Exhibit 10.4
NON-QUALIFIED STOCK OPTION AGREEMENT
OF
REXNORD CORPORATION
THIS AGREEMENT (this “Agreement”), dated as of ________, 20__ is made by and
between Rexnord Corporation, a Delaware corporation (the “Corporation”), and
_____________, an employee of the Corporation or one of its Subsidiaries (the
“Optionee”).
WHEREAS, the Corporation wishes to afford the Optionee the opportunity to
purchase shares of its common stock (“Common Stock”);
WHEREAS, the Corporation wishes to carry out the purpose of the Rexnord
Corporation 2012 Performance Incentive Plan (as may be amended from time to
time, the “Plan”), the terms of which are hereby incorporated by reference and
made a part of this Agreement; and
WHEREAS, the Administrator, as defined in the Plan, (i) has determined that it
would be to the advantage and in the best interests of the Corporation and its
stockholders to grant the Non-Qualified Stock Option provided for herein (the
“Option”) to the Optionee as an inducement for the Optionee to enter into or
remain in the employ of the Corporation or one of its Subsidiaries and as an
incentive for increased efforts by the Optionee during such employment, and
(ii) has instructed the officers of the Corporation to issue said Option.
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt and sufficiency of which is
hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
GRANT OF OPTION
Section 1.1    Grant of Option
In consideration of the Optionee’s agreement to enter into or remain in the
employ of the Corporation or one of its Subsidiaries and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, on the date hereof the Corporation irrevocably grants to the
Optionee the Option to purchase any part or all of an aggregate of ________
shares of Common Stock upon the terms and conditions set forth in the Plan and
this Agreement.
Section 1.2    Option Price
The purchase price of the shares of Common Stock covered by the Option shall be
$_________ per share (without commission or other charge).
Section 1.3    Option Subject to Plan
The Option granted hereunder is subject to the terms and provisions of the Plan,

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including without limitation, Sections 7.4 and 8.9 of the Plan. Capitalized
terms used in this Agreement and not defined herein shall have the meaning given
to such terms in the Plan.
ARTICLE II
EXERCISABILITY
Section 2.1    Commencement of Exercisability
(a)    This Option shall become exercisable in accordance with the schedule
established by the Administrator at the time of grant and set forth below:
•
50% of the Option (for ______ shares of Common Stock) shall vest on ________,
20__, the third anniversary of the Grant Date; and

•
50% of the Option (for _______ shares of Common Stock) shall vest on ________,
20__, the fifth anniversary of the Grant Date.

(b)    No portion of the Option which is unvested at the Optionee’s termination
of employment shall thereafter become vested.
Section 2.2    Duration of Exercisability
Any portion of the Option which becomes vested pursuant to Section 2.1 shall
remain vested and may be exercised until the Option expires pursuant to Section
2.3.
Section 2.3    Expiration of Option
The Option may not be exercised to any extent by any person after the first to
occur of any of the following events:
(a)    The expiration of ten years from the date the Option was granted;
(b)    If the Optionee’s termination of employment is for any reason other than
(i) by the Corporation or any Subsidiary of the Corporation for Cause, or
(ii) on account of the Optionee’s death or disability (as defined in Section
22(e)(3) of the Code), the ninetieth day following the date of the Optionee’s
termination of employment;
(c)    The date of the Optionee’s termination of employment by the Corporation
or any Subsidiary of the Corporation for Cause; or
(d)    If the Optionee’s termination of employment is on account of the
Optionee’s death or disability (within the meaning of Section 22(e)(3) of the
Code), the expiration of 12 months from the date of the Optionee’s termination
of employment.
Section 2.4    Definition of Cause
For purposes of this Agreement, “Cause” shall have the meaning ascribed to it in
any

