Document:

Form of Non-qualified Stock Option Agreement

 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

  

 2Form of Stock Unit Agreement

 EXHIBIT 10(iii).12 
 BALDOR ELECTRIC COMPANY 
 STOCK UNIT 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”). Together they agree to the following. 
 WHEREAS, the Company
established, and the shareholders of the Company approved, the Baldor Electric Company 2006 Equity Incentive Plan (the “Plan”) pursuant to which options, stock appreciation rights, restricted stock and Stock Units covering an aggregate of
3,000,000 shares of the Stock of the Company may be granted to employees of the Company and its subsidiaries; 
 WHEREAS, the Board of Directors of the
Company, and the Administrator of the Plan appointed by the Board of Directors, has determined that the interests of the Company will be advanced by encouraging and enabling certain of its employees to own shares of the common stock of the Company,
and that Employee is one of those employees; 
 NOW, THEREFORE, in consideration of services rendered and the mutual covenants herein contained, the parties
agree as follows: 
 Section 1. Definitions 
 As used in this Agreement, the following terms shall have the following meanings: 
  

	A.	“Award” means the award provided for in Section 2. 

  

	B.	“Board of Directors” means the Board of Directors of the Company. 

  

	C.	“Change in Control” means: 

 (i) The acquisition
by one person, or more than one person acting as a group, of ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the
Company; 
 (ii) The acquisition by one person, or more than one person acting as a group, of ownership of stock of the Company, that
together with stock of the Company acquired during the twelve-month period ending on the date of the most recent acquisition by such person or group, constitutes 35% or more of the total voting power of the stock of the Company; 
 (iii) A majority of the members of the Company’s board of directors is replaced during any twelve-month period by directors whose appointment or
election is not endorsed by a majority of the members of the Company’s board of directors before the date of the appointment or election. 
 Persons
will not be considered to be acting as a group solely because they purchase or own stock of the same corporation at the same time, or as a result of the same public offering. However, persons will be considered to be acting as a group if they are
owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. 
 This
definition of Change in Control shall be interpreted in accordance with, and in a manner that will bring the definition into compliance with, the regulations under Section 409A of the Internal Revenue Code. 
 D. “Date of Award” means date granted by the Compensation Committee of the Company’s Board of Directors. 
  

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 E. “Permanent Disability” means Employee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months. 
 F. “Retirement” means termination of employment with the Company and its Subsidiaries after attaining the age of 65. 
 G. “Stock” means the common stock of the Company. 
 H. “Subsidiary” means any corporation, other than the Company, in an unbroken chain of corporations beginning with the Company if, at the relevant date, each of the corporations, other than the last
corporation in the unbroken chain, owns stock possessing fifty percent or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
 Section 2. Award 
 Subject to the terms of this Agreement, the Company hereby awards to the
Employee «UNITS » Stock Units, effective as of the Date of Award. Each Stock Unit represents the obligation of the Company to transfer one share of Stock to Employee at the time provided in Section 5 of this Agreement,
provided such Stock Unit is vested at such time. 
 Section 3. Bookkeeping Account 
 The Company shall record the number of Stock Units granted hereunder to a bookkeeping account for Employee (the “Stock Unit Account”). Employee’s Stock
Unit Account shall be debited by the number of Stock Units, if any, forfeited in accordance with Section 4 and by the number of shares of Stock transferred to Employee in accordance with Section 5 with respect to such Stock Units.
Employee’s Stock Unit Account also shall be adjusted from time to time for stock dividends, stock splits and other such transactions in accordance with Section 10. 
 Section 4. Vesting 
 Subject to the accelerated vesting provisions provided below, the Stock
Units shall vest on, «EXERVEST», the second anniversary of the Date of Award (the “Vesting Date”), if Employee remains employed by the Company through such date. 
 In the event Employee dies while employed, or terminates employment on account of his Permanent Disability or Retirement, all of the Stock Units granted pursuant to
Section 2 shall be fully vested immediately. Stock Units also shall be fully vested upon the occurrence of a Change in Control. 
 In the event of the
termination of employment of Employee with the Company for any other reason, all Stock Units that are not vested at the time of such termination of employment normally shall be forfeited. The Company, in its sole discretion, may consent to
termination of employment and waive the forfeiture of Stock Units on account of termination of employment; but such a waiver of forfeiture shall neither accelerate nor defer the date on which shares are transferred pursuant to this Agreement.

 Section 5. Distribution of Shares 
 Subject to the provisions below, shares of Stock equal to the number of Stock Units credited to the Stock Unit Account of Employee shall become distributable on the scheduled Vesting Date prescribed above (regardless of whether the shares
vest earlier because of Retirement or waiver of the forfeiture). 
 Shares of Stock equal to the number of Stock Units credited to the Stock Unit Account of
Employee shall become distributable upon termination of the employment of Employee on account of Permanent Disability. 
  

