Exhibit 10.4

 

ALTRA INDUSTRIAL MOTION CORP.

2014 OMNIBUS INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

 

THIS NONQUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”) is made as of
«Date_of_Grant» (the “Date of Grant”), by and between Altra Industrial Motion
Corp., a Delaware corporation (the “Company”), and «First_Name» «Last_Name» (the
“Participant”).  This Agreement is subject to all of the terms and conditions as
set forth herein and in the Company’s 2014 Omnibus Incentive Plan, as amended
(the “Plan”), which is incorporated herein by reference. Any capitalized term
not herein defined shall have the meaning as set forth in the Plan.  

 

1.Grant of Option.  

 

(a)Grant.  The Company hereby grants to the Participant an Option (the “Option”)
to purchase a total of [●] Shares (the “Option Shares”), on the terms and
conditions set forth in this Agreement and as otherwise provided in the
Plan.  The Option is not intended to qualify as an incentive stock option under
Section 422 of the Code.

 

(b)Exercise Price.  The per share exercise price of the Option shall be $[●] per
Option Share (the “Exercise Price”).  

 

2. Vesting.  The Option shall become vested and exercisable in accordance with
the schedule set forth on [Appendix [●]]; provided that the Participant
continues to be an employee of the Company or a Subsidiary from the Date of
Grant through the applicable vesting dates set forth therein (each, a “Vesting
Date”).

 

3.

Exercise of Option.

 

(a)Method of Exercise.  The Participant may exercise the vested and exercisable
portion of the Option, in whole or in part, by notifying the Company in writing
of the whole number of Option Shares to be purchased thereunder and delivering
with such notice an amount equal to the aggregate Exercise Price for such number
of Option Shares to be purchased, in cash (certified check, wire transfer or
bank draft) or in whole Shares already owned by the Participant.  The
Participant may also exercise the Option by means of (i) a “net exercise”
procedure effected by withholding the applicable number of Option Shares
otherwise deliverable in respect of an Option that are needed to pay for the
aggregate Exercise Price for such Option Shares and all applicable required
withholding taxes or (ii) a broker-assisted “cashless exercise” pursuant to
which the Company is delivered a copy of irrevocable instructions to a
stockbroker to sell the Option Shares otherwise deliverable upon the exercise of
the Option and to deliver promptly to the Company an amount equal to the
aggregate Exercise Price for such Option Shares and all applicable required
withholding taxes.

(b)Automatic Exercise Upon Expiration Date.  Notwithstanding any other provision
of this Agreement, if, as of the close of trading on the last trading day on
which all or a portion of

«Last_Name» Stock Option Award Agreement [●]

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the outstanding Option may be exercised (such day, the “Last Trading Date”), the
then-Fair Market Value of a Share exceeds the Exercise Price by at least $.01
(such expiring portion of the Option that is so in-the-money, the “Auto-Exercise
Eligible Option”), the Participant will be deemed to have automatically
exercised such Auto-Exercise Eligible Option (to the extent it has not
previously been exercised or forfeited) as of the close of trading on the Last
Trading Date in accordance with the provisions of this Section 3(b). In the
event of an automatic exercise pursuant to this Section 3(b), the Company will
reduce the number of Option Shares issued to the Participant upon such exercise
in an amount necessary to satisfy (i) the Participant’s Exercise Price
obligation for the Auto-Exercise Eligible Option and (ii) all applicable tax
withholding requirements, in each case, based on the Fair Market Value of the
Option Shares as of the close of trading on the Last Trading Date. The
Participant may notify the record-keeper of the Plan in writing in advance that
the Participant does not wish for the Auto-Exercise Eligible Option to be
exercised. The Committee may, at any time in its discretion, determine not to
automatically exercise the Option.

4.  Termination; Change in Control.

(a) General.  Except as otherwise provided in this Section 4, if the Participant
ceases to be an employee of the Company or any Subsidiary for any reason, the
unvested portion of the Option shall thereupon be forfeited immediately and
without any further action by the Company.   If any employment or similar
agreement entered into between the Participant, on the one hand, and the Company
or a Subsidiary, on the other, provides for treatment of the Option that is more
favorable to the Participant than the treatment set forth in this Section 4, the
more favorable treatment set forth in such employment or similar agreement shall
govern.

