Exhibit 10.20

 

NONQUALIFIED STOCK OPTION AGREEMENT

THE TORO COMPANY 2000 DIRECTORS STOCK OPTION PLAN

 

Agreement dated November   , 20   , between The Toro Company, a Delaware
corporation (“Toro”), and <<name>> (“you”) setting forth the terms and
conditions of the grant to you of a nonqualified option to purchase           
shares of Toro Common Stock, at an exercise price of    .    per share, under
The Toro Company 2000 Directors Stock Option Plan (“Plan”).

 

1.                                       Expiration Date.  This option shall
expire on November    , 20   .

 

2.                                       Vesting.  Except as provided in
Sections 3 and 5, 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 a director of Toro and only if you have been continuously
serving since the date of grant, except as follows:

 

(a)

 

If you become disabled, this option will vest in full on the date your service
ceases 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 service ceases by reason of your
disability.

 

 

 

(b)

 

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)

 

If you have served as a member of the Board for ten full fiscal years or longer
and terminate service on the Board, (i) the option will continue to vest in
accordance with its terms and (ii) you may exercise the vested portion of the
option for up to four years after the date of termination, but not later than
the date the option expires.

 

 

 

(d)

 

If you have served as a member of the Board for less than ten full fiscal years
and terminate service on the Board, (i) any unvested portion of the option shall
expire and be canceled and (ii) you may exercise any vested portion of the
option for up to three months after the date of termination, but not later than
the date the option expires.

 

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

 

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5.                                       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.

 

6.                                       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 for at least six months,
valued at the 4 p.m. Eastern Time closing price on the date of exercise (or if a
holiday, the most recent closing price), (c) in a combination of cash and Common
Stock, or (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.

 

7.                                       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.

 

8.                                       Tax Withholding.   If you exercise this
option, you will recognize ordinary income to the extent that the exercise price
is lower than the fair market value of the Common Stock on the exercise date
(the “spread”) and you will owe income tax on the spread.  Toro has the right to
deduct from any settlement made upon your exercise of the option, any federal,
state or local taxes of any kind required by law to be withheld with respect to
the 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 Toro 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 Toro.

 

  9.                                 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.

 

10.                                 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.

 

11.                                 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.

 

IN WITNESS WHEREOF, this option agreement has been executed and

 

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delivered by The Toro Company.

 

 

November   , 2008

By:

 

 

 Chairman & CEO

 

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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.

 

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