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 Shares of Stock equal to the number of Stock Units credited to the Stock Unit Account of Employee also shall become
distributable upon the occurrence of a Change in Control. 
 Such shares shall be distributed as soon as administratively feasible after the date prescribed
above; but no later than the later of the end of the calendar year in which the specified date occurs or the 15th
day of the third calendar month following such specified date. 
 The Employee may elect to defer the date of transfer of all or any specified portion of the
Stock transferable pursuant to this Agreement to a specified later date in accordance with the provisions of the Baldor Electric Company Supplemental Deferred Compensation Plan governing Stock Unit Deferrals. 
 Notwithstanding any other provision of this Agreement to the contrary, no shares of Stock shall be transferred to the Employee prior to the earliest date on which the
Company’s federal income tax deduction for such payment is not precluded by Section 162(m) of the Internal Revenue Code. In the event any payment is delayed solely as a result of the preceding restriction, such payment shall be made as
soon as administratively feasible following the first date as of which Section 162(m) of the Internal Revenue Code no longer precludes the deduction by the Company of such payment. 
 Section 6. Shareholder Rights 
 The Employee shall not have any of the rights of a
shareholder of the Company with respect to Stock Units, such as the right to vote. 
 Section 7. Dividend Equivalents

 Effective for record dates of dividends that occur after the Stock Units granted pursuant to this Agreement become vested in accordance with
Section 4, the Company shall pay the Employee, as soon as practical after the Company pays a cash dividend to shareholders of Stock, an amount in cash equal to the amount per share of such cash dividend multiplied by the number of Stock Units
credited to the Stock Unit Account of the Employee as of the record date of such dividend. The Company may withhold from such payment any applicable federal, state or local income or payroll tax. 
 Section 8. Death Benefits 
 In the event of
the death of The Employee, as soon as practical after the death of the Employee, the Company shall transfer shares equal in number to the vested Stock Units, if any, credited to the Employee’s Stock Unit Account to The Employee’s
Beneficiary or Beneficiaries. 
 The Employee may designate a Beneficiary or Beneficiaries (contingently, consecutively, or successively) of such death
benefit and, from time to time, may change his or her designated Beneficiary. A Beneficiary may be a trust. A beneficiary designation shall be made in writing in a form prescribed by the Company and delivered to the Company while the Participant is
alive. If there is no designated Beneficiary surviving at the death of a Participant, payment of any death benefit of the Participant shall be made to the persons and in the proportions which any death benefit under the Baldor Electric Company the
Employees’ Profit Sharing and Savings Plan is or would be payable. 
 Section 9. Units Non-Transferable 
 Stock Units awarded hereunder shall not be transferable by the Employee. Except as may be required by the federal income tax withholding provisions of the Code or by the
tax laws of any State, the interests of the Employee and his Beneficiaries under this Agreement are not subject to the claims of their creditors and may not be voluntarily or involuntarily sold, transferred, alienated, assigned, pledged,
anticipated, or encumbered. Any attempt by the Employee or a Beneficiary to sell, transfer, alienate, assign, pledge, anticipate, encumber, charge or otherwise dispose of any right to benefits payable hereunder shall be void. 
  

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 Section 10. Adjustment in Certain Events 
 If there is any change in the Stock by reason of stock dividends, split-ups, mergers, consolidations, reorganizations, combinations or exchanges of shares or the like,
the number of Stock Units credited to the Employee’s Stock Unit Account shall be adjusted appropriately so that the number of Stock Units credited to the Employee’s Stock Unit Account after such an event shall equal the number of shares of
Stock a shareholder would own after such an event if the shareholder, at the time such an event occurred, had owned shares of Stock equal to the number of Stock Units credited to the Employee’s Stock Unit Account immediately before such an
event. 
 Section 11. Tax Withholding 
 The Company shall not be obligated to transfer any shares of Stock until the Employee pays to the Company or a Subsidiary in cash, or any other form of property, including Stock, acceptable to the Company, the amount required to be withheld
from the wages of The Employee with respect to such shares. The Employee may elect to have such withholding satisfied by a reduction of the number of shares otherwise transferable under this Agreement at such time, such reduction to be calculated
based on the closing market price of the Stock on the day the Employee gives written notice of such election to the Company. 
 Section 12.
Source of Payment 
 Shares of Stock transferable to the Employee, or his Beneficiary, under this Agreement may be either Treasury
shares, authorized but unissued shares, or any combination of such stock. The Company shall have no duties to segregate or set aside any assets to secure the Employee’s right to receive shares of Stock under this Agreement. The Employee shall
not have any rights with respect to transfer of shares of Stock under this Agreement other than the unsecured right to receive shares of Stock from the Company. 
 Section 13. Amendment 
 This Agreement may be amended by mutual consent of the parties hereto by written agreement. 
 Section 14. Governing Law 
 This Agreement
shall be construed and administered in accordance with the laws of the State of Missouri. 
  

					
	BALDOR ELECTRIC COMPANY	  		 	ATTEST:
			
	  
	  		 	  

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

	Employee’s Signature	  		 	Employee’s Printed Name

  

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