Exhibit 10.1

 

Annual Incentive Arrangements for 2004 and 2005

 

On February 23, 2005, the Compensation Committee of the Board of Directors (the
“Committee”) of UNOVA, Inc. (the “Company”) approved the payment of bonuses to
Named Executive Officers and other employees for performance in 2004.  The
performance goals for those awards were established in the first quarter of 2004
and the Named Executive Officers were assigned targets for incentive pay ranging
from 50 percent to 100 percent of their annual salaries.  At the meeting of
February 23, 2005, the Committee reviewed the extent to which the Company and
its operating entities had met the previously established performance goals.

 

The 2004 performance goals for the Chief Executive Officer and other corporate
officers who were not heads of operating divisions were based 70 percent on the
Company achieving the Earnings Before Tax goal and 30 percent on achieving the
Net Capital Utilized as a Percent of Sales goal.  The actual Earnings Before Tax
were 106.00 percent of the goal.  The actual Net Capital Utilized as a Percent
of Sales was 107.10 percent of the goal.  Applying the weighting of 70 percent
and 30 percent, respectively, to those factors resulted in awards of 106.33
percent of the individual targets for the Chief Executive Officer and the other
corporate Named Executive Officers.  Mr. Brady and Mr. Keane each received a
bonus equal to 106.33 percent of his 2004 salary and Mr. Cohen received a bonus
equal to 53.16 percent of his 2004 salary.

 

Goals for executives and other participants associated with the Automatic Data
Systems segment (“ADS”) were based 70 percent on achieving the Business
Operating Profit goal and 30 percent on achieving the Net Working Assets as a
Percent of Sales goal.  In addition, the Committee adopted a bonus modifier for
ADS for 2004.  The modifier enabled the Committee, in its discretion, to
increase or decrease the earned payout by up to ten percent, based on the
successful implementation of four specifically identified strategic product and
market development programs in 2004.  The actual Business Operating Profit was
122.70 percent of the goal.  The actual Net Working Assets as a Percent of Sales
was 97.50 percent of the goal.  Therefore, the weighted result before
application of the modifier was 115.14 percent of the individual targets.  After
considering the outstanding performance of ADS in the four identified programs,
and the long-term benefits that are expected to result, the Committee increased
the payout for ADS participants by ten percent, to 126.65 percent of their
targets.  Mr. Miller received a bonus equal to 101.32 percent of his 2004
salary.

 

For the executives responsible for the Industrial Automation Systems segment
(“IAS”) as a whole, the goals were based 50 percent on Business Operating Profit
and 50 percent on Net Working Assets as a Percent of Sales.  The actual Business
Operating Profit achieved was 59.9 percent of the goal and the actual Net
Working Assets as a Percent of Sales achieved was 115.3 percent of the goal,
producing weighted awards of 87.6 percent of the individual targets.  Mr. Smith
received a bonus equal to 78.84 percent of his 2004 salary.

 

The following table sets out the bonus awards for performance in 2004 to the
Named Executive Officers whose compensation will be reported in the proxy
statement for the 2005 annual meeting of shareholders:

 

--------------------------------------------------------------------------------

 

Name and Title

 

Bonus Amount

 

Larry D. Brady
Chairman, President and Chief Executive Officer

 

$

736,213

 

 

 

 

 

Kenneth L. Cohen
Vice President and Treasurer

 

104,645

 

 

 

 

 

Michael E. Keane
Senior Vice President and Chief Financial Officer

 

385,619

 

 

 

 

 

Thomas O. Miller
Senior Vice President

 

335,303

 

 

 

 

 

Robert T. Smith
Senior Vice President

 

250,257

 

 

At its meeting on February 23, 2005, the Committee also established the
performance goals and individual targets for incentive awards for performance in
2005.  The performance goals and weight factors applicable to the Named
Executive Officers are as follows:

 

Corporate:

 

Achievement of Earnings Before Tax from Continuing Operations goal, 70 percent
Achievement of Net Capital Utilized as a Percent of Sales goal, 30 percent

 

 

 

ADS:

 

Achievement of Business Operating Profit goal, 70 percent
Achievement of Net Working Assets as a Percent of Sales goal, 30 percent

 

 

 

IAS:

 

Achievement of Business Operating Profit goal, 50 percent
Achievement of Net Working Assets as a Percent of Sales goal, 50 percent

 

--------------------------------------------------------------------------------