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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.ex10_2.htm

    
      
         

      

      
         

        
        

      

      
         

      

    

    Exhibit
      10.2

    

    The
      Toro Company

    Performance
      Share Plan

    (As
      Amended January 15, 2008)

    

    

    
      	
              1.

            	
              Purpose.  The
                purpose of The Toro
                Company Performance Share Plan (the “Plan”) is to enhance long-term
                stockholder value of The Toro Company (the “Company”), by reinforcing the
                incentives of key executives to achieve long-term performance goals
                of the
                Company; to link a significant portion of a participant’s compensation to
                the achievement by the Company of performance goals and 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
                motivate executives and to encourage their continued employment on
                a
                competitive basis.  The
                purposes of the Plan are to be
                achieved by the grant of Performance Share Awards.

            

    

    

    
      	
              2.

            	
              Eligibility
                and
                Participation.  Key employees
                of the Company, who,
                through their position or performance, can have a significant, positive
                impact on the Company’s financial results, shall be eligible to
                participate in the Plan. The
                Compensation Committee (the
                “Committee”) shall select recipients of Performance Shares (“Plan
                Participants”).  Newly-hired
                and newly-promoted
                executives may be selected as Plan Participants subject to the provisions
                of paragraph 3.c.(ii), if applicable.

            

    

    

    
      	
              3.

            	
              Performance
                Share Awards.

            

    

    

    
      	
               

            	
              a.

            	
              Performance
                Share Defined.  A Performance
                Share is a right to
                receive shares of Common Stock or Common Stock units, contingent
                on the
                achievement of performance goals of the Company during a three-year
                period, except that a shorter period may be established for new
                participants (the “Award Term”).  A
                Performance Share Award shall be
                subject to such conditions, restrictions and contingencies as the
                Committee shall determine.

            

    

    

    
      	
               

            	
              b.

            	
              Vesting.  Performance
                Shares shall be
                subject to forfeiture until they vest and shall vest only after the
                conclusion of the Award Term, and only if the Committee makes the
                certification required by paragraph 3.c.(iv), except as may otherwise
                be
                provided in paragraphs 3.e.(i), 3.e.(ii) and 3.e.(iv).

            

    

    

    
      	
               

            	
              c.

            	
              Section 162(m) Conditions.  Performance
                Share Awards may
                be designated as “performance-based compensation” as that term is used in
                Section 162(m) of the Internal Revenue Code of 1986, as amended
                (the “Code”).

            

    

    

    
      	
               

            	
              (i)

            	
              Performance
                Goals.  The performance
                goal
                criteria (“Performance Goals”) that may be used by the Committee for
                Performance Shares shall include one or more of the following, as
                selected
                by the Committee: cumulative earnings, cumulative earnings per share,
                profit after tax, net income, return on invested capital, invested
                capital
                dollars, earnings per share, average net assets, after-tax interest
                expense, return on average net assets, average net asset turns, cumulative
                average net asset turns, return on equity, return on beginning equity,
                revenue growth, earnings growth, economic value added, fill rate,
                customer
                care and customer satisfaction scores.

            

    

    

    
      	
               

            	
              (ii)

            	
              Establishment
                of Performance Goals.  Performance
                Share
                Awards designated “performance-based compensation” shall be granted, and
                Performance Goals shall be established, by the Committee in writing
                not
                later than 90 days after the commencement of the period of service
                to
                which the Performance Goal relates, or such other period required
                under
                Section 162(m) of the Code, provided that the outcome is
                substantially uncertain at the time the Committee establishes the
                Performance Goal; and provided further that in no event will a Performance
                Goal be considered to be preestablished if it is established
                after 25% of the period of service (as scheduled in good faith at the
                time the Performance Goal is established) has elapsed.

            

    

    

    
      	
               

            	
              (iii)

            	
              Section 162(m) Maximum
                Award Payment.  With respect
                to a
                Performance Share Award that is designated “performance-based
                compensation” for purposes of Section 162(m), the maximum number of
                shares that may be issued under the award shall be set at the time
                the
                Committee grants the award and establishes Performance Goals under
                the
                award.  Notwithstanding
                any other
                provision of this Plan, the maximum number of Performance Shares
                that may
                be granted to a Plan Participant with respect to any Award Term is
                100,000, subject to adjustment as provided in paragraph 4.

