Exhibit 10.12


 


[Non-Employee Director
Form]


 


NON-QUALIFIED STOCK OPTION AGREEMENT 

OF

REXNORD HOLDINGS, INC.


 


THIS AGREEMENT (this “Agreement”), dated as of [                   ]
is made by and between Rexnord Holdings, Inc., a Delaware corporation (the
“Company”), and [                  ],
a non-employee director of the Company (as defined herein) (the “Optionee”)


 


WHEREAS, the Company wishes to carry out the 2006 Stock Option Plan of Rexnord
Holdings, Inc. (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, in consideration for the Optionee’s agreement to serve as a member of
the Board, the Board has determined that it would be to the advantage and best interest
of the Company and its stockholders to grant the Optionee the Non-Qualified
Stock Option to purchase shares of the Company’s common stock, par value $0.01
per share (“Common Stock”), provided for herein.


 


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

DEFINITIONS


 


Capitalized
terms used in this Agreement and not defined herein shall have the meaning
given to such terms in the Plan.  The
singular pronoun shall include the plural, where the context so indicates.


 


ARTICLE II

GRANT OF OPTION


 


Section 2.1                                      Grant of Option


 


In
consideration of the Optionee’s service as a member of the Board, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, on the date hereof the Company irrevocably grants to the Optionee
the Option to purchase any part or all of an aggregate of 4,211 shares of
Common Stock upon the terms and conditions set forth in the Plan and this
Agreement.


 


Section 2.2                                      Option Subject to Plan


 


The
Option granted hereunder is subject to the terms and provisions of the Plan,
including without limitation, Article V and Sections 7.1, 7.2, 7.3 and
7.10 thereof.


 

















 


Section 2.3                                      Option Price


 


The
purchase price of the shares of Common Stock covered by the Option shall be
$47.50 per share (without commission or other charge).


 


ARTICLE III

EXERCISABILITY


 


Section 3.1                                      Exercisability 


 


The
Option shall become vested as to 100% of the shares of Common Stock subject
thereto on the first anniversary of the date hereof; provided that the Optionee
is a member of the Board on such anniversary date.


 


Section 3.2                                      Expiration of Option


 


The
Option may not be exercised to any extent by any Person after the first to
occur of the following events:


 


(a)                                  The expiration of ten years from the date the
Option was granted; or


 


(b)                                 The first anniversary of the Optionee’s
Termination of Directorship for any reason.


 


Section 3.3                                      Partial Exercise


 


Any
portion of the Option or the entire Option 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 3.4                                      Exercise of Option


 


The
exercise of the Option shall be governed by the terms of this Agreement and the
terms of the Plan, including without limitation, the provisions of Article V
of the Plan, which, among other things, require that the Optionee (or, in the
event of the Optionee’s death or disability, the Optionee’s Eligible
Representative) deliver an executed copy of a Joinder to the Stockholders’
Agreement designated by the Company (in the form attached to such Stockholders’
Agreement) to the Secretary as a condition to the exercise of the Option.


 


ARTICLE IV

OTHER PROVISIONS


 


Section 4.1                                      Optionee’s Service as a Director


 


Nothing
in this Agreement or in the Plan shall confer upon the Optionee any right to
continue in the service of the Company or any of its affiliates (whether as a
director or otherwise).


 

















 


Section 4.2                                      Shares Subject to Plan and Stockholder
Agreement


 


The
Optionee acknowledges that any shares of Common Stock acquired upon exercise of
the Option are subject to the terms of the Plan and the Stockholders’
Agreement, including without limitation, the restrictions set forth in Section 5.6
of the Plan.


 


Section 4.3                                      Construction


 


This
Agreement shall be administered, interpreted and enforced under the laws of the
state of New York, without regard to conflicts of laws provisions that would
give effect to the laws of another jurisdiction.


 


Section 4.4                                      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 4.5                                      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.  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 4.6                                      Amendment


 


The
Board 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 Company
shall provide the Optionee with notice and a copy of any amendment made to this
Agreement


 


Section 4.7                                      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 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 4.7, 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 4.8                                      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 Company, to:


 


Rexnord
Holdings, Inc.

4701 Greenfield Avenue

Milwaukee, WI 53214

Attention:  Patty Whaley


 


with
copies to:


 


Rexnord
Holdings, Inc.


c/o
Apollo Management, L.P.


10250
Constellation Blvd, Suite 2900


Los
Angeles, CA 90067


 

















 


Fax:  (310) 843-1933


Attention:  Larry Berg


 


and


 


Rexnord
Holdings, Inc.

c/o Apollo Management, L.P.

9 West 57th Street, 43rd Floor

New York, NY  10019

Fax:  (212) 515-3288

Attention:   Steven Martinez


 


and


 


O’Melveny &
Myers LLP

Times Square Tower

7 Times Square

New York, NY  10036

Fax:  (212) 326-2061

Attention:  John M. Scott, Esq.


 


(ii)                                  if to the Optionee, to the Optionee’s home
address on file with the Company.


 


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]


 

















 


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
  COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Rexnord Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE
  OPTIONEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Optionee’s
  Address:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Optionee’s
  Taxpayer Identification Number: