complete.
The terms of the Amended and Restated Rights will in all cases be governed by the Amended and
Restated Rights Agreement. A copy of the Amended and Restated Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to the Amendment to Registration Statement on
Form 8-A dated April 30, 2010. A copy of the Amended and Restated Rights Agreement is available
free of charge from the Company. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Amended and Restated Rights Agreement.

Purchase Price

     Each Right entitles the registered holder to purchase from the Company one one-hundredth of a
share of Series A Junior Participating Preferred Stock, par value $.01 (the “Preferred Shares”), of
the Company at a price of $250.00 (Two Hundred Fifty dollars) per one-hundredth of a Preferred
Share (the “Purchase Price”), subject to adjustment.

Distribution Date

     The Rights are attached to all certificates representing the Common Shares and no separate
certificates evidencing the Rights (“Rights Certificates”) will be distributed. The Rights will
separate from the Common Shares and a “Distribution Date” will occur upon the earlier of (i) the
date that a person or group of affiliated or associated persons becomes an “Acquiring Person” (as
defined below), or (ii) ten (10) business days (or such later date as the Board shall determine)
following the commencement of a tender offer or exchange offer that would result in a person or
group becoming an “Acquiring Person.” Except as set forth below, an “Acquiring Person” is a person
or group of affiliated or associated persons who has acquired beneficial ownership of 15% or

C-1

 

more of the outstanding Common Shares. The term “Acquiring Person” excludes (i) the Company, (ii)
any wholly owned Subsidiary of the Company, (iii) any employee benefit plan of the Company or any
wholly owned Subsidiary of the Company, and (iv) any person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan.

Exercisability

     The Rights are not exercisable until the occurrence of the Distribution Date. Until the
occurrence of the Distribution Date, (i) the Rights will be evidenced by the Common Shares
certificates and will be transferred with and only with such Common Shares certificates, (ii) new
Common Shares certificates issued after the Record Date will contain a notation incorporating the
Amended and Restated Rights Agreement by reference, and (iii) the surrender for transfer of any
certificates for Common Shares outstanding will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificates.

     As soon as practicable after the occurrence of the Distribution Date, Rights Certificates will
be mailed to holders of record of the Common Shares as of the close of business on the Distribution
Date and, thereafter, the separate Rights certificates alone will represent the Rights. The Rights
will expire at the close of business on April 29, 2020, unless extended or earlier redeemed by the
Company.

Adjustments

     The Purchase Price payable, and the number of Preferred Shares or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification
of, the Preferred Shares, (ii) if holders of the Preferred Shares are granted certain rights or
warrants to subscribe for Preferred Shares or convertible securities at less than the current
market price of the Preferred Shares, or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above). With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments amount to at least
1% of the Purchase Price. No fractional Rights will be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Preferred Shares on the last trading date
prior to the date of exercise.

Preferred Shares

     Because of the nature of the Preferred Shares’ dividend, liquidation and voting rights, the
value of the one one-hundredth interest in a share of Preferred Shares purchasable upon exercise of
each Right should approximate the value of one share of Common Shares. Preferred Shares
purchasable upon exercise of the Rights will not be redeemable. Each share of the Preferred Shares
will be entitled to a quarterly dividend payment of 100 times the dividend declared per share of
Common Shares. Each share of Preferred Shares will have 100 votes, voting together with the shares
of Common Shares. These rights are protected by customary antidilution provisions.

C-2

 

Flip-In Provision

     In the event that, at any time following the Distribution Date, a person becomes an Acquiring
Person, each holder of a Right will thereafter have the right to receive, upon exercise of the
Right, Common Shares (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right. Notwithstanding any of
the foregoing, following the occurrence of the event set forth in this paragraph, all Rights that
are, or (under certain circumstances specified in the Amended and Restated Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void and nontransferable and any holder
of any such Right (including any purported transferee or subsequent holder) will be unable to
exercise or transfer any such Right.

Flip-Over Provision

     In the event that, at any time following the Distribution Date, the Company is acquired in
certain merger or other business combination transactions or 50% or more of the Company’s assets or
earning power is sold, mortgaged or transferred, each holder of a Right (except Rights which
previously have been voided as set forth above) shall thereafter have the right to receive, upon
exercise, common shares of the acquiring company having a value equal to two times the exercise
price of the Right.

Redemption

     At any time until the Shares Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $.001 per Right by resolution of the Board of Directors.

Exchange

     At any time after a Person becomes an Acquiring Person (subject to certain exceptions), and
prior to the acquisition by a Person of 50% or more of the outstanding Common Shares, the Board of
Directors of the Company may exchange all or part of the Rights for Common Shares at an exchange
ratio per Right equal to the result obtained by dividing the exercise price of a Right by the
current per share market price of the Common Shares, subject to adjustment.

Rights of Holders

     Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Company, including, without limitation, the right to vote or to receive dividends. While
the distribution of the Rights will not be taxable to shareholders or to the Company, shareholders
may, depending upon the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Shares (or other consideration) of the Company or for common shares of the
acquiring company as set forth above.

C-3

 

Amendments

     Any of the provisions of the Amended and Restated Rights Agreement may be amended by
resolution of the Company’s Board of Directors prior to the Distribution Date. After the
Distribution Date, the provisions of the Amended and Restated Rights Agreement may be
amended by resolution of the Company’s Board in order to make changes that do not adversely affect
the interests of holders of Rights (excluding the interests of any Acquiring Person or its
affiliates or associates).

C-4

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