UNOVA. INC. RESTORATION PLAN
 
 

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UNOVA, INC. RESTORATION PLAN
 
TABLE OF CONTENTS
 

       
Page
Section 1
 
General
 
1
         
1.1
 
Purpose
 
1
1.2
 
Coverage
 
1
         
Section 2
 
Participating Divisions and Subsidiaries
 
1
         
2.1
 
Participating Divisions and Subsidiaries
 
1
         
Section 3
 
Definitions
 
2
         
3.1
 
Actuarial Equivalent
 
 2
3.2
 
Affected Employee
   
2
3.3
 
Affiliate Company
 
2
3.4
 
Annual Benefit
 
2
3.5
 
Annual Benefit Statement
 
2
3.6
 
Annual Compensation
 
2
3.7
 
Board
 
2
3.8
 
Break in Credited Service
 
2
3.9
 
Change of Control
 
 3
3.10
 
Code
 
4
3.11
 
Committee
 
 4
3.12
 
Coverage Date
 
 4
3.13
 
Credited Service
 
 4
3.14
 
Designated Foreign Corporation
 
 4
3.15
 
Distribution Date
 
 4
3.16
 
FSSP
 
 4
3.17
 
Interest
 
 4
3.18
 
Litton
 
 5
3.19
 
Litton Restoration Plan Benefit
 
 5
3.20
 
Part I Restricted Amount
 
 5
3.21
 
Part II Restricted Amount
 
 5
3.22
 
Plan
 
 5
3.23
 
Plan Administrator
 
 5
3.24
 
Plan Year
 
 5
3.25
 
Restricted Amount
 
 5
3.26
 
Retirement
 
 5
3.27
 
Spouse
 
 5
3.28
 
Termination of Employment
 
 5
3.29
 
Western Atlas
 
 5
3.30
 
Western Atlas Inc. Restoration Plan Benefit
 
 6
         
Section 4
 
Participation
 
 6
         
4.1
 
Participation
 
 6
         
Section 5
 
Retirement Dates
 
 6
         
5.1
 
Normal Retirement Date
 
  6
5.2
 
Early Retirement Date
 
 6
5.3
 
Disability Retirement Date
 
 6
         
Section 6
 
Amount of Retirement Income
 
 7
         
6.1
 
Normal Retirement Benefit
 
 7
6.2
 
Early Retirement Benefit
 
 8
6.3
 
Disability Retirement Benefit
 
 8
6.4
 
Vesting Schedule
 
 8
6.5
 
Initial and Subsequent Payment Dates
 
 9
         
Section 7
 
Death Benefits
 
 9
         
7.1
 
Pre-Retirement Spouse Benefit
 
 9
7.2
 
Death After Retirement
 
 9
         
Section 8
 
Termination of Employment
 
 9
         
8.1
 
Rights of Affected Employees
 
 9
8.2
 
Transfer of Employment
 
 9
         
Section 9
 
Forms of Retirement Income
 
 9
         
9.1
 
Joint and Survivor Income Annuity
 
 9
9.2
 
Straight Life Annuity
 
 9
9.3
 
Form of Benefit on Change of Control
 
 9
         
Section 10
 
Miscellaneous
 
 10
         
10.1
 
Receipt and Release for Payments
 
 10
10.2
 
Dispute as to Benefit Payments
 
 10
10.3
 
No Contract of Employment
 
 10
10.4
 
Commutation of Benefit
 
 10
10.5
 
Assignment
 
 10
10.6
 
Applicable Laws
 
 10
10.7
 
Terms
 
 10
10.8
 
Waiver
 
 11
10.9
 
Severability
 
 11
10.10
 
Unfunded Top Hat Plan
 
  11
         
Section 11
 
Amendment or Discontinuance, Assumption of Liabilities and Coordination of
Benefits
 
  11
         
11.1
 
Amendment of Plan
 
 11
11.2
 
Freezing Plan Benefits
 
 11
11.3
 
Termination of Plan
 
 12
11.4
 
Merger or Consolidation
 
 12
11.5
 
Assumption of Liabilities
 
 12
11.6
 
Coordination of Benefits
 
 12
       
 
Section 12
 
Plan Administrator
 
 12
       
 
12.1
 
Plan Administrator
 
 12

 

 

