Document:

Exhibit 10.20

 

NONQUALIFIED STOCK OPTION AGREEMENT

THE TORO COMPANY 2000 DIRECTORS STOCK OPTION
PLAN

 

Agreement
dated November   , 20   , between The Toro
Company, a Delaware corporation (“Toro”), and <<name>> (“you”)
setting forth the terms and conditions of the grant to you of a nonqualified
option to purchase           
shares of Toro Common Stock, at an exercise price of    .   
per share, under The Toro Company 2000 Directors Stock Option Plan (“Plan”).

 

1.                                       Expiration
Date.  This option shall expire on November    ,
20   .

 

2.                                       Vesting.  Except as provided in Sections 3 and 5, this
option shall vest and become exercisable in three approximately equal
installments on each of the first, second and third anniversaries after the
date of grant.

 

3.                                       Exercise.
 Except as provided in Section 2 or
as otherwise provided in this section, you may exercise the option only while
you are a director of Toro and only if you have been continuously serving since
the date of grant, except as follows:

 

	
  (a)

  	
   

  	
  If you
  become disabled, this option will vest in full on the date your service
  ceases by reason of such disability, and you or your guardian or legal
  representative may exercise the option until the earlier of the date the
  option expires or one year after the date your service ceases by reason of
  your disability.

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  If you die,
  this option will vest immediately, and your legal representatives, heirs or
  legatees may exercise the option until the earlier of the date it expires or
  one year after the date of your death.

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  If you have served as a member of the Board for ten full fiscal years
  or longer and terminate service on the Board, (i) the option will
  continue to vest in accordance with its terms and (ii) you may exercise
  the vested portion of the option for up to four years after the date of
  termination, but not later than the date the option expires.

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  If you have served as a member of the Board for less than ten full
  fiscal years and terminate service on the Board, (i) any unvested
  portion of the option shall expire and be canceled and (ii) you may
  exercise any vested portion of the option for up to three months after the
  date of termination, but not later than the date the option expires.

  

 

4.                                       No
Transfer. You may not transfer this option other than by will or applicable
laws of descent and distribution.

 

 

5.                                       Change
of Control. This option will vest in full if there is a Change of Control of
Toro, as defined in the Plan as in effect at the date of such event, and will
remain exercisable for three years following the Change of Control, but not
later than the date the option expires.

 

6.                                       Methods
of Exercise.  In order to exercise this
option, you must deliver to the office of the Secretary of Toro a written
notice of exercise specifying the number of whole shares with respect to which
you wish to exercise this option, accompanied by payment in full of the
exercise price for the shares to be purchased. 
Payment may be made in (a) cash, (b) by tendering shares of
Common Stock already owned for at least six months, valued at the 4 p.m.
Eastern Time closing price on the date of exercise (or if a holiday, the most
recent closing price), (c) in a combination of cash and Common Stock, or (d) by
tendering a notice of exercise of options and irrevocable instructions to a
brokerage firm and Toro to execute a cashless exercise in accordance with the
terms of the Plan.

 

7.                                       General
Restriction.  If at any time the Board of
Directors  determines that the listing,
registration or qualification of the Common Stock subject to the option on any
securities exchange or under any state or federal law, or the consent or,
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the issue or purchase of Common Stock
under this option, this option may not be exercised unless such listing,
registration, qualification, consent or approval has been obtained free of
conditions not acceptable to the Board.

 

8.                                       Tax
Withholding.   If you exercise this
option, you will recognize ordinary income to the extent that the exercise
price is lower than the fair market value of the Common Stock on the exercise
date (the “spread”) and you will owe income tax on the spread.  Toro has the right to deduct from any
settlement made upon your exercise of the option, any federal, state or local
taxes of any kind required by law to be withheld with respect to the income
recognized, or to require you to pay the amount of any such taxes or to take
such other action as may be necessary in the opinion of Toro to satisfy all
obligations for payment of such taxes. 
If Common Stock is withheld or surrendered to satisfy tax withholding,
such stock will be valued at its fair market value as of the date it is
withheld or surrendered.  Toro may also
deduct from any such settlement any amounts you may owe Toro.

 

  9.                                 Governing
Law. This Agreement 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 to the substantive law of another
jurisdiction.

 

10.                                 Conflict.  To the extent the terms of this agreement are
inconsistent with the Plan, the provisions of the Plan shall control and
supersede any inconsistent provision of this agreement.

 

11.                                 Non-negotiable
Terms.  The terms of this option are not
negotiable, but you may refuse to accept this option by notifying Toro’s
Corporate Secretary in writing.

 

IN WITNESS
WHEREOF, this option agreement has been executed and

 

 

delivered by The Toro Company.

 

 

	
  November   , 2008 

  	
  By:

  	
   

  
	
   

  	
   Chairman & CEO

  

 

 

I hereby agree
to the terms and conditions governing this option grant as set forth in this
agreement, acknowledge that I have received electronically a copy of the
Prospectus relating to the Toro Common Stock and agree to accept electronic
delivery of the Prospectus, Toro’s Annual Report on Form 10-K and
Quarterly Report on Form 10-Q and Current Reports on Form 8-K by
email directed to my Toro email address.

 

Note:  If you do not wish to
accept this option on the terms stated in this agreement, please contact Toro’s
Corporate Secretary immediately to decline the grant.Exhibit 10.21

 

NONQUALIFIED STOCK OPTION
AGREEMENT

THE
TORO COMPANY 2000 STOCK OPTION PLAN

 

Agreement
dated «date», between The Toro Company, a Delaware corporation (“Toro”), and
«firstname» «lastname» (“you”) setting forth the terms and conditions of the grant
to you of a nonqualified option to purchase 
«# of shares» shares of Toro Common Stock, at an exercise price of  «$» per share, under The Toro Company 2000
Stock Option Plan (“Plan”).

 

1.             Expiration Date.  This option shall expire on «date».

 

2.             Vesting. 
Except as provided in Sections 3 and 6, this option shall vest and
become exercisable in three approximately equal installments on each of the
first, second and third anniversaries after the date of grant.

 

3.             Exercise. 
Except as provided in Section 2 or as otherwise provided in this
section, you may exercise the option only while you are an employee of Toro or
a parent or subsidiary of Toro and only if you have been continuously employed
since the date of grant, except as follows:

 

(a)           Disability.  If you become
disabled, this option will vest immediately prior to your termination of
employment by reason of such disability, and you or your guardian or legal
representative may exercise the option until the earlier of the date the option
expires or one year after the date your employment terminates by reason of your
disability.

 

(b)           Death.  If you die, this option
will vest immediately, and your legal representatives, heirs or legatees may
exercise the option until the earlier of the date it expires or one year after
the date of your death.

 

(c)           Retirement.  If you cease to be
an employee by reason of retirement as defined in this Section 3(c) on
or after November 1, 2009  this
option will remain outstanding for up to four years after the date of your retirement,
but not later than the date the option expires, and will continue to vest under
Section 2; provided, however, that if you become employed or retained to
render services or assume responsibilities similar to those of the Toro
position from which you retire, your option shall be canceled and shall
automatically be canceled and shall automatically expire and be forfeited.  For purposes of this Section 3(c) and
Section 3(d), your termination of employment shall be deemed to be “retirement”
if you meet both of the following conditions: 
(i) you

 

 

terminate
employment at or after age 55 and (ii) your age and the number of years of
your service to Toro, when added together, equal at least 65.

 

(d)           Termination.  Except as provided
otherwise in this Section 3 with respect to disability, death and
retirement, if you cease to be an employee including retiring on or before October 31,
2009, you may exercise the vested portion of this option, if any, for up to
three months after the date your employment terminates, but not later than the
date the option expires, and any unvested portion of this option will be
canceled on the date your employment terminates.

 

(e)           Leave.  Your absence on leave or
other interruption in your performance of services will not be deemed a
cessation or interruption of employment for purposes of the Plan, if approved
by Toro’s Compensation & Human Resources Committee.

 

4.             No Transfer. You may not transfer this option
other than by will or applicable laws of descent and distribution.

 

5.             Non-Compete. 
Notwithstanding any other provision of this agreement, if within one
year after you terminate employment with or performance of services to Toro,
including by reason of retirement, you (a) are employed or retained by, or
render services to, any organization that directly or indirectly competes with
or becomes competitive with Toro, or if the rendering of such services is
prejudicial to or in conflict with the interests of Toro, or (b) you
violate any confidentiality agreement, or agreement governing the ownership or
assignment of intellectual property rights with Toro, or (c) you engage in
any other conduct or act determined to be injurious, detrimental or prejudicial
to any interest of Toro, Toro may cancel and rescind all options you may then
hold, including this option, and shall have the right to the return of the
economic value of any option you realized or obtained (measured at the date of
exercise) at any time during the period beginning on the date twelve months
prior to the date of termination to the date of the last exercise, provided
that this provision shall not be applicable in the event of a Change of
Control.