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employment agreement in effect between the Corporation or any of its
Subsidiaries and the Optionee as of the date of the Optionee’s termination of
employment and, in the absence of any such employment agreement, “Cause” shall
mean,
(a)    the Board’s determination that the Optionee failed to carry out, or
comply with, in each case in any material respect, any lawful and reasonable
directive of the Board or its designee consistent with the terms of the
Optionee’s employment, which is not remedied within 30 days after the receipt of
written notice from the Corporation specifying such failure;
(b)    the Optionee’s conviction, plea of no contest, plea of nolo contendere,
or imposition of unadjudicated probation for any felony;
(c)    the Optionee’s unlawful use (including being under the influence) or
possession of illegal drugs;
(d)    the Optionee’s commission of an act of fraud, embezzlement,
misappropriation, willful misconduct, or breach of fiduciary duty against the
Corporation or any of its Subsidiaries; or
(e)    the breach by the Optionee of any of the provisions contained in Article
III below or similar provisions contained in any other agreement with the
Corporation or any of its Subsidiaries or other affiliates.
Section 2.5    Partial Exercise
Any vested portion of the Option or the entire Option, if then wholly vested,
may be exercised in whole or in part at any time prior to the time when the
Option or portion thereof expires; provided, however, that each partial exercise
shall be for not less than 100 shares of Common Stock and shall be for whole
shares of Common Stock only.
Section 2.6    Exercise of Option
This Option shall be exercised by Optionee delivering a written notice to the
Corporation specifying the number of shares the Optionee desires to purchase,
and by paying the Corporation the option price for the shares being acquired at
the time. The option purchase price may be paid by means of any lawful
consideration as determined by the Administrator and permitted by Section 5.5 of
the Plan.
ARTICLE III
RESTRICTIVE COVENANTS
Section 3.1    Reasonableness of Restrictions
Optionee acknowledges that Optionee has had and will continue to have access to
Confidential Information (as defined below), that such Confidential Information
is of economic value to the Company and its Subsidiaries, that such Confidential
Information would be of value

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to a competitor of the Company and/or one of its Subsidiaries in competing
against the Company and/or one of its Subsidiaries, and that it would be unfair
for Optionee to exploit such Confidential Information for Optionee’s personal
benefit or for the benefit of a competitor. Optionee further acknowledges that
Optionee has had and/or will have an opportunity to learn about, and develop
relationships with, customers of the Company and/or its Subsidiaries and that
the Company and its Subsidiaries have a legitimate interest in protecting
relationships with such customers, and that it would be unfair for Optionee to
exploit information Optionee has learned about such customers and relationships
which Optionee has developed with such customers for Optionee’s personal benefit
or for the benefit of a competitor. Optionee further acknowledges that the
Company and its Subsidiaries currently market and sell products and services to
customers throughout the United States and that Optionee’s job duties have
included and/or will include contact with products that are marketed throughout
the entire United States and that the Confidential Information to which Optionee
has had and/or and will have access to, and the Optionee’s customer knowledge
and contacts and relationships, would be of value to a competitor in competing
against the Company and/or one of its Subsidiaries anywhere in the United
States. Accordingly, Optionee acknowledges that the protections provided to the
Company and its Subsidiaries in this Article III are reasonable and necessary to
protect the legitimate interests of the Company and its Subsidiaries and that
abiding by Optionee’s obligations under this Article III will not impose an
undue hardship on Optionee.
Section 3.2    Restricted Services Obligation
For a period of two years following the end, for whatever reason, of the
Optionee’s employment with the Company or any of its Subsidiaries, the Optionee
agrees not to directly or indirectly provide Restricted Services to any
Competitor respecting its operations in the United States. For purposes of this
Section, (i) “Restricted Services” means services of any kind or character
comparable to those the Optionee provided to the Company or any of its
Subsidiaries during the one year period preceding the end of the Optionee’s
employment with the Company or any of its Subsidiaries, and (ii) “Competitor”
means any business located in the United States which is engaged in the
development and/or sale of any product line that is substantially similar to a
product line sold by the Company or any of its Untied States Subsidiaries for
which the Optionee had direct managerial responsibility during the last year of
the term of the Optionee’s employment with the Company or any of its United
States Subsidiaries.
Section 3.3    Customer Non-Solicitation
For a period of two years following the end, for whatever reason, of the
Optionee’s employment with the Company or any of its Subsidiaries, the Optionee
agrees not to directly or indirectly attempt to sell or otherwise provide to any
Restricted Customer any goods, products or services of the type or substantially
similar to the type sold or otherwise provided by the Company or any of its
Subsidiaries for which the Optionee was employed during the twelve months prior
to termination of Optionee’s employment. For purposes of this Section 3.3,
“Restricted Customer” means any individual or entity (i) for whom/which the
Company or any of its Subsidiaries provided goods, products or services, and
(ii) with whom/which the Optionee was the primary contact on behalf of the
Company during Optionee’s last twelve months of employment or about whom/which
the Optionee acquired non-public information during Optionee’s last twelve
months of employment

