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2010 MASTER STOCK INCENTIVE
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 (together with its subsidiaries, “Donaldson”) and the person specified in the individual grant summary, an employee of Donaldson (“Employee”).
Donaldson has adopted the 2010 Master Stock Incentive Plan (the “Plan”) which permits issuance of stock options for the purchase of shares of Common Stock of Donaldson. Donaldson is now granting this option under the Plan and in consideration of the Employee’s and Donaldson’s covenants in this Agreement.
1. Grant of Option . Donaldson grants the Employee the right and option (the “Option”) to purchase all or any part of an aggregate of the number of shares specified in the grant summary of Donaldson’s Common Stock, par value $5.00 per share, at the Option purchase price specified in the grant summary which shall be 100% of the fair market value of Donaldson’s common stock on the date the award is granted. The Option shall be subject to the terms and conditions in this Agreement and in the Plan. A copy of the Plan will be furnished upon request of the Employee. The date of grant is the date specified in the individual grant summary. The Option terminates at the close of business ten (10) years from the date of grant or at an earlier time period if specified in this Agreement.
2. Vesting of Option Rights . The Option may be exercised by the Employee 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 of the shares vest on the one-year anniversary date from the date of grant; one-third of the shares vest on the two-year anniversary date from the date of grant; one-third of the shares vest on the three-year anniversary date from the date of grant. The Option may be exercised as to any or all of the shares that are vested.
3. Exercise of Option after Death or Termination of Employment . The Option shall terminate and may no longer be exercised if the Employee ceases to be employed by Donaldson, except that:
(a) If the Employee’s employment is terminated for any reason, voluntary or involuntary, other than for the Employee’s death or disability (as set forth in Sections 3(b) and 3 (c)) or normal retirement (as set forth in Section 3(c)), the Employee may at any time within a period of one (1) month after such termination exercise the Option to the extent the Option was exercisable by the Employee on the date of the termination of the Employee’s employment.
(b) If the Employee should die while the Option is still exercisable according to its terms and the Employee should not have fully exercised the Option, such Option may be exercised at any time within thirty-six (36) months after the Employee’s death by the personal representatives or administrators of the Employee, as applicable, or by any person or persons to whom the Option is transferred by will or the applicable laws of descent and distribution, to the extent of the full number of shares the Employee was entitled to exercise under the Option on the date of death.
(c) If employment is terminated because the Employee has become disabled (within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the “Code”)) while in the employ of Donaldson and the Employee shall not have fully exercised the Option, such Option may be exercised at any time within thirty-six (36) months after the Employee’s date of termination of employment for disability by the Employee, personal representatives or administrators, or guard