A power transfer assembly for a four-wheel drive vehicle includes first and second output shafts and a drive mechanism operable to selectively transfer drive torque from a driven input shaft to the output shafts. The drive mechanism includes a differential assembly, a planetary gear assembly and first and second mode clutches. The first mode clutch is operable with the planetary gear assembly to increase the rotary speed of the first output shaft which, in turn, causes a corresponding decrease in the rotary speed of the second output shaft. The second mode clutch is operable with the planetary gear assembly to decrease the rotary speed of the first output shaft so as to cause an increase in the rotary speed of the second output shaft. A control system controls actuation of both mode clutches.