Exhibit 10.u


 


INDEMNIFICATION AGREEMENT


 


AGREEMENT, effective as of
                        
between THE TORO COMPANY, a Delaware corporation (“Toro”), and
                                         
(“Director”).


 


WHEREAS, it is essential to Toro to retain and attract as directors the
most capable persons available;


 


WHEREAS, Director is a member of the Board of Directors of Toro;


 


WHEREAS, both Toro and Director recognize the increased risk of
litigation and other claims being asserted against directors of public
companies in today’s environment;


 


WHEREAS, basic protection against undue risk of personal liability of
Toro directors heretofore has been provided through insurance coverage
providing reasonable protection at reasonable cost, and Director has relied on
the availability of such coverage;


 


WHEREAS, Toro’s Certificate of Incorporation requires Toro to indemnify
and advance expenses to its directors to the full extent permitted by law, and
Director has been serving and continues to serve as a director of Toro in part
in reliance on such provisions;


 


WHEREAS, in recognition of Director’s need for substantial protection
against personal liability in order to enhance Director’s continued service to
Toro in an effective manner,  and of
Director’s reliance on the aforesaid provision in Toro’s Certificate of
Incorporation, and in part to provide Director with specific contractual
assurance that the protection promised by such provision will be available to
Director (regardless of, among other things, any amendment to or revocation of
such provision of the Certificate of Incorporation, any change in the
composition of Toro’s Board of Directors or the occurrence of any acquisition
transaction relating to Toro); and


 


WHEREAS, Toro wishes to provide in this Agreement for the effective
indemnification of and the advancing of expenses to Director to the fullest
extent (whether partial or complete) permitted by law and as set forth in this
Agreement and, to the extent insurance is maintained, for the continued coverage
of Director under Toro’s director and officer liability insurance policies;


 


NOW THEREFORE, in consideration of the premises and of Director
continuing to serve Toro directly or, at its request, with another enterprise,
and intending to be legally bound hereby, the parties hereto agree as follows:


 


1.                                       Certain
Definitions:


 


(a)  Change in Control:  shall be deemed to have occurred if (i)
during any period of two consecutive calendar years, individuals who at the
beginning of such period constitute the Board of Directors of Toro and any new
director whose election by the Board of Directors or nomination for election by
Toro’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (ii) the
stockholders of Toro approve a merger or consolidation of Toro with any other
corporation, other than a merger or consolidation which would result in the
Voting Securities of


 









 



Toro outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting Securities
of the surviving entity) at least 80% of the total voting power represented by
the Voting Securities of Toro or such surviving entity outstanding immediately
after such merger or consolidation, or the stockholders of Toro approve a plan
of complete liquidation of Toro or an agreement for the sale or disposition by
Toro of all or substantially all of Toro’s assets; provided, however, that a
would-be Change in Control under Section 1(a)(ii) which is approved by a
majority of the directors on Toro’s Board of Directors who were directors prior
thereto shall not be deemed a Change in Control.


 


(b)  Claim:  any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation, whether conducted by Toro
or any other party, that Director in good faith believes might lead to the
institution of any such action, suit or proceeding, whether civil, criminal,
administrative, investigative or other.


 


(c)  Expenses:  include attorneys’ fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in, or participate in, any Claim relating to
any Indemnifiable Event.


 


(d)  Indemnifiable Event:  any event or occurrence related to the fact
that Director is or was a director, officer, employee, agent or fiduciary of
Toro, or is or was serving at the request of Toro as a director, officer,
employee, trustee, agent or fiduciary of another corporation, partnership,
joint venture, employee benefit plan, trust or other enterprise, or did not do
anything in any such capacity.


 


(e)  Potential Change in
Control:  shall be deemed to have
occurred if (i) Toro enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control; (ii) any person or entity
(including Toro) publicly announces an intention to take, or to consider
taking, actions which if consummated would constitute a Change in Control;
(iii) any person or entity, other than a trustee or other fiduciary holding
securities under an employee benefit plan of Toro or any of its subsidiaries,
is or becomes the beneficial owner, directly or indirectly, of securities of
Toro representing 15% or more of the combined voting power of Toro’s then
outstanding Voting Securities or (iv) the Board adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in Control has
occurred.


 


(f)  Reviewing Party:  any appropriate person or body consisting of
a member or members of Toro’s Board of Directors or any other person or body
appointed by the Board (including Special Independent Counsel) who is not a
party to the particular Claim for which Director is seeking
indemnification.  If there has not been a
Change in Control, the Reviewing Party shall be selected by Toro’s Board of
Directors.  If there has been such a
Change in Control, the Reviewing Party shall be Special Independent Counsel.


