Document:

Exhibit

Exhibit 10-AJ
DONALDSON COMPANY, INC.

COMPENSATION PLAN
FOR
NON‐EMPLOYEE DIRECTORS
Amended on _____, 2019 

I.  Introduction
The Board of Directors of Donaldson Company, Inc. (the “Company”) has adopted stock ownership guidelines attached hereto as Exhibit A because it believes that it is in the best interests of the Company and its stockholders for non‐employee directors of the Company to have a significant equity interest in the Company in order to align their financial interests with those of the Company’s stockholders.  The Company has previously established an automatic equity grant program and a deferred compensation program for non‐employee directors, both of which are intended to assist non‐employee directors in meeting the Company’s stock ownership guidelines.  Set forth in writing below are the provisions of both programs combined into one restated plan document entitled the Donaldson Company, Inc. Compensation Plan for Non‐Employee Directors (hereinafter, the “Plan”).
All equity awards granted hereunder, as well as any amounts deferred that are payable in shares of the Company’s common stock, par value of US$5.00 per share (“Common Stock”) are subject to the terms, conditions, and restrictions set forth in under the Company’s 2019 Master Stock Incentive Plan (the “Master Stock Plan”).  In the event of any inconsistency between the terms contained herein and in the Plan, the Master Stock Plan shall govern.  All capitalized terms that are not defined herein have the meanings set forth in the Master Stock Plan.
II.  Plan Year
The Plan shall operate on a calendar year basis.
III.  Eligibility
All members of the Board of Directors who are not employees of the Company (“Eligible Directors”) are eligible for the Plan.
IV.  Automatic Equity Grant Program
		
	1.
	Annual Award Grants

		
	(a)
	Stock Options.  On the first day following January 1 that the New York Stock Exchange is open for trading (the “First Trading Day”), each Eligible Director shall automatically be granted a Non‐Qualified Stock Option with a fair market value (computed as of the date of grant in accordance with applicable financial

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accounting rules) equal to $70,000 (the “Annual Option Grant”).  The number of shares subject to the Annual Option Grant shall be determined using the closing price of the Common Stock on the grant date, and rounding this number to the nearest integer multiple of one hundred (100) shares.  With respect to an individual who becomes an Eligible Director during a calendar year after the First Trading Day, such Eligible Director’s Annual Option Grant for that year shall have a fair market value obtained by multiplying $70,000 by a fraction, the numerator of which is the number of whole calendar months remaining in the calendar year and the denominator of which is twelve.  Such prorated grant shall be made upon the first trading day of the calendar month, within the Company’s open trading window, following the date such individual becomes an Eligible Director, with the number of shares determined using the closing price of the Common Stock on the grant date, and rounding this number to the nearest integer multiple of one hundred (100) shares.

		
	(b)
	Restricted Stock Unit.  On the First Trading Day, each Eligible Director shall automatically be granted a Restricted Stock Unit Award with a fair market value (computed as of the date of grant in accordance with applicable financial accounting rules) equal to $70,000 (the “Annual Restricted Stock Unit Grant”).  The number of shares subject to the Annual Restricted Stock Unit Grant shall be determined using the closing price of the Common Stock on the grant date, and rounding this number to the nearest integer multiple of one hundred (100) shares.  With respect to an individual who becomes an Eligible Director during a calendar year after the First Trading Day, such Eligible Director’s Annual Restricted Stock Unit Grant for that year shall have a fair market value obtained by multiplying $70,000 by a fraction, the numerator of which is the number of whole calendar months remaining in the calendar year and the denominator of which is twelve.  Such prorated grant shall be made upon the first trading day of the calendar month, within the Company’s open trading window, following the date such individual becomes an Eligible Director, with the number of shares determined using the closing price of the Common Stock on the grant date, and rounding this number to the nearest integer multiple of one hundred (100) shares.

2.Award Terms

		
	(a)
	Options.  All Non‐Qualified Stock Options granted under the Plan shall have: (i) a per share exercise price equal to the closing price of the Common Stock on the day on which such options are granted; and (ii) vesting, expiration and such other terms as provided in the Company’s form of Non‐Employee Director Non‐Qualified Stock Option Agreement attached hereto as Exhibit B.

		
	(b)
	Restricted Stock Units.  All Restricted Stock Units granted under the Plan shall have vesting and such other terms as provided in the Company’s form of Non‐Employee Director Restricted Stock Unit Award Agreement attached hereto as Exhibit C.

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V.  Director Deferred Compensation Program
		
	1.
	Compensation Covered by the Plan

Eligible Director compensation covered by this Plan includes annual retainers (including committee retainers) generally payable on or shortly after January 1 of each calendar year (hereinafter “Eligible Fees”).  The Plan permits Eligible Directors to elect to receive this compensation in one or more of the following methods:
		
	(a)
	In cash on a current basis;

		
	(b)
	In cash on a deferred basis (a “Deferred Cash Election”); or

		
	(c)
	In Company stock on a deferred basis (a “Deferred Stock Election”).

No other compensation or fees otherwise payable to an Eligible Director shall be eligible for an election under this Plan.
Notwithstanding the foregoing, a portion of each Eligible Director’s annual retainer for Board service shall be automatically deferred in Phantom Shares in accordance with Section V.3 below only for 2019 and the prior Plan Years.
		
	2.
	Election to Defer

An Eligible Director may elect to defer payment of Eligible Fees under Section V.4 or V.5 of this Plan by filing, no later than the last day of a Plan Year (or by such earlier date as the Plan administrator shall determine), an irrevocable election with the administrator on a form provided for that purpose.  The Annual Deferral Election shall be effective with respect to the Eligible Fees payable during the following Plan Year.  The Deferral Election Form shall specify an amount to be deferred expressed as a percentage of the Eligible Director’s annual retainer, as provided in the form attached hereto as Exhibit D.
That portion of Eligible Fees for which a valid form has not been timely received by the Company will be paid in cash in accordance with the Company’s customary practice of paying such Eligible Fees.  Once a Plan Year has commenced, all Deferral Elections under this Plan for such Plan Year shall be irrevocable.
		
	3.
	Automatic Receipt of Phantom Shares

For 2019 and prior Plan Years only, -in addition to an Eligible Director’s voluntary election provided under Section V.4(b), if any, a portion of each Eligible Director’s annual retainer payable to each Eligible Director for service on the Board shall be automatically exchanged for Phantom Shares (in the same manner as provided in Section V.4(b)).  The retainer amount automatically exchanged for Phantom Shares shall be $15,000.  Effective for the 2020 Plan Year and subsequent years, no portion of the annual retainer payable to each Eligible Director for service on the Board shall be automatically exchanged for Phantom Shares.
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	4.
	Deferral Elections

		
	(a)
	Deferred Cash Election

For Eligible Directors who make an Annual Deferred Cash Election, the Company will establish a bookkeeping account for cash deferred for that Plan Year (an “Annual Deferred Cash Account”) and will credit to the Annual Deferred Cash Account the amount of the Eligible Fees earned and deferred by him/her as of the date such fees would normally be payable by the Company (the “Credit Date”).  Amounts credited to an Eligible Director’s Annual Deferred Cash Account will be adjusted for gains and/or losses to the same extent that equal amounts would have been adjusted if they had been invested in one or more notional investments designated by the Company.  The use of notional investments herein is solely as a device for computing the amount of benefits to be paid under the Plan, and the Company shall not be required to purchase such investments.
		
	(b)
	Deferred Stock Election

Eligible Directors may elect to exchange part or all of their Eligible Fees for a Plan Year for the Company’s commitment to issue to such Eligible Directors a fixed number of shares of common stock of the Company at a future date.  The Company’s commitment to issue shares shall be referred to as “Phantom Shares” held in an “Annual Deferred Stock Account”.”
As of the Credit Date, an Eligible Director shall receive a credit to his or her Annual Deferred Stock Account.  The amount of the credit shall be the number of Phantom Shares (rounded to the nearest whole Share) determined by dividing (i) an amount equal to Eligible Fees payable to the Eligible Director on the Credit Date and specified for deferral, by (ii) the fair market value of one share of Common Stock on such date.
For purposes of this paragraph (b), the following rules shall apply:
		
	(i)
	Fair Market Value

The fair market value of each share of Common Stock shall be equal to the closing price of one share of the Company’s common stock on the New York Stock Exchange‐Composite Transactions on the Credit Date as of which Phantom Shares are credited to the Eligible Director’s Deferred Stock Account.
		
	(ii)
	No Actual Shares Prior to Distribution

No actual shares of Common Stock shall be issued until the distribution date described below.  The Phantom Shares shall not be considered issued and outstanding shares for purposes of stockholder voting rights.

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	(iii)
	Dividend Credit

Each time a dividend is paid on Common Stock, an Eligible Director shall receive a credit to his or her Deferred Stock Account equal to that number of shares of common stock (rounded to the nearest whole share) having a fair market value on the dividend payment date equal to the amount of the dividend payable on the number of Phantom Shares credited to the Eligible Director’s Deferred Stock Account on the dividend record date.
		
	(iv)
	Restrictions on Phantom Shares

All Phantom Shares issued under and subject to the terms of this Plan will be issued under the Master Stock Plan (and/or its successor plans) and shall be deemed to be “other stock‐based awards” for purposes of such plan; provided, that any Phantom Shares credited before November 22, 2019 are subject to the Donaldson Company, Inc. 2010 Master Stock Incentive Plan, and any Phantom Shares credited before November 19, 2010 are subject to the Donaldson Company, Inc. 2001 Master Stock Incentive Plan.
		
	5.
	Distributions of Annual Deferred Accounts

		
	(a)
	Timing of Distributions

At the time an Eligible Director’s Annual Deferral Election is made for a Plan Year, each Eligible Director shall specify the time and manner in which his/her Annual Deferred Cash Account and/or Annual Deferred Stock Account shall be distributed.  If an Eligible Director does not specify an election for the timing and manner of a distribution, the balance of an Eligible Director’s Annual Deferred Accounts shall be distributed in a lump sum in accordance with option (i) below.  The Eligible Director shall be entitled to receive, or to commence receiving, his/her Annual Deferred Accounts as soon as practicable after the following:
		
	(i)
	the first anniversary of his/her separation from service (as that term is defined under Section 409A of the Code) with the Company; or

		
	(ii)
	a specified date or specified age set by him/her.

		
	(b)
	Manner of Distribution

Each Eligible Director shall be entitled to receive the balance in his/her Annual Deferred Accounts in any one of the following manners:
		
	(i)
	in a lump sum; or

		
	(ii)
	in annual installments over a period of years stipulated by him/her not to exceed ten (10).  The amount of the installments will be determined by annually dividing the value of the benefits in the Account by the number of installments remaining to be paid.

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Notwithstanding anything to the contrary above, the Company may make an immediate lump sum payment of the Eligible Director’s Annual Deferral Accounts if the balance of such Accounts, combined with any other amounts required to be treated as deferred under a single plan pursuant to Section 409A of the Code, does not exceed the applicable dollar amount under Section 402(g)(1)(B) of the Code, provided any other such aggregated amounts are also distributed in a lump sum at the same time.
Each Eligible Director’s Annual Deferred Stock Account shall be distributed in Common Stock.
		
	(c)
	Distribution in Event of Death

In the event of the Eligible Director’s death, either before or after commencement of payments, distribution of the Eligible Director’s entire Account balance will be made in a single lump sum to the beneficiary named by the Eligible Director (on such form or forms prescribed by the Plan administrator) or to that person who would have a right to receive such distribution by will or by the applicable laws of descent and distribution.
		
	(d)
	Distribution to Specified Employees

Notwithstanding any other provision in this Plan, in the event that an Eligible Director in this Plan is determined to be a “specified employee” (as that term is defined under Section 409A of the Code), any distribution to the Eligible Director on account of the Eligible Director’s separation from service shall be delayed as necessary to comply with the requirements of Section 409A of the Code.
		