(b)Acceleration Events.  Notwithstanding anything contrary in this Agreement,
upon the occurrence of any of the following events, the unvested portion of the
Option shall become fully vested and exercisable as of the date of such event
(subject, in each case except in the case of the Participant’s death, to the
Release Condition (as defined below) and the Participant’s compliance with the
restrictive covenants provided in Section 9 herein):

(i)the Participant’s death or termination of employment due to Disability;

(ii)in the discretion of the Committee, the termination of the Participant’s
employment by the Company without Cause (not within 24 months following a Change
in Control); or

(iii)following a Change in Control, if:

(1) the continuing entity fails to assume the Option; or

(2)  the Participant’s employment is terminated by the Company (or its
successor) without Cause or the Participant resigns for Good Reason, in each
case, within the 24-month period following the Change in Control.

(c)Authorized Retirement.  Notwithstanding anything contrary in this Agreement,
upon the Participant’s Authorized Retirement (as defined herein) (subject to the
Release Condition and the Participant’s compliance with the restrictive
covenants provided in Section 9 herein), the Option shall continue to vest in
accordance with the vesting schedule set forth on [Appendix [●]],

 

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as if the Participant had remained continuously employed by the Company or a
Subsidiary through the applicable Vesting Date.  For purposes of this Agreement,
“Authorized Retirement” means the Participant’s voluntary resignation from
employment with the Company and its Subsidiaries under circumstances which the
Committee, in its sole discretion, determines to constitute “Retirement”. For
the avoidance of doubt, the Committee’s determination of whether “Retirement”
has occurred shall be made on an individual Award basis, and “Retirement”
treatment for any one Award shall not require that all Awards held by the
Participant will receive “Retirement” treatment.

5.Expiration. Notwithstanding anything to the contrary in this Agreement, in no
event shall any portion of the Option be exercisable after the 10th anniversary
of the Date of Grant (the “Option Period”). The Option (including the vested
portion thereof) is subject to earlier cancellation, termination or expiration
of the Option (i) pursuant to Section 10(c) or 10(m) of the Plan; (ii) pursuant
to Section 4(b)(iii)(1), 7 or 9 herein; or (iii) immediately upon a termination
of the Participant’s employment by the Company for Cause.  In the case of any
termination of the Participant’s employment due to the Participant’s voluntary
resignation from the Company and its Subsidiaries that does not constitute an
Authorized Retirement, or due to an event set forth in Section 4(b)(ii) or
4(b)(iii)(2), the vested portion of the Option shall expire on the earlier of
(x) the last day of the Option Period and (y) the 90th day following the date of
such termination. In the case of any termination of the Participant’s employment
as described in Section 4(b)(i), the vested portion of the Option shall expire
on the earlier of (x) the last day of the Option Period and (y) the one-year
anniversary of the effective date of such event.  In the case of the
Participant’s Authorized Retirement, the vested portion of the Option shall
expire on the earliest of (x) the last day of the Option Period, (y) the
one-year anniversary of the last Vesting Date and (z) the date of any breach of
the restrictive covenants provided in Section 9 herein.

 

6.Restrictions on Transfer.  Other than by will or under the laws of descent and
distribution, the Participant shall not have the right to make or permit to
occur any Transfer of all or any portion of the Option, whether vested or
unvested, whether outright or as security, with or without consideration,
voluntary or involuntary. Any such Transfer not made in accordance with this
Agreement shall be deemed null and void. For purposes of this Agreement,
“Transfer” means, with respect to any Shares, any direct or indirect, voluntary
or involuntary, offer to sell, transfer, sale, assignment, pledge,
hypothecation, short sales, loan, grant of an option to purchase or other
disposition of any of the Shares, or the entering of any contract or agreement
to do any of the foregoing.  

 

7.Effect of Changes in Capitalization.  The Option shall be subject to
adjustment in accordance with Section 10(c) of the Plan. In addition,
notwithstanding anything in the Plan or this Agreement to the contrary, in
connection with any Change in Control, the Committee shall have authority to (i)
make provision for a cash payment to the Participant in consideration for the
cancellation of all or a portion of the Option, in an amount equal to the
excess, if any, of (x) the Fair Market Value of a Share (as of a date specified
by the Committee), multiplied by the number of Option Shares subject to the
portion of the Option being cancelled, over (y) the aggregate Exercise Price for
the Option Shares subject to the portion of the Option being cancelled, or (ii)
if the Exercise Price is equal to, or in excess of, the Fair Market Value of a
Share (as of a date specified by the Committee), cancel and terminate the Option
without any payment or consideration therefor.

