exhibit10-1to03112008.htm


    


      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.