Exhibit 10.B



DONALDSON COMPANY,
INC.


Performance Award
Agreement


          This Agreement is made as of the _____ day of _____,
19___, between Donaldson Company, Inc., a Delaware corporation (the “Company”)
and _______________________ (the “Participant”) pursuant to the Donaldson
Company, Inc. 1991 Master Stock Compensation Plan (the “Plan”).


WITNESSETH:


WHEREAS, the Human Resources Committee of the Board of
Directors of the Company have decided to enter into agreements with key
executives to provide for long term performance awards, and


WHEREAS, the Plan contemplates that an award should be
evidenced by a written agreement, executed by the Company and the Participant,
containing such restrictions, terms and conditions as may be required by the
Plan or the Committee.










NOW, THEREFORE, in consideration of the mutual
agreements hereinafter set forth and of other good and valuable consideration,
the Participant and the Company hereby agree as follows:


1.   Definitions. Participant acknowledges receipt of a
copy of the Plan and reference is made to the Plan for definition of certain
terms used in this Agreement.


	
 

	
 

	
 


	
 

	
(a)

	
“Award Delivery Date” means a date no more than 60
 days nor less than 45 days after the end of an Incentive Cycle or such
 earlier date as hereinafter provided.


	
 

	
 

	
 


	
 

	
(b)

	
“Incentive Cycle” is the three consecutive year
 period set forth in the attached Exhibit A.


	
 

	
 

	
 


	
 

	
(c)

	
“Award Split” means Award split between
 business/corporate Performance Objectives for each Participant as determined
 by the Committee and set forth in the attached Exhibit A.


	
 

	
 

	
 


	
 

	
(d)

	
“Performance Objective” means the primary net
 earnings per share resulting from the Return on Investment and Compound Sales
 Growth determined by the Committee and set forth in Exhibit A.


	
 

	
 

	
 


	
 

	
(e)

	
“Return on Investment” and “Sales” for purposes of
 this Plan shall have the meaning and value set forth separately for each
 operating group and corporate in the monthly operating reports published by
 the Company’s Accounting Department.


	
 

	
 

	
 


	
 

	
(f)

	
“Vesting Date” shall be July 31, 19____.





2.   Award. The Company
hereby grants to the Participant an award (the “Award”) based on the number of
shares of Common Stock of the Company as set forth in the attached Exhibit A
(“Performance Units”) subject to the restrictions, terms and conditions set
forth below and in the Plan.


3.   Award Delivery. Except
as provided in Paragraphs 5 and 6 below, the Award will be received only if the
Performance Objectives set forth in Exhibit A have been achieved by the end of
the Incentive Cycle. The Award shall be calculated by multiplying the
Performance Units times a point, in an interpolation of the Award Value Matrix,
that coincides with the intersection of the respective Performance Objectives’
results. The Award shall be increased for Earnings Per Share consistency as set
forth in Exhibit A. If applicable, other Award characteristics have also been
referenced in Exhibit A. To avoid the necessity of issuing fractional shares,
fractional amounts will be applied to tax withholding requirements.


4.   Performance Objectives
Alteration. The Performance Objectives may not be changed. Provided, however,
that in the event of an acquisition, disposition or other change which, in the
judgment of the Committee, may have a significant effect on particular Performance
Objectives, the Committee may adopt such changes in the applicable Performance
Objectives as it shall, in its sole discretion, deem equitable and appropriate
to achieve the purpose of the Plan.


5.   Termination and
Transfer.


	
 

	
 

	
 


	
 

	
(a)

	
If the Plan is terminated or Participant ceases to
 be an employee by reason of retirement (as defined in the Company’s Employee
 Retirement Plan), disability (as determined under the Company’s Long Term
 Disability Plan), or death prior to the Vesting Date, the Award earned will
 be based on actual results compared to the Performance Objectives at the end
 of the Incentive Cycle and multiplied by a fraction whose numerator is the
 number of months completed in the cycle and
















	
 

	
 

	
 


	
 

	
 

	
denominator is thirty-six with delivery on the Award
 Delivery Date.


	
 

	
 

	
 


	
 

	
(b)

	
If Participant ceases to be an employee for any
 other reason than stated in (a) above, participation in the Plan will cease
 and the Award shall be immediately and irrevocably forfeited.


	
 

	
 

	
 


	
 

	
(c)

	
If a participant transfers to an ineligible
 position, the Award earned will be based on actual results compared to the
 Performance Objectives at the end of the Incentive Cycle and multiplied by a
 fraction whose numerator is the number of months completed in the cycle and
 denominator is thirty-six with delivery on the Award Delivery Date.





6.   Reorganization. In the
event of a reorganization, merger or consolidation of the Company with one or
more Corporations in which the Company is not the surviving Corporation or in
the event a Change in Control shall have occurred, the Performance Objectives
shall be deemed to have been met for the period ending, respectively, on a date
prior to such reorganization, merger or
consolidation, as determined by the Committee or on the date on which
the Change in Control occurs and, the Award shall be calculated in the same
manner as provided under Section 5(a).


7.   Miscellaneous.


	
 

	
 

	
 


	
 

	
(a)

	
The rights and interest under this Agreement or the
 Plan may not be assigned, pledged or transferred except by will or the laws
 of descent and distribution.


	
 

	
 

	
 


	
 

	
(b)

	
The Company shall have the right to deduct from all
 Awards any taxes required by law to be withheld.


	
 

	
 

	
 


	
 

	
(c)

	
Nothing in the Plan or in this Agreement shall be
 deemed to grant any right of continued employment to Participant or to limit
 or waive any rights of the Company to terminate such employment at any time,
 with or without cause.


	
 

	
 

	
 


	
 

	
(d)

	
The Plan shall be unfunded. The Company shall not be
 required to establish any special or separate fund or to make any other
 segregation of assets or assure delivery of the Award under this Agreement.
 Any liability of the Company to Participant with respect to the Award shall
 be based solely upon any contractual obligations of this Agreement or that
 may be created by the Plan; no such obligation shall be deemed to be secured
 by any pledge or any encumbrance on any property of the Company.


	
 

	
 

	
 


	
 

	
(e)

	
The Company, the Company’s Board of Directors, the
 Committee, the officers and other employees and agents of the Company shall
 be fully protected in relying in good faith on the computations and reports
 made pursuant to or in connection with the Plan by the Company’s accountants
 or independent public accountants.


	
 

	
 

	
 


	
 

	
(f)

	
This Agreement is subject to the requirement that,
 if at any time the Committee determines, in its sole discretion, that the
 consent or approval of any governmental regulatory body is necessary or
 desirable as a condition of, or in connection with, the Award or delivery of
 the Award, no delivery shall be made unless such consent or approval has been
 obtained free of any conditions not acceptable to the Committee.


	
 

	
 

	
 


	
 

	
(g)

	
Participant may elect to defer receipt of the award
 delivery until January of the year following the Award Delivery Date by executing
 an Award Delivery Deferral form prior to the Vesting Date.





          IN
WITNESS WHEREOF, Donaldson and the Participant have duly executed Exhibit A to
this Agreement effective the day and year first above written.










EXHIBIT A


DONALDSON COMPANY,
INC.


INCENTIVE CYCLE:     August
1, 19__ to July 31, 19__


PARTICIPANT: __________________________


PERFORMANCE
UNITS: ________


PERFORMANCE OBJECTIVES: 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Compound Sales

 Growth Per Year

	
 

	
Return on

 Investment

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Maximum

	
 

	
___________

	
 

	
___________

	
 


	
Corporate

	
 

	
Target

	
 

	
___________

	
 

	
___________

	
 


	
Performance

	
 

	
Threshold

	
 

	
___________

	
 

	
___________

	
 


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
Maximum

	
 

	
___________

	
 

	
___________

	
 


	
Group 

	
 

	
Target

	
 

	
___________

	
 

	
___________

	
 


	
Performance

	
 

	
Threshold

	
 

	
___________

	
 

	
___________

	
 





AWARD SPLIT: Corporate __________% Group _________%


	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
AWARD VALUE MATRIX:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 


	
                COMPOUND

	
 

	
Maximum

	
 

	
1.00

	
 

	
 

	
1.25

	
 

	
 

	
1.50 

	
 

	
 


	
                SALES GROWTH

	
 

	
Target

	
 

	
.75

	
 

	
 

	
1.00

	
 

	
 

	
1.25 

	
 

	
 


	
 

	
 

	
Threshold

	
 

	
.50

	
 

	
 

	
.75

	
 

	
 

	
1.00 

	
 

	
 


	
 

	
 

	
 

	
 

	
Threshold

	
 

	
Target

	
 

	
Maximum

	
 





RETURN ON
INVESTMENT


	
 

	
 


	
CONSISTENCY BONUS:

	
If Earnings per Share increase by at least 5% each
 year of the Incentive Cycle and the threshold Corporate Performance
 Objectives are achieved, the Award value shall be increased by 25%. 





OTHER AWARD CHARACTERISTICS:


	
 

	
 

	
 

	
 


	
 

	
 

	
Accepted _____________, 19___.

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
PARTICIPANT

	
 

	
DONALDSON COMPANY, INC.