Exhibit 10.7

 

UNOVA, Inc.

2004 Long-Term Performance Share Program

 

Agreement for the Performance Period [        ] to [        ]

 

This Performance Share Unit Agreement (the “Agreement”) is made as of the       
day of               ,         , between UNOVA, Inc., a Delaware corporation
(the “Company”) and                              (the “Participant”).

 

WHEREAS, the UNOVA, Inc. 2004 Omnibus Incentive Compensation Plan (the “Plan”)
was adopted by the Board of Directors of the Company on March 11, 2004, and was
approved by the shareholders of the Company on May 6, 2004; and

 

WHEREAS, the Committee has adopted the 2004 Long-Term Performance Share Program
(the “Program”) as a sub-plan of the Plan and authorized the Award represented
by this Agreement;

 

NOW, THEREFORE, in consideration of the premises, the mutual covenants
hereinafter set forth, and other good and valuable consideration, the Company
and the Participant hereby agree as follows:

 

Article 1.  Award

 

The Participant is hereby awarded, as a matter of separate inducement and
agreement, and not in lieu of salary or other compensation for services,
          Performance Share Units (the “Target Award”), on the terms and
conditions hereinafter set forth. The number of Performance Share Units (“PSUs”)
that the Participant may earn under this Agreement shall range from 0% to 200%
of the Target Award (the “Awarded Shares”), as determined by the achievement of
the performance measures set forth in Article 3 of this Agreement. The Awarded
Shares may be paid in either shares of the common stock, par value $.01 per
share, of the Company (the “Common Stock”) or cash, as determined by the
Committee, as set forth in Article 6 of this Agreement. The Participant shall
have no obligation to pay the Company additional consideration for the Awarded
Shares.

 

The Plan and the Program, copies of which have been made available to the
Participant, are incorporated herein by reference and made part of this
Agreement as if fully set forth herein. Capitalized terms used in this Agreement
that are not defined herein shall have the meanings assigned to such terms in
the Plan and the Program. This Agreement is subject to, and the Company and the
Participant agree to be bound by, all of the terms and conditions of the Plan
and the Program as the same exist at the time this Agreement became effective.
The Plan and the Program shall control in the event there is any express
conflict between the terms hereof and either the Plan or the Program and with
respect to such matters as are not expressly covered in this Agreement. The
Company hereby reserves the right to alter, amend, modify, restate, suspend or
terminate the Plan, the Program and this Agreement in accordance with Section 12
of the Plan, but no such subsequent amendment, modification, restatement, or
termination of the Plan, the Program or this Agreement shall adversely affect in
any material way the Participant’s rights under this Agreement without the
Participant’s written consent.  This Agreement shall be subject, without further
action by the Company or the Participant, to such amendment, modification, or
restatement.

 

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Article 2.  Performance Period

 

For all purposes of this Agreement, “Performance Period” means January 1,
           through December 31,          .

 

ARTICLE 3.  ACHIEVEMENT OF PERFORMANCE MEASURES

 

The number of Awarded Shares to be earned under this Agreement shall be based
upon the achievement of the following Performance Measures set by the Committee:
(a) [Peformance Measure 1] and (b) [Performance Measure 2], in accordance with
the following matrix:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The number of Awarded Shares earned for achievement between the levels shown in
the matrix will be calculated using interpolation.

 

Article 4. Termination Provisions

 

Except as provided below, a Participant shall be eligible for payment of Awarded
Shares, as determined in Section 3, only if the Participant’s employment with
the Company continues through the end of the Performance Period.

 

In the event of a Participant’s Disability or Retirement at age 65 or later
during the Performance Period, a pro rata payment will be made for the number of
full months worked during the Performance Period, based on achievement of the
Performance Measures over the entire Performance Period.  In the case of death,
payment shall be calculated and paid as provided in the Program.

 

In the event of a Change of Control (as defined in the Plan), all outstanding
Awards will automatically vest and be paid out in cash at the Target Award level
or the actual performance level as of the Change of Control, whichever is
higher.

 

ARTICLE 5. RIGHTS AS A SHAREHOLDER

 

During the Performance Period, the Participant shall have no rights of a
shareholder with respect to the PSUs or the Awarded Shares. Notwithstanding the
foregoing, the Participant shall be entitled to receive any dividend equivalents
declared by the Board, as provided in the Program.

 

ARTICLE 6. FORM AND TIMING OF PAYMENT

 

Payment of Awarded Shares shall be made within ninety (90) calendar days
following the close of the Performance Period, subject to the following
provisions.

 

For Participants who are corporate officers and have met their minimum ownership
levels under the Guidelines for Corporate Officers Trading in UNOVA, Inc.
Securities (the “Guidelines”), and for Participants who are not subject to the
Guidelines, the Awarded Shares

 

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shall be paid in cash based on the average of the high and low daily sale prices
of the Common Stock for the last 30 trading days of the Performance Period.

 

For Participants who are corporate officers and have not met their minimum
ownership levels under the Guidelines, the Awarded Shares shall be paid in
Common Stock, in cash, or any combination of Common Stock and cash, as
determined by the Committee in its sole discretion.

 

ARTICLE 7. NONTRANSFERABILITY

 

PSUs may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
 The Participant’s rights under this Agreement shall be exercisable during the
Participant’s lifetime only by the Participant or the Participant’s legal
representative.

