Toro 2010 Annual Report Download - page 88

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5
8. Change of Control. Notwithstanding any provision of this Agreement to the contrary and
subject to the terms of any separate Change of Control or similar agreement to which you are
bound or Change of Control or similar policy or plan under which you are covered, upon the
occurrence of a Change of Control prior to the end of the Performance Period, this Annual
Performance Award shall be settled by payment of your Target Potential Payout within 60 days
after the Change of Control, unless you have properly elected to defer your receipt of any
payment pursuant to this Annual Performance Award under The Toro Company Deferred
Compensation Plan, as such plan may be amended from time to time, or any similar successor
plan, in which case, you will receive such payment in accordance with your deferral election.
9. No Transfer. You may not transfer this Annual Performance Award or any rights granted
under this Annual Performance Award other than by will or applicable laws of descent and
distribution or, if approved by the Committee, pursuant to a qualified domestic relations order
entered into by a court of competent jurisdiction.
10. Tax Withholding. Toro will deduct or withhold from the payment issued under this
Agreement any federal, state, local or other taxes of any kind that Toro reasonably determines
are required by law to be withheld with respect to income recognized or will take such other
action as may be necessary in the opinion of Toro to satisfy all obligations for the payment of
such taxes.
11. Performance-Based Compensation. If you are a Covered Employee, it is intended that all
payments under this Annual Performance Award constitute “qualified performance-based
compensation” within the meaning Section 162(m) of the Code and the Plan. This Annual
Performance Award is to be construed and administered in a manner consistent with such intent.
12. Successors. All obligations of Toro under the Plan with respect to this Annual
Performance Award shall be binding on any successor to Toro, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all
or substantially all of the business or assets of Toro.
13. No Right to Continue Employment or Service. Neither the Plan, this Annual Performance
Award, the Annual Performance Award Acceptance Agreement nor any related material shall
give you the right to continue in employment by or perform services to Toro or any Affiliate or
Subsidiary or shall adversely affect the right of Toro or any Affiliate or Subsidiary to terminate
your employment or service relationship with Toro or any Affiliate or Subsidiary with or without
cause at any time.
14. Governing Law. This Agreement and the Annual Performance Award Acceptance
Agreement shall be construed, administered and governed in all respects under and by the
applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation to the substantive law of
another jurisdiction.