THE TORO COMPANY
 
2000 STOCK OPTION PLAN
 
(As Amended March 11, 2008)
 
1.  
Purpose. The purpose of The Toro Company 2000 Stock Option Plan (the “Plan”) is
to enhance stockholder value of The Toro Company (the “Company”) by providing an
incentive to key employees and other key individuals who perform services for
the Company to contribute significantly to the long-term performance and growth
of the Company; to link a significant portion of a participant’s compensation to
the value of the Company’s Common Stock, par value $1.00 per share, and related
Preferred Share Purchase Rights (“Common Stock”); and to attract and retain
experienced and knowledgeable employees on a competitive basis. These purposes
are expected to be achieved by granting options to acquire the Common Stock
(“options”).

 
2.  
Eligibility. Any employee of the Company who is regularly employed in an
executive, managerial, professional or technical position and any other
individual who performs services for the Company and who contributes
significantly to the strategic and long-term performance objectives of the
Company is eligible to participate in the Plan. Options may be granted to
directors of the Company who are also employees of the Company. More than one
option may be granted to the same individual.

 
a.  
Limitations. No option may be granted to an individual who owns, directly or
indirectly, Common Stock or other capital stock of the Company possessing more
than 5% of the total combined voting power or value of any class of capital
stock of the Company or a subsidiary immediately after such option is granted,
and the maximum number of shares that may be covered by options granted to any
individual during any calendar year shall be 100,000 shares. Except for the
foregoing limitations, there is no minimum or maximum number of shares of Common
Stock with respect to which options may be granted to any individual under the
Plan. Individuals to whom options are granted are referred to as “option
holders”.

 
3.  
Stock Options.

 
a.  
ISOs and Nonqualified Options. Options granted under the Plan may be either
nonqualified stock options (“nonqualified options”) or incentive stock options
(“Incentive Stock Options”) as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the “Code”).

 
(i)  
Incentive Stock Options. Incentive Stock Options shall meet the applicable
requirements of, and contain or be deemed to contain all provisions required by,
the Code or corresponding provisions of subsequent revenue laws and regulations
in effect at the time such options are granted. Any ambiguities in construction
shall be interpreted in order to effectuate such intent. To the extent that the
aggregate fair market value of Common Stock (determined at the time of grant of
the Incentive Stock Option) with respect to which Incentive Stock Options are
exercisable for the first time by an option holder during any calendar year
(under all such plans of the Company and its parent and subsidiary corporations)
exceeds $100,000 or such other limit as may be imposed by the Code, such options
to the extent they exceed such limit shall be treated as options which are not
Incentive Stock Options. In applying the foregoing limitation, options shall be
taken into account in the order in which they were granted.

 
b.  
Agreements. Options shall be evidenced by stock option agreements in such form
and not inconsistent with the Plan as the Compensation and Human Resources
Committee (the “Committee”) of the Board of Directors shall approve from time to
time.

 
c.  
Number of Shares, Date of Grant and Term. An option agreement shall specify the
number of shares of Common Stock to which it pertains; the date of grant, which
shall be the date on which the Committee grants an option or any later date
which the Committee specifically designates, and the term of the option, which
shall not exceed ten years.

 
d.  
Exercise Price. The exercise price of an option shall be not less than 100% of
fair market value of the Common Stock on the date of grant. Fair market value is
the 4 p.m. Eastern Time closing price for the Common Stock as reported by the
New York Stock Exchange. Notwithstanding the foregoing, to the extent that
options are granted under the Plan as a result of the Company’s assumption or
substitution of options issued by any acquired, merged or consolidated entity,
the exercise price for such options shall be the price determined by the
Committee pursuant to the conversion terms applicable to the transaction. After
an option is granted, the exercise price shall not be reduced.

 
e.  
Vesting, Transferability and Exercisability.

 
(i)  
Vesting. An option granted to an officer or general manager of the Company shall
vest and become exercisable in three approximately equal installments on each of
the first, second and third anniversaries after the date of grant.  An option
granted to an employee or other service provider who is not an officer or
general manager of the Company shall vest and become exercisable in full on the
second anniversary after the date of grant.  Notwithstanding the foregoing, the
Committee shall have the authority to provide in any option agreement for any
one or more of the following:  (a) longer periods after the date of grant during
which an option or any portion thereof may not yet be exercisable,
(b) acceleration of vesting in the event of an option holder’s disability or
death and (c) continued vesting after an option holder’s retirement, subject to
Section 3.e(iii)(c).

 
(ii)  
No Transfer. Options shall not be transferable by the option holder except by
will or applicable laws of descent and distribution.