	(e)
	Distribution in Event of Change of Control

Notwithstanding any other provision of this Plan, in the event of a Change of Control (as defined below), each Eligible Director who separates from service with the Company for any reason during the two (2) year period following such Change of Control shall receive within ten (10) business days after the date of separation the following:
		
	(i)
	If a Eligible Director has a balance in an Annual Deferred Cash Account, a lump sum payment of the entire balance contained in his/her Annual Deferred Cash Account, together with applicable earnings adjustment, on the average daily balance in such Deferral Account for the period since the last earnings adjustment through the date of separation; and

		
	(ii)
	If an Eligible Director has a balance in an Annual Deferred Stock Account, a distribution of the number of shares represented by the Phantom Shares issued pursuant to such election; and

Notwithstanding paragraph (e)(i) above, with respect to any Eligible Director who separated from service before the date of a Change of Control, the balance of the 

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Annual Deferred Accounts shall be paid at the time and in the manner as elected by the Eligible Director (and shall not be commuted to a lump sum or otherwise accelerated by the Change of Control).  For purposes of this section, a “Change of Control” shall have the meaning ascribed to that term in the Company’s 401(k) Excess Plan, as may be amended from time to time.
VI.  General Provisions
		
	1.
	Unsecured Obligation

The amounts credited to each Eligible Director’s Account shall not be held by the Company in a trust, escrow or similar fiduciary capacity, and neither the Eligible Director, nor any legal representative, shall have any right against the Company with respect to any portion of the Account except as a general unsecured creditor of the Company.
		
	2.
	Administration of the Plan

The Plan shall be administered by the Human Resources Committee of the Board of Directors.
		
	3.
	Amendment, Termination and Governing Law

This Plan may be amended or terminated at any time by the Board of Directors or the Human Resources Committee of the Board of Directors.  This Plan shall be construed and enforced in accordance with the laws of the state of Delaware, except with respect to its rules relating to conflicts of law.
		
	4.
	Cautionary Statement

Eligible Directors should be aware that their participation in the Plan involves the following risks, among others:
		
	(a)
	Balances in the Annual Deferred Accounts represent unfunded, unsecured general obligations of the Company.  If the Company is unable to pay its debts as they become due, Eligible Directors may not be able to collect the balances in their Annual Deferral Accounts.

		
	(b)
	The value of an Eligible Director’s Non‐Qualified Stock Options, Restricted Stock Unit and Phantom Shares will depend on the value of the Company’s Common Stock.  An investment in the Company’s Common Stock involves risk.  Eligible Directors are encouraged to review the Company’s filings with the U.S. Securities and Exchange Commission for a description of some of the risk factors associated with an investment in the Company’s Common Stock.

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EXHIBIT A

DONALDSON COMPANY, INC.
STOCK OWNERSHIP GUIDELINES FOR
NON‐EMPLOYEE DIRECTORS

Amended January 25, 2019

Purpose
The Board of Directors of Donaldson Company, Inc. (the “Company”) has adopted these stock ownership guidelines because it believes that it is in the best interests of the Company and its stockholders for Non‐Employee Directors of the Company to have a significant equity interest in the Company in order to align their financial interests with those of the Company’s stockholders.

Applicability
These guidelines are applicable to all Non‐Employee Directors of the Company (“Covered Individuals”).

Minimum Ownership Guidelines
Each Covered Individual is expected to own shares of the Company’s common stock with a value at least equal to the amount shown in the following schedule:

	
		
	Position
	Value of Shares

	Non‐Employee Director
	$ 400,000

Determining Share Ownership
Shares to be counted for purposes of the ownership guidelines will be all shares owned by the Covered Individual, including shares owned jointly with, or separately by, the Covered Individual’s immediate family members residing in the same household and shares held in trust for the benefit of the Covered Individual or his or her immediate family members residing in the same household.  Additionally, the following rules apply to determining which shares are counted:  (i) all outstanding shares “beneficially owned” for purposes of Section 16 of the Securities Exchange Act are included, (ii) all time‐based restricted stock and restricted stock units, regardless of whether vested, less any estimated shares required to cover the assumed withholding tax amount upon vesting (iii) all “in‐the‐money” unexercised vested stock options, less any estimated shares required to cover the assumed withholding tax amount upon exercise, are included, (iv) all shares in the Company’s deferred compensation programs are included, and (v) all unvested performance‐based restricted stock and restricted stock units (including performance units) are excluded.

Valuation Methodology
The value of the shareholdings of a Covered Individual is based on the historical three‐month average closing price of Donaldson stock at the time of valuation.

Exh A-1

Achieving Compliance
A Covered Individual has five years from the date he or she becomes subject to these ownership guidelines to achieve compliance with the ownership guidelines.  Until a Covered Individual has achieved compliance with these ownership guidelines, the Covered Individual must retain 100% of the “net profit shares” resulting from any option exercise or from the exercise, vesting, or settlement of any other form of equity‐based compensation award.  For these purposes, “net profit shares” refers to that portion of the number of shares subject to the exercise, vesting, or settlement of an award that the Covered Individual would receive had he or she authorized the Company to withhold shares otherwise deliverable in order to satisfy any applicable exercise price or withholding taxes.

Administration
The Human Resources Committee of the Board shall be responsible for monitoring the application of these stock ownership guidelines.  In its discretion, the Human Resources Committee may alter the amount or form of compensation for any Covered Individual who fails to comply with the ownership guidelines, including the retention requirements described above.

Exh A-2

EXHIBIT B

NON‐EMPLOYEE DIRECTOR
NON‐QUALIFIED STOCK OPTION AGREEMENT

This Stock Option Award Agreement (the “Agreement”) is made as of the date specified in the individual grant summary by and between Donaldson Company, Inc., a Delaware corporation (hereinafter, together with its subsidiaries, called “Donaldson” or “Company”), and the person specified in the individual grant summary, a non‐Employee Director of Donaldson (hereinafter called the “Participant”).
In consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties agree as follows:
1.    Grant of Option.  Donaldson irrevocably grants to the Participant a Non‐Qualified Stock Option (hereinafter, the “Option”) representing the right to purchase all or any part of an aggregate of the number of shares specified in the grant summary of common stock, par value of US$5.00 per share, of Donaldson (“Common Stock”).  This Option is granted pursuant to the Donaldson Company, Inc. Compensation Plan for Non‐Employee Directors and the 2019 Master Stock Incentive Plan of Donaldson (collectively, the “Plan”).  The Participant acknowledges receipt of a copy of the Plan.  Capitalized terms not defined in this Agreement shall have the meaning ascribed to such terms in the Plan.
The purchase price of the shares of Common Stock subject to this Option is specified in the grant summary which shall be 100% of the Fair Market Value of Donaldson Common Stock on the date the award is granted (the “Date of Grant”).  The Date of Grant is the date specified in your individual grant summary made available to you on‐line.  The term of this Option is for the period of ten (10) years from and after the Date of Grant, or such shorter period as may be provided by the provisions of the Plan.
2.    Transferability.  This Option shall not be transferable otherwise than by will or the laws of descent and distribution and may be exercised during the lifetime of the Participant only by the Participant; provided, however, that notwithstanding the above, this Option shall be transferable by the Participant to family members and related estate planning entities.
3.    Vesting of Option Right.  Each Option grant may be exercised by the Participant under the following schedule except as otherwise provided in this Agreement.  The Option may not be exercised for a period of one (1) year from the Date of Grant.  Following that one‐year period, the Option vests in equal one‐third increments:
		
	–
	one‐third vests on the one‐year anniversary of the Date of Grant;

		
	–
	one‐third vests on the two‐year anniversary of the Date of Grant;

		
	–
	one‐third vests on the three‐year anniversary of the Date of Grant.

Exh B-1

The Option may be exercised as to any portion of the Option that is vested.  An unvested portion of the Option shall only vest so long as:
		
	(1)
	the Participant remains a Director of the Company on the date that the Option vests,

		
	(2)
	the Participant retires or resigns from service as a Director of the Company in accordance with the age and term limits of the Corporate Governance Guidelines of the Company, or

		
	(3)
	the Participant’s service as a Director of the Company is terminated for any other reason and a majority of the members of the Board of Directors other than the eligible Director consent to the continued vesting of such portion of the Option in accordance with the original vesting schedule.

The vesting of the Option also is subject to acceleration in the event of a Change in Control (as defined in the 2019 Master Stock Incentive Plan).
4.    Exercise of Option.  Once vested, the Participant may exercise this Option, in whole or in part, at any time during the term as specified above but not after ten (10) years from the Date of Grant; provided, that if the Participant dies, this Option, if vested, may be exercised within three (3) years after death, but not after ten (10) years from the Date of Grant, by the Participant’s estate or by the person or persons who acquire the right to exercise this Option by bequest, inheritance or otherwise by reason of such death.  Donaldson and the Participant recognize that this Agreement in no way restricts the right of Donaldson to terminate the Participant’s membership consistent with applicable Delaware laws.
5.    Method of Exercise of Option.  Subject to the terms and conditions of this Agreement, the Option may be exercised only within the Option period by serving written notice of exercise on Donaldson at its principal office which is as of this date located at 1400 W. 94th Street, Bloomington, Minnesota, Attention: General Counsel, or such other forms of written or electronic notice as are designated by the Company.  The notice must state the number of shares being exercised and include payment in full of the purchase price.  Payment of the purchase price shall be made in cash or, with the approval of Donaldson (which may be given in its sole discretion), in shares of Common Stock of Donaldson having a Fair Market Value equal to the full purchase price of the shares of Common Stock being acquired or a combination of cash and such shares of Common Stock.
6.    Acceleration of Exercisability upon Change in Control.  In the event of a Change in Control (as defined in the 2019 Master Stock Incentive Plan), any outstanding Option granted under this Agreement not previously vested and exercisable shall become fully vested and exercisable and shall remain exercisable thereafter until they are either exercised or expire by their terms.
7.    Miscellaneous.
		
	(a)
	Donaldson shall not be liable for any foreign exchange rate fluctuation, where applicable, between the Participant’s local currency and the United States dollar that may affect the value of the Option or any amounts due to the Participant 

Exh B-2

pursuant to the exercise of the Option or the subsequent sale of any shares of Common Stock acquired upon exercise.

		
	(b)
	The exercise of all or any parts of the Option shall only be effective at such time that the sale of shares of Common Stock pursuant to such exercise will not violate any U.S. federal, state or foreign securities or other laws.

		
	(c)
	It is understood and agreed that the Option price is the per share market value of a share of Common Stock on the Date of Grant.  The Option is not intended to be an Incentive Option within the meaning of Section 422 of the Code.  The Option is issued pursuant to the Plan and is subject to its terms.

		
	(d)
	If all or any portion of the Option is exercised subsequent to any stock dividend or split, recapitalization, consolidation, or the like, occurring after the date hereof, as a result of which securities of any class shall be issued in respect of outstanding shares of Common Stock, or shares of Common Stock shall be changed into the same or a different number of shares or other securities of the same or other class or classes, then the Board of Directors shall determine if any equitable adjustment is necessary to protect the Participant against dilution and shall determine the terms of such adjustment, if any.  In the case of any stock dividend or split effected after the date hereof, the number of shares of Common Stock to be granted hereunder shall be automatically adjusted to prevent dilution of the potential benefits intended to be made available hereunder.

		
	(e)
	This Option grant shall be effective only after the Participant agrees to the terms and conditions of the Agreement.

		
	(f)
	This agreement shall be construed and enforced in accordance with the laws of the state of Delaware, except with respect to its rules relating to conflicts of law.  The Participant consents to the exclusive jurisdiction of the state and federal courts of the state of Minnesota in connection with any controversies relating to or arising out of this Agreement, and agrees that any and all litigation relating to or arising out of this Agreement shall be venued in Hennepin County, Minnesota.

		
	(g)
	As a condition of the grant of this Option, the Participant agrees to repatriate all payments attributable to the shares of Common Stock and/or cash acquired under the Plan (including, but not limited to, dividends and any proceeds derived from the sale of the shares of Common Stock acquired pursuant to the Option) in accordance with local foreign exchange rules and regulations in the Participant’s country of residence.  In addition, the Participant also agrees to take any and all actions, and consents to any and all actions taken by Donaldson, as may be required to allow Donaldson to comply with local laws, rules and regulations in the Participant’s country of residence.  Finally, the Participant agrees to take any and all actions as may be required to comply with the Participant’s personal legal and tax obligations under local laws, rules and regulations in the Participant’s country of residence.

Exh B-3

		
	(h)
	Donaldson, in its sole discretion, may decide to deliver any documents related to the Option or other awards granted to the Participant under the Plan by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on‐line or electronic system established and maintained by Donaldson or a third party designated by Donaldson.

		
	(i)
	The Participant acknowledges and agrees that it is the Participant’s express intent that this Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the grant of this Option, be drawn up in English.  If the Participant has received this Agreement, the Plan or any other documents related to the Option translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version shall control.

		
	(j)
	Notwithstanding any provisions in this Agreement to the contrary, this Option shall be subject to any special terms and conditions for the Participant’s country of residence, as set forth in the applicable addendum to this Agreement, if any.  Further, if the Participant transfers residency to another country reflected in an addendum to this Agreement, the special terms and conditions for such country will apply to the Participant to the extent Donaldson determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Option and the Plan (or Donaldson may establish alternative terms and conditions as may be necessary or advisable to accommodate the Participant’s transfer).  Any applicable addendum shall constitute part of this Agreement.

		
	(k)
	Donaldson reserves the right to impose other requirements on this Option, any shares of Common Stock acquired pursuant to this Option, and the Participant’s participation in the Plan, to the extent Donaldson determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Option and the Plan.  Such requirements may include (but are not limited to) requiring the Participant to sign any agreements or undertakings that may be necessary to accomplish the foregoing.

		
	(l)
	If the Participant is resident outside the United States, the grant of the Option is not intended to be a public offering of securities in the Participant’s country of residence.  Donaldson has not submitted any registration statement, prospectus or other filings with the local securities authorities (unless otherwise required under local law), and the grant of the Option is not subject to the supervision of the local securities authorities.  No employee of Donaldson or any Affiliate is permitted to advise the Participant on whether the Participant should acquire shares of Common Stock by exercising the Option under the Plan.  Investment in shares of Common Stock involves a degree of risk.  Before deciding to acquire shares of Common Stock by exercising the Option, the Participant should carefully review all of the 

Exh B-4

materials related to the Option and the Plan.  In addition, the Participant should consult with the Participant’s personal advisor for professional investment advice.

		
	(m)
	The Participant’s country of residence may have insider trading and/or market abuse laws that may affect the Participant’s ability to acquire or sell shares of Common Stock under the Plan during such times the Participant is considered to have “inside information” (as defined in the laws in Participant’s country of residence).  These laws may be the same or different from any Donaldson insider trading policy.  The Participant acknowledges that it is the Participant’s responsibility to be informed of and compliant with such regulations, and the Participant is advised to speak to his / her personal advisor on this matter.

		
	(n)
	The invalidity or unenforceability of any provision of the Plan or this Agreement will not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement will be severable and enforceable to the extent permitted by law.

8.    Consent to Collection/Processing/Transfer of Personal Data.  Pursuant to applicable personal data protection laws, Donaldson hereby notifies the Participant of the following in relation to the Participant’s personal data and the collection, use, processing and transfer of such data in relation to Donaldson’s grant of this Option and the Participant’s participation in the Plan.  The collection, use, processing and transfer of the Participant’s personal data is necessary for Donaldson’s administration of the Plan and the Participant’s participation in the Plan, and the Participant’s denial and/or objection to the collection, use, processing and transfer of personal data may affect the Participant’s participation in the Plan.  As such, the Participant hereby voluntarily acknowledges and consents (where required under applicable law) to the collection, use, processing and transfer of personal data as described in this paragraph.
Donaldson holds certain personal information about the Participant, including the Participant’s name, home address, email address and telephone number, date of birth, social security number, passport number or other employee identification number, salary, nationality, job title, any shares of Common Stock or directorships held in Donaldson, details of all stock options or any other entitlement to shares of Common Stock awarded, canceled, purchased, vested, unvested or outstanding in the Participant’s favor, for the purpose of managing and administering the Plan (“Data”).  Data may be provided by the Participant or collected, where lawful, from third parties, and Donaldson will process Data for the exclusive purpose of implementing, administering and managing the Participant’s participation in the Plan.  Data processing will take place through electronic and non‐electronic means according to logics and procedures strictly correlated to the purposes for which Data are collected and with confidentiality and security provisions as set forth by applicable laws and regulations in the Participant’s country of residence.  Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought.  Data will be accessible within Donaldson’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for the Participant’s participation in the Plan.

Exh B-5

Donaldson will transfer Data within the Donaldson organization as necessary for the purpose of implementation, administration and management of the Participant’s participation in the Plan, and Donaldson may further transfer Data to any third parties assisting Donaldson in the implementation, administration and management of the Plan.  These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States.  The Participant hereby authorizes (where required under applicable law) them to receive, possess, use, retain and transfer Data, in electronic or other form, for purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any shares of Common Stock acquired pursuant to the Plan.
The Participant may, at any time, exercise his or her rights provided under applicable personal data protection laws, which may include the right to (a) obtain confirmation as to the existence of Data, (b) verify the content, origin and accuracy of Data, (c) request the integration, update, amendment, deletion, or blockage (for breach of applicable laws) of Data, and (d) to oppose, for legal reasons, the collection, processing or transfer of Data which is not necessary or required for the implementation, administration and/or operation of the Plan and the Participant’s participation in the Plan.  The Participant may seek to exercise these rights by contacting Donaldson Legal Department.
By executing this Agreement as of the Date of Grant, the Participant hereby accepts and agrees to be bound by all terms and conditions of this Agreement and the Plan.
PARTICIPANT:
SIGNED BY ELECTRONIC SIGNATURE*

* BY ELECTRONICALLY ACCEPTING THE OPTION, THE PARTICIPANT AGREES THAT (i) SUCH ACCEPTANCE CONSTITUTES THE PARTICIPANT’S ELECTRONIC SIGNATURE IN EXECUTION OF THE AGREEMENT; (ii) THE PARTICIPANT AGREES TO BE BOUND BY THE PROVISIONS OF THE PLAN, THE AGREEMENT AND THE ADDENDUM TO THE AGREEMENT (IF ANY); (iii) THE PARTICIPANT HAS REVIEWED THE PLAN, THE AGREEMENT AND THE ADDENDUM TO THE AGREEMENT (IF ANY) IN THEIR ENTIRETY, HAS HAD AN OPPORTUNITY TO OBTAIN THE ADVICE OF COUNSEL PRIOR TO ACCEPTING THE OPTION AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THE PLAN, THE AGREEMENT AND THE ADDENDUM TO THE AGREEMENT (IF ANY); (iv) THE PARTICIPANT HAS BEEN PROVIDED WITH A COPY OR ELECTRONIC ACCESS TO A COPY OF THE U.S. PROSPECTUS FOR THE PLAN AND THE TAX SUPPLEMENT TO THE U.S. PROSPECTUS FOR EMPLOYEE’S COUNTRY, IF APPLICABLE; AND (v) THE PARTICIPANT HEREBY AGREES TO ACCEPT AS BINDING, CONCLUSIVE AND FINAL ALL DECISIONS OR INTERPRETATIONS OF THE HUMAN RESOURCES COMMITTEE UPON ANY QUESTIONS ARISING UNDER THE PLAN, THE AGREEMENT AND THE ADDENDUM TO THE AGREEMENT (IF ANY).

Exh B-6

EXHIBIT C

NON‐EMPLOYEE DIRECTOR
RESTRICTED STOCK UNIT AWARD AGREEMENT

This Restricted Stock Unit Award Agreement (the “Agreement”) is made as of the date specified in the individual grant summary by and between Donaldson Company, Inc., a Delaware corporation (hereinafter, together with its subsidiaries, called “Donaldson” or “Company”), and the person specified in the individual grant summary, a non‐Employee Director of Donaldson (hereinafter called the “Participant”).
In consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration the parties hereto agree as follows:
1.    Grant of Restricted Stock Units.  Donaldson hereby grants to the Participant the number of Restricted Stock Units representing the right to receive shares of common stock, par value of US$5.00 per share, of Donaldson (“Common Stock”) specified in the grant summary for no cash consideration, and dividend equivalent amounts corresponding to the shares, subject to the following terms and conditions:
		
	(a)
	This Award is granted pursuant to the Donaldson Company, Inc. Compensation Plan for Non‐Employee Directors and the 2019 Master Stock Incentive Plan of Donaldson (collectively, the “Plan”), and is subject to all of the terms and conditions of the Plan.  The Participant acknowledges receipt of a copy of the Plan and the Plan Prospectus.  Capitalized terms not defined in this Agreement shall have the meaning ascribed to such terms in the Plan.

		
	(b)
	Date of grant shall be as specified on your individual grant summary made available to you on‐line (“Grant Date”).

		
	(c)
	Neither the Restricted Stock Units, nor the shares of Common Stock to which the units relate, may be sold, assigned, hypothecated or transferred (including without limitation, transfer by gift or donation) until the first anniversary of the Grant Date (“Restriction Period”).  Restricted Stock Units granted to the Participant shall be credited to an account in the Participant’s name.  This account shall be a record of book‐keeping entries only and shall be utilized solely as a device for the measurement and determination of the number of shares of Common Stock to be issued to or in respect of the Participant pursuant to this Agreement.

		
	(d)
	The Restricted Stock Units subject to the Award shall be forfeited to Donaldson if, at any time within the Restriction Period, the Participant’s service as a Director of the Company is terminated for any reason unless:

		
	(i)
	the Participant’s termination is due to retirement or resignation from service as a Director of the Company in accordance with the age and term limits of the Corporate Governance Guidelines of the Company; or

Exh C-1

		
	(ii)
	a majority of the members of the Board of Directors other than the eligible Director consent to the continued vesting of the Restricted Stock in accordance with the original vesting schedule.

		
	(e)
	Upon the expiration of the Restriction Period, the Company shall cause to be issued to the Participant, or to the Participant’s designated beneficiary or estate in the event of the Participant’s death, one share of Common Stock in payment and settlement of each vested Restricted Stock Unit.  The Company shall cause the shares issuable in connection with the vesting of any such Restricted Stock Units to be issued as soon as practicable after the Restriction Period, but in all events no later than 30 days after the Restriction Period, and the Participant shall have no power to affect the timing of such issuance.  Such issuance shall be evidenced by a stock certificate or appropriate entry on the books of the Company or a duly authorized transfer agent of the Company and shall be in complete settlement and satisfaction of such vested Restricted Stock Units.

		
	(f)
	Notwithstanding anything herein to the contrary such restrictions shall lapse and all of the shares of Common Stock shall become fully vested in the event of a Change in Control (as defined in the 2019 Master Stock Incentive Plan).

2.    Vesting upon Change in Control.  In the event of a Change in Control (as defined in the 2019 Master Stock Incentive Plan), the Restricted Stock Units shall immediately become fully vested and the shares subject to the Award shall be delivered to the Participant.  Notwithstanding the foregoing, if any payment due under this Section 2 is deferred compensation subject to Section 409A of the Code, and if the Change in Control is not a “change in control event” that serves as a permissible payment event under Treasury Regulation § 1.409A‐3(i)(5) or such other regulation or guidance issued under Section 409A of the Code, then the Restricted Stock Units shall vest upon the Change in Control as provided above but delivery of the shares subject to the Award shall be delayed until the end of the Restriction Period.
3.    Miscellaneous.
		
