Exhibit 10.3


 


UNOVA, Inc.


6001
36th Avenue West


Everett, WA 98203-1264


 


UNOVA, INC.


2001 STOCK INCENTIVE PLAN


INCENTIVE STOCK OPTION AGREEMENT


(FOR OPTIONEES IN THE U.S.)


 


	
  [Name and
  address]

  	
  Option Number:

  	
   

  
	
   

  	
  Option Plan:

  	
  2001

  
	
   

  	
  Grant Date:

  	
   

  
	
   

  	
  Option Shares:

  	
   

  
	
   

  	
  Option Price:

  	
   

  



 


1.             THIS
AGREEMENT sets forth the terms of Stock Options granted to you
subject to the UNOVA, Inc. 2001 Stock Incentive Plan (the “Plan”).  As of the
Grant Date indicated above, subject to your acceptance of the terms and
conditions hereof, UNOVA, Inc. (the “Company”) has
granted to you Stock Options to purchase [#Shares] shares of the Common Stock
of the Company (“Stock”) at the purchase price of $xx.xxx
per share.


 


Capitalized
terms that are not defined herein shall have the meanings assigned to such
terms in the Plan.  The Plan shall
control in the event there is any express conflict between the Plan and this
Agreement and with respect to such matters as are not expressly covered herein.


 


In order for this grant to become effective, you must accept
it electronically or sign and return one copy of this Agreement to the Company’s
Secretary no later than [Date].  In the
event you fail to do so, this Agreement shall be deemed canceled, null, and
void.


 


2.             The options granted by this Agreement
are intended to be Incentive Stock Options, as that term is defined in Section 422
of the Internal Revenue Code of 1986, as amended (the “Code”); provided, however,
that to the extent the terms of these options, or any action taken with respect
thereto, fail to satisfy the requirements of Section 422, these options
shall be Non-Qualified Stock Options, as that term is defined in the Plan.


 


3.             The options granted hereunder
shall, subject to the provisions of the Plan, become exercisable in
installments on the dates set forth below and shall remain cumulatively
exercisable until the expiration date indicated:


 


	
  Number
  of

  Shares

  	
   

  	
  Date Options May

  First Be Exercised

  	
   

  	
  Expiration Date

  of Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [#Shares/5]

  	
   

  	
  [Grant Date + 1 year]

  	
   

  	
  [Grant Date + 10 years]

  	
   

  
	
  [#Shares/5]

  	
   

  	
  [Grant Date + 2 years]

  	
   

  	
  [Grant Date + 10 years]

  	
   

  
	
  [#Shares/5]

  	
   

  	
  [Grant Date + 3 years]

  	
   

  	
  [Grant Date + 10 years]

  	
   

  
	
  [#Shares/5]

  	
   

  	
  [Grant Date + 4 years]

  	
   

  	
  [Grant Date + 10 years]

  	
   

  
	
  [#Shares/5]

  	
   

  	
  [Grant Date + 5 years]

  	
   

  	
  [Grant Date + 10 years]

  	
   

  



 





















 


4.             You hereby acknowledge that the options granted hereby
are subject to the terms and conditions of the Plan, which is incorporated
herein by reference, and you hereby acknowledge that you have received or have access
to a copy of the Plan.  You are also
encouraged to review the Company’s most recent Form 10-K and proxy
statement, which may be found at www.unova.com.


 


5.             (a)  Subject to the provisions
of this Section 5, vested Stock Options may be exercised, in whole or in
part, at any time during the option term by giving written notice of exercise
to the Company on the form furnished by the Company for that purpose specifying
the number of shares of Stock subject to the Stock Option to be purchased.  Each exercise must encompass at least one
installment or 100 shares of Stock, whichever is less.


 


(b) 
The option price of Stock to be purchased upon exercise of any Stock Option
shall be paid in full in cash in United States dollars (by certified or bank
check or such other instrument payable to the order of “UNOVA, Inc.” as the Company may accept).  The option price may also be paid in the form
of unrestricted Stock already owned by you for a period of at least six months
and based in any such instance on the average of the highest and lowest per
share sales prices of the Stock during normal trading hours on the New York
Stock Exchange (the “Fair Market Value”)
on the date the Stock Option is exercised.


 


(c) 
In the discretion of the Committee, payment for any shares subject to a Stock
Option may also be made by delivering a properly executed exercise notice to
the Company, together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds to pay the
purchase price, and, if requested by you or required by law to be withheld by
the Company, the amount of any federal, state, local and foreign withholding
taxes.


 


(d) 
No shares of Stock shall be issued until full payment therefor has been
made.  You shall have all of the rights
of a shareholder of the Company holding the Stock that is subject to such Stock
Option (including, if applicable, the right to vote the shares and the right to
receive dividends, if any) when you have given written notice of exercise and
have paid in full for such shares.


 


(e) 
If as a result of any adjustment to the shares or number of shares subject to this
Agreement made pursuant to Section 3 of the Plan, any fractional share
would be issuable under this Agreement, such fractional share shall be canceled
without the payment of any consideration to you.


 


6.             You may transfer any or all
Non-Qualified Stock Options granted under the Plan by way of gift to any family
member, provided that any such transferee shall agree in writing with the
optionee and the Company, as a condition to such transfer, to be bound by the
provisions of all agreements and other instruments, including without
limitation, the Plan, and shall agree in writing to such other terms as the
Company may reasonably require to assure compliance with applicable federal and
state securities and other laws.  For
purposes of the preceding sentence, “family member” shall include any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationship, any person sharing your household (other than a tenant or
employee), a trust in which these persons have more than 50 percent of the
beneficial interest, a foundation in which these persons (or the optionee)
control the management of assets, and any other entity in which these persons
(or the optionee) own more than 50 percent of the voting interests.  All Stock Options shall be


 


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exercisable, subject to
the terms of the Plan, only by you, your guardian or legal representative, or
any person to whom such option is transferred pursuant to this paragraph, it
being understood that the term “holder” and “optionee” include such guardian,
legal representative and other trustee. 
If such transfer is made to a family member, there may be additional tax
consequences at the time of transfer, and the Company will not be responsible
for such tax consequences.


 


7.             (a)  In the event of your Termination
of Employment due to death, any Stock Option held by you may thereafter be
exercised for a period of one year from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is shorter,
in accordance with the following schedule:


 




	
  Time from Grant

  Date to Death

  	
   

  	
  Stock Options

  Exercisable by Estate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than 1 year

  	
   

  	
  33

  	
  %

  
	
  1 year to 2 years

  	
   

  	
  67

  	
  %

  
	
  More than 2 years

  	
   

  	
  100

  	
  %

  






 


(b) 
In the event of your Termination of Employment due to death, if any portion of
the Incentive Stock Options granted hereby is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code,
such portion of Stock Options will thereafter be treated as Non-Qualified Stock
Options.


 


8.             Subject to the provisions of
subparagraph 10(b) below, in the event of your Termination of Employment
by reason of Disability, any Stock Option held by you may thereafter be
exercised by you, to the extent it was vested at the time of termination, for a
period of three years from the date of such Termination of Employment or until
the expiration of the stated term of such Stock Option, whichever period is
shorter; provided, however, that if you die within such period, any unexercised
Stock Option held by you shall, notwithstanding the expiration of such period,
continue to be exercisable to the extent to which it was vested at the time of
death for a period of 12 months from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is
shorter.  “Disability” means your permanent and total disability as more
specifically defined in the Plan.  In the
event of your Termination of Employment by reason of Disability, if any portion
of the Incentive Stock Options granted hereby is exercised after the expiration
of the exercise periods that apply for purposes of Section 422 of the
Code, such portion of Stock Options will thereafter be treated as Non-Qualified
Stock Options.


