Exhibit 10.u
INDEMNIFICATION
AGREEMENT
AGREEMENT,
effective as of
between THE TORO COMPANY, a Delaware corporation
(“Toro”), and
(“Director”).
WHEREAS,
it is essential to Toro to retain and attract as directors the most
capable persons available;
WHEREAS,
Director is a member of the Board of Directors of Toro;
WHEREAS,
both Toro and Director recognize the increased risk of litigation
and other claims being asserted against directors of public
companies in today’s environment;
WHEREAS,
basic protection against undue risk of personal liability of Toro
directors heretofore has been provided through insurance coverage
providing reasonable protection at reasonable cost, and Director
has relied on the availability of such coverage;
WHEREAS,
Toro’s Certificate of Incorporation requires Toro to
indemnify and advance expenses to its directors to the full extent
permitted by law, and Director has been serving and continues to
serve as a director of Toro in part in reliance on such
provisions;
WHEREAS,
in recognition of Director’s need for substantial protection
against personal liability in order to enhance Director’s
continued service to Toro in an effective manner, and of
Director’s reliance on the aforesaid provision in
Toro’s Certificate of Incorporation, and in part to provide
Director with specific contractual assurance that the protection
promised by such provision will be available to Director
(regardless of, among other things, any amendment to or revocation
of such provision of the Certificate of Incorporation, any change
in the composition of Toro’s Board of Directors or the
occurrence of any acquisition transaction relating to Toro);
and
WHEREAS,
Toro wishes to provide in this Agreement for the effective
indemnification of and the advancing of expenses to Director to the
fullest extent (whether partial or complete) permitted by law and
as set forth in this Agreement and, to the extent insurance is
maintained, for the continued coverage of Director under
Toro’s director and officer liability insurance
policies;
NOW
THEREFORE, in consideration of the premises and of Director
continuing to serve Toro directly or, at its request, with another
enterprise, and intending to be legally bound hereby, the parties
hereto agree as follows:
1.
Certain
Definitions:
(a)
Change in Control: shall be deemed to have occurred if (i)
during any period of two consecutive calendar years, individuals
who at the beginning of such period constitute the Board of
Directors of Toro and any new director whose election by the Board
of Directors or nomination for election by Toro’s
stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to
constitute a majority thereof, or (ii) the stockholders of Toro
approve a merger or consolidation of Toro with any other
corporation, other than a merger or consolidation which would
result in the Voting Securities of
Toro
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 80% of the total
voting power represented by the Voting Securities of Toro or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of Toro approve a plan of
complete liquidation of Toro or an agreement for the sale or
disposition by Toro of all or substantially all of Toro’s
assets; provided, however, that a would-be Change in Control under
Section 1(a)(ii) which is approved by a majority of the directors
on Toro’s Board of Directors who were directors prior thereto
shall not be deemed a Change in Control.
(b)
Claim: any threatened, pending or completed action, suit or
proceeding, or any inquiry or investigation, whether conducted by
Toro or any other party, that Director in good faith believes might
lead to the institution of any such action, suit or proceeding,
whether civil, criminal, administrative, investigative or
other.
(c)
Expenses: include attorneys’ fees and all other costs,
expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in
(including on appeal), or preparing to defend, be a witness in, or
participate in, any Claim relating to any Indemnifiable
Event.
(d)
Indemnifiable Event: any event or occurrence related to the
fact that Director is or was a director, officer, employee, agent
or fiduciary of Toro, or is or was serving at the request of Toro
as a director, officer, employee, trustee, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit
plan, trust or other enterprise, or did not do anything in any such
capacity.
(e)
Potential Change in Control: shall be deemed to have occurred
if (i) Toro enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control; (ii) any
person or entity (including Toro) publicly announces an intention
to take, or to consider taking, actions which if consummated would
constitute a Change in Control; (iii) any person or entity, other
than a trustee or other fiduciary holding securities under an
employee benefit plan of Toro or any of its subsidiaries, is or
becomes the beneficial owner, directly or indirectly, of securities
of Toro representing 15% or more of the combined voting power of
Toro’s then outstanding Voting Securities or (iv) the Board
adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.
(f)
Reviewing Party: any appropriate person or body consisting of
a member or members of Toro’s Board of Directors or any other
person or body appointed by the Board (including Special
Independent Counsel) who is not a party to the particular Claim for
which Director is seeking indemnification. If there has not
been a Change in Control, the Reviewing Party shall be selected by
Toro’s Board of Directors. If there has been such a
Change in Control, the Reviewing Party shall be Special Independent
Counsel.
(g)
Special Independent Counsel: counsel selected by Director and
approved by Toro (which approval shall not be unreasonably
withheld) and who has not, unless waived by Toro and Director,
otherwise performed services for (i) Toro or Director within the
last ten (10) years or (ii) any other party to a proceeding giving
rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Special Independent
Counsel” shall not include any person who under the
applicable standards of professional conduct then prevailing, would
have a
2
conflict
of interest in representing either Toro or Director in an action to
determine Director’s rights under this Agreement.
(h)
Voting Securities: any securities of Toro which have the
right to vote generally in the election of directors.
2.
Basic
Indemnification Arrangement.
(a)
In the event Director was, is or becomes a party to or witness or
other participant in, or is threatened to be made a party to or
witness or other participant in, a Claim by reason of (or arising
in part out of) an Indemnifiable Event, Toro shall indemnify
Director to the fullest extent permitted by law as soon as
practicable but in any event not later than thirty days after
written demand is presented to Toro, against any and all Expenses,
judgments, fines, penalties and amounts paid or owing with respect
to or in settlement of (including all interest, assessments and
other charges paid or payable in connection with or in respect of
such Expenses, judgments, fines, penalties or amounts) such
Claim. Director shall give Toro written notice of all such
Claims and the particulars thereof as soon as practicable;
provided, however, that the failure to give such notice shall not
affect the right of Director to indemnity hereunder unless such
failure has materially and adversely affected the rights of
Toro.
(b)
If so requested by Director, Toro shall advance (within ten
business days of such request) any and all Expenses, judgments,
fines, penalties and amounts paid or owing with respect to or in
settlement of any Claim to Director (an “Expense
Advance”).
(c)
Notwithstanding anything in this Agreement to the contrary,
(i) prior to a Change in Control, Director shall not be entitled to
indemnification pursuant to this Agreement in connection with any
Claim (other than a claim for indemnification) initiated by
Director against Toro or any director or officer of Toro unless
Toro has joined in or consented to the initiation of such Claim,
(ii) the obligations of Toro under Section 2(a) shall be subject to
the condition that the Reviewing Party shall not have determined in
a writing stating the reasons therefor that Director would not be
permitted to be indemnified under applicable law, and (iii) the
obligation of Toro to make an Expense Advance pursuant to Section
2(b) shall be subject to the condition that, if, when and to the
extent the Reviewing Party determines that Director would not be
permitted to be indemnified under applicable law, Toro shall be
entitled to be reimbursed by Director (who hereby agrees to
reimburse Toro) for all such amounts theretofore paid; provided,
however, that if Director has commenced legal proceedings in a
court of competent jurisdiction to secure a determination that
Director should be indemnified under applicable law, any
determination made by the Reviewing Party that Director would not
be permitted to be indem