 
(iii)  
Exercise. During the lifetime of an option holder, an option may be exercised
only by the option holder and only while an employee of the Company or a parent
or subsidiary of the Company or otherwise performing services for the Company or
a parent or subsidiary and only if the option holder has been continuously so
employed or engaged since the date such options were granted, except as the
Committee may otherwise determine and provide for in an option agreement at the
time of grant or, if the Committee does not so provide, as follows:

 
 
 

 
(a)  
Disability. In the event of disability of an option holder, options may be
exercised by such individual or his or her guardian or legal representative, not
later than the earlier of the date the option expires or one year after the date
employment or performance of services ceases by reason of such disability, but
only with respect to an option exercisable at the time employment or performance
of services ceases.

 
(b)  
Death. An option may be exercised after the death of an option holder only by
such individual’s legal representatives, heirs or legatees, not later than the
earlier of the date the option expires or one year after the date of death of
such individual, and only with respect to an option exercisable at the time of
death.

 
(c)  
Retirement. An option may be exercised by an option holder after such individual
ceases to be an employee by reason of retirement for up to four years after the
date of retirement but not later than the date the option expires, provided that
the option holder has remained an employee of the Company through the last day
of the fiscal year in which the option is granted.  “Retirement” shall have the
meaning established by the Committee from time to time or, if no such meaning is
established, shall mean termination of employment with the Company at or after
age 55 and with a number of years of service that, when added together with the
option holder’s age, equals at least 65.

 
(d)  
Other Termination of Employment. An option may be exercised by an option holder
after such individual ceases to be an employee (for reasons other than
disability, death or retirement) for up to three months after the date of
termination of employment but not later than the date the option expires.

 
(iv)  
Non-compete. Notwithstanding any other provision of paragraph 3.e., if within
one year after the termination of employment with or performance of services for
the Company, an option holder is (a) employed or retained by or renders service
to any organization that, directly or indirectly, competes with or becomes
competitive with the Company, or if the rendering of such services is
prejudicial or in conflict with the interests of the Company, or (b) violates
any confidentiality agreement or agreement governing the ownership or assignment
of intellectual property rights with the Company, or (c) engages in any other
conduct or act determined to be injurious, detrimental or prejudicial to any
interest of the Company, the Company may cancel or rescind or restrict all
options held by such individual and shall have the right to the return of the
economic value of any option which was realized or obtained (measured at the
date of exercise) by such individual at any time during the period beginning on
the date that is twelve months prior to the date of termination to the date of
the last exercise, provided however, that this provision shall not be applicable
in the event of a Change of Control.

 
(v)  
Interruption in Service. Absence on leave from the Company, or other
interruption in the performance of services, by an option holder shall, if
approved by the Committee, not be deemed a cessation or interruption of
employment or services for the purposes of the Plan.

 
f.  
Methods of Exercise and Payment of Exercise Price. Subject to the terms and
conditions of the Plan and the terms and conditions of the option agreement, an
option may be exercised in whole at any time or in part from time to time, by
delivery to the Company at its principal office of a written notice of exercise
specifying the number of shares with respect to which the option is being
exercised, accompanied by payment in full of the exercise price for shares to be
purchased at that time. Payment may be made (i) in cash, (ii) by tendering
(either actually or by attestation) shares of Common Stock already owned for at
least six months (or other period necessary to avoid a charge to the Company’s
earnings for financial statement purposes) valued at the fair market value of
the Common Stock on the date of exercise or (iii) in a combination of cash and
Common Stock; or the Committee may also, in its sole discretion exercised either
at the time the option is granted or at any time before an option is exercised,
(iv) permit option holders to deliver a notice of exercise of options, together
with irrevocable instructions, approved in advance by proper officers of the
Company, (A) to a brokerage firm designated by the Company, to deliver promptly
to the Company the aggregate amount of sale or loan proceeds to pay the exercise
price and any related tax withholding obligations and (B) to the Company, to
deliver certificates for such purchased shares directly to such brokerage firm,
all in accordance with regulations of the Federal Reserve Board; or
(v) authorize such other methods as it deems appropriate and as comply with
requirements of the Code, the Securities Exchange Act of 1934 (the “Exchange
Act”) and other applicable laws and regulations. No shares of Common Stock shall
be issued until full payment has been made.

 
g.  
Rights as a Stockholder. An option holder shall have no rights as a stockholder
with respect to any Common Stock covered by an option until the option is
exercised and shares of Common Stock are issued. Except as otherwise expressly
provided in the Plan, no adjustments shall be made for dividends or other rights
for which the record date is prior to issuance of the Common Stock.