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Section 1 - General
 

 
1.1
Purpose - UNOVA, Inc. establishes this Plan effective as of the Distribution
Date. The purpose of the Plan is to provide for Annual Benefits to the Affected
Employees of the Participating Divisions of UNOVA, Inc., a Delaware corporation,
and any unit thereof, enumerated in Section 2 and hereinafter referred to
collectively as the "Company." An additional purpose of the Plan is to provide
for the satisfaction of any Western Atlas Inc. Restoration Plan Benefit and
Litton Restoration Plan Benefit previously earned by an employee under the
Litton Restoration Plan and the Western Atlas Inc. Restoration Plan, to the
extent the obligation for payment of such benefit has been transferred to and
assumed by UNOVA, Inc. The Plan is intended to provide benefits solely for a
select group of management or highly compensated employees within the meaning of
Sections 201(2), 301(a)(3) and 401(a)(I) of Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Payments under the Plan shall
be made either from general assets of the Company or from the assets of a trust
which may be established hereunder. It is intended that the Plan remain at all
times an unfunded plan for purposes of ERJSA and that the trust, if established,
shall constitute a grantor trust under Sections 671 through 679 of the Code.

 
1.2 Coverage
 

A.  
Unless otherwise provided, the provisions of the Plan shall apply to any
Affected Employee who incurs a Termination of Employment on or after the
Distribution Date.

 

B.  
Any subsequent amendment to this Plan shall apply only to an Affected Employee
who incurs a Termination of Employment on or after the effective date of said
amendment, unless said amendment provides otherwise.

 
Section 2 - Participating Divisions and Subsidiaries
 

 
2.1
Participating Divisions or Subsidiaries - The Participating Divisions and
Subsidiaries and their respective participation dates are as set forth in the
FSSP. When the name or status of a Participating, Division or Subsidiary is
changed, such change shall also be effective for Plan purposes.

 
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Section 3 - Definitions
 
 
As used in the Plan, the following terms shall have the meanings defined below:
 

 
3.1
Actuarial Equivalent - The definition of such term under the UNOVA, Inc.
Retirement Plan, as amended.

 

 
3.2
Affected Employee - An Affected Employee, for any particular Plan Year, is an
individual employed as a common law employee by the Company (except that the
Chief Executive Officer of the Company for such Plan Year shall, notwithstanding
any other provision of the Plan, be deemed to have a Part I Restricted Amount of
zero for such Plan Year) 8% of whose Annual Compensation for that particular
Plan Year exceeds the maximum amount of elective deferrals available to such
Affected Employee under a Code section 401(k) plan for such Plan Year and who
was a participant in the FSSP, as amended from time to time, for such Plan Year
and who contributed his or her legally permissible maximum amount to the FSSP
for such Plan Year.

 

 
3.3
Affiliate Company - Each company fifty percent (50%) or more of whose voting
stock is owned directly or indirectly by UNOVA, Inc., its successors or assigns,
and which company is not a Participating Division or Subsidiary of the Company
participating in the Plan.

 

 
3.4
Annual Benefit - The portion of the total annual retirement benefit that an
Affected Employee is entitled to with respect to a particular Plan Year,
determined in accordance with Section 6.1, Section 6.2, or Section 6.3,
whichever is applicable.

 

 
3.5
Annual Benefit Statement - The statement given to an Affected Employee for each
Plan Year such Affected Employee is entitled to an Annual Benefit under the
Plan. All such Annual Benefit Statements shall be in the form prescribed by the
Plan Administrator.
 

 

 
3.6
Annual Compensation - An Affected Employee's wages paid by the Company (limited,
however, to wages paid by the Company on or after the date the Participating
Division by which the Affected Employee is employed became a Participating
Division), as determined under section 3121 of the Code without regard to the
dollar limitation of section 3121(a)(1) of the Code, plus any amounts treated as
excluded from gross income by reason of Code sections 125 and 401(k), excluding
therefrom any amount so paid which represents (a) reimbursed expenses, (b) wages
not paid in cash, (c) cash received pursuant to the exercise of a stock option
or a stock appreciation right, or (d) certain other wage items as may be agreed
to from time to time between the Company and one or more Affected Employees;
provided, however, that for the Plan Year ending December 31, 1997, wages paid
by Western Atlas Inc. shall be taken into account for all purposes under the
Plan.

 
 

3.7
Board - The Board of Directors of UNOVA, Inc., a Delaware corporation.

 

3.8
Break in Credited Service - The definition of such term under the UNOVA, Inc.
Retirement Plan, as amended from time to time.

