Exhibit 10.21

 

NONQUALIFIED STOCK OPTION AGREEMENT

THE TORO COMPANY 2000 STOCK OPTION PLAN

 

Agreement dated «date», between The Toro Company, a Delaware corporation
(“Toro”), and «firstname» «lastname» (“you”) setting forth the terms and
conditions of the grant to you of a nonqualified option to purchase  «# of
shares» shares of Toro Common Stock, at an exercise price of  «$» per share,
under The Toro Company 2000 Stock Option Plan (“Plan”).

 

1.             Expiration Date.  This option shall expire on «date».

 

2.             Vesting.  Except as provided in Sections 3 and 6, this option
shall vest and become exercisable in three approximately equal installments on
each of the first, second and third anniversaries after the date of grant.

 

3.             Exercise.  Except as provided in Section 2 or as otherwise
provided in this section, you may exercise the option only while you are an
employee of Toro or a parent or subsidiary of Toro and only if you have been
continuously employed since the date of grant, except as follows:

 

(a)           Disability.  If you become disabled, this option will vest
immediately prior to your termination of employment by reason of such
disability, and you or your guardian or legal representative may exercise the
option until the earlier of the date the option expires or one year after the
date your employment terminates by reason of your disability.

 

(b)           Death.  If you die, this option will vest immediately, and your
legal representatives, heirs or legatees may exercise the option until the
earlier of the date it expires or one year after the date of your death.

 

(c)           Retirement.  If you cease to be an employee by reason of
retirement as defined in this Section 3(c) on or after November 1, 2009  this
option will remain outstanding for up to four years after the date of your
retirement, but not later than the date the option expires, and will continue to
vest under Section 2; provided, however, that if you become employed or retained
to render services or assume responsibilities similar to those of the Toro
position from which you retire, your option shall be canceled and shall
automatically be canceled and shall automatically expire and be forfeited.  For
purposes of this Section 3(c) and Section 3(d), your termination of employment
shall be deemed to be “retirement” if you meet both of the following
conditions:  (i) you

 

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terminate employment at or after age 55 and (ii) your age and the number of
years of your service to Toro, when added together, equal at least 65.

 

(d)           Termination.  Except as provided otherwise in this Section 3 with
respect to disability, death and retirement, if you cease to be an employee
including retiring on or before October 31, 2009, you may exercise the vested
portion of this option, if any, for up to three months after the date your
employment terminates, but not later than the date the option expires, and any
unvested portion of this option will be canceled on the date your employment
terminates.

 

(e)           Leave.  Your absence on leave or other interruption in your
performance of services will not be deemed a cessation or interruption of
employment for purposes of the Plan, if approved by Toro’s Compensation & Human
Resources Committee.

 

4.             No Transfer. You may not transfer this option other than by will
or applicable laws of descent and distribution.

 

5.             Non-Compete.  Notwithstanding any other provision of this
agreement, if within one year after you terminate employment with or performance
of services to Toro, including by reason of retirement, you (a) are employed or
retained by, or render services to, any organization that directly or indirectly
competes with or becomes competitive with Toro, or if the rendering of such
services is prejudicial to or in conflict with the interests of Toro, or (b) you
violate any confidentiality agreement, or agreement governing the ownership or
assignment of intellectual property rights with Toro, or (c) you engage in any
other conduct or act determined to be injurious, detrimental or prejudicial to
any interest of Toro, Toro may cancel and rescind all options you may then hold,
including this option, and shall have the right to the return of the economic
value of any option you realized or obtained (measured at the date of exercise)
at any time during the period beginning on the date twelve months prior to the
date of termination to the date of the last exercise, provided that this
provision shall not be applicable in the event of a Change of Control.

 

6.             Change of Control. This option will vest in full if there is a
Change of Control of Toro, as defined in the Plan as in effect at the date of
such event, and will remain exercisable for three years following the Change of
Control, but not later than the date the option expires.