 
4.  
Common Stock Subject to the Plan. Subject to adjustment to reflect corporate
transactions provided for in paragraph 4.a., the total number of shares of
Common Stock that is reserved and available for issuance pursuant to options
granted under the Plan shall be 7,200,000. Any shares issued by the Company in
connection with the assumption or substitution of outstanding grants from any
acquired corporation shall not reduce the shares available for option grants
under the Plan. Shares of Common Stock that may be issued under the Plan may be
authorized but unissued shares, reacquired or treasury shares, or outstanding
shares acquired in the market or from private sources, or a combination
thereof.  Shares of Common Stock that are issued under the Plan or that are
potentially issuable pursuant to outstanding options granted under the Plan will
be applied to reduce the maximum number of shares of Common Stock remaining
available for issuance under the Plan.  All shares so subtracted from the amount
available under the Plan with respect to an option that lapses, expires, is
forfeited or for any reason is terminated unexercised or unvested or is settled
or paid in cash or any form other than shares of Common Stock will not
automatically again become available for issuance under the Plan.  Without
limiting the generality of the foregoing, (i) any shares which would have been
issued upon any exercise of an option but for the fact that the exercise price
was paid by the tender or attestation as to ownership of shares of Common Stock
already owned pursuant to paragraph 3.f. of the Plan will not again become
available for issuance under the Plan, (ii) shares withheld or repurchased by
the Company to satisfy the payment of the exercise price of an option or any tax
withholding obligation will not again become available for issuance under the
Plan, and (iii) shares repurchased by the Company using option proceeds will not
again become available for issuance under the Plan.

 
a.  
Adjustments for Corporate Transactions. In the event of a corporate transaction
involving the Company (including, without limitation, any merger, consolidation,
recapitalization, reorganization, split off, spin off, reclassification,
combination, stock dividend, stock split, reverse stock split, repurchase,
exchange, extraordinary cash dividend, issuance of warrants or other rights to
purchase Common Stock or other securities of the Company, or other similar
corporate transaction or change in the corporate structure of the Company
affecting the Common Stock, or a sale by the Company of all or part of its
assets or any distribution to stockholders other than a normal cash dividend),
the Committee shall make such proportional adjustments as are necessary to
preserve the benefits or potential benefits of the options. Action by the
Committee may include appropriate adjustments in all or any of (i) the number of
shares of the Common Stock or other new or different securities that may be
available for option grants under the Plan; (ii) the number of shares of Common
Stock or other new or different securities subject to outstanding options;
(iii) the option price per share of outstanding options and, if deemed
appropriate, cash payments; (iv) the maximum number and kind of securities that
may be made subject to options for any individual as set forth in paragraph
2.a.; or (v) any other adjustment the Committee determines to be equitable. The
Committee may also, in its sole discretion, make provisions in any option
agreement for the protection of outstanding options in the event of such a
corporate transaction.

 
5.  
Administration of the Plan.

 
a.  
The Plan shall be administered by the Committee, provided that members of the
Committee shall be “non-employee directors” as contemplated by Rule 16b-3 under
the Exchange Act or any successor rule and shall qualify to administer the Plan
as “outside directors” as contemplated by Section 162(m) of the Internal Revenue
Code and the regulations thereunder (“Section 162(m)”). The Committee may
delegate administrative duties and all decisions not required to be exercised by
it under Section 162(m), Section 16 of the Exchange Act or the rules of the New
York Stock Exchange to an officer of the Company. The decision of the Committee
on any matter affecting the Plan and obligations arising under the Plan or any
option granted thereunder shall be deemed final and binding upon all persons,
including the Company, its stockholders and option holders. No member of the
Board or of the Committee shall be liable for any action taken or determination
made in good faith with respect to the Plan or any option granted under the
Plan.

 
b.  
Subject to the express provisions of the Plan, the Committee shall have
authority, in its discretion, to grant options; to interpret the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the exercise price of each option to purchase Common Stock, the
individuals to whom and the time or times at which options shall be granted, the
number of shares to be subject to each option, when an option may be exercisable
and the other terms and provisions (and amendments thereto) of the respective
option agreements (which need not be identical); to determine whether a
particular option is to be an Incentive Stock Option; and to make all other
determinations deemed necessary or advisable for the administration of the Plan.

 
c.  
Notwithstanding any other provision of this Plan other than paragraph 4, the
Committee may not, without prior approval of the Company’s stockholders, seek to
effect any repricing of any previously granted option by: (i) amending or
modifying the terms of the option to lower the exercise price; (ii) canceling
the option and granting replacement options having a lower exercise price in
exchange; (iii) repurchasing the options and granting new options under this
Plan; or (iv) taking any other action that is treated as a “repricing” under
generally accepted accounting principles.

 
6.  
Foreign Nationals and Residents of California.

 
a.  
Foreign Nationals. Without amending the Plan, options may be granted to
individuals who are foreign nationals or are employed or otherwise performing
services for the Company or any subsidiary outside the United States or both, on
such terms and conditions different from those specified in the Plan as may, in
the judgment of the Committee, be necessary or desirable to further the purposes
of the Plan.

 
b.  
California Residents. Without amending the Plan, and notwithstanding any
provision of the Plan to the contrary, options granted to individuals who are
residents of the State of California may contain such terms and conditions as
may be required by applicable California statutes governing stock options.

 
c.  
Limitations. The Committee shall have no authority, however, to take action
pursuant to paragraphs 6.a. and 6.b. of the Plan: (i) to reserve shares or grant
options in excess of the limitations provided in paragraph 4 of the Plan; (ii)
to effect any repricing in violation of paragraph 5.c. of the Plan; (iii) to
grant options having an exercise price in violation of paragraph 3.d. of the
Plan; or (iv) for which stockholder approval would then be required pursuant to
any applicable law, rule or regulation, including without limitation the rules
and regulations of the New York Stock Exchange and the Securities and Exchange
Commission.

 
7.  
Change of Control. In the event of a Change of Control of the Company as
hereinafter defined, whether or not approved by the Board, all options shall
fully vest, unless otherwise limited by the Committee at the time of the option
grant, and be exercisable in their entirety immediately, and notwithstanding any
other provisions of the Plan, shall continue to be exercisable for three years
following the Change of Control, but not later than ten years after the date of
grant.

 
a.  
Definition. For the purpose of this paragraph 7, a “Change of Control” shall
mean:

 
(i)  
The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 15% or
more of either (A) the then-outstanding shares of Common Stock of the Company
(the “Outstanding Company Common Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control: (A) any acquisition
directly from the Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or
(D) any acquisition by any corporation pursuant to a transaction that complies
with clauses (A), (B) and (C) of subsection (iii) of this paragraph 7; or

 
(ii)  
Individuals who, as of the date hereof, constitute the Board of Directors of the
Company (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or

 
(iii)  
Consummation of a reorganization, merger or consolidation of the Company or sale
or other disposition of all or substantially all of the assets of the Company or
the acquisition by the Company of assets or stock of another entity (a “Business
Combination”), in each case, unless, following such Business Combination,
(A) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 15% or more of, respectively, the then-outstanding shares of common
stock of the corporation resulting from such Business Combination, or the
combined voting power of the then-outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (C) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

 
(iv)  
Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

 
8.  
Tax Withholding. The Company shall have the right to deduct from any settlement
made under the Plan, including the exercise of an option or the sale of shares
of Common Stock, any federal, state or local taxes of any kind required by law
to be withheld with respect to such payments or to require the option holder 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 the
payment of such taxes. If Common Stock is withheld or surrendered to satisfy tax
withholding, such stock shall be valued at its fair market value as of the date
such Common Stock is withheld or surrendered. The Company may also deduct from
any such settlement any other amounts due the Company by the option holder.

 
9.  
Governing Law. The Plan, options granted under the Plan and agreements entered
into under the Plan 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 of the Plan or an agreement to the substantive
law of another jurisdiction.

 
10.  
Plan Amendment and Termination. The Board may amend, suspend or terminate the
Plan at any time, with or without advance notice to option holders; provided
however that no amendment that would (a) increase the maximum number of shares
that may be subjected to options or (b) increase the number of shares that may
be covered by an option grant to any person referred to in Section 162(m) or (c)
modify requirements as to eligibility for participation in the Plan or (d)
constitute a material revision to the terms of the Plan within the meaning of
the rules and regulations of the New York Stock Exchange or the Securities and
Exchange Commission or (e) than is required by any applicable law, rule or
regulation to be approved by the stockholders of the Company or (f) modify
paragraph 3.d. or 5.c. of the Plan shall be effective unless the stockholders of
the Company shall have approved such amendment in accordance with applicable
provisions of the Code, other law, rule or regulation. No amendment,
modification or termination of the Plan may adversely affect in a material
manner any right of any option holder with respect to any option theretofore
granted without such option holder’s written consent.

 
11.  
Effective Date and Duration of the Plan. The Plan first became effective on
March 29, 2000. Any amendment to the Plan shall be effective on the date
established by the Committee, subject to stockholder approval, if required. The
Plan shall remain in effect until all shares reserved for issuance pursuant to
the Plan have been purchased pursuant to options granted under the Plan,
provided that options under the Plan must be granted not later than ten years
after the effective date of the Plan or any future amendment approved by
stockholders.