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   3.9
 Change of Control -
(a) An acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
[the "Exchange Act"] (a "Person") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 30 percent or more of either
(1) the then outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (2) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); excluding, however, the
following acquisitions of Outstanding Company Common Stock and Outstanding
Company Voting Securities: (A) any acquisition directly from the Company other
than an acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself acquired directly from the Company;
(B) any acquisition by the Company; (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or (D) any acquisition by any Person
pursuant to a transaction which complies with clauses (1), (2), and (3) of
paragraph (c) below of this Section 3.9; or
 
(b) Individuals who, as of the effective date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual who becomes a member of the Board
subsequent to the effective 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 shall be
considered as though such individual were a member of the Incumbent Board, but
provided further that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board shall not be so considered as a member
of the Incumbent Board; or
 
(c) The consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company
("Business Combination"); excluding, however, such Business Combination pursuant
to which (1) all or substantially all of the individuals and entities who are
the beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination, will beneficially own, directly or indirectly, more than 60 percent
of, respectively, the 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 corporation resulting from
such Business Combination (including, without limitation, a corporation 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 as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (2) no Person (other than any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any entity controlled by the Company or such corporation resulting from such
Business Combination) will beneficially own, directly or indirectly, 30 percent
or more of, respectively, the outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the outstanding voting securities of such corporation entitled to vote
generally in the election of directors except to the extent that such ownership
existed with respect to the Company prior to the Business Combination; and (3)
at least a majority of the members of the board of directors of the corporation
resulting from such Business Combination will have been members of the Incumbent
Board at the time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
 
(d) Consummation of a complete liquidation or dissolution of the Company.

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3.10
Code - The Internal Revenue Code of 1986, as amended.

 

 
3.11
Committee - The Compensation Committee of the Board, unless at the time no
Compensation Committee has been constituted, in which case the Committee shall
mean the Board.

 

 
3.12
Coverage Date - The Distribution Date, or the date an employee of the Company
first becomes an Affected Employee, if later.

 

 
3.13
Credited Service - The definition of such term under the UNOVA, Inc. Retirement
Plan, as amended.

 

 
3.14
Designated Foreign Corporation - An entity: (a) created under the laws of a
country other than the United States; (b) of which a majority of the voting
shares are owned directly or indirectly by UNOVA, Inc., and (c) with respect to
which the Company has entered into an agreement under section 3121(1) of the
Code, and has satisfied the provisions of section 406 of the Code.

 

 
3.15
Distribution Date - The date determined by the Board of Directors of Western
Atlas on which the shares of UNOVA, Inc. are distributed by Western Atlas to the
holders of Western Atlas common stock.

 

 
3.16
FSSP - The UNOVA, Inc. Financial Security and Savings Program, as amended, or
the Western Atlas Inc. Financial Security and Savings Program, prior to The
Distribution Date.

 

 
3.17
Interest - The amount of interest (based on a stated rate of interest,
compounded annually, as determined by the Board or its delegate) with respect to
the Parts I and II Restricted Amounts of all Affected Employees for a particular
Plan Year with such rate of interest to be fixed for both of such Restricted
Amounts and to commence on the first day of the Plan Year succeeding such
particular Plan Year and to continue for all Plan Years thereafter; but such
interest shall cease with respect to the Part I and Part II Restricted Amounts
of any particular Affected Employee upon the later of: (i) the last day of the
month such Affected Employee is projected to attain his or her Normal Retirement
Date for purposes of determining the amount of such Affected Employee's annual
retirement benefit pursuant to Section 6.1; or (ii) if such Affected Employee
attains Retirement after his or her Normal Retirement Date, the last day of the
month such Affected Employee attains Retirement.

 
 
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3.18
Litton - Litton Industries, Inc., a Delaware corporation.

 

 
3.19
Litton Restoration Plan Benefit - The annual benefit earned by an Affected
Employee while a participant in the Litton Industries, Inc. Restoration Plan,
the obligation for payment of which was assumed by Western Atlas Inc. and, if it
has been assumed by UNOVA, Inc., then for purposes of this Plan it shall be
treated as a Western Atlas Restoration Plan Benefit.

 

 
3.20
Part I Restricted Amount - As applied for any particular Plan Year to a
particular Affected Employee, the Part I Restricted Amount, if any, shall be
that portion of such Affected Employee's Restricted Amount for such Plan Year
which is equal to the excess, if any, of 4% of such Affected Employee's Annual
Compensation for such Plan Year over the maximum amount of elective deferrals
available to such Affected Employee under Part I of the FSSP for such Plan Year.