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that would be of benefit to Optionee in selling or attempting to sell such
goods, products or services in competition with the Company or any of its
Subsidiaries.
Section 3.4    Non-Solicitation of Employees
During the term of the Optionee’s employment with the Company or any of its
Subsidiaries and for a period of two years thereafter, the Optionee shall not
directly or indirectly encourage any employee of the Company or any of its
United States Subsidiaries with whom the Optionee has worked to terminate his or
her employment with the Company or any such Subsidiary or solicit such an
individual for employment outside the Company or any of its Subsidiaries in a
manner which would end or diminish that Employee’s services to the Company or
any of its Subsidiaries.
Section 3.5    Non-Disparagement
During the term of the Optionee’s employment with the Company or any of its
Subsidiaries and thereafter in perpetuity, the Optionee shall not knowingly
disparage, criticize, or otherwise make derogatory statements regarding the
Company or any of its Affiliates, Subsidiaries, successors, directors, officers,
customers or suppliers. During the term of the Optionee’s employment with the
Company or any of its Subsidiaries and thereafter in perpetuity, none of the
Company, Rexnord LLC, nor any of their respective officers shall knowingly
disparage, criticize, or otherwise make derogatory statements regarding the
Optionee. The restrictions of this Section 3.5 shall not apply to any statements
that are made truthfully in response to a subpoena or other compulsory legal
process.
Section 3.6    Non-Disclosure of Confidential Information
The Optionee shall maintain in confidence and shall not directly, indirectly or
otherwise, use, disseminate, disclose or publish, or use for the Optionee’s
benefit or the benefit of any Person, or deliver to any Person any document,
record, notebook, computer program or similar repository of or containing, any
confidential or proprietary information or trade secrets of or relating to the
Company or any of its Subsidiaries, including, without limitation, information
with respect to the Company’s or any of its Subsidiary’s operations, processes,
products, inventions, business practices, finances, principals, vendors,
suppliers, customers, potential customers, marketing methods, costs, prices,
contractual relationships, regulatory status, compensation paid to employees or
other terms of employment (the “Confidential Information”). Confidential
Information shall be defined to exclude information which is or becomes public
knowledge through no fault of Optionee, or which was known to Optionee before
the start of Optionee’s earliest relationship with the Company or any of its
Subsidiaries, or which is otherwise not subject to protection under applicable
law. The Optionee’s obligations under this Section 3.6 shall apply for so long
as Optionee continues in the employment of the Company or any of its
Subsidiaries. In addition, those obligations shall continue after Optionee’s
employment terminates with respect to each piece of Confidential Information for
so long as that piece of Confidential Information continues to have economic
value to the Company or any of its Subsidiaries and, accordingly, could be used
by a competitor of the Company or one of its Subsidiaries to compete unfairly
against the Company or one of its Subsidiaries.

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Section 3.7    Return of Company Property
All correspondence, drawings, manuals, letters, notes, notebooks, reports,
programs, plans, proposals, financial documents, or any other documents
concerning the Company’s or any of its Subsidiary’s customers, business plans,
marketing strategies, products or processes, whether confidential or not, is the
property of the Company (the “Company Property”). Accordingly, upon Optionee’s
Termination of Employment for any reason, the Optionee shall promptly deliver to
the Company all such Company Property, including any and all copies of any such
Company Property, and shall not make any notes of or relating to any information
contained in any such Company Property. The Optionee may respond to a lawful and
valid subpoena or other legal process but shall give the Company the earliest
possible notice thereof, shall, as much in advance of the return date as
possible, make available to the Company and its counsel the documents and other
information sought and shall assist such counsel in resisting or otherwise
responding to such process.
Section 3.8    Injunctive Relief
The Optionee hereby acknowledges that a breach of the covenants contained in
this Article III will cause irreparable damage to the Company and its goodwill,
the exact amount of which will be difficult or impossible to ascertain, and that
the remedies at law for any such breach will be inadequate. Accordingly, the
Optionee hereby agrees that, in the event of a breach of any of the covenants
contained in this Article III, in addition to any other remedy which may be
available at law or in equity, the Company shall be entitled to specific
performance and injunctive relief. The Company hereby acknowledges that a breach
of the Company’s covenant contained in Section 3.5 will cause irreparable damage
to the Optionee, the exact amount of which will be difficult or impossible to
ascertain, and that the remedies at law for any such breach will be inadequate.
Accordingly, the Company hereby agrees that, in the event of a breach of the
Company’s covenant contained in Section 3.5, in addition to any other remedy
which may be available at law or in equity, the Optionee shall be entitled to
specific performance and injunctive relief.
ARTICLE IV
OTHER PROVISIONS
Section 4.1    Not a Contract of Employment
Nothing in this Agreement or in the Plan shall (i) confer upon the Optionee any
right to continue in the employ of the Corporation or any of its Subsidiaries,
or (ii) interfere with or restrict in any way the rights of the Corporation or
its Subsidiaries, which are hereby expressly reserved, to discharge the Optionee
at any time for any reason whatsoever, with or without Cause, except pursuant to
an employment agreement, if any, executed by and between the Corporation or any
of its Subsidiaries, on the one hand, and the Optionee, on the other hand, and
approved by the Board.
Section 4.2    Construction
This Agreement shall be administered, interpreted and enforced under the laws of
the