 

 

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8.Tax Withholding.  If the Participant or his or her personal representative
elects to satisfy the withholding obligation by executing the withholding
election form, the actual number of Option Shares delivered to the Participant
upon exercise of the Option shall be reduced by a number of whole Shares, which,
when multiplied by the Fair Market Value on the last trading day prior to the
date that the Option is exercised, the Company determines is sufficient to
satisfy the Participant’s tax obligations in connection with such exercise. The
Participant may, instead, choose to deliver to the Company a check payable to
the Company in the amount of all withholding tax obligations (whether federal,
state, local or foreign income or social insurance tax). If the Participant
fails to tender either the required certified check or withholding election, the
Participant shall be deemed to have elected and executed the withholding
election form; provided that, if, at the time that a tax withholding obligation
arises in respect of the Option, the Participant has been designated as an
“officer” within the meaning of Section 16 of the Exchange Act, unless otherwise
elected in writing by the Participant, the Company shall withhold the maximum
amount necessary to satisfy the amount of such withholding tax obligations.

 

9.Non-Compete; Non-Solicitation.

(a) In consideration of the Option granted hereby, the Participant agrees and
covenants not to:

(i)Contribute his or her knowledge, directly or indirectly, in whole or in part,
as an employee, officer, owner, manager, advisor, consultant, agent, partner,
director, shareholder, volunteer, intern or in any other similar capacity to an
entity engaged in the same or similar business as the Company and its Related
Entities, as such business may be expanded from time to time, for a period of
two years following the Participant’s termination of employment; provided that
nothing in this Section 9 shall prohibit the ownership of less than five percent
(5%) of the stock of a publicly held corporation whose stock is traded on a
national securities exchange or listed with the Nasdaq Stock Market;

(ii) Directly or indirectly, solicit, hire, recruit, attempt to hire or recruit,
or induce the termination of employment of any employee of the Company or its
Related Entities for two years following the Participant’s termination of
employment; or

(iii) Directly or indirectly, solicit, contact (including, but not limited to,
e-mail, regular mail, express mail, telephone, fax, and instant message),
attempt to contact or meet with the current, former, or prospective customers of
the Company or any of its Related Entities for purposes of offering or accepting
goods or services similar to or competitive with those offered by the Company or
any of its Related Entities for a period of two years following the
Participant’s termination of employment.

(b) If the Participant breaches any of the covenants set forth in Section 9(a)
herein:

(i) All unvested and vested Options shall be immediately forfeited; and

 

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(ii)the Participant hereby consents and agrees that the Company shall be
entitled to seek, in addition to other available remedies, a temporary or
permanent injunction or other equitable relief against such breach or threatened
breach from any court of competent jurisdiction, without the necessity of
showing any actual damages or that money damages would not afford an adequate
remedy, and without the necessity of posting any bond or other security. The
aforementioned equitable relief shall be in addition to, not in lieu of, legal
remedies, monetary damages or other available forms of relief.

(c)If the Participant has agreed to a non-compete and/or a non-solicitation
provision in any other contract or agreement with the Company, then the Company
may choose to enforce any other non-compete and/or non-solicitation provision to
which the Participant is bound to the extent such provision provides greater
restrictions than those provided in Sections 9(a) and 9(b) herein.  

10.  Release Condition.  Except as otherwise determined by the Committee, if any
vesting or exercise of the Option is subject to a “Release Condition”, the
Participant must sign and deliver to the Company a release of claims, in the
form provided by the Company (which, following a Change in Control, shall be
based on the Company’s form prior to the Change in Control) (“Release”), as
consideration for such vesting or exercise, within 30 days following the
applicable event and shall not revoke it within the period specified therein.

11. Fractional Shares.   The Company will not issue fractional Option Shares
upon the exercise of an Option. Any fractional Option Shares will be treated in
accordance with Section 10(i) of the Plan.

12.General Provisions.

 

(a)This Agreement shall be governed by the laws of the State of Delaware,
without giving effect to principles of conflicts of laws.