            

    

    

    
      	
               

            	
              (iv)

            	
              Certification
                of Payment.  Before any
                payment or
                delivery of shares of Common Stock is made under the Plan to any
                Participant who is a person referred to in Section 162(m), the
                Committee must certify in writing, as reflected in the minutes, that
                the
                Performance Goals established with respect to a Performance Share
                Award
                have been achieved.  To
                the extent necessary with
                respect to any fiscal year or Award Term, in order to avoid any undue
                windfall or hardship due to external causes, the Committee may make
                the
                determination as to whether a Performance Goal has been achieved
                without
                regard to the effect on the Performance Goal measure, as it may otherwise
                be presented in the financial statements, of any change in accounting
                standards, any acquisition by the Company not planned for at the
                time the
                Performance Goals are established or any Board-approved extraordinary
                or
                non-recurring event or item.  With
                respect to any Plan
                Participant who is a person referred to in Section 162(m), the
                Committee shall have the discretion to decrease an award payment
                under a
                Performance Share Award, but may not under any circumstances increase
                such
                amount.

            

    

    

    
      	
               

            	
              d.

            	
              Delivery.  Certificates
                for shares of
                Common Stock in the number of Performance Shares that vest under
                an award
                will be delivered as soon as possible after the applicable vesting
                requirements (including accelerated vesting under paragraph 3.e.(iv))
                have
                been fulfilled, except that if a Plan Participant has properly elected
                to
                defer income that may be attributable to an award under a Company
                deferred
                compensation plan, Common Stock units will be credited to the Plan
                Participant’s account thereunder.  In
                the event vesting requirements
                are not fulfilled or in the event Performance Shares are canceled
                under
                the provisions of paragraph 3.e.(v), Performance Shares shall be
                canceled
                and have no value.

            

    

    

    
      	
               

            	
              e.

            	
              Vesting
                and
                Cancellation Under Special Circumstances.

            

    

    

    
      	
               

            	
              (i)

            	
              Retirement,
                Death or Disability.  If
                a Plan Participant
                retires, dies or becomes permanently disabled and unable to work
                prior to
                the end of an Award Term, but after the conclusion of not less than
                33% of
                the Award Term, the Committee may, in its sole discretion, cause
                shares of
                Common Stock to be delivered with respect to the participant’s Performance
                Share Award, but only if otherwise earned and only with respect to
                the
                portion of the applicable Award Term completed at the date of such
                event,
                with proration based on full fiscal years only and no shares to be
                delivered for partial fiscal years.  “Retirement”
means
                termination of
                employment with the Company at age 55 or older and with a number
                of years
                of service to the Company that, when added together with the participant’s
                age, equals at least 65.  The
                Committee shall consider the
                requirements of paragraph (A) under this paragraph 3.e.(i) and shall
                have the discretion to consider any other fact or circumstance in
                making
                its decision as to whether to deliver shares, including whether the
                participant again becomes employed.  Shares
                shall be delivered only
                after the conclusion of the applicable Award Term in accordance with
                paragraphs 3.b., 3.c. and 3.d. of the Plan.

            

    

    

    
      	
               

            	
              (A)

            	
              Non-compete.  Notwithstanding
                the
                foregoing, if a Plan Participant retires prior to age 65, and within
                one year after the later of the date of that retirement or the date
                shares
                are delivered pursuant to paragraph 3.e.(i), the Plan Participant
                (a) is 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
                rescind or restrict the special vesting under this paragraph
                3.e.(i) or withhold or have the right to the return of the economic
                value of the Performance Shares that vested under this paragraph;
                provided, however, that this provision shall not be applicable in
                the
                event of a Change of Control.