 

7.             Methods of Exercise.  In order to exercise this option, you must
deliver to the office of the Secretary of Toro a written notice of exercise
specifying the number of whole shares with respect to which you wish to exercise
this option, accompanied by payment in full of the exercise price for the shares
to be purchased.  Payment may be made in (a) cash, (b) by tendering shares of
Common Stock already owned, valued at the closing sale price of a share of
Common Stock on the date of exercise (or , if no shares were traded on such
date, as of the next preceding date on which there was such a trade)

 

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during the regular trading session, as reported by the New York Stock Exchange),
(c) in a combination of cash and Common Stock, (d) by tendering a notice of
exercise of options and irrevocable instructions to a brokerage firm and Toro to
execute a cashless exercise in accordance with the terms of the Plan, or (e) by
a “net exercise” of this option (as described below).  In the case of a “net
exercise” of this option, Toro will not require any payment of the exercise
price of this option for the shares to be purchased from you in cash or
otherwise (except as may be required for any fractional shares) but will reduce
the number of shares of Common Stock issued upon the exercise by the largest
number of whole shares that has a fair market value (as defined to be the
closing sale price of a share of Common Stock on the date of exercise (or, if no
shares were traded on such date, as of the next preceding date on which there
was such a trade) during the regular trading session, as reported by the New
York Stock Exchange) on the exercise date that does not exceed the aggregate
exercise price for the shares exercised under this method.  Shares of Common
Stock will no longer be outstanding under this option (and will therefore not
thereafter be exercisable) following the exercise of this option to the extent
of (i) shares used to pay the exercise price of this option under the “net
exercise,” (ii) shares actually delivered to you as a result of such exercise,
and (iii) any shares withheld for purposes of tax withholding.

 

8.             General Restriction.  If at any time the Board of Directors
determines that the listing, registration or qualification of the Common Stock
subject to the option on any securities exchange or under any state or federal
law, or the consent or, approval of any government regulatory body, is necessary
or desirable as a condition of, or in connection with, the issue or purchase of
Common Stock under this option, this option may not be exercised unless such
listing, registration, qualification, consent or approval has been obtained free
of conditions not acceptable to the Board.

 

9.             Tax Withholding.  Toro has the right to deduct from any
settlement made upon exercise of the option or the sale of shares of Common
Stock acquired upon exercise of the option, any federal, state or local taxes of
any kind required by law to be withheld with respect to income recognized or to
require you to pay the amount of any such taxes or to take such other action as
may be necessary in the opinion of the Company to satisfy all obligations for
payment of such taxes.  If Common Stock is withheld or surrendered to satisfy
tax withholding, such stock will be valued at its fair market value as of the
date it is withheld or surrendered.  Toro may also deduct from any such
settlement any amounts you may owe the Company.

 

10.           Governing Law. This Agreement shall be construed, administered and
governed in all respects under and by the applicable laws of the State of
Delaware, excluding any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation to the substantive law of another
jurisdiction.

 

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11.           Conflict.  To the extent the terms of this agreement are
inconsistent with the Plan, the provisions of the Plan shall control and
supersede any inconsistent provision of this agreement.

 

12.           Non-negotiable Terms.  The terms of this option are not
negotiable, but you may refuse to accept this option by notifying Toro’s
Corporate Secretary in writing.

 

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IN WITNESS WHEREOF, this option agreement has been executed and delivered by The
Toro Company.

 

 

«date»

By:

 

 

 

  President, Chairman and CEO

 

I hereby agree to the terms and conditions governing this option grant as set
forth in this agreement, acknowledge that I have received electronically a copy
of the Prospectus relating to the Toro Common Stock and agree to accept
electronic delivery of the Prospectus, Toro’s Annual Report on Form 10-K and
Quarterly Report on Form 10-Q and Current Reports on Form 8-K by email directed
to my Toro email address.

 

Note:  If you do not wish to accept this option on the terms stated in this
agreement, please contact Toro’s Corporate Secretary immediately to decline the
grant.

 

 

 

 

 

 

 

«firstname» «lastname»

 

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