 

 
3.21
Part II Restricted Amount - As applied for any particular Plan Year to a
particular Affected Employee, the Part II Restricted Amount of such Affected
Employee shall be equal to 2% of such Affected Employee's Annual Compensation
for such Plan Year reduced by one-half (1/2) of the actual amount of elective
deferrals made by such Affected Employee to Part II of the FSSP for such Plan
Year.

 

 
3.22
Plan - UNOVA, Inc. Restoration Plan.

 

 
3.23
Plan Administrator - The person appointed to administer the Plan pursuant to
Section 12.

 

 
3.24
Plan Year - The Distribution Date to December 31, 1997 and each calendar year
thereafter.

 

 
3.25
Restricted Amount - As applied for any particular Plan Year to a particular
Affected Employee, the Restricted Amount of such Affected Employee shall be the
amount, if any, by which 8% of such Affected Employee's Annual Compensation for
the particular Plan Year under consideration exceeds the maximum amount of
elective deferrals available to such Affected Employee under a Code section
401(k) plan for such Plan Year.

 

 
3.26
Retirement - An Affected Employee who incurs a Termination of Employment attains
Retirement under the Plan when he or she is eligible to and elects to receive
his or her annual retirement benefit under the Plan except that any Affected
Employee who continues to be employed by the Company after his or her Normal
Retirement Date shall attain Retirement immediately upon his or her Termination
of Employment.

 

 
3.27
Spouse - A person who has been married to the Affected Employee throughout the
one-year period ending on the earlier of the date the Affected Employee's annual
retirement benefit commences under the Plan, or the date of the Affected
Employee's death.

 

 
3.28
Termination of Employment - When an Affected Employee is discharged or quits
from the Company; provided, however, that such term shall not include an
authorized leave of absence from the Company.

 

 
3.29
Western Atlas - Western Atlas Inc., a Delaware corporation.

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3.30
Western Atlas Inc. Restoration Plan Benefit - The benefit earned by an employee
of the Company while a participant in the Western Atlas Inc. Restoration Plan
prior to the Distribution Date, the obligation for payment of which has been
assumed by UNOVA, Inc. Provided, however, that such benefit shall be taken into
account only if the individual who earned the benefit becomes an employee of the
Company on or before 90 days following the Distribution Date and had not
retired, become disabled or terminated employment pursuant to the Western Atlas
Restoration Plan prior to the Distribution Date.

 
Section 4 - Participation
 
4.1
Participation - Effective as of the Distribution Date, each Affected Employee of
the Company shall be a participant in the Plan.

 
Section 5 - Retirement Dates
 

 
5.1
 
Normal Retirement Date - An Affected Employee's sixty-fifth (65th) birthday or
the completion of five (5) years of Credited Service, if later.

 

 
5.2
 
Early Retirement Date - The date that an eligible Affected Employee elects to
retire and receive an early retirement benefit prior to his or her Normal
Retirement Date. Except as otherwise provided in the following sentence with
respect to the surviving Spouse of a deceased Affected Employee, an Affected
Employee may not elect to receive an early retirement benefit unless he or she
is age sixty-two (62) or older and is one hundred percent (100%) vested pursuant
to Section 6.4. In the case of determining whether a Pre-Retirement Spouse
benefit is payable in accordance with Section 7.1 of the Plan, the Early
Retirement Date of the deceased Affected Employee shall be the date on which
such Affected Employee would have attained age fifty-five (55) or older had he
or she lived.

 

 
5.3
 
Disability Retirement Date - The date that an eligible Affected Employee elects
to retire and receive a disability retirement benefit prior to his or her Normal
Retirement Date. An Affected Employee may not elect to receive a disability
retirement benefit unless he or she is an Affected Employee who becomes totally
and permanently disabled while employed by the Company and who has attained age
fifty-five (55). An Affected Employee shall be deemed totally and permanently
disabled for the purpose of the Plan only when he or she will be in the opinion
of a qualified physician permanently, continuously and wholly prevented by
bodily injuries or disease for life from engaging in any occupation or
employment for wage or profit, as long as he or she is also entitled to
disability benefits under the Federal Social Security Act or any comparable
foreign law that is applicable to such Affected Employee.

