Nonqualified Stock Option Agreement for Nonemployee DirectorsEquity Incentive Plan Agreement |
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EXHIBIT 10.35
THE TIMKEN COMPANY
Nonqualified Stock Option Agreement for
Nonemployee Directors
WHEREAS, [NAME] (hereinafter called the "Optionee") is a Non employee Director (as defined in The Timken Company Long-Term Incentive Plan (the "Plan") (As Amended and Restated on February 6, 2004) of The Timken Company (hereinafter called the "Company");
WHEREAS, Section 9 of the Plan authorizes the Company's Board of Directors (the "Board") to grant options to purchase Common Shares of the Company to Non employee Directors of the Company, subject to the terms and conditions of the Plan; and
WHEREAS, the execution of a Nonqualified Stock Option Agreement substantially in the form hereof has been authorized by a resolution of the Committee duly adopted on [DATE]; and
NOW, THEREFORE, the Company hereby grants to the Optionee on this ____ day of __________ (the "Date of Grant") an Option (the "Option") pursuant to the Plan to purchase [NUMBER] Common Shares of the Company at a price of [PRICE] per share (the "Option Price") which represents the Market Value per Share on the Date of Grant. The Company agrees to cause certificates for any shares purchased hereunder to be delivered to the Optionee upon payment of the Option Price in full, subject to the terms and conditions of the Plan and the terms and conditions hereinafter set forth.
1. Vesting of Option. (a) Unless terminated as hereinafter provided, the Option shall be exercisable with respect to all of the Common Shares covered by the Option after the Optionee continuously serves as a Non- employee Director of the Company for a period of one (1) year following the Date of Grant.
(b) Notwithstanding the provisions of Section 1(a) hereof, the Option shall become immediately exercisable in full upon any change in control of the Company that shall occur while the Optionee is a Nonemployee Director of the Company. For the purposes of this agreement, the term "change in control" shall mean the occurrence of any of the following events:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 30% or more of either: (A) the
then-outstanding Common Shares or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote
generally in the election of directors ("Voting Shares"); provided,
however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a change in control: (1) any acquisition
directly from the Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary, or (4) any acquisition by any
Person pursuant to a transaction which complies with clauses (A), (B) and
(C) of subsection (iii) of this Section 1(b); or
CLI-1223273v3
(ii) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason (other than death or
disability) to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (either by a specific vote
or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without objection to such nomination)
shall be considered as though such individual were a member of the
Incumbent Board, but excluding for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest (within the meaning of Rule 14a-11 of the Exchange Act)
with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(iii) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of
the Company (a "Business Combination"), in each case, unless, following
such Business Combination, (A) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Common
Shares and Voting Shares immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 66 2/3% of,
respectively, the then-outstanding shares of common stock and the combined
voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without limitation, an
entity which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions relative to each
other as their ownership, immediately prior to such Business Combination,
of the Common Shares and Voting Shares of the Company, as the case may be,
(B) no Person (excluding any entity resulting from such Business
Combination or any employee benefit plan (or related trust) sponsored or
maintained by the Company or such entity resulting from such Business