 

6.             Change of Control. This option will vest in
full if there is a Change of Control of Toro, as defined in the Plan as in effect
at the date of such event, and will remain exercisable for three years
following the Change of Control, but not later than the date the option
expires.

 

7.             Methods of Exercise.  In order to exercise this option, you must
deliver to the office of the Secretary of Toro a written notice of exercise
specifying the number of whole shares with respect to which you wish to
exercise this option, accompanied by payment in full of the exercise price for
the shares to be purchased.  Payment may
be made in (a) cash, (b) by tendering shares of Common Stock already
owned, valued at the closing sale price of a share of Common Stock on the date
of exercise (or , if no shares were traded on such date, as of the next
preceding date on which there was such a trade)

 

 

during
the regular trading session, as reported by the New York Stock Exchange), (c) in
a combination of cash and Common Stock, (d) by tendering a notice of
exercise of options and irrevocable instructions to a brokerage firm and Toro
to execute a cashless exercise in accordance with the terms of the Plan, or (e) by
a “net exercise” of this option (as described below).  In the case of a “net exercise” of this
option, Toro will not require any payment of the exercise price of this option
for the shares to be purchased from you in cash or otherwise (except as may be
required for any fractional shares) but will reduce the number of shares of
Common Stock issued upon the exercise by the largest number of whole shares
that has a fair market value (as defined to be the closing sale price of a
share of Common Stock on the date of exercise (or, if no shares were traded on
such date, as of the next preceding date on which there was such a trade)
during the regular trading session, as reported by the New York Stock Exchange)
on the exercise date that does not exceed the aggregate exercise price for the
shares exercised under this method. 
Shares of Common Stock will no longer be outstanding under this option
(and will therefore not thereafter be exercisable) following the exercise of
this option to the extent of (i) shares used to pay the exercise price of
this option under the “net exercise,” (ii) shares actually delivered to
you as a result of such exercise, and (iii) any shares withheld for
purposes of tax withholding.

 

8.             General Restriction.  If at any time the Board of Directors determines
that the listing, registration or qualification of the Common Stock subject to
the option on any securities exchange or under any state or federal law, or the
consent or, approval of any government regulatory body, is necessary or
desirable as a condition of, or in connection with, the issue or purchase of
Common Stock under this option, this option may not be exercised unless such
listing, registration, qualification, consent or approval has been obtained
free of conditions not acceptable to the Board.

 

9.             Tax Withholding.  Toro has the right to deduct from any
settlement made upon exercise of the option or the sale of shares of Common
Stock acquired upon exercise of the option, any federal, state or local taxes
of any kind required by law to be withheld with respect to income recognized or
to require you 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 payment of such taxes.  If Common
Stock is withheld or surrendered to satisfy tax withholding, such stock will be
valued at its fair market value as of the date it is withheld or surrendered.  Toro may also deduct from any such settlement
any amounts you may owe the Company.

 

10.           Governing Law. This Agreement 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 to the substantive law of
another jurisdiction.

 

 

11.           Conflict. 
To the extent the terms of this agreement are inconsistent with the
Plan, the provisions of the Plan shall control and supersede any inconsistent
provision of this agreement.

 

12.           Non-negotiable Terms.  The terms of this option are not negotiable,
but you may refuse to accept this option by notifying Toro’s Corporate
Secretary in writing.

 

 

IN
WITNESS WHEREOF, this option agreement has been executed and delivered by The
Toro Company.

 

 

	
  «date»

  	
  By:

  	
   

  
	
   

  	
   

  	
    President,
  Chairman and CEO

  

 

I hereby agree to the terms
and conditions governing this option grant as set forth in this agreement,
acknowledge that I have received electronically a copy of the Prospectus
relating to the Toro Common Stock and agree to accept electronic delivery of
the Prospectus, Toro’s Annual Report on Form 10-K and Quarterly Report on Form 10-Q
and Current Reports on Form 8-K by email directed to my Toro email
address.

 

Note:  If you do not wish to accept this option on
the terms stated in this agreement, please contact Toro’s Corporate Secretary
immediately to decline the grant.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  «firstname» «lastname»

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