 
 

6

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Section 6 - Amount of Retirement Income
 

6.1
Normal Retirement Benefit

 

(a)
Any employee of the Company who was an Affected Employee with respect to one or
more Plan Years and who attains Retirement on or after his or her Normal
Retirement Date and/or who is entitled to a Western Atlas Restoration Plan
Benefit, shall be entitled to receive an annual retirement benefit, payable by
the Company, which will be equal to ([(i) plus (ii)] multiplied by (iii)),
wherein: (i) is equal to the aggregate amount of such Affected Employee's Annual
Benefit amounts with respect to all Plan Years during which such Affected
Employee was an Affected Employee with each such amount being computed for each
such Plan Year in accordance with paragraphs (b) below; wherein (ii) is equal to
the aggregate Western Atlas Restoration Plan Benefit, if any, of such employee;
and wherein (iii) is equal to the vested percentage of such Affected Employee,
determined in accordance with Section 6.4, in his or her annual retirement
benefit.

 

(b)(1)
For any particular Plan Year, an Affected Employee's Annual Benefit attributable
to his or her Part I Restricted Amount, if any, for such Plan Year shall be
equal to eighty-five percent (85%) of the Part I Restricted Amount of such
Affected Employee for such Plan Year reduced by ([the sum of (i) plus (ii)]
multiplied by (iii)), wherein: (i) is equal to the Part I Restricted Amount of
such Affected Employee for such Plan Year; wherein (ii) is equal to the amount
of Interest with respect to (1) above; and wherein (iii) is equal to either: (a)
the Actuarial Equivalent factor for such Plan Year, applicable under the UNOVA,
Inc. Retirement Plan, as amended, with respect to such Affected Employee's
projected age at his or her Normal Retirement Date, or (b) if such Affected
Employee attains Retirement after his or her Normal Retirement Date, the
Actuarial Equivalent factor for such Plan Year, under the UNOVA, Inc. Retirement
Plan, as amended, with respect to such Affected Employee's age when he or she
attains Retirement.

 

(2)
For any particular Plan Year, an Affected Employee's Annual Benefit attributable
to his or her Part II Restricted Amount shall be equal to ([the sum of (i) plus
(ii)] multiplied by (iii)), wherein: (i) is equal to the Part II Restricted
Amount of such Affected Employee for such Plan Year; wherein (ii) is equal to
the amount of Interest with respect to (i) above; and wherein (iii) is equal to
either: (a) the Actuarial Equivalent factor for such Plan Year, applicable under
the UNOVA, Inc. Retirement Plan, as amended, with respect to such Affected
Employee's projected age at his or her Normal Retirement Date, or (b) if such
Affected Employee attains Retirement after his or her Normal Retirement Date,
the Actuarial Equivalent factor for such Plan Year, under the UNOVA, Inc.
Retirement Plan, as amended, with respect to such Affected Employee's age when
he or she attains Retirement.

 

7

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(3)
With respect to the Plan Year ending December 31, 1997, the Annual Benefit of an
Affected Employee who was a participant in the Western Atlas Restoration Plan
shall not exceed the benefit to which the Affected Employee would have been
entitled under the Western Atlas Restoration Plan for such year had such
Affected Employee been a participant in such plan until the earlier of his
Retirement, death, Termination of Employment or December 31, 1997, offset by the
amount actually payable to such Affected Employee under the Western Atlas Inc.
Restoration Plan for such Plan Year.

 
 

6.2
Early Retirement Benefit - At his or her Early Retirement Date an Affected
Employee who attains Retirement, or his or her surviving spouse if a benefit is
payable pursuant to Section 7.1 of the Plan, shall be entitled to an annual
early retirement benefit which will be equal to the annual retirement benefit
amount calculated pursuant to Section 6.1(a) above for such Affected Employee
reduced by one-half percent (1/2%) for each full month by which his or her Early
Retirement Date precedes his or her Normal Retirement Date.

 
 

6.3
Disability Retirement Benefit - At his or her Disability Retirement Date an
Affected Employee who attains Retirement, shall be entitled to an annual
disability retirement benefit which will be equal to the normal retirement
benefit amount calculated pursuant to Section 6.1(a) above for such Affected
Employee reduced by one-half percent (1/2%) for each full month by which his or
her Disability Retirement Date precedes his or her Normal Retirement Date.

 

6.4
Vesting Schedule - An Affected Employee shall be vested in his or her annual
retirement benefit under the Plan according to the Company-purchased retirement
benefit vesting schedule under the UNOVA, Inc. Retirement Plan, as amended from
time to time, except that: (i) for purposes of this Plan only, on the Disability
Retirement Date of any Affected Employee, such Affected Employee shall become
one hundred percent (100%) vested in his or her annual disability retirement
benefit, notwithstanding his actual number of years of Credited Service; (ii)
for purposes of this Plan only, if an Affected Employee should die prior to
incurring a Termination of Employment, such Affected Employee's Spouse, if any,
shall become one hundred percent (100%) vested in his or her annual retirement
benefit, notwithstanding, such Affected Employee’s actual number of years of
Credited Service at the time of his or her death; (iii) for purposes of this
Plan only, upon Change of Control, unless the Committee decides otherwise prior
to said Change of Control, such Affected Employee shall become one hundred
percent (100%) vested in his or her annual retirement benefit.

8

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6.5
Initial and Subsequent Payment Dates - An Affected Employee's annual retirement
benefit shall be payable in twelve (12) equal monthly installments commencing
effective the first of the month following the month the Affected Employee
attains Retirement and the first payment shall be made no later than sixty (60)
days following the end of the Plan Year in which the Affected Employee attains
Retirement, except that no payment shall be made until the date that an Affected
Employee files with the Company a request for payment of an annual retirement
benefit on a form prescribed by the Plan Administrator.

 
Section 7 - Death Benefits
 

 
7.1
Pre-Retirement Spouse Benefit - If a married Affected Employee dies after
becoming either wholly or partially vested under this Plan and before commencing
to receive an annual retirement benefit, his or her surviving Spouse shall be
entitled to receive an annual benefit, payable by the Company, commencing on the
first day of the month following the later of the date of death of the Affected
Employee or the date the Affected Employee would have attained his or her Early
Retirement Date, and terminating with the last monthly payment preceding the
surviving Spouse's death. In the case of an Affected Employee who dies before
commencing to receive an annual retirement benefit, but after he or she has
attained his or her Early Retirement Date, the amount of annual benefit to which
such Affected Employee's surviving Spouse shall be entitled shall be equal to
the amount which would have been payable to the surviving Spouse had the
Affected Employee commenced receiving an annual retirement benefit pursuant to
Section 6.1 or Section 6.2, whichever is applicable, on the day before his or
her death, in the form of a joint and survivor income annuity computed in
accordance with Section 9.1. In the case of an Affected Employee who dies before
commencing to receive an annual retirement benefit and before he or she has
attained his or her Early Retirement Date, the amount of such annual benefit to
which such Affected Employee's surviving Spouse shall be entitled shall be equal
to the amount which would have been payable had the Affected Employee incurred a
Termination of Employment on the date of his or her death, (or the date of his
or her actual Termination of Employment, if earlier) survived to his or her
Normal Retirement Date under Section 5.1 or to his or her Early Retirement Date
under Section 5.2, if applicable, and commenced receiving his or her annual
retirement benefit in the form of a joint and survivor income annuity computed
in accordance with Section 9.1 on his or her Normal Retirement Date or his or
her Early Retirement Date, whichever is applicable, and died immediately
thereafter.

 

 
7.2
Death after Retirement - Upon the death of an Affected Employee after he or she
has attained Retirement, his or her surviving Spouse shall be entitled to an
annual benefit, payable by the Company, and determined in accordance with
Section 9.1.

 
Section 8 - Termination of Employment
 

 
8.1
Rights of Affected Employees - In the event that an Affected Employee incurs a
Termination of Employment, any part of his or her accrued benefit which is not
then vested in accordance with Section 6.4 shall be forfeited. Such amount
forfeited shall not be restored unless such Affected Employee is reemployed by
the Company and has not incurred a Break in Credited Service prior to such
reemployment by the Company.

 

 
8.2
Transfer of Employment - If an Affected Employee transfers from a category of
employment covered by the Plan to a category of employment not covered by the
Plan but who continues to be employed either with UNOVA, Inc., with any
Affiliate Company or with a Designated Foreign Corporation, said Affected
Employee shall not be deemed to have incurred a Termination of Employment.

 
Section 9 - Forms of Retirement Income
 

 
9.1
Joint and Survivor Income Annuity - The annual retirement benefit of an Affected
Employee who is married at the time he or she attains Retirement shall be
payable by the Company, to the Affected Employee in twelve (12) equal monthly
payments commencing with the first calendar month after the Affected Employee
attains Retirement and shall be payable for his or her life, and shall continue
to be payable monthly to his or her surviving Spouse, following the death of the
Affected Employee, for the life of the surviving Spouse. Payments will cease
with the last payment made prior to the date of the death of the surviving
Spouse. Such annual retirement benefit shall be the Actuarial Equivalent of a
straight life annuity computed in accordance with Section 6.1, Section 6.2, or
Section 6.3, whichever is applicable, payable for the life of the Affected
Employee. Any such survivor benefit shall be equal to one hundred percent (100%)
of the annual retirement benefit payable during the joint lives of the Affected
Employee and his or her surviving Spouse.