	(a)
	The Restricted Stock Units do not entitle the Participant to any rights of a stockholder of the Company.  Notwithstanding the foregoing, the Participant shall accumulate an unvested right to dividend equivalent amounts on the shares of Common Stock underlying Restricted Stock Units if cash dividends are declared by Donaldson on the shares on or after the Grant Date.  Each time a dividend is paid on Common Stock, the Participant shall accrue an additional number of Restricted Stock Units (rounded to the nearest whole share) having a Fair Market Value on the dividend payment date equal to the amount of the dividend payable on the Participant’s Restricted Stock Units on the dividend record date.  The additional Restricted Stock Units shall be subject to the same vesting, forfeiture and share delivery terms in Section 1 and Section 2 above as if they had been awarded on the Grant Date.  The Participant shall not be entitled to dividend equivalents with respect to dividends declared prior to the Grant Date.  All dividend equivalents accumulated with respect to forfeited Restricted Stock Units shall also be irrevocably forfeited.  As of the date of issuance of shares underlying Restricted 

Exh C-2

Stock Units, the Participant shall have all of the rights of a stockholder of the Company with respect to any shares issued pursuant hereto.

		
	(b)
	Upon any stock dividend or split, recapitalization, consolidation, or the like, occurring after the date hereof, as a result of which securities of any class shall be issued in respect of outstanding shares of Common Stock, or shares of Common Stock shall be changed into the same or a different number of shares or other securities of the same or other class or classes, then the Board of Directors shall determine if any equitable adjustment is necessary to protect the Participant against dilution and shall determine the terms of such adjustment, if any.  In the case of any stock dividend or split effected after the date hereof, the number of shares of Common Stock to be issued hereunder shall be automatically adjusted to prevent dilution of the potential benefits intended to be made available hereunder.

		
	(c)
	This Award shall be effective only after the Participant agrees to the terms and conditions of the Agreement.

		
	(d)
	This agreement shall be construed and enforced in accordance with the laws of the state of Delaware, except with respect to its rules relating to conflicts of law.  The Participant consents to the exclusive jurisdiction of the state and federal courts of the state of Minnesota in connection with any controversies relating to or arising out of this Agreement, and agrees that any and all litigation relating to or arising out of this Agreement shall be venued in Hennepin County, Minnesota.

		
	(e)
	As a condition of the grant of this Award, the Participant agrees to repatriate all payments attributable to the shares of Common Stock and/or cash acquired under the Plan (including, but not limited to, dividends and any proceeds derived from the sale of the shares of Common Stock) in accordance with local foreign exchange rules and regulations in the Participant’s country of residence.  In addition, the Participant also agrees to take any and all actions, and consents to any and all actions taken by Donaldson, as may be required to allow Donaldson to comply with local laws, rules and regulations in the Participant’s country of residence.  Finally, the Participant agrees to take any and all actions as may be required to comply with the Participant’s personal legal and tax obligations under local laws, rules and regulations in the Participant’s country of residence.

		
	(f)
	Donaldson, in its sole discretion, may decide to deliver any documents related to the Restricted Stock Units or other Awards granted to the Participant under the Plan by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on‐line or electronic system established and maintained by Donaldson or a third party designated by Donaldson.

		
	(g)
	The Participant acknowledges and agrees that it is the Participant’s express intent that this Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the grant of this Award, be drawn up in English.  If the Participant has received this Agreement, the Plan or 

Exh C-3

any other documents related to the Award translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version shall control.

		
	(h)
	Notwithstanding any provisions in this Agreement to the contrary, this Award shall be subject to any special terms and conditions for the Participant’s country of residence, as set forth in the applicable addendum to this Agreement, if any.  Further, if the Participant transfers residency to another country reflected in an addendum to this Agreement, the special terms and conditions for such country will apply to the Participant to the extent Donaldson determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Award and the Plan (or Donaldson may establish alternative terms and conditions as may be necessary or advisable to accommodate the Participant’s transfer).  Any applicable addendum shall constitute part of this Agreement.

		
	(i)
	Donaldson reserves the right to impose other requirements on this Award, any shares of Common Stock underlying the Award, and the Participant’s participation in the Plan, to the extent Donaldson determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Award and the Plan.  Such requirements may include (but are not limited to) requiring the Participant to sign any agreements or undertakings that may be necessary to accomplish the foregoing.

		
	(j)
	If the Participant is resident outside the United States, the grant of the Award is not intended to be a public offering of securities in the Participant’s country of residence.  Donaldson has not submitted any registration statement, prospectus or other filings with the local securities authorities (unless otherwise required under local law), and the grant of the Award is not subject to the supervision of the local securities authorities.  Investment in shares of Common Stock involves a degree of risk.  The Participant should consult with the Participant’s personal advisor for professional investment advice.

		
	(k)
	The Participant’s country of residence may have insider trading and/or market abuse laws that may affect the Participant’s ability to acquire or sell shares of Common Stock under the Plan during such times the Participant is considered to have “inside information” (as defined in the laws in Participant’s country of residence).  These laws may be the same or different from any Donaldson insider trading policy.  The Participant acknowledges that it is the Participant’s responsibility to be informed of and compliant with such regulations, and the Participant is advised to speak to his / her personal advisor on this matter.

		
	(l)
	The invalidity or unenforceability of any provision of the Plan or this Agreement will not affect the validity or enforceability of any other provision of the Plan or 

Exh C-4

this Agreement, and each provision of the Plan and this Agreement will be severable and enforceable to the extent permitted by law.

4.    Consent to Collection/Processing/Transfer of Personal Data.  Pursuant to applicable personal data protection laws, Donaldson hereby notifies the Participant of the following in relation to the Participant’s personal data and the collection, use, processing and transfer of such data in relation to Donaldson’s grant of this Award and the Participant’s participation in the Plan.  The collection, use, processing and transfer of the Participant’s personal data is necessary for Donaldson’s administration of the Plan and the Participant’s participation in the Plan, and the Participant’s denial and/or objection to the collection, use, processing and transfer of personal data may affect the Participant’s participation in the Plan.  As such, the Participant hereby voluntarily acknowledges and consents (where required under applicable law) to the collection, use, processing and transfer of personal data as described in this paragraph.
Donaldson holds certain personal information about the Participant, including the Participant’s name, home address, email address and telephone number, date of birth, social security number, passport number or other employee identification number, salary, nationality, job title, any shares of Common Stock or directorships held in Donaldson, details of all stock awards or any other entitlement to shares of Common Stock awarded, canceled, purchased, vested, unvested or outstanding in the Participant’s favor, for the purpose of managing and administering the Plan (“Data”).  Data may be provided by the Participant or collected, where lawful, from third parties, and Donaldson will process Data for the exclusive purpose of implementing, administering and managing the Participant’s participation in the Plan.  Data processing will take place through electronic and non‐electronic means according to logics and procedures strictly correlated to the purposes for which Data are collected and with confidentiality and security provisions as set forth by applicable laws and regulations in the Participant’s country of residence.  Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought.  Data will be accessible within Donaldson’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Plan and for the Participant’s participation in the Plan.
Donaldson will transfer Data within the Donaldson organization as necessary for the purpose of implementation, administration and management of the Participant’s participation in the Plan, and Donaldson may further transfer Data to any third parties assisting Donaldson in the implementation, administration and management of the Plan.  These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States.  The Participant hereby authorizes (where required under applicable law) them to receive, possess, use, retain and transfer Data, in electronic or other form, for purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares of Common Stock on the Participant’s behalf to a broker or other third party with whom the Participant may elect to deposit any shares of Common Stock acquired pursuant to the Plan.
The Participant may, at any time, exercise his or her rights provided under applicable personal data protection laws, which may include the right to (a) obtain confirmation as to the existence of Data, (b) verify the content, origin and accuracy of Data, (c) request the integration, 

Exh C-5

update, amendment, deletion, or blockage (for breach of applicable laws) of Data, and (d) to oppose, for legal reasons, the collection, processing or transfer of Data which is not necessary or required for the implementation, administration and/or operation of the Plan and the Participant’s participation in the Plan.  The Participant may seek to exercise these rights by contacting Donaldson Legal Department.
By execution of this Agreement as of the Grant Date, the Participant hereby accepts and agrees to be bound by all of the terms and conditions of this Agreement and the Plan. 
PARTICIPANT:

SIGNED BY ELECTRONIC SIGNATURE*

* BY ELECTRONICALLY ACCEPTING THIS AWARD, THE PARTICIPANT AGREES THAT (i) SUCH ACCEPTANCE CONSTITUTES THE PARTICIPANT’S ELECTRONIC SIGNATURE IN EXECUTION OF THE AGREEMENT; (ii) THE PARTICIPANT AGREES TO BE BOUND BY THE PROVISIONS OF THE PLAN, THE AGREEMENT AND THE ADDENDUM TO THE AGREEMENT (IF ANY); (iii) THE PARTICIPANT HAS REVIEWED THE PLAN, THE AGREEMENT AND THE ADDENDUM TO THE AGREEMENT (IF ANY) IN THEIR ENTIRETY, HAS HAD AN OPPORTUNITY TO OBTAIN THE ADVICE OF COUNSEL PRIOR TO ACCEPTING THIS AWARD AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THE PLAN, THE AGREEMENT AND THE ADDENDUM TO THE AGREEMENT (IF ANY); (iv) THE PARTICIPANT HAS BEEN PROVIDED WITH A COPY OR ELECTRONIC ACCESS TO A COPY OF THE U.S. PROSPECTUS FOR THE PLAN AND THE TAX SUPPLEMENT TO THE U.S. PROSPECTUS FOR EMPLOYEE’S COUNTRY, IF APPLICABLE; AND (v) THE PARTICIPANT HEREBY AGREES TO ACCEPT AS BINDING, CONCLUSIVE AND FINAL ALL DECISIONS OR INTERPRETATIONS OF THE HUMAN RESOURCES COMMITTEE UPON ANY QUESTIONS ARISING UNDER THE PLAN, THE AGREEMENT AND THE ADDENDUM TO THE AGREEMENT (IF ANY).

Exh C-6

EXHIBIT D

DONALDSON COMPANY, INC.
COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

20___ ANNUAL RETAINER ELECTION FORM

Name: __________________________________

	
	
	Retainer Elections

	Annual Retainer:  I elect to receive my annual retainer for calendar year 20__ as follows (total must add up to 100%):

	                                                    % in Cash:_____________%
                                    % in Deferred Stock:_____________%
                                     % in Deferred Cash:_____________%

	Committee Retainer (including Committee Chair retainers):  I elect to receive my Committee retainer as follows (total must add up to 100%):
                                                     % in Cash:_____________%
                                     % in Deferred Stock:_____________%
                                      % in Deferred Cash:_____________%

	
	
	Deferred Stock Payment Election

	I elect to receive my deferred stock account of shares of company stock beginning on (choose one):
                      ̈  One year after I cease to be a director
                      ̈  A Specified Date: _________________
                      ̈  Specified Age: _____________________

	I elect to receive my deferred stock account of shares of company stock in the following form of payment:
     ̈   Lump Sum                          ̈ Annual Installments for ______ years (maximum of 10 years)

	
	
	Deferred Cash Payment Election

	I elect to receive my deferred cash account beginning on (choose one):
                      ̈  One year after I cease to be a director
                      ̈  A Specified Date: _________________
                      ̈  Specified Age: _____________________

	I elect to receive my deferred cash account in the following form of payment:
     ̈   Lump Sum                          ̈ Annual Installments for ______ years (maximum of 10 years)

NOTE:  Changes to this election may only be made under certain specific circumstances described in the Plan document.

Payments pursuant to this agreement shall be reduced for the amount of any applicable tax withholdings.  I understand that this Agreement is covered by the terms of the Company’s Compensation Plan for Non‐Employee Directors and the 2019 Master Stock Incentive Plan.  I understand that this Agreement form must be returned to the Company before the beginning of the calendar year in which I wish the Agreement to take effect.  I understand that the deferral account shall not be held by the Company in a fiduciary capacity and that I or my representative has no right with respect to such account, except as a general unsecured creditor of the Company.