            

    

    

    
      	
               

            	
              (ii)

            	
              Reassignment.  If
                prior to the end of an
                Award Term, a Plan Participant is reassigned to a position with the
                Company (including a subsidiary or parent of the Company), and that
                position is not eligible to participate in the Plan, but the Plan
                Participant does not terminate employment with the Company, the Committee
                may, in its sole discretion, cause shares of Common Stock to be delivered
                with respect to the participant’s Performance Share Award, but only if
                otherwise earned and only with respect to the portion of the applicable
                Award Term completed at the date of such reassignment, based on full
                fiscal years only, with no shares to be delivered for partial fiscal
                years.

            

    

    

    
      	
               

            	
              (iii)

            	
              Other
                Termination.  In
                the event that a Plan
                Participant terminates employment with the Company other than by
                reason of
                retirement, death or disability as provided
                in
                paragraph 3.e.(i), Performance Shares in such participant’s name that
                have not yet vested shall not vest and shall be canceled.

            

    

    

    
      	
               

            	
              (iv)

            	
              Change
                of Control.  Notwithstanding
                the
                provisions of paragraphs 3.b. and 3.c., all Performance Shares that
                have
                not yet vested shall vest and become immediately payable if there
                is a
                change of control of the Company.

            

    

    

    
      	
               

            	
              Change
                of Control means:

            

    

    

    
      	
               

            	
              (A)

            	
              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
                paragraph (A), 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 paragraph (C) of this
                paragraph 3.e.(iv); or

            

    

    

    
      	
               

            	
              (B)

            	
              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

            

    

    

    
      	
               

            	
              (C)

            	
              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

            

    

    

    
      	
               

            	
              (D)

            	
              Approval
                by the stockholders of
                the Company of a complete liquidation or dissolution of the
                Company.

            

    

    

    
      	
               

            	
              (v)

            	
              Committee
                Discretion to Scale Back Awards.  At
                any time during an Award
                Term of more than one fiscal year, the Committee may, in its discretion,
                cancel a portion of the Performance Shares in any Performance Share
                Award
                prior to the conclusion of the Award Term (a “Scale Back”), provided
                that:

            

    

    

    
      	
               

            	
              (A)

            	
              the
                Performance Share Award has
                not yet vested;

            

    

    

    
      	
               

            	
              (B)

            	
              based
                on financial information
                contained in the Company’s financial statements or similar internal
                reports, the Committee determines that the Performance Goals for
                the Award
                Term cannot be achieved at the maximum levels established at the
                time
                of grant;

            

    

    

    
      	
               

            	
              (C)

            	
              Performance
                Share Awards shall be
                Scaled Back in proportion to the estimated short fall in achievement
                of
                Performance Goals from maximum levels;

            

    

    

    
      	
               

            	
              (D)

            	
              all
                Performance Share Awards for
                the same Award Term are Scaled Back by the same percentage;

            

    

    

    
      	
               

            	
              (E)

            	
              once
                an award is Scaled Back, it
                may not again be increased to add or recover Performance Shares that
                were
                canceled; and

            

    

    

    
      	
               

            	
              (F)

            	
              Performance
                Shares canceled in a
                Scale Back shall again be available to the Committee for grant of
                new
                Performance Share Awards for any future Award Term.  This
                provision shall not be used
                in any manner that could have the effect of repricing a previous
                Performance Share Award grant.

            

    

    

    
      	
               

            	
              f.

            	
              Dividends
                and
                Voting.  A
                Plan Participant shall have no rights as a stockholder with respect
                to
                Performance Shares unless and until Common Stock or Common Stock
                units are
                issued in settlement of the award.

            

    

    

    
      	
               

            	
              g.

            	
              Non-transferability.  Neither
                Performance Shares nor Performance Share Awards nor any interest
                in any
                one of such awards or shares may be anticipated, alienated, encumbered,
                sold, pledged, assigned, transferred or subjected to any charge or
                legal
                process, other than by will or the laws of descent and distribution,
                so
                long as the Performance Shares have not vested and shares of Common
                Stock
                have not been distributed in accordance with the Plan, and any sale,
                pledge, assignment or other attempted transfer shall be null and
                void.  A
                Plan Participant may receive
                payment under a Performance Share Award only while an employee of
                the
                Company and only if continuously employed from the date the award
                was
                granted, except as may otherwise be provided in paragraphs
                3.e.(i) and 3.e.(ii).