 

 
9.2
Straight Life Annuity - If an Affected Employee does not have a Spouse at the
time he or she attains Retirement, his or her annual retirement benefit shall be
payable by the Company, in the form of a straight life annuity for the life of
the Affected Employee and shall be payable in twelve (12) equal monthly payments
commencing with the first calendar month after the Affected Employee attains
Retirement. Payments will cease with the last payment made prior to the date of
death of the Affected Employee. The amount of the annual retirement benefit will
be computed in accordance with Section 6.1, Section 6.2, or Section 6.3,
whichever is applicable.

 

9.3
Form of Benefit on Change of Control - Notwithstanding the other provisions of
this Section, upon a Change of Control, benefits payable to an Affected Employee
who remains employed by the Company, shall be paid in a lump sum payment equal
to the Actuarial Equivalent at the age of the Affected Employee as of the date
of Change of Control of a single life annuity payable at the later of age 65 or,
if the Affected Employee had remained in continuous employment with the Company
after attaining age 65, the age of the Affected Employee at the date of Change
of Control or at the date Affected Employee's employment terminated, whichever
is earlier, unless the Committee decides otherwise prior to said Change of
Control.

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Section 10 - Miscellaneous
 

 
10.1
Receipt and Release for Payments - Any payment to any Affected Employee, his or
her surviving Spouse or to his or her legal representative or to any committee
appointed for such Affected Employee or surviving Spouse in accordance with the
provisions of this Plan shall, to the extent thereof, be in full satisfaction of
such benefit claim under the Plan. As a condition precedent to the payment, such
Affected Employee, surviving Spouse, legal representative or committee may be
required to execute a receipt and release therefor in such form as shall be
determined by the Plan Administrator.

 

 
10.2
Dispute as to Benefit Payments - Upon written notice to the Plan Administrator
that there is a dispute as to the proper recipient of any benefits not yet
distributed under the Plan, the Plan Administrator may in his or her sole
discretion enter into any arrangement necessary to prevent the benefits from
being paid to the wrong party until the dispute shall have been determined by a
court of competent jurisdiction or settled by the claimants concerned.

 

 
10.3
No Contract of Employment - Nothing herein contained shall be construed as
giving any Affected Employee the right to be retained in the service of the
Company, nor upon dismissal or upon his or her voluntary Termination of
Employment, to have any right or interest in this Plan other than as provided
herein.

 

 
10.4
Commutation of Benefit - If the amount of the annual retirement benefit payable
hereunder to any Affected Employee or to his or her surviving Spouse is less
than one hundred dollars ($100.00) per month, payment of the Actuarial
Equivalent of such payments may be made in a lump sum in full settlement of all
sums payable hereunder.

 

 
10.5
Assignment - The benefits payable under the Plan may not be assigned or
alienated.

 

 
10.6
Applicable Law - The Plan shall be governed by the laws of Delaware.

 

 
10.7
Terms - Except as required otherwise by the context, capitalized terms that are
used in the Plan shall have the meaning assigned to them in Article II or
elsewhere in the Plan. Feminine or neuter pronouns shall be substituted for
those of the masculine form and the plural shall be substituted for the
singular, in any place or places herein where the context may require such
substitution or substitutions. The title and headings of the Sections of this
Plan are for convenience only, and are not intended to be a part of or to affect
the meaning or interpretation of the Plan.

 

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10.8
Waiver - Any waiver of or failure to enforce any provision of this Plan inany
instance shall not be deemed a waiver of such provision as to any other or
subsequent instance.

 

10.9
Severability - In the event that any provision of this Plan shall be declared
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining provisions of this Plan but shall be fully severable, and
this Plan shall be construed and enforced as if said illegal or invalid
provision had never been inserted herein.

 

                  10.10
Unfunded Top Hat Plan - It is the Company's intention that this Plan be a Top
Hat Plan, defined as an unfunded plan maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees, as provided in Sections 201(2), 301(a)(3), and 401(a)(1)
of the Employee Retirement Income Security Act of 1974, as amended from time to
time. The Company may establish and fund one or more trusts for the purpose of
paying some or all of the benefits promised to Affected Employees under the
Plan; provided, however, that (i) any such trust(s) shall at all times be
subject to the claims of the Company's general creditors in the event of the
insolvency or bankruptcy of the Company, and (ii) notwithstanding the creation
or funding of any such trust(s), the Company shall remain primarily liable for
any obligation hereunder. Notwithstanding the establishment of any such
trust(s), the Affected Employees shall have no preferred claim on, or any
beneficial ownership interest in, any assets of any such trust or of the
Company.

