EXHIBIT 10(iii).11

BALDOR ELECTRIC COMPANY

NON-QUALIFIED STOCK OPTION AGREEMENT

This Agreement is entered into as of «DATE» (the “Agreement Date”), by and
between BALDOR ELECTRIC COMPANY (the “Company”) and «OPTIONEE» (ID # «SS» ) (the
“Employee”). The Plan under which this Agreement is made is the Baldor Electric
Company 2006 Equity Incentive Plan and the Administrator of the Plan is the
Stock Option Committee of the Board of Directors of the Company.

The Board of Directors of the Company, with the approval of the shareholders of
the Company, has determined: (1) that the interests of the Company will be
advanced by encouraging and enabling certain of its employees to acquire shares
of the common stock of the Company which will provide them with a more direct
concern for the welfare of the Company and assure a closer identification of
their interests with those of the Company; (2) that the acquisition of such an
interest in the Company will stimulate the endeavors of such employees on behalf
of the Company and strengthen their desire to remain with the Company; and
(3) that the Employee named above is one of such employees.

The Company and the Employee hereby agree to all of the terms, conditions, and
restrictions of the Plan and further agree as follows:

 

1. Shares Subject to Option. The Company hereby grants to the Employee the
option to purchase all or part of an aggregate of «UNITS » shares of common
stock of the Company at the purchase price of $ «PRICE » per share.

 

2. Time, Manner of Exercise, and Form of Payment. The options shall be one
hundred percent (100%) exercisable on and after «EXERVEST». Options granted
pursuant to this Agreement shall cease to be exercisable on and after
«EXPIRATION», and the Employee shall have no rights to these options after this
date. Subject to Paragraphs 3 and 6, the Employee may purchase all or part of
the shares subject to this Agreement, but in no case may the Employee exercise
an option for a fraction of a share. The option granted pursuant to this
Agreement shall be exercisable by the giving of written notice of exercise to
the Company on a form provided by the Company and shall be accompanied by
payment in full of the purchase price for the shares to be purchased. The full
purchase price shall be payable in cash or check at the time of exercise. In
lieu of cash or check, the Employee may make payment, in whole or in part, by
tendering shares of common stock of the Company (“Shares”) valued at the fair
market value on the day before the date the Company receives written notice of
exercise from the Employee; provided that, the shares used to purchase shares
under this Agreement must be issued to the Employee in certificate form. The
purchase transaction shall be affected as soon as practical following receipt by
the Company of such a written notice.

 

3. Employment Status. Options under this Agreement shall be exercisable during
the lifetime of the Employee only by him. Except as provided in Paragraph 6, the
Employee may not exercise an option under this Agreement unless at the time of
exercise he has been employed by the Company continuously since the Agreement
Date. The rights and privileges of the Employee granted pursuant to this
Agreement may not be transferred, or assigned to any person other than the
Employee, except by will or the laws of descent and distribution.

 

4. Shareholder Status. Neither the Employee nor his legal representatives shall
have any rights or privileges of a shareholder of the Company with respect to
any of the Shares issuable on the exercise of this option unless and until
certificates representing such shares shall have been issued and delivered to
the Employee or his representatives.

 

5. Adjustment of Shares. If prior to exercise there shall be any change in the
outstanding common shares of the Company through merger, consolidation,
reorganization, recapitalization, stock dividend, split-up, combination of
shares, exchange of shares, change in corporate structure, or otherwise,
proportionate adjustments to the kind and number of shares and price per share
of shares subject to this option shall be made by the Administrator. No
fractional shares of stock shall be issued under this option on account of any
such adjustments, and rights to shares shall be limited after such an adjustment
to the lower full share. The determination by the Administrator in each case
shall be conclusive and binding on the Company and the Employee and his legal
representatives.

 

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6. Termination of Employment. If the Employee’s employment terminates for any
reason other than those listed below, the Employee may at any time within three
months after termination of his employment exercise options granted under this
Agreement only to the extent such options were exercisable by him on the date of
his termination of employment. The Company, in its sole discretion, may consent
to retirement before age 65 and within six months of the Agreement Date, and
accelerate vesting on account of termination of employment before age 65, in
which case the option will become exercisable six months after the Agreement
Date and the Employee may exercise options granted under this Agreement until
nine months after the Agreement Date.

Disability – If the Employee’s employment with the Company terminates due to
disability, all options granted pursuant to this Agreement shall become
exercisable on the date of such termination of employment and shall remain
exercisable for a period of up to three months. For purposes of this paragraph,
disability normally means termination of employment on account of a medical
impairment resulting in inability to perform the duties of the position held by
the Employee with the Company. The Administrator shall judge whether termination
of employment is a result of disability, and the decision of the Administrator
shall be binding.

Misconduct – If the Employee’s employment with the Company terminates on account
of conduct which involves dishonesty or action by the Employee which is
detrimental to the best interest of the Company, options granted pursuant to
this Agreement shall terminate immediately upon such a termination of employment
and the Employee shall have no further rights under this Agreement. The
Administrator shall judge whether termination of employment is a result
misconduct, and the decision of the Administrator shall be binding.

Death – If the Employee shall die while in the employ of the Company, or within
three months after termination of his employment and prior to the termination of
the options granted pursuant to this Agreement, such option may be exercised at
any time within twelve months following his death by the person or persons to
whom the Employee’s rights under this option shall pass by the Employee’s will
or by the laws of descent and distribution.

The option holder shall have no further rights under this Agreement after the
expiration of such exercise period.

 

7. Required Withholding. Notwithstanding anything to the contrary in this
Agreement, if the Company is required to withhold an amount from the wages of
the Employee as a result of the award of Shares, expiration of a Restricted
Period or exercise of an option, the Company shall not deliver or otherwise make
the Stock Certificate available to the Employee until the Employee pays to the
Company in cash or check the amount necessary to enable the Company to remit to
the appropriate government entity or entities on behalf of the Employee the
amount required to be withheld from his wages with respect to such Shares. In
lieu of cash or check, the Employee may make payment, in whole or in part, by
tendering shares of common stock of the Company valued at the fair market value
on the day before the date the Company receives written notice of exercise from
the Employee.

 

BALDOR ELECTRIC COMPANY      ATTEST:

 

    

 

John A. McFarland      Ronald E. Tucker Chairman and CEO      President, CFO and
Secretary

 

    

 

Signature of Employee      Printed Name of Employee

 

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