 


9.             Subject to the provisions of
subparagraph 10(b) below, in the event of your Termination of Employment
by reason of Retirement, any Stock Option held by you may thereafter be
exercised by you (or your estate or personal representative), to the extent it
was vested at the time of such Retirement, until the expiration of the stated
term of such Stock Option or, if earlier, 12 months from the date of your
death.  “Retirement”
means retirement from active employment with the Company or a Subsidiary (i) at
or after age 65 or (ii) pursuant to the early retirement provisions of the
basic pension plan of the Company or a Subsidiary under which you may receive
retirement benefits.  In the event of your
Termination of Employment by reason of Retirement, if any portion of the
Incentive Stock Options granted hereby is exercised after the expiration of the
exercise periods that apply for purposes of Section 422 of the Code, such
portion of Stock Options will thereafter be treated as Non-Qualified Stock
Options.


 


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10.           (a)  If you incur a Termination
of Employment for any reason other than death, Disability, or Retirement, any
Stock Option held by you, to the extent it was vested at the time of
termination, may be exercised for the lesser of three months from the date of
such Termination of Employment or the balance of such Stock Option’s term; provided, however, that if you die within such three-month
period, any unexercised Stock Option held by you shall, notwithstanding the
expiration of such three-month period, continue to be exercisable to the extent
to which it was vested at the time of death for a period of 12 months from the
date of such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter. 
Notwithstanding the foregoing, after a Change of Control, Stock Options
shall remain exercisable following a Termination of Employment described in
this Section 10 for seven months following such termination or until
expiration of the stated term of such Stock Option, whichever period is
shorter.


 


(b) 
“Termination of Employment” means the
termination of your employment with the Company or any Subsidiary.  You shall also be deemed to incur a
Termination of Employment if the Subsidiary ceases to be such a Subsidiary, and
if you do not immediately thereafter become an employee of the Company or
another Subsidiary.  Temporary absences
from employment because of illness, vacation, or leave of absence and transfers
among the Company and its Subsidiaries shall not be considered Terminations of
Employment.  If so determined by the
Committee, you shall be deemed not to have incurred a Termination of Employment
following Retirement or Disability if you enter into a contract with the Company
or any Subsidiary providing for the rendering by you of consulting services to
the Company or such Subsidiary on terms approved by the Committee; however,
your Termination of Employment shall be deemed to occur when such contract
ceases to be in effect.  In the event of
such Retirement or Disability and subsequent assumption by you of the status of
a consultant, any portion of the Incentive Stock Options granted hereby which
is exercised after the applicable period for purposes of Section 422 of
the Code shall be treated as Non-Qualified Stock Options.


 


11.           No later than the date as of which an
amount first becomes includable in your gross income for federal income tax
purposes with respect to any Stock Option granted by this Agreement, you shall
pay to the Company, or make arrangements satisfactory to the Company regarding
the payment of, any federal, state or local, and foreign taxes of any kind
required by law to be withheld by the Company with respect to such amount.  The minimum amount of statutory withholding
obligations may be settled with unrestricted Stock having a Fair Market Value
on the date of the exercise of the Stock Option equal to the amount of taxes required
by law to be withheld, including Stock issuable upon exercise of a Stock Option
that gives rise to the withholding requirement. 
Tax withholdings in excess of the statutory minimum amount may not be
satisfied in Stock but may, if desired, be paid in cash.  The obligations of the Company under the Plan
shall be conditional on such payment or arrangements having been made, and the
Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due you.


 


12.           The Plan is established voluntarily
by the Company, it is discretionary in nature and it may be modified, amended,
suspended or terminated by the Company at any time, unless otherwise provided
in the Plan and this Agreement.  Grants
of Stock Options and other Stock awards under the Plan are made from time to
time in the sole discretion of the Committee. 
The grant of a Stock Option or other award does not create any
contractual or other right to receive future grants of Stock Options, or
benefits in lieu of Stock Options, even if Stock Options have been granted repeatedly
in the past.  You acknowledge that future
grants under the Plan, if any, will be at the sole discretion of the Committee,
including the timing of any grant, the number of


 


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options, the vesting
provisions, and the exercise price. The grant of a Stock Option to you in any
year shall give you neither any right to similar grants in future years nor any
right to be retained in the employ of the Company or its Subsidiaries, such
employment being terminable to the same extent as if the Plan and this
Agreement were not in effect.  The right
and power of the Company and its Subsidiaries to dismiss or discharge you is
specifically and unqualifiedly unimpaired by this Agreement.


 


You
acknowledge that your participation in the Plan is voluntary and the value of
the Stock Option is an extraordinary item that does not constitute compensation
of any kind for services of any kind rendered to the Company or its
Subsidiaries, and which is outside the scope of any employment contract you may
have, unless such contract specifically provides otherwise.  As such, you understand that any Stock Option
is not part of normal or expected compensation for purposes of calculating any
severance, resignation, redundancy, end of service payments, bonuses, long-term
service awards, pension or retirement benefits, or similar payments and in no
event should be considered as compensation for, or relating in any way to, past
services for the Company or its Subsidiaries.


 


13.           If employed by a Subsidiary of the
Company, you authorize and direct such Subsidiary or any agent of the Company
or such Subsidiary administering the Plan or providing plan recordkeeping
services to disclose to the Company or any of its Subsidiaries such information
and data as it shall request in order to facilitate the grant of Stock Options
and the administration of the Plan, and you waive any data privacy rights you
may have with respect to such information. 
By accepting this Agreement, you authorize the Company and the
Subsidiary by which you are employed, if applicable, to store and transmit such
information in electronic form.


 


14.           It is the present practice of the
Company to provide participants in the Plan, solely as a courtesy and not as a
Company policy, with written or oral notification of the imminent expiration of
any Stock Option having monetary value. 
You acknowledge that the Company and its Subsidiaries and agents shall
have no liability or responsibility in the event you should fail to receive any
such “courtesy notice” and your Stock Option expires unexercised.  You acknowledge that the obligation to
monitor the schedule of exercisability and expiration of options awarded
under this Agreement, and to procure current quotations regarding the market
value of the Stock, is solely your obligation and not that of the Company or
any Subsidiary by which you are employed or the agents of either of them.


 


15.           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 may be
furnished to you in writing.  All notices
to you or other person or persons then entitled to exercise any right pursuant
to this Agreement shall be delivered to you or such other person as you or such
other person may specify in writing to the Secretary of the Company by a notice
delivered in accordance with this paragraph.


 


16.           The Company may, in
its sole discretion, decide to deliver any documents related to the Stock
Option granted under and participation in the Plan or future options (if any)
that may be granted under the Plan by electronic means or to request your
consent to participate in the Plan by electronic means.  You hereby consent to receive such documents
by electronic delivery and, if requested, to agree to participate in the Plan
through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company.


 


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17.           The terms and conditions of this
Agreement and of the Plan incorporated by reference herein comprise the whole
terms and conditions between you and the Company with respect to the subject
matter of this Agreement and shall be governed by and construed in accordance
with the laws of the State of Delaware, United States of America.  The Committee may amend the terms and
conditions of this Agreement at any time, prospectively or retroactively, to
the extent permitted by Section 9 of the Plan.  The provisions of this Agreement are severable
and if any one or more provisions are determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions shall nevertheless
be binding and enforceable.


 


18.           This Agreement shall inure to the
benefit of and be binding upon each successor of the Company and, to the extent
specifically provided therein and in the Plan, shall inure to the benefit of
and shall be binding upon your heirs, legal representatives, and successors and
upon any person to whom a transfer of a Stock Option permitted by paragraph 6
of this Agreement has been made.


 


IN
WITNESS WHEREOF, this Agreement has been executed by you and by the Company
through its duly authorized officer, all as of the Grant Date indicated above.


 


 


	
   

  	
  UNOVA, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IMPORTANT

  	
   

  	
   

  	
   

  
	
  PLEASE ACCEPT
  ELECTRONICALLY OR

  	
   

  	
   

  	
   

  
	
  SIGN AND RETURN PROMPTLY

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name: First, MI. Last]

  	
   

  



 


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