recognize that this Agreement in no way restricts the right of Donaldson to terminate Participant’s membership consistent with applicable Delaware laws.

        6.   Subject to the terms and conditions of this Agreement, this option may be exercised by written notice to the Company at its principal office, which is now located at 1400 West 94th Street, Bloomington, Minnesota, Attention: Treasurer. Such notice shall state the election to exercise the option and the number of shares in respect of which it is being exercised, shall be signed by the person or persons so exercising the option. Such notice shall be accompanied by payment in full of the purchase price of the shares purchased. Payment of the exercise price may be made in cash or in whole or in part in Common Stock of the Company valued at the Market Value (as defined in the Master Plan) on the day preceding the date of exercise. The Company will issue and deliver a certificate or certificates representing the shares to be received as soon as practicable after completion of these requirements. In the event the option shall be exercised pursuant to paragraphs 4 or 5 by any person or persons other than the Participant such notice shall be accompanied by appropriate proof of the right of such person or persons to exercise the option.

        7.   In the event of a Change in Control of Donaldson (as defined below), any outstanding options granted under this Agreement not previously vested and exercisable shall become fully vested and exercisable and shall remain exercisable thereafter until they are either exercised or expire by their terms. The term “Change in Control” shall have the following meaning assigned to it in this Agreement. A “Change in Control” of Donaldson shall have occurred if (i) any “person” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than Donaldson, any trustee or other fiduciary holding securities under an employee benefit plan of Donaldson or any corporation owned, directly or indirectly, by the shareholders of Donaldson in substantially the same proportions as their ownership of stock of Donaldson), either is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Donaldson representing 30% or more of the combined voting power of Donaldson’s then outstanding securities, (ii) during any period of two consecutive years (not including any period prior to the effective date of this Master Plan), individuals who at the beginning of such period constitute the Board of Directors of Donaldson (the “Board”), and any new director (other than a director designated by a person who has entered into an agreement with Donaldson to effect a transaction described in clause (i), (iii) or (iv) of this subparagraph) whose election by the Board or nomination for election by Donaldson’s shareholders was approved by a vote of at least two-thirds (2/3) 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 at least a majority thereof, unless the approval of the election or nomination for election of such new directors was in connection with an actual or threatened election or

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