            

    

    

    
      	
              4.

            	
              Maximum
                Shares
                Subject to Performance Share Awards.  Subject to
                the
                provisions of paragraph 4.a., the total number of shares of Common
                Stock that may be issued pursuant to Performance Share Awards under
                the
                Plan is 2,750,000.  Shares
                of Common Stock that may be
                issued hereunder 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.

            

    

    

    
      	
               

            	
              a.

            	
              Adjustments.  In
                the event of a corporate
                transaction involving the Company, the Common Stock or the Company’s
                corporate or capital structure, including but not limited to any
                stock
                dividend, stock split, extraordinary cash dividend, recapitalization,
                reorganization, merger, consolidation, reclassification, split-up,
                spin-off, combination or exchange of shares, or a sale of the Company
                or
                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 Performance Share Awards.  Action
                by the Committee may
                include all or any of adjustment in (i) the maximum number and kind
                of securities subject to the Plan as set forth in this paragraph;
                (ii) the maximum number and kind of securities that may be made
                subject to Performance Share Awards for any individual as set forth
                in
                paragraph 3.c. (iii); (iii) the number and kind of securities subject
                to any outstanding Award; and (iv) any other adjustments that the
                Committee determines to be equitable.

            

    

    

    
      	
              5.

            	
              Administration.  The
                Plan shall
                be administered by the Committee.  The
                Committee shall have the
                authority to administer the Plan; establish policies under the Plan;
                amend
                the Plan, subject to the provisions of paragraph 8; interpret provisions
                of the Plan; select Plan Participants; establish Performance Goals;
                make
                Performance Share Awards; or terminate the Plan, in its sole
                discretion.  The
                Committee may delegate
                administrative duties and all decisions not required to be exercised
                by it
                under Section 162(m) or Section 16 of the Exchange Act, as
                it solely determines, including to Company officers.  All
                decisions of the Committee
                shall be final and binding upon all parties including the Company,
                its
                stockholders and Plan Participants.

            

    

    

    
      	
              6.

            	
              Tax
                Withholding.  The
                Company shall have the
                right to deduct from any settlement made under the Plan or to require
                the
                Participant to pay the amount of any federal, state or local taxes
                of any kind required by law
                to be withheld with respect to the grant, vesting, payment or settlement
                of an award under this Plan, 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 it is withheld or surrendered.  The
                Company may also deduct from
                any award settlement any other amounts due the Company by the Plan
                Participant.

            

    

    

    
      	
              7.

            	
              Governing
                Law.  The
                Plan, awards granted
                under the Plan, agreements entered into under the Plan and Performance
                Shares 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 award or agreement
                or Performance Shares to the substantive law of another
                jurisdiction.

            

    

    

    
      	
              8.

            	
              Plan
                Amendment
                and Termination.  The Committee
                may, in its sole
                discretion, amend, suspend or terminate the Plan at any time, with
                or
                without advance notice to Plan Participants, provided that no amendment
                to
                the Plan shall be effective that would increase the maximum number
                of
                Performance Shares that may be granted under paragraph 3.c.(iii) to a
                participant who is a person referred to in Section 162(m); that would
                change the Performance Goal criteria applicable to a participant
                who is a
                person referred to in Section 162(m) for payment of awards as
                set forth in paragraph 3.c.(i); or that would modify the requirements
                as
                to eligibility for participation under paragraph 2, unless the
                stockholders of the Company shall have approved such change in accordance
                with the requirements of Section 162(m).  No
                amendment, modification or
                termination of the Plan may adversely affect in a material manner
                any
                right of any Plan Participant with respect to any Performance Share
                Award
                theretofore granted without such participant’s written consent.

            

    

    

    9.           
Effective
      Date of the
      Plan and Amendments.  The Plan first became
      effective on November 18, 1998.  Any amendment to the Plan shall be
      effective on the date established by the Committee, subject to stockholder
      approval, if required under the provisions of paragraph 8.

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