By: __________________________________________        Date: _________________

Exh D-1Exhibit

Exhibit 10-AK

DONALDSON COMPANY, INC.
DEFERRED COMPENSATION AND 401(k) EXCESS PLAN
(2020 Restatement)

As Amended and Restated Effective as of January 1, 2020

DONALDSON COMPANY, INC.
DEFERRED COMPENSATION AND 401(k) EXCESS PLAN
(2020 Restatement)

TABLE OF CONTENTS
Page
		
	SECTION 1.
	HISTORY AND PURPOSE................................................................................................................1

		
	1.1.
	History

		
	1.2.
	Purpose

		
	1.3.
	Relation to Master Stock Plans

		
	SECTION 2.
	DEFINITIONS........................................................................................................................................2

		
	2.1.
	Account

		
	2.1.1.
	Annual Deferral Account

		
	2.1.2.
	Company Credit Account

		
	2.2.
	Affiliate

		
	2.3.
	Base Salary

		
	2.4.
	Beneficiary

		
	2.5.
	Board

		
	2.6.
	Change of Control

		
	2.7.
	Code

		
	2.8.
	Committee

		
	2.9.
	Common Stock

		
	2.10.
	Company

		
	2.11.
	Company Credit

		
	2.12.
	Deferral Credit

		
	2.13.
	Disability, Disabled

		
	2.14.
	Effective Date

		
	2.15.
	Eligible Employee

		
	2.16.
	ERISA

		
	2.17.
	401(k)‐ESOP Plan

		
	2.18.
	Incentive Cycle

		
	2.19.
	Master Stock Incentive Plan

		
	2.20.
	Participant

		
	2.21.
	Performance Cash

		
	2.22.
	Performance Share

		
	2.23.
	Plan

		
	2.24.
	Plan Year

		
	2.25.
	Prior Plan Statement

-i-

		
	2.26.
	Profit Sharing Credit

		
	2.27.
	Restoration Matching Credit

		
	2.28.
	Restricted Stock

		
	2.29.
	Termination of Employment

		
	2.30.
	Valuation Date

		
	2.31.
	Vested

		
	SECTION 3.
	PARTICIPATION...................................................................................................................................8

		
	3.1.
	Eligibility Requirements

		
	3.2.
	Termination of Participation

		
	3.3.
	Overriding Exclusion

		
	SECTION 4.
	DEFERRED COMPENSATION AMOUNTS..............................................................................9

		
	4.1.
	Minimum/Maximum Deferrals

		
	4.2.
	Enrollment and Election to Defer

		
	4.3.
	401(a)(17) Excess Deferral Credits

		
	4.4.
	Share Deferral Credits

		
	4.5.
	Company Credits

		
	4.6.
	Vesting

		
	4.7.
	Reduction for Tax Withholding

		
	SECTION 5.
	TIME AND MANNER OF PAYMENTS    ....................................................................................13

		
	5.1.
	Time of Payment

		
	5.2.
	Manner of Payment

		
	5.3.
	Changes in Time and Manner of Payment

		
	5.4.
	Hardship Distributions

		
	5.4.1.
	When Available

		
	5.4.2.
	Purposes

		
	5.4.3.
	Suspension

		
	5.4.4.
	Limitations

		
	5.5.
	Change of Control Distributions

		
	5.6.
	Death Benefit

		
	5.7.
	Beneficiary Designation

		
	5.8.
	Post‐Termination Deferral Credits

		
	SECTION 6.
	DEFERRED COMPENSATION ACCOUNT............................................................................18

		
	6.1.
	Participant Accounts

		
	6.2.
	Investment of Accounts

		
	6.3.
	Assumption of Risk

		
	6.4.
	Charges Against Accounts

-ii-

		
	SECTION 7.
	FUNDING..............................................................................................................................................19

		
	7.1.
	Funding

		
	7.2.
	Corporate Obligation

		
	SECTION 8.
	FORFEITURE OF BENEFITS.......................................................................................................20

		
	SECTION 9.
	ADMINISTRATION..........................................................................................................................21

		
	9.1.
	Authority

		
	9.2.
	Liability

		
	9.3.
	Procedures

		
	9.4.
	Claim for Benefits

		
	9.5.
	Claims Procedure

		
	9.5.1.
	Original Claim

		
	9.5.2.
	Claims Review Procedure

		
	9.5.3.
	General Rules

		
	9.6.
	Legal Fees

		
	9.7.
	Errors in Computations

		
	SECTION 10.
	MISCELLANEOUS...........................................................................................................................24

		
	10.1.
	Not an Employment Contract

		
	10.2.
	Nontransferability

		
	10.3.
	Tax Withholding

		
	10.4.
	Expenses

		
	10.5.
	Governing Law

		
	10.6.
	Amendment and Termination

		
	10.7.
	Rules of Interpretation

-iii-

DONALDSON COMPANY, INC.
DEFERRED COMPENSATION AND 401(k) EXCESS PLAN
(2020 Restatement)

SECTION 1

HISTORY AND PURPOSE

1.1.History.    Since December 21, 1997, Donaldson Company, Inc. has maintained an unfunded, nonqualified deferred compensation program for a select group of highly compensated employees, known as the “DONALDSON COMPANY, INC. DEFERRED COMPENSATION AND 401(k) EXCESS PLAN.”  The Plan, in its most current amended and restated form, is maintained under a document effective January 1, 2008, as amended.  Effective as of January 1, 2020, Donaldson Company, Inc. hereby amends and restates the Plan in the manner hereinafter set forth to (i) discontinue notional investment of future Deferral Credits (other than deferrals of Performance Shares) and Company Credits into Stock Units or any other Company stock fund and (ii) make other miscellaneous changes.

1.2.Purpose.    The purposes of this Plan are to enable the Company to supplement the benefits for a select group of management or highly compensated employees under the 401(k)‐ESOP Plan which will be reduced because of the compensation limitation under section 401(a)(17) of the Code; to provide a means whereby certain amounts payable by the Company to a select group of management or highly compensated employees may be deferred to some future period; and to attract and retain certain executive employees of outstanding competence.

1.3.Relation to Master Stock Plans.    All benefits provided by this Plan that are attributable to Performance Shares and Restricted Stock are subject to any applicable terms, conditions and restrictions required by the applicable Master Stock Plan pursuant to which the corresponding long‐term incentive or restricted stock award was issued.  Benefits attributable to Company Credits which are paid in the form of Common Stock are subject to any applicable terms, conditions and restrictions required by the Donaldson Company, Inc. 2019 Master Stock Incentive Plan if they are credited on or after November 22, 2019, the Donaldson Company, Inc. 2010 Master Stock Incentive Plan if they are credited on or after November 19, 2010 but before November 22, 2019, the Donaldson Company, Inc. 2001 Master Stock Incentive Plan if they are credited on or after November 16, 2001 but before November 19, 2010, or the Donaldson Company, Inc. 1991 Master Stock Compensation Plan if they are credited before November 16, 2001.

SECTION 2

DEFINITIONS

The following words and phrases shall have the following meanings, unless a different meaning is plainly required by the context.  Any masculine terminology used in the Plan shall also include the feminine gender and the definition of any terms in the singular shall also include the plural.
2.1.Account - the deferred compensation account established under this Plan for a Participant pursuant to Section 6.1, which shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant (or designated Beneficiary) pursuant to this Plan, and shall including the following:

2.1.1.             Annual Deferral Account - with respect to a Participant, each of the following entries on the records of the Company reflecting Deferral Credits of the Participant for a Plan Year, Incentive Cycle or other performance period as applicable:

		
	(a)
	Annual Base Salary Account - that portion of a Participant’s Base Salary that a Participant defers for any one Plan Year (without regard to whether such amounts are withheld and credited during such Plan Year), plus earnings, gains or losses credited or debited to such amounts pursuant to this Plan, less all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Account for such Plan Year.

		
	(b)
	Annual 401(a)(17) Excess Account - that portion of a Participant’s Base Salary or Performance Cash in excess of the dollar limit under section 401(a)(17) of the Code that a Participant defers for any one Plan Year pursuant to Section 4.3 (without regard to whether such amounts are withheld and credited during such Plan Year), plus earnings, gains or losses credited or debited to such amounts pursuant to this Plan, less all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Account for such Plan Year.

		
	(c)
	Annual Performance Cash Account - that portion of a Participant’s Performance Cash that a Participant defers for any one performance period (without regard to whether such amounts are withheld and credited during such performance period), plus earnings, gains or losses credited or debited to such amounts pursuant to this Plan, less all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Account for such performance period.

		
	(d)
	Annual Performance Share Account - that portion of a Participant’s Performance Shares that a Participant defers for any one Incentive Cycle 

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(without regard to whether such amounts are withheld and credited during such Incentive Cycle), plus earnings, gains or losses credited or debited to such amounts pursuant to this Plan, less all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Account for such Incentive Cycle.

		
	(e)
	Annual Restricted Stock Account - that portion of a Participant’s Restricted Stock award that a Participant deferred for any one Plan Year (without regard to whether such amounts are withheld and credited during such Plan Year) prior to January 1, 2008, plus earnings, gains or losses credited or debited to such amounts pursuant to this Plan, less all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Account for such Plan Year.

2.1.2.             Company Credit Account - with respect to a Participant, all Company Credits entered on the records of the Company, plus earnings, gains or losses credited or debited to such amounts pursuant to this Plan, less all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Account for such Plan Year.

2.2.Affiliate - a business entity which is under “common control” with the Company or which is a member of an “affiliated service group” that includes the Company, as those terms are defined in sections 414(b), (c) and (m) of the Code.  A business entity shall also be treated as an Affiliate if, and to the extent that, such treatment is required by regulations under section 414(o) of the Code.  In addition to said required treatment, the Committee may, in its discretion, designate as an Affiliate any business entity which is not such a “common control” or “affiliated service group” business entity but which is otherwise affiliated with the Company, subject to such limitations as the Committee may impose.

2.3.Base Salary - the annual cash compensation relating to services performed during any calendar year, excluding distributions from nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, profit sharing contributions, stock options, relocation expenses, incentive payments, non‐monetary awards, tuition reimbursement and automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee’s gross income).  Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or nonqualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant’s gross income under Code Section 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Employee.  In no event shall Base Salary include any amounts payable to the Participant prior to the commencement of his or her participation in this Plan.

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2.4.Beneficiary - any person or entity validly designated by the Participant in accordance with Section 5 to receive the benefits, if any, payable from the Participant’s Account after the Participant’s death.  Designated persons or entities shall not be considered Beneficiaries until the death of the Participant.

2.5.Board - the Board of Directors of the Company.

2.6.Change of Control - the occurrence of a “change in the ownership,” “change in effective control,” and/or a “change in the ownership of a substantial portion of the assets,” as defined under Treasury Regulation § 1.409A‐3(i)(5), of the Affected Corporation.  For this purpose, the “Affected Corporation” is the Participant’s employer, or any corporation (including the Company) in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending with the Participant’s employer.  A “majority shareholder” is a shareholder owning more than 50 percent of the total fair market value and total voting power of such corporation.

2.7.Code - the Internal Revenue Code of 1986, including applicable regulations for the specified section of the Code.  Any reference in this Plan Statement to a section of the Code, including the applicable regulation, shall be considered also to mean and refer to any subsequent amendment or replacement of that section or regulation.

2.8.Committee - the Human Resources Committee of the Board of Directors of the Company.

2.9.Common Stock - shares of common stock of the Company.

2.10.Company - Donaldson Company, Inc. and, except in determining under Section 2.6 hereof whether or not any Change of Control has occurred, shall include any successor by merger, purchase or otherwise.

2.11.Company Credit - any amount credited to an Eligible Employee in accordance with Section 4.6.

2.12.Deferral Credit - any amount credited to an Eligible Employee in accordance with Section 4.1, 4.2, 4.3 or 4.4.

