|
Exhibit 10.5
THE TORO COMPANY
2000 STOCK OPTION PLAN
(As Amended December 3, 2008)
1.
Purpose. The purpose of The Toro Company 2000 Stock Option Plan
(the "Plan") is to enhance stockholder value of The Toro Company
(the "Company") by providing an incentive to key employees and
other key individuals who perform services for the Company to
contribute significantly to the long-term performance and growth of
the Company; to link a significant portion of a participant’s
compensation to the value of the Company’s Common Stock, par
value $1.00 per share ("Common Stock"); and to attract and retain
experienced and knowledgeable employees on a competitive basis.
These purposes are expected to be achieved by granting options to
acquire the Common Stock ("options").
2.
Eligibility. Any employee of the Company who is regularly employed
in an executive, managerial, professional or technical position and
any other individual who performs services for the Company and who
contributes significantly to the strategic and long-term
performance objectives of the Company is eligible to participate in
the Plan. Options may be granted to directors of the Company who
are also employees of the Company. More than one option may be
granted to the same individual.
a.
Limitations. No option may be granted to an individual who owns,
directly or indirectly, Common Stock or other capital stock of the
Company possessing more than 5% of the total combined voting power
or value of any class of capital stock of the Company or a
subsidiary immediately after such option is granted, and the
maximum number of shares that may be covered by options granted to
any individual during any calendar year shall be 100,000 shares.
Except for the foregoing limitations, there is no minimum or
maximum number of shares of Common Stock with respect to which
options may be granted to any individual under the Plan.
Individuals to whom options are granted are referred to as "option
holders".
3.
Stock Options.
a.
ISOs and Nonqualified Options. Options granted under the Plan may
be either nonqualified stock options ("nonqualified options") or
incentive stock options ("Incentive Stock Options") as defined in
Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code").
(i)
Incentive Stock Options. Incentive Stock Options shall meet the
applicable requirements of, and contain or be deemed to contain all
provisions required by, the Code or corresponding provisions of
subsequent revenue laws and regulations in effect at the time such
options are granted. Any ambiguities in construction shall be
interpreted in order
to effectuate such intent. To the extent that the
aggregate fair market value of Common Stock (determined at the time
of grant of the Incentive Stock Option) with respect to which
Incentive Stock Options are exercisable for the first time by an
option holder during any calendar year (under all such plans of the
Company and its parent and subsidiary corporations) exceeds
$100,000 or such other limit as may be imposed by the Code, such
options to the extent they exceed such limit shall be treated as
options which are not Incentive Stock Options. In applying the
foregoing limitation, options shall be taken into account in the
order in which they were granted.
b.
Agreements. Options shall be evidenced by stock option agreements
in such form and not inconsistent with the Plan as the Compensation
and Human Resources Committee (the "Committee") of the Board of
Directors shall approve from time to time.
c.
Number of Shares, Date of Grant and Term. An option agreement shall
specify the number of shares of Common Stock to which it pertains;
the date of grant, which shall be the date on which the Committee
grants an option or any later date which the Committee specifically
designates, and the term of the option, which shall not exceed ten
years.
d.
Exercise Price. The exercise price of an option shall be not less
than 100% of fair market value of the Common Stock on the date of
grant. Fair market value is the 4 p.m. Eastern Time closing
price for the Common Stock as reported by the New York Stock
Exchange. Notwithstanding the foregoing, to the extent that options
are granted under the Plan as a result of the Company’s
assumption or substitution of options issued by any acquired,
merged or consolidated entity, the exercise price for such options
shall be the price determined by the Committee pursuant to the
conversion terms applicable to the transaction. After an option is
granted, the exercise price shall not be reduced.
e.
Vesting, Transferability and Exercisability.
(i)
Vesting. An option granted to an officer, general manager or
employee of the Company shall vest and become exercisable in three
approximately equal installments on each of the first, second and
third anniversaries after the date of grant. An option
granted to an other service provider who is not an officer, general
manager or employee of the Company shall vest and become
exercisable in full on the second anniversary after the date of
grant. Notwithstanding the foregoing, the Committee shall
have the authority to provide in any option agreement for any one
or more of the following: (a) longer periods after the
date of grant during which an option or any portion thereof may not
yet be exercisable, (b) acceleration of vesting in the event
of an option holder’s disability or death and
(c) continued vesting after an option holder’s
retirement, subject to Section 3.e(iii)(c).
