Exhibit 10-O
DONALDSON COMPANY,
INC.
2001 MASTER STOCK INCENTIVE
PLAN
The purpose of the Plan is to
promote the interests of the Company and its stockholders by aiding
the Company in attracting and retaining employees, officers,
consultants, independent contractors and non-employee directors
capable of assuring the future success of the Company, to offer
such persons incentives to put forth maximum efforts for the
success of the Company's business and to afford such persons an
opportunity to acquire a proprietary interest in the Company,
thereby aligning the interests of such persons with the Company's
stockholders.
As used in the Plan, the following
terms shall have the meanings set forth below:
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(a)
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“Affiliate” shall mean
(i) any entity that, directly or indirectly through one or more
intermediaries, is controlled by the Company and (ii) any entity in
which the Company has a significant equity interest, in each case
as determined by the Committee.
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(b)
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“Award” shall mean any
Option, Stock Appreciation Right, Restricted Stock, Performance
Award, Dividend Equivalent or Other Stock-Based Award granted under
the Plan.
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(c)
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“Award Agreement” shall mean any
written agreement, contract or other instrument or document
evidencing any Award granted under the Plan.
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(d)
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“Board” shall mean the Board of
Directors of the Company.
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(e)
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“Code” shall mean the Internal
Revenue Code of 1986, as amended from time to time, and any
regulations promulgated thereunder.
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(f)
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“Committee” shall mean a committee
of Directors designated by the Board to administer the Plan. The
Committee shall be comprised of not less than such number of
Directors as shall be required to permit Awards granted under the
Plan to qualify under Rule 16b-3, and each member of the Committee
shall be a “Non-Employee Director” within the meaning
of Rule 16b-3 and an “outside director” within the
meaning of Section 162(m) of the Code. The Company expects to have
the Plan administered in accordance with the requirements for the
award of “qualified performance-based compensation”
within the meaning of Section 162(m) of the Code.
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(g)
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“Company” shall mean Donaldson
Company, Inc., a Delaware corporation, and any successor
corporation.
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(h)
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“Director” shall mean a member of
the Board.
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(i)
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“Dividend Equivalent” shall mean any
right granted under Section 6(e) of the Plan.
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(j)
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“Eligible Person” shall mean any
employee, officer, Director (including any Non-Employee Director),
consultant or independent contractor providing services to the
Company or any Affiliate who the Committee determines to be an
Eligible Person.
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(k)
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“Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended.
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(l)
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“Fair Market Value” shall mean, with
respect to any property (including, without limitation, any Shares
or other securities), the fair market value of such property
determined by such methods or procedures as shall be established
from time to time by the Committee. Notwithstanding the foregoing,
unless otherwise determined by the Committee, the Fair Market Value
of a Share as of a given date shall be, if the Shares are then
traded on the New York Stock Exchange, the closing price of one
Share as reported on the New York Stock Exchange on such date or,
if the New York Stock Exchange is not open for trading on such
date, on the most recent preceding date when the New York Stock
Exchange is open for trading.
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(m)
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“Incentive Stock Option” shall mean
an option granted under Section 6(a) of the Plan that is intended
to meet the requirements of Section 422 of the Code or any
successor provision.
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(n)
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“Limitation Amount” shall mean, with
respect to any Plan Year, one and one-half (1.50) percent of the
Outstanding Shares.
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(o)
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“Non-Employee Director” shall mean
any Director who is not also an employee of the Company.
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(p)
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“Non-Qualified Stock Option” shall
mean an option granted under Section 6(a) of the Plan that is not
intended to be an Incentive Stock Option.
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(q)
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“Option” shall mean an Incentive
Stock Option or a Non-Qualified Stock Option.
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(r)
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“Other Stock-Based Award” shall mean
any right granted under Section 6(f) of the Plan.
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(s)
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“Outstanding Shares” shall mean,
with respect to any Plan Year, the sum of the outstanding Shares,
the outstanding Share equivalents (as determined by the Company in
the calculation of earnings per share on a fully diluted basis) and
Shares held in the treasury of the Company, as reported in the
Annual Report on Form 10-K of the Company, as filed with the
Securities and Exchange Commission, for the most recent fiscal year
that ends during such Plan Year.