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state of Delaware, without regard to conflicts of laws provisions that would
give effect to the laws of another jurisdiction.
Section 4.3    Conformity to Securities Laws
The Optionee acknowledges that the Plan is intended to conform to the extent
necessary with all provisions of the Securities Act and the Exchange Act and any
and all regulations and rules promulgated thereunder by the Securities and
Exchange Commission, including without limitation, Rule 16b-3. Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Option
is granted and may be exercised, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by applicable law, the Plan
and this Agreement shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
Section 4.4    Entire Agreement
The parties hereto acknowledge that this Agreement and the Plan set forth the
entire agreement and understanding of the parties and supersede all prior
written or oral agreements or understandings with respect to the subject matter
hereof, except that any provisions therein regarding confidentiality or
non-competition remain in full force and effect in favor of the Corporation and
its Subsidiaries as if the agreements containing such provisions were not so
superseded. The obligations imposed by this Agreement are severable and should
be construed independently of each other. The invalidity of one provision shall
not affect the validity of any other provision. If any provision of this
Agreement shall be invalid or unenforceable, in whole or in part, or as applied
to any circumstances, under the laws of any jurisdiction which may govern for
such purpose, then such provision shall be deemed, to the extent allowed by the
laws of such jurisdiction, to be modified or restricted to the extent and in the
manner necessary to render the same valid and enforceable, either generally or
as applied to such circumstance, or shall be deemed exercised from this
Agreement, as the case may require, and this Agreement shall be construed and
enforced to the maximum extent permitted by law, as if such provision had been
originally incorporated herein as so modified or restricted, or as if such
provision had not been originally incorporated herein, as the case may be.
Section 4.5    Amendment
The Administrator at any time, and from time to time, may amend the terms of
this Agreement, provided, however, that the rights of the Optionee shall not be
adversely impaired without the Optionee’s written consent. The Corporation shall
provide the Optionee with notice and a copy of any amendment made to this
Agreement
Section 4.6    Arbitration; Waiver of Jury Trial
Any dispute or controversy arising under, out of, or in connection with or in
relation to this Agreement or the Plan shall be finally determined and settled
by arbitration in New York, New York in accordance with the Commercial Rules of
the American Arbitration Association, and judgment upon the award may be entered
in any court having jurisdiction. Within 20 days of

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the conclusion of the arbitration hearing, the arbitrator shall prepare written
findings of fact and conclusions of law. It is mutually agreed that the written
decision of the arbitrator shall be valid, binding, final and non-appealable;
provided, however, that the parties hereto agree that the arbitrator shall not
be empowered to award punitive damages against any party to such arbitration. To
the extent permitted by law, the arbitrator’s fees and expenses will be borne
equally by each party. In the event that an action is brought to enforce the
provisions of this Agreement or the Plan pursuant to this Section 4.6, each
party shall pay its own attorney’s fees and expenses regardless of whether in
the opinion of the court or arbitrator deciding such action there is a
prevailing party. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL, INCLUDING TRIAL BY JURY, IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THE PLAN OR THIS AGREEMENT.
Section 4.7    Notices
All notices, requests, consents and other communications hereunder to any party
hereto shall be deemed to be sufficient if contained in a written instrument and
shall be deemed to have been duly given when delivered in person, by telecopy,
by nationally-recognized overnight courier, or by first class registered or
certified mail, postage prepaid, addressed to such party at the address set
forth below or such other address as may hereafter be designated in writing by
the addressee to the addressor:
(i)    if to the Corporation, to:
Rexnord Corporation
4701 Greenfield Avenue
Milwaukee, WI 53214
Attention: Patty Whaley

(ii)    if to the Optionee, to the Optionee’s home address on file with the
Corporation.
Section 4.8    Government and Other Regulations.
The obligation to sell and deliver shares of stock under the Plan shall be
subject to all applicable laws, rules and regulations and the obtaining of all
such approvals by governmental agencies as may be deemed necessary or desirable
by the Corporation, including (without limitation) the satisfaction of all
applicable federal, state and local tax withholding requirements. The
Corporation shall have the power and the right to deduct or withhold, or require
Optionee to remit to the Corporation, an amount sufficient to satisfy Federal,
state, and local taxes (including the Optionee’s FICA obligation) required by
law to be withheld with respect to any taxable event arising or as a result of
this Option.

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Section 4.9    Counterparts
This Agreement may be executed in several counterparts, including via facsimile
transmission, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
[Signature Page to Follow]

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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the day, month and year first set forth above.
THE CORPORATION:
 
 
 
Rexnord Corporation
 
 
By:

Print Name:
 
Title:
 

THE OPTIONEE:
 
 
 
Signature:
 
Print Name

 
 
Optionee's Address:
 
 
 
 
 
Optionee's Taxpayer Identification Number: