ex10_1.htm


    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    Exhibit
      10.1

    


    THE
      TORO COMPANY

    2000
      STOCK OPTION PLAN

    (As
      Amended January 15, 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 6,400,000.  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 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.