 

ARTICLE 8. ADMINISTRATION

 

It is expressly understood that the Committee is authorized to administer,
construe, and make all determinations necessary or appropriate to the
administration of the Plan, the Program and this Agreement, all of which shall
be binding upon the Participant.

 

Article 9.  Withholding Taxes

 

No later than the date as of which an amount first becomes includable in the
gross income of the Participant for federal income tax purposes with respect to
any Awarded Shares, the Participant shall pay to the Company, or make
arrangements satisfactory to the Company regarding the payment of, any federal,
state, local, or foreign taxes of any kind required by law to be withheld by the
Company with respect to such amount. Unless otherwise determined by the
Committee, withholding obligations (up to the minimum statutory amount required
to be withheld by the Company) may be settled with shares of Common Stock,
including the Awarded Shares that give rise to the withholding requirement or
shares of Common Stock already owned by the Participant for a period of at least
six months. The obligations of the Company under the Plan shall be conditional
on such payment or arrangements, and the Company, and its Subsidiaries and its
Affiliates shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to the Participant. Participant,
therefore, hereby unconditionally and irrevocably elects, notwithstanding
anything to the contrary in this Article 9 or elsewhere in this Agreement, to
satisfy any and all federal, state, local, and foreign taxes of any kind that
may be withheld by the Company in connection with Participant’s Awarded Shares
(the “Withholding Taxes”) by electing one of the following options; provided
that in all cases, the Company shall have the right to receive not less than the
minimum amount of the Withholding Taxes that the Company is required by law to
withhold (the “Mandatory Withholding Taxes”); and further provided that an
amount equal to the Mandatory Withholding Taxes in respect of any cash payment
to Participant shall be withheld from any such cash payment:

 

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OPTION 1:

 

o                        Authorizing and directing the Company to deduct from
the total number of shares of Common Stock issued and deliverable to Participant
pursuant to this Agreement the number of shares having a value equal to the
Mandatory Withholding Taxes.

 

OPTION 2:

 

o                        Tendering to the Company the number of unrestricted
shares of Common Stock owned by the Participant for a period of at least six
months prior to the date on which Withholding Taxes are due and having a value
equal to the Mandatory Withholding Taxes.

 

OPTION 3:

 

o                        Paying to the Company in cash an amount up to the
Withholding Taxes but not less than the Mandatory Withholding Taxes.

 

In the event that none of the payment options set forth above is specified, the
Participant’s election shall be deemed to be Option 1, and the Company shall
proceed accordingly.

 

ARTICLE 10. MISCELLANEOUS

 

A.        Participant understands and acknowledges that Participant is one of a
limited number of employees of the Company and its Subsidiaries and Affiliates
who have been selected to receive grants of PSUs and that Participant’s Award is
considered Company confidential information. Participant hereby covenants and
agrees not to disclose the Award of PSUs pursuant to this Agreement to any other
person except (i) Participant’s immediate family and legal or financial advisors
who agree to maintain the confidentiality of this Agreement, (ii) as required in
connection with the administration of this Agreement and the Plan as it relates
to this Award or under applicable law, and (iii) to the extent the terms of this
Award have been publicly disclosed.

 

B.        The grant of PSUs to the Participant in any year shall give the
Participant neither any right to similar grants in future years nor any right to
be retained in the employ of the Company or its Subsidiaries or Affiliates, such
employment being terminable to the same extent as if the Program and this
Agreement were not in effect. The right and power of the Company and its
Subsidiaries and Affiliates to dismiss or discharge the Participant is
specifically and unqualifiedly unimpaired by this Agreement.

 

C.        Each notice relating to this Agreement shall be in writing and
delivered in person or by mail to the Company at its office, 6001 36th Avenue
West, Everett, WA 98203-1264, to the attention of the Company’s Secretary or at
such other address as the Company may specify in writing to the Participant by a
notice delivered in accordance with this paragraph. All notices to the
Participant shall be delivered to the Participant at the Participant’s address
specified below or at such other address as the Participant may specify in
writing to the Secretary of the Company by a notice delivered in accordance with
this paragraph.

 

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D.        This Agreement, including the provisions of the Plan and the Program
incorporated by reference herein, comprises the whole Agreement between the
parties hereto with respect to the subject matter hereof, and shall be governed
by and construed in accordance with the laws of the State of Delaware, without
reference to principles of conflicts of law.  This Agreement shall become
effective when it has been executed or accepted electronically by the Company
and the Participant.

 

E.         This Agreement shall inure to the benefit of and be binding upon each
successor of the Company and, to the extent specifically provided herein and in
the Plan and the Program, shall inure to the benefit of and shall be binding
upon the Participant’s heirs, legal representatives, and successors.

 

F.         If any provision of this Agreement shall be invalid or unenforceable,
such invalidity or unenforceability shall not affect the validity and
enforceability of the remaining provisions of this Agreement.

 

G.        This Agreement may be executed in separate counterparts, each of which
when so executed and delivered will be an original, but all of which together
will constitute one and the same instrument. In pleading or proving this
Agreement, it will not be necessary to produce or account for more than one such
counterpart.

 

IN WITNESS WHEREOF, this Agreement is executed by the Participant and by the
Company through its duly authorized officer as of the day and year first above
written.

 

 

UNOVA, INC.

 

 

 

 

 

By:

 

 

[Name]

 

[Title]

 

 

 

PARTICIPANT:

 

(One of the boxes under Article 9 must be
checked)

 

 

 

 

 

Signature

 

 

 

Address

 

 

 

Social Security Number

 

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