2.13.Disability, Disabled - the Participant:

		
	(a)
	is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company; or

-4-

		
	(b)
	is eligible to receive and is actually receiving (after the applicable waiting period) benefits under the federal Social Security Act as in effect at the time of the Disability.

Notwithstanding the foregoing, the terms Disability and Disabled shall at all times be interpreted in a manner so as not to violate section 409A of the Internal Revenue Code.
		
	2.14.
	Effective Date - December 21, 1997, the original effective date of the Plan.  Except as otherwise explicitly provided herein, this amended and restated Plan document is effective as of January 1, 2020.

2.15.Eligible Employee - unless the Committee determines otherwise, each individual described in (a) or (b) below shall be an Eligible Employee to the extent and subject to the limitations specified:

		
	(a)
	Officers.  Each person who has been designated as an officer of the Company by the Company’s board of directors shall be an Eligible Employee until such person ceases to be such an officer (but excluding any officer who is not receiving any earned income which constitutes income from sources within the United States).

		
	(b)
	Executive Employees.  For purposes of Section 4.3 only, each executive employee of the Company or its Affiliates, other than an officer described in (a) above, whose compensation (as defined below) from November 1 through October 31 exceeds the annual compensation limit in effect under Code section 401(a)(17) as of such October 31 shall become an Eligible Employee beginning with the immediately following Plan Year.  Once an executive has become an Eligible Employee under this paragraph (b), the executive shall remain an Eligible Employee under this paragraph (b) for each subsequent Plan Year until the executive is designated as an officer under paragraph (a) or incurs a Termination of Employment, death or Disability, whichever happens first.  For purposes of this paragraph, “compensation” means (i) the executive’s Recognized Compensation (as defined under the 401(k)-ESOP Plan) paid to the executive from November 1 through October 31, plus (ii) any voluntary deferred compensation that would have been included in Recognized Compensation during such period but for the deferral.

2.16.ERISA - the Employee Retirement Income Security Act of 1974, including applicable regulations for the specified section of ERISA.  Any reference in this Plan to a section of ERISA, including the applicable regulation, shall be considered also to mean and refer to any subsequent amendment or replacement of that section or regulation.

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2.17.401(k)‐ESOP Plan - the tax‐qualified, profit sharing and employee stock ownership plan known as the “Donaldson Company, Inc. Retirement Savings and Employee Stock Ownership Plan,” as amended from time to time.

2.18.Incentive Cycle - the performance period applicable to a Performance Share.

2.19.Master Stock Incentive Plan - the Donaldson Company, Inc. 2019 Master Stock Incentive Plan, the Donaldson Company, Inc. 2010 Master Stock Incentive Plan, the Donaldson Company, Inc. 2001 Master Stock Incentive Plan, or the Donaldson Company, Inc. 1991 Master Stock Compensation Plan, as applicable.

2.20.Participant - an Eligible Employee or a former Eligible Employee of the Company or its Affiliates who has any amount credited to his or her Account in this Plan.

2.21.Performance Cash - any performance‐based cash compensation (not including Base Salary) earned by a Participant under any Company’s annual or long‐term bonus and incentive plans for services rendered during a performance period of at least 12 months, as further specified on an election form approved by the Committee in its sole discretion.

2.22.Performance Share - any long‐term performance share or share unit award granted under a Master Stock Incentive Plan.

2.23.Plan - the Donaldson Company, Inc. Deferred Compensation and 401(k) Excess Plan as set forth herein, and as the same may be amended from time to time.

2.24.Plan Year - the twelve (12) consecutive month period ending on any December 31.

2.25.Prior Plan Statement - the series of documents pursuant to which the Plan was established effective December 21, 1997 and operated thereafter until the effective date of this restatement.  Credits made to the Plan which relate entirely to services performed on or before December 31, 2005 shall continue to be governed under the terms of the Prior Plan Statement in order to preserve grandfathering from the application of section 409A of the Code.

2.26.Profit Sharing Credit - any amount credited to an Eligible Employee in accordance with Section 4.6(b).

2.27.Restoration Matching Credit - any amount credited to an Eligible Employee in accordance with Section 4.6(a).

2.28.Restricted Stock - time‐based restricted stock awarded to an Eligible Employee under restricted stock awarded to an Eligible Employee under the Donaldson Company, Inc. 2001 Master Stock Incentive Plan, or any predecessor plan.

2.29.Termination of Employment - the separation from service (within the meaning of Treas. Regs. § 1.409A‐1(h)) with the Company Controlled Group, voluntarily or involuntarily, 

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for any reason other than Disability or death.  Whether a separation from service has occurred is determined under section 409A of the Code and Treasury Regulation 1.409A‐1(h) (i.e., whether the facts and circumstances indicate that the employer and the employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services the employee would perform after such date (whether as an employee or independent contractor) would permanently decrease to no more than twenty percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty‐six (36) month period (or the full period of services to the employer if the employee has been providing services to the employer less than thirty‐six (36) months)).  Separation from service shall not be deemed to occur while the employee is on military leave, sick leave or other bona fide leave of absence if the period does not exceed six (6) months or, if longer, so long as the employee retains a right to reemployment with any member of the Company Controlled Group under an applicable statute or by contract.  For this purpose, a leave is bona fide only if, and so long as, there is a reasonable expectation that the employee will return to perform services for any member of the Company Controlled Group.  Notwithstanding the foregoing, a twenty‐nine (29) month period of absence will be substituted for such six (6) month period if the leave is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of no less than six (6) months and that causes the employee to be unable to perform the duties of his or her position of employment.  For this purpose, the “Company Controlled Group” is the Participant’s employer and all persons with whom the employer would be considered a single employer under Code sections 414(b) and 414(c); provided that, in applying Code sections 1563(a)(1), (2) and (3) for purposes of determining a controlled group of corporations under Code section 414(b), the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears therein, and in applying Treas. Regs. § 1.414(c)‐2 for purposes of determining trades or businesses that are under common control for purposes of Code section 414(c), “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears therein.

2.30.Valuation Date - each December 31 and each other day that the New York Stock Exchange is open and conducting business, or such other date or dates as the Committee may establish.

2.31.Vested - nonforfeitable.

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SECTION 3

PARTICIPATION

3.1.Eligibility Requirements.  Each Eligible Employee who is eligible to participate in the Plan shall commence participation in the Plan only after the Eligible Employee has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period.

3.2.Termination of Participation.  A person shall cease to be a Participant as soon as all amounts credited to the Participant’s Account have been paid in full.

3.3.Overriding Exclusion.  Notwithstanding anything apparently to the contrary in this Plan or in any written communication, summary, resolution or document or oral communication, no individual shall be a Participant in this Plan, develop benefits under this Plan or be entitled to receive benefits under this Plan (either for the employee or his or her survivors) unless such individual is a member of a select group of management or highly compensated employees (as that expression is used in ERISA).  If a court of competent jurisdiction, any representative of the U.S. Department of Labor or any other governmental, regulatory or similar body makes any direct or indirect, formal or informal, determination that an individual is not a member of a select group of management or highly compensated employees (as that expression is used in ERISA), such individual shall not be (and shall not have ever been) a Participant in this Plan at any time.  If any person not so defined has been erroneously treated as a Participant in this Plan, upon discovery of such error such person’s erroneous participation shall immediately terminate ab initio and upon demand such person shall be obligated to reimburse the Company for all amounts erroneously paid to him or her.

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SECTION 4

DEFERRED COMPENSATION AMOUNTS

4.1.Minimum/Maximum Deferrals.  For each Plan Year, an Eligible Employee under Section 2.15(a) may elect to defer remuneration in the following minimum and up to the following maximum amounts for each deferral elected:

	
		
	Cash Compensation
	Deferral Amount

	Base Salary
	1% ‐ 75%

	Performance Cash
	1% ‐ 100%

	
		
	Equity Compensation
	Deferral Amount

	Performance Shares
	1% ‐ 100%

If, prior to the beginning of a Plan Year, an Eligible Employee has made an election for less than the stated minimum amounts, or if no election is made, the amount deferred shall be zero. Notwithstanding the foregoing, with respect to an Eligible Employee who first becomes a Participant after the first day of a Plan Year, the maximum deferral shall be limited to the amount of compensation not yet earned by the Participant as of the date the Participant submits a deferral election to the Committee for acceptance.
4.2.Enrollment and Election to Defer.  As a condition to participation, each Eligible Employee who is eligible to participate in the Plan under Section 2.15(a) shall complete, execute and return to the Committee an election form and a beneficiary designation form to the Committee.  In addition, the Committee may establish from time to time such other enrollment requirements as it determines, in its sole discretion, are necessary.

		
	(a)
	First Plan Year of Eligibility.  If the Committee so allows, an Eligible Employee who first becomes eligible to participate in this Plan (including for this purpose all other voluntary deferral plans that would be required to be aggregated with this Plan under Treas. Regs. § 1.409A‐1(c)(2)) after the first day of a Plan Year must submit a Base Salary deferral election within 30 days after he or she first becomes eligible to participate in the Plan, or within such other earlier deadline as may be established by the Committee in its discretion, in order to participate for that Plan Year.  In such event, such person’s participation in this Plan shall not commence earlier than 30 days after he or she first becomes eligible to participate in the Plan, and such person shall not be permitted to defer under this Plan any portion of his or her Base Salary that is paid with respect to services performed prior to his or her participation commencement date, except to the extent permissible under section 409A of the Code and related Treasury guidance or regulations thereunder.  If the Participant is not

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eligible to enter the Plan within a Plan Year under the aforementioned thirty (30) day rule (because, for example, the Participant was previously eligible to participate in the Plan or another voluntary deferral plan of the Company), then any Base Salary deferral election shall apply for the immediately following Plan Year and shall be made before the end of the Plan Year preceding such Plan Year.

		
	(b)
	Subsequent Plan Years.  For each succeeding Plan Year, an irrevocable Base Salary deferral election for that Plan Year, and such other elections as the Committee deems necessary or desirable under the Plan, shall be made by timely delivering a new election form to the Committee, in accordance with the terms of the Plan, before the end of the Plan Year preceding the Plan Year for which the election is made.  The deferral election for the preceding Plan Year, if any, shall not automatically carry over and continue in effect for subsequent years; rather, an affirmative election for each year shall be required.

		
	(c)
	Performance‐Based Compensation.  Notwithstanding the foregoing requirements as to the timing of deferral elections with respect to Base Salary, an irrevocable deferral election pertaining to Performance Cash or Performance Shares which qualify as “performance‐based compensation” may be made by timely delivering an election form to the Committee, in accordance with the terms of the Plan, no later than six months before the end of the applicable performance period, provided that such compensation is not yet readily ascertainable.  “Performance‐based compensation” shall be compensation based on services performed over a period of at least twelve (12) months, in accordance with section 409A of the Code and related guidance.  (For this purpose, restricted stock does not qualify as “performance‐based compensation” unless subject to a performance‐based vesting condition or as otherwise qualified under section 409A of the Code and related guidance.)  If no such election form is timely delivered for a performance period (including a form canceling a prior election), the deferral election for the preceding performance period, if any, shall continue in effect.

4.3.401(a)(17) Excess Deferral Credits.  An Eligible Employee under Section 2.15(a) or (b) may make a separate election (subject to the minimum and maximum limitations in Section 4.1 above) to defer only from the Participant’s Base Salary and Performance Cash in excess of the annual compensation limit in effect for the Plan Year under section 401(a)(17) of the Code.  (In the case of any Eligible Employee under 2.15(a), this election may be addition to or in lieu of a Base Salary or Performance Cash deferral election under Section 4.1.) Any excess deferral election under this Section 4.3 shall be made by timely delivering a new election form to the Committee, in accordance with the terms of the Plan, before the end of the Plan Year preceding the Plan Year for which the election is made.  The deferral election for the preceding 

-10-

Plan Year, if any, shall not automatically carry over and continue in effect for subsequent years; rather, an affirmative election for each year shall be required.  If an Eligible Employee makes an election under this Section 4.3 for a Plan Year and earns no Base Salary and no Performance Cash in excess of the annual compensation limit for that year, then no excess deferrals shall be credited for that year.