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(t)
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“Participant” shall mean an Eligible
Person designated to be granted an Award under the Plan.
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(u)
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“Performance Award” shall mean any
right granted under Section 6(d) of the Plan.
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(v)
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“Person” shall mean any individual,
corporation, partnership, association or trust.
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(w)
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“Plan” shall mean the Donaldson
Company, Inc. 2001 Master Stock Incentive Plan, as amended from
time to time, the provisions of which are set forth
herein.
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(x)
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“Plan Year” shall mean a consecutive
12-month period ending on December 31 of each year.
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(y)
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“Reload Option” shall mean any
Option granted under Section 6(a)(iv) of the Plan.
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(z)
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“Restricted Stock” shall mean any
Shares granted under Section 6(c) of the Plan.
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(aa)
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“Restricted Stock Unit” shall mean
any unit granted under Section 6(c) of the Plan evidencing the
right to receive a Share (or a cash payment equal to the Fair
Market Value of a Share) at some future date.
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(bb)
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“Rule 16b-3” shall mean Rule 16b-3
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act, or any successor rule or
regulation.
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(cc)
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“Share” or “Shares”
shall mean shares of common stock, $5.00 par value per share, of
the Company or such other securities or property as may become
subject to Awards pursuant to an adjustment made under Section 4(c)
of the Plan.
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(dd)
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“Stock Appreciation
Right” shall mean any right granted under Section 6(b) of the
Plan.
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SECTION 3.
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ADMINISTRATION
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(a)
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Power and Authority of the Committee.
The Plan shall be administered by
the Committee. Subject to the express provisions of the Plan and to
applicable law, the Committee shall have full power and authority
to: (i) designate Participants; (ii) determine the type or types of
Awards to be granted to each Participant under the Plan; (iii)
determine the number of Shares to be covered by (or with respect to
which payments, rights or other matters are to be calculated in
connection with) each Award; (iv) determine the terms and
conditions of any Award or Award Agreement; (v) amend the terms and
conditions of any Award or Award Agreement and accelerate the
exercisability of Options or the lapse of restrictions relating to
Restricted Stock, Restricted Stock Units or other Awards; (vi)
determine whether, to what extent and under what circumstances
Awards may be exercised in cash, Shares, other securities, other
Awards or other property, or canceled, forfeited or suspended;
(vii) determine whether, to what extent and under what
circumstances cash, Shares, promissory notes, other securities,
other Awards, other property and other amounts payable with respect
to an Award under the Plan shall be deferred either automatically
or at the election of the holder thereof or the Committee; (viii)
interpret and administer the Plan and any instrument or agreement,
including an Award Agreement, relating to the Plan; (ix) establish,
amend, suspend or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration
of the Plan; (x) establish any special rules for Eligible Persons,
former employees, or Participants located in any particular country
other than the United States, which such rules shall be set forth
in Appendices to the Plan and shall be deemed incorporated into and
form part of the Plan; and (xi) make any other determination and
take any other action that the Committee deems necessary or
desirable for the administration of the Plan. Unless otherwise
expressly provided in the Plan, all designations, determinations,
interpretations and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive
and binding upon any Participant, any holder or beneficiary of any
Award and any employee of the Company or any Affiliate.
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(b)
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Delegation. The Committee may delegate to one or more
officers of the Company or any Affiliate or a committee of such
officers, but only to the extent such officer or officers are also
members of the Board of Directors of the Company, the authority,
subject to such terms and limitations as the Committee shall
determine, to grant Awards to Eligible Persons who are not officers
or directors of the Company for purposes of Section 16 of the
Exchange Act. The Committee shall not delegate its powers and
duties under the Plan (i) with regard to officers or directors of
the Company or any Affiliate who are subject to Section 16 of the
Exchange Act or (ii) in such a manner as would cause the Plan not
to comply with the requirements of Section 162(m) of the
Code.
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(c)
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Power and Authority of the Board of
Directors. Notwithstanding anything to the contrary
contained herein, the Board may, at any time and from time to time,
without any further action of the Committee, exercise the powers
and duties of the Committee under the Plan.
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SECTION 4.