 


(g)  Special Independent
Counsel:  counsel selected by Director
and approved by Toro (which approval shall not be unreasonably withheld) and
who has not, unless waived by Toro and Director, otherwise performed services
for (i) Toro or Director within the last ten (10) years or (ii) any other party
to a proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Special
Independent Counsel” shall not include any person who under the applicable
standards of professional conduct then prevailing, would have a


 



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conflict of interest in representing either Toro or Director in an
action to determine Director’s rights under this Agreement.


 


(h)  Voting Securities:  any securities of Toro which have the right
to vote generally in the election of directors.


 


2.                                       Basic
Indemnification Arrangement.


 


(a)  In the event Director was,
is or becomes a party to or witness or other participant in, or is threatened
to be made a party to or witness or other participant in, a Claim by reason of
(or arising in part out of) an Indemnifiable Event, Toro shall indemnify
Director to the fullest extent permitted by law as soon as practicable but in
any event not later than thirty days after written demand is presented to Toro,
against any and all Expenses, judgments, fines, penalties and amounts paid or
owing with respect to or in settlement of (including all interest, assessments
and other charges paid or payable in connection with or in respect of such
Expenses, judgments, fines, penalties or amounts) such Claim.  Director shall give Toro written notice of
all such Claims and the particulars thereof as soon as practicable; provided,
however, that the failure to give such notice shall not affect the right of
Director to indemnity hereunder unless such failure has materially and
adversely affected the rights of Toro.


 


(b)  If so requested by Director,
Toro shall advance (within ten business days of such request) any and all
Expenses, judgments, fines, penalties and amounts paid or owing with respect to
or in settlement of any Claim to Director (an “Expense Advance”).


 


(c)  Notwithstanding anything in
this Agreement to the contrary,  (i)
prior to a Change in Control, Director shall not be entitled to indemnification
pursuant to this Agreement in connection with any Claim (other than a claim for
indemnification) initiated by Director against Toro or any director or officer
of Toro unless Toro has joined in or consented to the initiation of such Claim,
(ii) the obligations of Toro under Section 2(a) shall be subject to the
condition that the Reviewing Party shall not have determined in a writing
stating the reasons therefor that Director would not be permitted to be
indemnified under applicable law, and (iii) the obligation of Toro to make an
Expense Advance pursuant to Section 2(b) shall be subject to the condition
that, if, when and to the extent the Reviewing Party determines that Director
would not be permitted to be indemnified under applicable law, Toro shall be
entitled to be reimbursed by Director (who hereby agrees to reimburse Toro) for
all such amounts theretofore paid; provided, however, that if Director has
commenced legal proceedings in a court of competent jurisdiction to secure a
determination that Director should be indemnified under applicable law, any
determination made by the Reviewing Party that Director would not be permitted
to be indemnified under applicable law shall not be binding and Director shall
not be required to reimburse Toro for any Expense Advance until a final
judicial determination is made with respect thereto (as to which all rights of
appeal therefrom have been exhausted or lapsed).


 


(d)  If the Reviewing Party
determines that Director would not be permitted to be indemnified in whole or
in part under applicable law (such determination to be made by the Reviewing
Party independent of any position of Toro on any aspect of the indemnification
including but not limited to the appropriateness of the amount of any
settlement), Director shall have the right to commence litigation in any court,
in the states of Delaware or Minnesota or the state(s) of Director’s residence
or employment, having subject matter jurisdiction thereof, and in


 



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which venue is proper, seeking an initial determination by the court or
challenging any such determination by the Reviewing Party or any aspect thereof
and Toro hereby consents to service of process and to appear in any such
proceeding.  Any determination by the
Reviewing Party otherwise shall be conclusive and binding on Toro and Director.


 


(e)  Any Expenses incurred by
Director in cooperating with the Reviewing Party shall be borne by Toro (irrespective
of the determination as to Director’s entitlement to indemnification pursuant
to Section 2(a) and Toro hereby indemnifies and agrees to hold Director
harmless therefrom.


 


3.                                       Change in
Control.


 


If a Change in Control occurs, then with respect to all matters
thereafter arising concerning the rights of Director to indemnity payments and
Expense Advances under this Agreement or any other agreement, or Toro’s
Certificate of Incorporation or Bylaws now or hereafter in effect, relating to
Claims for Indemnifiable Events, Toro shall seek legal advice only from Special
Independent Counsel.  Such counsel, among
other things, shall render its written opinion to Toro and Director as to
whether and to what extent Director would be permitted to be indemnified under
applicable law.  Toro agrees to pay the
reasonable fees of the Special Independent Counsel referred to above and to
fully indemnify such counsel against any and all expenses (including attorneys’
fees), claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.


 


4.                                       Establishment
of Trust.


 


(a)  Nature of Trust.