 

(b)This Agreement and the Plan constitute the entire agreement between the
Company and the Participant concerning the subject matter hereof.  There is no
representation or statement made by any party on which another party has relied
which is not included in this Agreement or the Plan.  Any previous agreement
between the Company and the Participant concerning the subject matter hereof is
hereby terminated and superseded by this Agreement and the Plan.  This Agreement
may not be assigned by the Participant except as required in connection with a
permitted transfer thereunder.  Subject to the foregoing, the provisions hereof
shall inure to the benefit of, and be binding upon, the successors, permitted
assigns, heirs, executors and administrators of the parties hereto.  Any
attempted transfer of this Agreement not in compliance with the terms hereof
shall be null and void.

 

(c) Neither this Agreement nor any term hereof may be amended, modified, waived,
discharged, or terminated except by a written instrument signed by the Company
and the Participant; provided, however, that the Company unilaterally may waive
any provision hereof in writing to the extent that such waiver does not
adversely affect the interests of the Participant

 

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hereunder, but no such waiver shall operate as, or be construed to be, a
subsequent waiver of the same provision or a waiver of any other provision
hereof.

 

(d)Either party’s failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent that party thereafter from enforcing each and every
other provision of this Agreement.  The rights granted both parties herein are
cumulative and shall not constitute a waiver of either party’s right to assert
all other legal remedies available to it under the circumstances.

(e) The Participant acknowledges and agrees that this Agreement, the
transactions contemplated hereunder and the vesting schedule set forth herein do
not constitute an express or implied promise of continued employment for such
period, for any period, or at all, and shall not interfere with the Company’s
right to terminate the Participant’s employment with the Company at any time,
for any reason.  The Participant further acknowledges and agrees that this
Agreement does not entitle the Participant to be granted any other Award under
the Plan or to be treated uniformly with other Participants and employees of the
Company.

 

(f)Any notice or other communication required or permitted hereunder shall be in
writing and shall be delivered personally or sent by facsimile transmission,
overnight air courier, or first-class, certified or registered mail, postage
prepaid, and addressed to the parties at the addresses of the parties set forth
at the end of this Agreement or such other address as a party may designate by
five (5) days’ advance written notice to the other parties hereto.  All notices
and communications shall be deemed to have been received unless otherwise set
forth herein:  (i) in the case of personal delivery, on the date of such
delivery; (ii) in the case of facsimile transmission, on the date on which the
sender receives electronic confirmation that such notice was received by the
addressee; (iii) in the case of overnight air courier, on the second business
day following the day sent, with receipt confirmed by the courier; and (iv) in
the case of mailing by first class certified or registered mail, postage
prepaid, return receipt requested, on the fifth business day following such
mailing.

 

(g)If any term or provision of this Agreement or the application thereof to any
person, property or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement, or the application of such term
or provision to persons, property or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.  

 

(h)The provisions of this Agreement shall apply, to the full extent set forth
herein with respect to the Shares, to any and all shares of capital stock or
other securities of the Company or a Subsidiary which may be issued in respect
of, in exchange for, in substitution of the Shares, and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof.

 

(i)This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Facsimiles or other electronic signatures (including PDFs)
shall be deemed an original.

 

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(j)The headings of the sections of this Agreement are for convenience and shall
not by themselves determine the interpretation of this Agreement.  The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent and no rule of strict construction will be
applied against any party.

 

(k)This Agreement will not confer any rights or remedies upon any person other
than the parties hereto and their respective successors and permitted assigns.

 

(l)By his or her signature below, the Participant agrees to be bound by the
terms and conditions of the Plan.  The Participant has reviewed the Plan in its
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Agreement and fully understands all provisions of this Agreement
and the Plan.  The Participant hereby agrees to accept as binding, conclusive
and final all decisions and interpretations of Plan and this Agreement by the
Committee.  

 

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first set forth above.

 

ALTRA INDUSTRIAL MOTION CORP.:

PARTICIPANT:

 

 

 

 

By:[gyecwczwohxe000001.jpg]

 

Name:  Carl R. Christenson

Title:    Chief Executive Officer

«First_Name» «Last_Name»

 

 

Address:

Address:

 

Altra Industrial Motion Corp.
300 Granite Street, Suite 201
Braintree, MA 02184
Attention:  Carl R. Christenson
Fax No.: (781) 843-0615

 

«Street_Address»

«City», «State» «Zip»

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page for 2014 Omnibus Incentive Plan Nonqualified Stock Option Award
Agreement]