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SHARES AVAILABLE FOR
AWARDS
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(a)
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Shares Available. Subject to adjustment as provided in Section
4(c) of the Plan, the aggregate number of Shares that may be issued
under all Awards under the Plan in any Plan Year shall not exceed
the Limitation Amount; PROVIDED THAT, any Shares with respect to
which Awards may be issued, but are not issued, under the Plan in
any Plan Year shall be carried forward and shall be available to be
covered by Awards issued in any subsequent Plan Year in which
Awards may be issued under the Plan. Shares to be issued under the
Plan may be either authorized but unissued Shares or Shares
acquired in the open market or otherwise. Any Shares that are used
by a Participant as full or partial payment to the Company of the
purchase price relating to an Award, or in connection with the
satisfaction of tax obligations relating to an Award, shall again
be available for granting Awards (other than Incentive Stock
Options) under the Plan. In addition, if any Shares covered by an
Award or to which an Award relates are not purchased or are
forfeited, or if an Award otherwise terminates without delivery of
any Shares, then the number of Shares counted against the aggregate
number of Shares available under the Plan with respect to such
Award, to the extent of any such forfeiture or termination, shall
again be available for granting Awards under the Plan.
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(b)
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Accounting for Awards. For purposes of this Section 4, if an Award
entitles the holder thereof to receive or purchase Shares, the
number of Shares covered by such Award or to which such Award
relates shall be counted on the date of grant of such Award against
the aggregate number of Shares available for granting Awards under
the Plan.
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(c)
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Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of
cash, Shares, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase
or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities
of the Company or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the
number and type of Shares (or other securities or other property)
that thereafter may be made the subject of Awards, (ii) the number
and type of Shares (or other securities or other property) subject
to outstanding Awards and (iii) the purchase or exercise price with
respect to any Award; provided, however, that the number of Shares
covered by any Award or to which such Award relates shall always be
a whole number.
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(d)
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Award Limitations Under the Plan.
No Eligible Person may be granted
any Award or Awards under the Plan, the value of which Award or
Awards is based solely on an increase in the value of the Shares
after the date of grant of such Award or Awards, for more than
500,000 Shares (subject to adjustment as provided for in Section
4(c) of the Plan), in the aggregate in any calendar year, beginning
with the calendar year commencing on January 1, 2001. The foregoing
annual limitation specifically includes the grant of any Award or
Awards representing “qualified performance-based
compensation” within the meaning of Section 162(m) of the
Code. Notwithstanding anything to the contrary in this Section 4,
but subject at all times to the annual Limitation Amount, the
number of Shares available for (i) granting Incentive Stock Options
under the Plan in the aggregate shall not exceed 2,000,000, and
(ii) Restricted Stock, and Restricted Stock Units under the Plan,
shall not exceed 600,000, subject to adjustment as provided in as
provided in Section 4(c) of the Plan and subject to the provisions
of Section 422 or 424 of the Code or any successor
provision.
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Any Eligible Person shall be
eligible to be designated a Participant. In determining which
Eligible Persons shall receive an Award and the terms of any Award,
the Committee may take into account the nature of the services
rendered by the respective Eligible Persons, their present and
potential contributions to the success of the Company or such other
factors as the Committee, in its discretion, shall deem relevant.
Notwithstanding the foregoing, an Incentive Stock Option may only
be granted to full or part-time employees (which term as used
herein includes, without limitation, officers and Directors who are
also employees), and an Incentive Stock Option shall not be granted
to an employee of an Affiliate unless such Affiliate is also a
“subsidiary corporation” of the Company within the
meaning of Section 424(f) of the Code or any successor
provision.
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(a)
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Options. The Committee is hereby authorized to grant
Options to Participants with the following terms and conditions and
with such additional terms and conditions not inconsistent with the
provisions of the Plan as the Committee shall determine:
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(i)
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Exercise Price. The purchase price per Share purchasable under
an Option shall be determined by the Committee; PROVIDED, HOWEVER,
that such purchase price shall not be less than 100% of the Fair
Market Value of a Share on the date of grant of such
Option.
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(ii)
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Option Term. The term of each Option shall be fixed by the
Co
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