 


In the event of a Potential Change in Control, Toro shall, upon written
request by Director, create a Trust for the benefit of Director and from time
to time, upon written request of Director, shall fund such Trust in an amount
sufficient to satisfy any and all Expenses reasonably anticipated at the time
of each such request to be incurred in connection with investigating, preparing
for and defending any Claim relating to an Indemnifiable Event, and any and all
judgments, fines, penalties and settlement amounts of any and all Claims
relating to an Indemnifiable Event from time to time actually paid or claimed
to be, reasonably anticipated or proposed to be paid.


 


(b)  Deposits in Trust.


 


The amount or amounts to be deposited in the Trust pursuant to the
foregoing funding obligation shall be determined by the Reviewing Party;
provided, however, that the total amount so deposited for all such Trusts in
existence at any one time shall not exceed 5% of Toro’s total net worth, on a
consolidated basis, at the time the deposit is authorized.  Any such Trust may, at Toro’s option, be
funded by the creation of a security interest in unencumbered assets of Toro.


 



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(c)  Terms of Trust.


 


The terms of the Trust shall provide that upon a Change in Control (i)
the Trust shall not be revoked or the principal thereof invaded, without the
written consent of Director, (ii) the Trustee shall advance, within ten business
days of a request by Director, any and all Expenses to Director (and Director
hereby agrees to reimburse the Trust upon the circumstances under which
Director would be required to reimburse Toro under Section 2(b) of this
Agreement), (iii) the Trust shall continue to be funded by Toro in accordance
with the funding obligation set forth above, (iv) the Trustee shall promptly
pay to Director all amounts which Director shall be entitled to, pursuant to
this Agreement or otherwise, and (v) all unexpended funds in such Trust shall
revert to Toro upon a final determination by the Reviewing Party or a court of
competent jurisdiction, as the case may be, that Director has been fully
indemnified under the terms of this Agreement. 
The Trustee shall be chosen by Director. 
Nothing in this Section 4 shall relieve Toro of any of its obligations
under this Agreement.


 


5.                                       Indemnification
for Additional Expenses.


 


Toro shall indemnify Director against any and all expenses (including
attorneys’ fees) and, if requested by Director, shall, within ten business days
of such request, advance such expenses to Director which are incurred by
Director in connection with any claim asserted against or action brought by
Director for (i) indemnification hereunder or advance payment of Expenses by
Toro under this Agreement (or any other agreement or Toro’s Certificate of
Incorporation or Bylaws now or hereafter in effect) relating to Claims for
Indemnifiable Events and/or (ii) recovery under any director and officer
liability insurance policies maintained by Toro, regardless of whether Director
ultimately is determined to be entitled to such indemnification, advance
expense payment or insurance recovery, as the case may be.


 


6.                                       Selection of
Counsel and Settlement Authority.


 


(a)  If no Change in Control has
occurred, Toro shall have the right to participate at its own expense in any
Claim against Director with respect to an Indemnifiable Event and to assume the
defense thereof with counsel satisfactory to Director.  Director shall have the right to employ
separate counsel in any such Claim and the fees and expenses of such separate
counsel shall be borne by Director; provided, that, all fees and expenses of
such separate counsel shall be borne by Toro if:  (i) Toro shall have authorized the engagement
of such separate counsel, (ii) Toro shall have failed to employ any counsel to
represent Director in such matter, or (iii) such separate counsel shall have
reasonably advised Director that there may be a conflict of interest between
Director and Toro in the defense or investigation of such matter.


 


(b)  If no Change in Control has
occurred, Director shall not independently negotiate settlement without first
giving the Reviewing Party and Toro twenty business days’ notice.  Thereafter, Director may engage in such
negotiations and may settle the case unless the Reviewing Party and outside
counsel for Toro handling the case (in cases where outside counsel is used)
advise Director that they have investigated the Director’s involvement in the
event and have determined that the matter is appropriate and legal for
indemnity and all judgments, expenses and costs will, if lawful, be paid by
Toro.  The Reviewing Party and such
counsel shall also give Director notice, at the time a determination is made,
of any later reversal stating the reasons


 



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therefor of the prior determination of the Reviewing Party and such
counsel, after which notice Director may independently negotiate and settle the
case.


 


(c)  If a Change in Control has
occurred, Director shall have the right to employ separate counsel in any Claim
against Director with respect to an Indemnifiable Event at the expense of Toro
and the right to independently negotiate settlement unless Special Independent
Counsel shall have reasonably advised Director that there is no conflict of
interest between Director and Toro in the defense or investigation of such
matter; in which case the provisions of Sections 6 (a) and 6 (b) shall be
controlling.


 


(d)  In any case, Toro shall not
unreasonably withhold its consent to any proposed settlement.


 


7.                                       Partial
Indemnity.


 


If Director is entitled under any provision of this Agreement to
indemnification by Toro for some or a portion of the Expenses, judgments,
fines, penalties and amounts paid with respect to settlement of a Claim but
not, however, for all of the total amount thereof, Toro shall nevertheless
indemnify Director for the portion thereof to which Director is entitled.  Moreover, notwithstanding any other provision
of this Agreement, to the extent that Director has been successful on the
merits or otherwise in defense of any or all Claims relating in whole or in
part to an Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, Director shall be indemnified against
all Expenses incurred in connection therewith. 
In connection with any determination by the Reviewing Party as to
whether Director is entitled to be indemnified hereunder, the burden of proof
shall be on Toro to establish that Director is not so entitled.


 


8.                                       No
Presumption.


 


For purposes of this Agreement, the termination of any claim, action,
suit or proceeding, by judgment, order, settlement (with or without court
approval) or conviction, or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that Director did not meet any particular
standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.  The termination of a suit by settlement shall
be presumed to be a disposition favorable to Director and in the best interests
of Toro.


 


9.                                       Non-Exclusivity.


 


The rights of Director hereunder shall be in addition to, and not
exclusive of, any other rights Director may have or hereafter acquired under
Toro’s Certificate of Incorporation, its Bylaws, the Delaware General
Corporation Law, vote of stockholders or disinterested directors, any other law
or agreement or otherwise.  To the extent
that a change in applicable law (whether by statute or judicial decision)
permits greater indemnification by agreement than would be afforded at the date
of this Agreement, it is the intent of the parties hereto that Director shall
enjoy by this Agreement the greater benefits so afforded by such change.


 



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10.                                 Liability
Insurance.


 


To the extent Toro maintains an insurance policy or policies providing
director and officer liability insurance, Director shall be covered by such
policy or policies, in accordance with its or their terms, to the maximum
extent of the coverage available for any Toro director or officer.


 


11.                                 Period of
Limitations.


 


No legal action shall be brought and no cause of action shall be
asserted by or on behalf of Toro or any affiliate of Toro against Director,
Director’s spouse, heirs, executors or personal or legal representatives after
the expiration of two years from the date Director ceases (for any reason) to
serve in all of the capacities covered by this Agreement, and any claim or
cause of action of Toro or its affiliate shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within such two-year
period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action, such shorter period shall
govern.


 


12.                                 Amendments.


 


No supplement, modification or amendment of this Agreement, and no
waiver of any provision hereof, shall be binding unless executed in writing by
both of the parties hereto.  No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.


 


13.                                 Subrogation.


 


In the event of payment under this Agreement, Toro shall be subrogated
to the extent of such payment to all of the rights of recovery of Director, who
shall execute all papers required and shall do everything that may be necessary
to enable Toro effectively to bring suit to enforce such rights.


 


14.                                 No Duplication
of Payments.


 


Toro shall not be liable under this Agreement to make any payment in
connection with any claim made against Director to the extent Director has
otherwise actually received payment (under any insurance policy, Toro’s
Certificate of Incorporation or Bylaws or otherwise) of the amounts otherwise
indemnifiable hereunder.


 


15.                                 Binding
Effect.


 


This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors (including
any direct or indirect successor by purchase, merger, consolidation or
otherwise to all or substantially all of the business and/or assets of Toro),
assigns, spouses, heirs, and personal and legal representatives.


 



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16.                                 Termination.


 


This Agreement shall continue until and terminate upon the later
of:  (a) ten (10) years after the date
that Director shall have ceased to serve Toro in all capacities covered by this
Agreement; or (b) the final termination of all pending Claims with respect to
Indemnifiable Events and of any proceedings commenced by Director pursuant to
this Agreement or otherwise relating thereto.


 


17.                                 Severability.


 


The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any provision within a single section,
paragraph or sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the fullest extent permitted by law.


 


18.                                 Notices.


 


All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if (i) delivered by
hand and receipted for by the party to whom said notice or other communication
shall have been directed on the day on which it is so delivered, or (ii) mailed
by certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed, if to Director to his then current
address and if to Toro, to The Toro Company, 8111 Lyndale Avenue South,
Bloomington, Minnesota 55420, Attention: J. Lawrence McIntyre, Vice President,
Secretary and General Counsel, or to such other address as may have been
furnished to Director by Toro or to Toro by Director, as the case may be.


 


19.                                 Governing Law.


 


This Agreement shall be governed and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed in such state, without giving effect to the principles of
conflicts of laws.


 


 


	
  Executed as of this

  	
  day of                      ,
           .

  
	
   

  	
   

  
	
  THE TORO COMPANY

  
	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SS No.

  	
   

  	
   

  
									



 



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