 
Section 11 - Amendment or Discontinuance, Assumption of Liabilities and
Coordination of Benefits
 

                    11.1
Amendment of Plan - Unless otherwise stated in a particular amendment, UNOVA,
Inc., or its corporate successor, is designated the agent for the Company to
alter, amend or change the Plan on behalf of all the Participating Divisions
enumerated in Section 2; and each Participating Division agrees, so long as it
shall be a Participating Division under the Plan, to be governed by the
resolutions of the agent acting on behalf of the Participating Divisions. The
Company may amend the Plan in its sole discretion in any manner or at any time.
No amendment to the Plan shall retroactively adversely affect benefits to which
the Affected Employees are entitled.

 

                    11.2
Freezing Plan Benefits - The Company intends and expects to continue the Plan
indefinitely, but necessarily reserves the right at any time to discontinue, in
whole or part, future benefits under the Plan. No Affected Employee shall have
any rights to benefits beyond the freeze date. Solely for purposes of computing
the Affected Employee's vesting under Section 6.4, Credited Service, if any,
with the Company after the freeze date shall be taken into account.

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                11.3
Termination of Plan - The Company intends and expects to continue the Plan
indefinitely, but necessarily reserves the right at any time or times to
terminate the Plan (including the partial termination of the Plan). If the Plan
is so terminated and is not continued by a successor employer or merged into
another plan of the Company or a successor employer, each Affected Employee who
is employed by the Company at such time shall be vested one hundred percent
(100%) in his or her annual retirement benefit, notwithstanding the actual
number of his or her years of Credited Service.

 

                11.4
Merger or Consolidation - In the event of any merger or consolidation of the
Plan with any other plan of deferred compensation maintained or to be
established for the benefit of all or some of the Affected Employees of this
Plan, each Affected Employee shall (if either this Plan or the other Plan then
terminated) receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he or she would have been
entitled to receive immediately before the merger, consolidation or transfer (if
the Plan had then terminated).

 

                11.5
Assumption of Liabilities - If as a result of the spin-off of the Company from
Western Atlas, the parties agree that the Company will assume the benefit
obligations under the Western Atlas Inc. Restoration Plan with respect to
certain individuals who are on pay status under the Western Atlas Inc.
Restoration Plan, such benefit obligations shall be provided hereunder as if
such benefit accrued under the Plan, as amended from time to time.

 

                11.6
Coordination of Benefits - In the event an Affected Employee is or was also a
participant in a similar restoration plan for highly compensated employees
within the meaning of Section 201(2), 301(a) and 401(a) of the Title I of ERISA
and maintained by the Company or Western Atlas (a “Subsidiary Plan”), the Plan
Administrator shall have the power and authority to reduce or modify the
benefits payable under this Plan in order to integrate the benefits with the
benefits payable under the Subsidiary Plan.

 
Section 12 - Plan Administration
 

12.1
Plan Administrator

 

A.  
General - A Plan Administrator appointed by and serving at the pleasure of the
Board of Directors of the Company shall be responsible for the supervision and
control of the operation and administration of the Plan. The Plan Administrator
shall not have the right to alter or change any terms of the Plan, such right
being retained solely by the Board of Directors of the Company and any Committee
thereof to which the Board of Directors may have delegated such right.

 

B.  
Specific Powers and Duties - The Plan Administrator shall have all powers and
duties, express and implied, necessary to carry out the supervision and control
of the Plan, as provided above, which shall include, but not by way of
limitation, the following:

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(1)  
To interpret the Plan and to decide any and all matters arising hereunder;
including the right to remedy possible ambiguities, inconsistencies or
omissions; provided, however, that all such interpretations and decisions shall
be applied in a uniform manner to all Affected Employees similarly situated;

 

(2)  
To compute the amount of retirement benefit which shall be payable to any
Affected Employee or Spouse in accordance with the provisions of the Plan;

 

                                     (3)
To authorize payments under the Plan; and

 

(4)  
To establish a claims procedure to provide each Affected Employee or Spouse a
full and fair review of any denial, in whole or part, of a claim for benefits.

 
 
IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly
authorized officers as of the 18th day of August, 1997.
 
UNOVA, INC.

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WITNESS: /s/ Brenda Brock
 
By:
 
By:
/s/ Michael E. Keane
     
WITNESS: /s/ Brenda Brock
 
 
 
 
/s/ Charles A. Cusumano