4.4.Share Deferral Credits.

		
	(a)
	Stock Units.  After the end of the Incentive Cycle, the Participant’s Account shall be credited with a number of Stock Units equal to the number of Performance Shares deferred by the Participant under any Company long‐term incentive program.  Since January 1, 2008, deferral elections made with respect to time‐based Restricted Stock are no longer accepted; provided, that any Stock Units credited pursuant to elections made prior to January 1, 2008 remain subject to the provisions of this Plan.

		
	(b)
	Adjustment.  In the event of any change in the outstanding shares of Common Stock by reason of any stock split or stock dividend in the form of a split, the Committee shall adjust the number of Stock Units in a Participant’s Account in accordance with the terms of the applicable Master Stock Incentive Plan under Section 1.3.

		
	(c)
	Dividend Units.  Each time a dividend is paid on shares of Common Stock, the Participant shall receive a credit to his or her Account equal to that number of shares of Common Stock (rounded to the nearest whole share) having a fair market value on the dividend payment date equal to the amount of the dividend payable on the number of Stock Units credited to the Participant’s Account on the dividend record date.  The fair market value of each share of Common Stock shall be equal to the closing price of one share of Common Stock on the New York Stock Exchange Composite Transactions on the credit date as of which Stock Units are credited to the Participant’s Account.

		
	(d)
	No Actual Shares Prior to Distribution.  No actual shares of Common Stock shall be issued until the distribution date(s) described below.  The Stock Units shall not be considered issued and outstanding shares for purposes of stockholder voting rights.

4.5.Company Credits.

		
	(a)
	Restoration Matching Credits.  An Eligible Employee’s Restoration Matching Credits for any Plan Year shall be the amount necessary to make up for the lost share, if any, of fixed matching contributions (but not elective deferred contributions) under Section 3.2 of the 401(k)‐ESOP Plan attributable to the Eligible Employee’s Base Salary and Performance Cash deferrals under this Plan if they would have otherwise been allocated to the account of the Participant under the 401(k)‐ESOP 

-11-

Plan for such Plan Year, without regard to the annual compensation limit then in effect under section 401(a)(17) of the Code.  The amount so credited to a Participant under this Plan for any Plan Year (i) may be smaller or larger than the amount credited to any other person and (ii) may differ from the amount credited the Eligible Employee in the preceding Plan Year.  Restoration Matching Credits, if any, shall be credited to the Participant’s Annual Account generally when fixed matching contributions are made to the 401(k)-ESOP throughout the Plan Year (but in all events no later than as soon as administratively practicable after the amount can determined for the applicable Plan Year).

		
	(b)
	Profit Sharing Credits.  The Board may, in its sole discretion, cause the Account of an Eligible Employee to be credited with Profit Sharing Credits for a Plan Year.  Such Profit Sharing Credits shall not exceed the amount necessary to make up for the lost share, if any, of profit sharing contributions under Section 3.4 of the 401(k)‐ESOP Plan attributable to the Eligible Employee’s Base Salary and Performance Cash deferrals under this Plan and the annual compensation limit then in effect under Code section 401(a)(17).  The Profit Sharing Credit, if any, shall be credited to the Participant’s Annual Account for the applicable Plan Year as soon as administratively practicable after the amount can determined for the applicable Plan Year.

4.6.Vesting.  Subject to the forfeiture provisions of Section 8, the Accounts of all Participants shall be 100% Vested at all times.

4.7.Reduction for Tax Withholding.  Notwithstanding anything in Section 4.4 to the contrary, the number of Stock Units credited pursuant to those sections shall be reduced by the number of shares whose aggregate fair market value on the crediting date equals the amount of any taxes that must be withheld at the time of crediting due to the Eligible Employee’s deferral election.

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SECTION 5

TIME AND MANNER OF PAYMENTS

5.1.Time of Payment.  Payment of a Participant’s Annual Deferral Accounts and Company Credit Account under the Plan will commence as soon as administratively feasible after (but not later than December 31 of the Plan Year in which occurs, or if later, sixty (60) days following) the earliest of the following events:

		
	(a)
	the Participant’s death;

		
	(b)
	the Participant’s Disability; 

		
	(c)
	the date that is twenty‐four (24) months following the Participant’s Termination of Employment; or

		
	(d)
	a date of distribution selected by the Participant on a form prescribed by the Committee (1) for each Annual Deferral Account at the time a deferral election is made, and (2) for the Company Credit Account at the time the Participant first becomes eligible to participate in the Plan, which may be:

		
	(i)
	January 1 of a specified year (for 2020 or later elections; 2019 and earlier elections may contain a specify a date certain); or

		
	(ii)
	a date that is a specified number of months after the Participant’s Termination of Employment (not to exceed twenty‐four (24) months); provided, however, that where payment under this paragraph (d)(ii) is made to any “specified employee” (as defined under section 409A of the Code) on account of Termination of Employment, such payment shall commence no earlier than six (6) months following a Termination of Employment (or upon the death of the employee, if earlier) if required to comply with section 409A of the Code.

5.2.Manner of Payment.  A Participant’s Annual Deferral Accounts and Company Credit Account will be paid to the Participant in either a single lump sum or in annual installments of not more than ten (10) years (for 2020 or later elections; 2019 and earlier elections may specify lump sum or annual installments of not more than twenty (20) years).  The Participant must elect a manner of payment at the time the Participant elects his or her date of distribution pursuant to Section 5.1(d).  Notwithstanding the foregoing, the following special rules shall apply:

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	(a)
	in the case of the Participant’s death or Disability, payment shall be in a single lump sum;

		
	(b)
	if the Participant’s Account upon commencement of an installment distribution under Section 5.1 is less than the dollar limit then in effect under section 402(g) of the Code (e.g., Nineteen Thousand Five Hundred Dollars ($19,500) in 2020), payment of the Participant’s entire Account shall be in a single lump sum in accordance with the requirements of the cash‐out rules under Treasury regulations issued under section 409A of the Code; and

		
	(c)
	in the event no election was made by the Participant, payment shall be in a single lump sum.

Payment of the portion of a Participant’s Account attributable to Deferral Credits other than Performance Shares and Restricted Stock shall be in cash.  Payment to a Participant of the portion of the Participant’s Account attributable to Performance Shares and Restricted Stock shall be made, net of withholding taxes, exclusively in shares of Common Stock.  Payment to a Participant on or after the date certified in writing by the Committee or its delegate as the date on which distributions in stock of the portion of the Participant’s Account attributable to Company Credits are administratively feasible shall be made, net of withholding taxes, exclusively in shares of Common Stock.  Payment prior to that certified date of such portion of a Participant’s Account shall be in cash.  For purposes of determining any tax withholding on a payment, the value of Common Stock will be the market price of such Common Stock as of the close of business on the day prior to the date as of which the payment is made.
5.3.Changes in Time and Manner of Payment.  Notwithstanding the foregoing, a Participant who is actively employed by the Company may make a new election that changes the time or form of payment selected pursuant to Section 5.1(d) and Section 5.2, subject to the following limitations:

		
	(a)
	Such election must be submitted to and accepted by the Committee at least twelve (12) months prior to the date a distribution to the Participant would otherwise have been made or commenced;

		
	(b)
	The election shall have no effect until at least twelve (12) months after the date on which the election is made;

		
	(c)
	The election may change the time when payment shall commence but only if the new date selected by the Participant for commencement shall be a date that is at least five (5) years from the prior date of distribution selected by the Participant;

		
	(d)
	The election may reduce or extend the number of installment payments (subject to the limitations in Section 5.2) so long as the initial installment 

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is delayed at least five (5) years from the date distribution would have otherwise commenced; and
		
	(e)
	If the participant changes the time and/or form of payment under this Section 5.3, payment shall commence as soon as administratively feasible after (but not later than December 31 of the Plan Year in which occurs, or if later, sixty (60) days following) the earliest of the following events:

		
	(i)
	the Participant’s death;

		
	(ii)
	the Participant’s Disability; or

		
	(iii)
	the new date selected by the Participant for commencement.

5.4.Hardship Distributions.

5.4.1.When Available.  A Participant may receive a hardship distribution from the Deferral Credits in his or her Account if the Committee determines that such hardship distribution is for a purpose described in Section 5.4.2 and the conditions in this Section 5.4 have been fulfilled.  To receive such a distribution, the Participant must file a written hardship distribution application with the Committee and furnish such documentation as the Committee may require.  In the application, the Participant shall specify the basis for the distribution and the dollar amount to be distributed.  If such hardship distribution is approved by the Committee, distribution shall be made as soon as administratively feasible (but no more than sixty (60) days) following the approval of a completed application by the Committee.  Hardship distributions shall be made in a lump sum payment of either cash or Common Stock, as required by Section 5.2.  The amount of each hardship distribution shall be taken from the portion of the Account attributable to the earliest enrollment (including related earnings) first.

5.4.2.Purposes.  Hardship distributions shall be allowed under Section 5.4.1 only if the Participant establishes that the hardship distribution is to be made on account of an unanticipated emergency that is caused by an event beyond the control of the Participant that would result in severe financial hardship to the Participant resulting from (i) a sudden and unexpected illness or accident of the Participant, the Participant’s spouse, or a dependent of the Participant, (ii) a loss of the Participant’s property due to casualty, or (iii) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Committee.

5.4.3.Suspension.  If the Committee approves a Participant’s petition for payout, the Participant’s deferrals under this Plan shall be suspended as of the date of such approval and the Participant shall receive a payout from the Plan within 60 days of the date of such approval.

5.4.4.Limitations.  The amount of the hardship distribution shall not exceed the amount of the Participant’s proven immediate and heavy financial need.  A hardship distribution 

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shall not be made after the death of the Participant.  The amount of approved hardship distribution shall not exceed the value of the Account.  Notwithstanding the foregoing, the Committee, as applicable, shall interpret all provisions relating to suspension and/or payout under this Section 5.4 in a manner that is consistent with section 409A of the Code and other applicable tax law, including but not limited to guidance issued after the effective date of this Plan.

5.5.Change of Control Distributions.  Notwithstanding any other provision of this Plan, in the event of a Change of Control, each Participant who incurs a Termination of Employment with the Company for any reason during the two (2) year period following such Change of Control shall receive within ten (10) business days after the date of termination a lump sum payment of the entire balance contained in the Participant’s Account; provided, however, that with respect to any Participant who separated from service before the date of a Change of Control, the balance of the Participant’s Account shall be paid at the time and in the manner as elected by the Participant under this Section 5 hereof (and shall not be commuted to a lump sum or otherwise accelerated by the Change of Control).  Where payment under this Section 5.5 is made to any “specified employee” (as defined under section 409A of the Code) on account of Termination of Employment, such payment shall commence no earlier than six (6) months following a Termination of Employment (or upon the death of the employee, if earlier) if required to comply with section 409A of the Code.

5.6.Death Benefit.  In the event of a Participant’s death, the Company shall pay the amount of the Participant’s Account as of the date of death (as adjusted from time to time pursuant to Section 6.2) in a lump sum to the Participant’s designated Beneficiary as soon as administratively feasible after the Participant’s death (but not later than December 31 of the Plan Year in which the Participant’s death occurs, or if later, sixty (60) days following such death).  Payment to a Participant’s designated Beneficiary shall be in cash to the extent the Participant would have been paid in cash, and in Common Stock of the Company (and cash for fractional shares) to the extent the Participant would have been paid in Common Stock.

5.7.Beneficiary Designation.  A Participant shall submit to the Company upon initial designation as an Eligible Employee in the Plan, and at such other times as the Participant desires, on a form provided by the Committee, a written designation of the beneficiary or beneficiaries to whom payment of the Participant’s Account under the Plan shall be made in the event of the Participant’s death.  Beneficiary designations shall become effective only when received by the Company.  Beneficiary designations first received by the Company after the Participant’s death, and any designations in effect at the time a valid subsequent designation is received by the Company, shall be invalid and have no effect.  If a Participant has not designated a Beneficiary, or if no designated Beneficiary is living on the date of distribution, the Participant’s Account shall be distributed to those persons entitled to receive the Participant’s benefit under the 401(k)‐ESOP Plan.

5.8.Post‐Termination Deferral Credits.  In the event of a Participant’s Disability, death or Termination of Employment prior to the end of a performance or vesting period to which a 

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Performance Cash or Performance Share deferral relates, if the Participant becomes entitled to all or any portion of such award upon completion of the performance or vesting period, a Deferral Credit shall be made to the applicable Annual Deferral Account.  Payment of such Annual Deferral Account shall commence in the form elected by the Participant under Section 5.2 as of the applicable distribution date under Section 5.1 (subject to any modifications under Section 5.3), or the date the Deferral Credit is made, if later.  If payment commences upon the Deferral Credit Date (and thereby is delayed beyond the applicable distribution date), there shall be no “catch‐up” payments.

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SECTION 6

DEFERRED COMPENSATION ACCOUNT

6.1.Participant Accounts.  The Committee shall cause a bookkeeping account to be kept in the name of each Participant which shall reflect the value of the Deferral Credits and Company Credits, and any earnings (including Dividend Units) thereon, credited to a Participant.  Deferral Credits shall be credited to a Participant’s Account as of the date the amounts deferred otherwise would have become due or payable.  Company Credits shall be credited at such times as the Committee shall direct.

6.2.Investment of Accounts.  Amounts credited to a Participant’s Account (other than those described in Section 4.4) will be adjusted for gains and losses to the same extent that equal amounts would have been adjusted if they had been invested as directed by the Participant in the subfund or subfunds designated by the Committee; provided, that no amounts credited to a Participant’s Account (other than those described in Section 4.4) for Plan Years beginning on and after January 1, 2020 may be credited to Stock Units or any other Company stock fund.  Amounts described in Section 4.4 will be adjusted as set forth in that section.

6.3.Assumption of Risk.  The Participant, by electing to make deferrals under this Plan, assumes all risk in connection with any decrease in value of the Participant’s Account.

6.4.Charges Against Accounts.  There shall be charged against each Participant’s bookkeeping account any payments made to the Participant or the Participant’s Beneficiary in accordance with Section 5.

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SECTION 7

FUNDING

7.1.Funding.  The Company and its Affiliates shall be responsible for paying all benefits due hereunder.  For the purpose of facilitating the payment of benefits due hereunder, the Company may (but shall not be required to) establish and maintain a grantor trust pursuant to an Agreement between the Company and a trustee selected by the Company; provided, however, that any such grantor trust must be structured so that it does not result in any federal income tax consequences to any Participant until distributions under Section 5 are actually received.  The Company may contribute to a grantor trust thereby created such amounts as it may from time to time determine.

7.2.Corporate Obligation.  Neither the officers nor any member of the Board of Directors of the Company or any of its Affiliates in any way secures or guarantees the payment of any benefit or amount which may become due and payable hereunder to or with respect to any Participant.  Each Participant and other person entitled at any time to payments hereunder shall look solely to the assets of the Company and its Affiliates for such payments as an unsecured, general creditor.  Nothing herein shall be construed to give a Participant, Beneficiary or any other person or persons any right, title, interest or claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company or in which it may have any right, title or interest now or in the future.  After benefits shall have been paid to or with respect to a Participant and such payment purports to cover in full the benefit hereunder, such former Participant or other person or persons, as the case may be, shall have no further right or interest in the other assets of the Company and its Affiliates in connection with this Plan.

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SECTION 8

FORFEITURE OF BENEFITS

All unpaid benefits under this Plan accrued under Section 4.6 shall be permanently forfeited if the Committee determines that the Participant, either before or after the Participant’s Termination of Employment or Disability, or before the Participant’s death:
		
	(a)
	engaged in criminal or fraudulent conduct resulting in a hardship to the Company or an Affiliate; or

		
	(b)
	breached the Participant’s written employment agreement with the Company or an Affiliate.

In addition to the foregoing, all benefits accrued or paid under this Plan are subject to the Company’s clawback and recoupment policy as the same may be amended from time to time.

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SECTION 9

ADMINISTRATION

9.1.Authority.  The Plan shall be administered by the Committee, which shall have full discretionary power and authority to administer and interpret the Plan and to determine all factual and legal questions under the Plan, including but not limited to the entitlement of Participants and Beneficiaries, and the amount of their respective interests.  Except where necessary to comply with applicable corporate or securities law, or applicable rules of the New York Stock Exchange (e.g., with respect to executive officers), the Committee may delegate or redelegate to one or more persons, jointly or severally, and whether or not such persons are members of the committee or employees of the Company, such functions assigned to the Committee hereunder as it may from time to time deem advisable.  Until withdrawn or redelegated by the Committee, all of the Committee’s delegable power and authority under this Section 9.1 shall be deemed delegated to the Company’s Vice President in charge of executive compensation, excluding only the power and authority to act in such a way as would materially increase the cost of the Plan.

9.2.Liability.  No member of the Committee and no director or member of the management of the Company or its Affiliates shall be liable to any persons for any actions taken under the Plan, or for any failure to effect any of the objective or purposes of the Plan, by reason of insolvency or otherwise.

9.3.Procedures.  The Committee may from time to time adopt such rules and procedures as it deems appropriate to assist in the administration of the Plan.

9.4.Claim for Benefits.  No employee or other person shall have any claim or right to payment of any amount hereunder until payment has been authorized and directed by the Committee.

9.5.Claims Procedure.  Until modified by the Committee, the claims procedure set forth in this Section 9.5 shall be the claims procedure for the resolution of disputes and disposition of claims arising under the Plan.

9.5.1.Original Claim.  Any employee, former employee, or Beneficiary of such employee or former employee may, if the employee, former employee or Beneficiary so desires, file with the Committee a written claim for benefits under the Plan.  Within ninety (90) days after the filing of such a claim, the Committee shall notify the claimant in writing whether the claim is upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred eighty (180) days from the date the claim was filed) to reach a decision on the claim.  If the claim is denied in whole or in part, the Committee shall state in writing:

		
	(a)
	the specific reasons for the denial,

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	(b)
	the specific references to the pertinent provisions of this Plan on which the denial is based,

		
	(c)
	a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary, and

		
	(d)
	an explanation of the claims review procedure set forth in this Section.

9.5.2.Claims Review Procedure.  Within sixty (60) days after receipt of notice that the claim has been denied in whole or in part, the claimant may file with the Committee a written request for a review and may, in conjunction therewith, submit written issues and comments.  Within sixty (60) days after the filing of such a request for review, the Committee shall notify the claimant in writing whether, upon review, the claim was upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred twenty (120) days from the date the request for review was filed) to reach a decision on the request for review.

9.5.3.General Rules.

		
	(a)
	No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the claims procedure.  The Committee may require that any claim for benefits and any request for a review of a denied claim be filed on forms to be furnished by the Committee upon request.

		
	(b)
	All decisions on original claims shall be made by the Committee and requests for a review of denied claims shall be made by the Committee.

		
	(c)
	The Committee may, in its discretion, hold one or more hearings on a claim or a request for a review of a denied claim.

		
	(d)
	Claimants may be represented by a lawyer or other representative at their own expense, but the Committee reserves the right to require the claimant to furnish written authorization.  A claimant’s representative shall be entitled to copies of all notices given to the claimant.

		
	(e)
	The decision of the Committee on an original claim or on a request for a review of a denied claim shall be served on the claimant in writing.  If a decision or notice is not received by a claimant within the time specified, the claim or request for a review of a denied claim shall be deemed to have been denied.

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	(f)
	Prior to filing a claim or a request for a review of a denied claim, the claimant or the claimant’s representative shall have a reasonable opportunity to review a copy of this Plan Statement and all other pertinent documents in the possession of the Company and its Affiliates.

9.6.Legal Fees.  If the Company does not pay the benefits required under the terms of the Plan for reasons other than the insolvency of the Company, the Company agrees to reimburse any Participant for all legal fees incurred in enforcing his or her claim to benefits under the Plan.  Notwithstanding the foregoing, to the extent required to comply with the provisions of section 409A of the Code, no reimbursement of expenses incurred by the Participant during any taxable year shall be made after the last day of the following taxable year.

9.7.Errors in Computations.  The Committee shall not be liable or responsible for any error in the computation of any benefit payable to or with respect to any Participant resulting from any misstatement of fact made by the Participant or by or on behalf of any Beneficiary to whom such benefit shall be payable, directly or indirectly, to the Committee, and used by the Committee in determining the benefit.  The Committee shall not be obligated or required to increase the benefit payable to or with respect to such Participant which, on discovery of the misstatement, is found to be understated as a result of such misstatement of the Participant.  However, the benefit of any Participant which is overstated by reason of any such misstatement or any other reason shall be reduced to the amount appropriate in view of the truth (and to recover any prior overpayment).

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SECTION 10

MISCELLANEOUS

10.1.Not an Employment Contract.  This Plan is not and shall not be deemed to constitute a contract of employment between the Company and any employee or other person, nor shall anything herein contained be deemed to give any employee or other person any right to be retained in the Company’s employ or in any way limit or restrict the Company’s right or power to discharge any employee or other person at any time and to treat him without regard to the effect which such treatment might have upon the employee as a Participant in the Plan.

10.2.Nontransferability.  A Participant’s rights and interest under the Plan, including amounts payable, may not be assigned, alienated, pledged or transferred except, in the event of a Participant’s death to his Beneficiary.  No benefit payable under this Plan shall be subject to attachment, garnishment, execution following judgment or other legal process before actual payment to the Participant or Beneficiary.

10.3.Tax Withholding.  The Company shall withhold the amount of any federal, state or local income tax or other tax required to be withheld by the Company under applicable law with respect to any amount payable under the Plan.  Any cash payable in lieu of fractional shares shall be applied to the payment of tax withholding.  The Participant shall not be liable for any tax withholding.

10.4.Expenses.  All expenses of administering the Plan shall be borne by the Company.

10.5.Governing Law.  Except to the extent that federal law is controlling, the Plan shall be construed and enforced in accordance with and governed by the laws of the State of Minnesota.

10.6.Amendment and Termination.  The Company reserves the power to unilaterally amend this Plan at any time, either prospectively or retroactively or both by action of the Committee.  The Committee may likewise terminate or curtail the benefits of this Plan both with regard to persons expecting to receive benefits in the future and persons already receiving benefits at the time of such action; provided, however, that the Committee may not amend or terminate the Plan with respect to benefits that have accrued and are vested pursuant to Section 4 in any manner that reduces the amount of such benefits or alters the effect of any participant election previously filed with the Company.  No modification of the terms of this Plan shall be effective unless it is in writing and signed on behalf of the Company by a person authorized to execute such writing.  No oral representation concerning the interpretation or effect of this Plan shall be effective to amend the Plan.  To the extent permissible under section 409A of the Code and related Treasury regulations and guidance, including but not limited to such guidance and regulations as may be issued after the effective date of this Plan, if there is a termination of the Plan, the Company shall have the right, in its sole discretion, and notwithstanding any elections made by the Participant, to pay all benefits in a lump sum following such termination as soon as 

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practicable subject to the limitations prescribed under section 409A of the Code and the regulations thereunder.

10.7.Rules of Interpretation.  The titles given to the various sections of this Plan are inserted for convenience of reference only and are not part of this Plan, and they shall not be considered in determining the purpose, meaning or intent of any provision hereof.  This Plan shall be construed and this Plan shall be administered to create an unfunded plan providing deferred compensation to a select group of management or highly compensated employees so that it is exempt from the requirements of Parts 2, 3 and 4 of Title I of ERISA and qualifies for a form of simplified, alternative compliance with the reporting and disclosure requirements of Part 1 of Title I of ERISA.

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