2
(ii)
No Transfer . Options shall not be transferable by the
option holder except by will or applicable laws of descent and
distribution.
(iii)
Exercise. During the lifetime of an option holder, an option may be
exercised only by the option holder and only while an employee of
the Company or a parent or subsidiary of the Company or otherwise
performing services for the Company or a parent or subsidiary and
only if the option holder has been continuously so employed or
engaged since the date such options were granted, except as the
Committee may otherwise determine and provide for in an option
agreement at the time of grant or, if the Committee does not so
provide, as follows:
(a)
Disability . In the event of disability of an option holder,
options may be exercised by such individual or his or her guardian
or legal representative, not later than the earlier of the date the
option expires or one year after the date employment or performance
of services ceases by reason of such disability, but only with
respect to an option exercisable at the time employment or
performance of services ceases.
(b)
Death . An option may be exercised after the death of an
option holder only by such individual’s legal
representatives, heirs or legatees, not later than the earlier of
the date the option expires or one year after the date of death of
such individual, and only with respect to an option exercisable at
the time of death.
(c)
Retirement . An option may be exercised by an option holder
after such individual ceases to be an employee by reason of
retirement for up to four years after the date of retirement but
not later than the date the option expires, provided that the
option holder has remained an employee of the Company through the
last day of the fiscal year in which the option is granted.
"Retirement" shall have the meaning established by the Committee
from time to time or, if no such meaning is established, shall mean
termination of employment with the Company at or after age 55 and
with a number of years of service that, when added together with
the option holder’s age, equals at least 65.
(d)
Other Termination of Employment . An option may be exercised
by an option holder after such individual ceases to be an employee
(for reasons other than disability, death or retirement) for up to
three months after the date of termination of employment but not
later than the date the option expires.
(iv)
Non-compete. Notwithstanding any other provision of paragraph 3.e.,
if within one year after the termination of employment with or
performance of services for the Company, an option holder is
(a) employed or retained
3
by or renders service to any organization that,
directly or indirectly, competes with or becomes competitive with
the Company, or if the rendering of such services is prejudicial or
in conflict with the interests of the Company, or (b) violates
any confidentiality agreement or agreement governing the ownership
or assignment of intellectual property rights with the Company, or
(c) engages in any other conduct or act determined to be
injurious, detrimental or prejudicial to any interest of the
Company, the Company may cancel or rescind or restrict all options
held by such individual and shall have the right to the return of
the economic value of any option which was realized or obtained
(measured at the date of exercise) by such individual at any time
during the period beginning on the date that is twelve months prior
to the date of termination to the date of the last exercise,
provided however, that this provision shall not be applicable in
the event of a Change of Control.
(v)
Interruption in Service. Absence on leave from the Company, or
other interruption in the performance of services, by an option
holder shall, if approved by the Committee, not be deemed a
cessation or interruption of employment or services for the
purposes of the Plan.
f.
Methods of Exercise and Payment of Exercise Price. Subject to the
terms and conditions of the Plan and the terms and conditions of
the option agreement, an option may be exercised in whole at any
time or in part from time to time, by delivery to the Company at
its principal office of a written notice of exercise specifying the
number of shares with respect to which the option is being
exercised, accompanied by payment in full of the exercise price for
shares to be purchased at that time. Payment may be made
(i) in cash, (ii) by tendering (either actually or by
attestation) shares of Common Stock already owned for at least six
months (or other period necessary to avoid a charge to the
Company’s earnings for financial statement purposes) valued
at the fair market value of the Common Stock on the date of
exercise or (iii) in a combination of cash and Common Stock;
or the Committee may also, in its sole discretion exercised either
at the time the option is granted or at any time before an option
is exercised, (iv) permit option holders to deliver a notice
of exercise of options, together with irrevocable instructions,
approved in advance by proper officers of the Company, (A) to
a brokerage firm designated by t
|
