**Exhibit 10.1**

 

UNOVA, Inc.

600136th Avenue West

Everett, WA 98203-1264

 

**UNOVA, INC.**

**2004 OMNIBUS INCENTIVE COMPENSATION PLAN**

**INCENTIVE STOCK OPTION AGREEMENT**

**(FOR OPTIONEES IN THE U.S.)**

** **
| [Name and  address] | Option Number: |   |
|---------------------|----------------|--------|
|                | Option Plan:   | 2004   |
|                | Grant Date:    |   |
|                | Option Shares: |   |
|                | Option Price:  |   |

 

1.             **THIS AGREEMENT** sets forth the terms of Stock Options grantedto you subject to the UNOVA, Inc. 2004 Omnibus Incentive Compensation Plan(the **“Plan”**).  As of the Grant Date indicated above, subjectto 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 (the **“Stock”**)at the purchase price of $xxx.xxx per share.

 

Capitalizedterms that are not defined herein shall have the meanings assigned to suchterms in the Plan.  The Plan shallcontrol in the event there is any express conflict between the Plan and thisAgreement and with respect to such matters as are not expressly covered herein.

 

**In order for this grant to become effective, you must acceptit electronically or sign and return one copy of this Agreement to the Company’sSecretary no later than [Date].  In theevent you fail to do so, this Agreement shall be deemed canceled, null, andvoid.**

** **

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

** **

**3.**             Theoptions granted hereunder shall, subject to the provisions of the Plan, becomeexercisable in installments on the dates set forth below and shall remaincumulatively 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]**     |

 

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

#  

5.             (a) Subject to the provisions of this Section 5, vested Stock Options may beexercised, in whole or in part, at any time during the option term by givingwritten notice of exercise to the Company on the form furnished by the Companyfor that purpose specifying the number of shares of Stock subject to the StockOption to be purchased.  Each exercisemust encompass at least one installment or 100 shares of Stock, whichever isless.

 

(b) The option price of Stock to be purchased upon exercise of any Stock Optionshall be paid in full in cash in United States dollars (by certified or bankcheck 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 formof unrestricted Stock already owned by you for a period of at least six monthsand based in any such instance on the average of the highest and lowest pershare sales prices of the Stock during normal trading hours on the New YorkStock Exchange (the  **“**FairMarket Value**”**) on the date the Stock Option isexercised.

 

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

 

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

 

(e) If as a result of any adjustment to the shares or number of shares subject to thisAgreement made pursuant to Section 3 of the Plan, any fractional sharewould be issuable under this Agreement, such fractional share shall be canceledwithout the payment of any consideration to you.

 

6.             Youmay transfer any or all Non-Qualified Stock Options granted under the Plan byway of gift to any family member, provided that any such transferee shall agreein 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 suchother terms as the Company may reasonably require to assure compliance withapplicable federal and state securities and other laws.  For purposes of the preceding sentence, “familymember” 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 thana tenant or employee), a trust in which these persons have more than 50 percentof the beneficial interest, a foundation in which these persons (or theoptionee) control the management of assets, and any other entity in which thesepersons (or the optionee) own more than 50 percent of the voting interests.  All Stock Options shall be

 

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exercisable, subject tothe terms of the Plan, only by you, your guardian or legal representative, orany person to whom such option is transferred pursuant to this paragraph, itbeing 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 taxconsequences at the time of transfer, and the Company will not be responsiblefor such tax consequences.

 

7.             (a) In the event of your Termination of Employment due to death, any Stock Optionheld by you may thereafter be exercised for a period of one year from the dateof 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 ofthe Incentive Stock Options granted hereby is exercised after the expiration ofthe exercise periods that apply for purposes of Section 422 of the Code,such portion of Stock Options will thereafter be treated as Non-Qualified StockOptions.

 

**8.**             Subjectto the provisions of subparagraph 10(b) below, in the event of your Terminationof Employment by reason of Disability, any Stock Option held by you maythereafter be exercised by you, to the extent it was vested at the time oftermination, for a period of three years from the date of such Termination of Employmentor until the expiration of the stated term of such Stock Option, whicheverperiod is shorter; provided, however, that if you die within such period, anyunexercised Stock Option held by you shall, notwithstanding the expiration ofsuch period, continue to be exercisable to the extent to which it was vested atthe time of death for a period of 12 months from the date of such death oruntil the expiration of the stated term of such Stock Option, whichever periodis shorter.  “Disability” means your permanent and total disability as morespecifically defined in the Plan.  In theevent of your Termination of Employment by reason of Disability, if any portionof the Incentive Stock Options granted hereby is exercised after the expirationof the exercise periods that apply for purposes of Section 422 of theCode, such portion of Stock Options will thereafter be treated as Non-QualifiedStock Options.

** **

9.             Subjectto the provisions of subparagraph 10(b) below, in the event of your Terminationof Employment by reason of Retirement, any Stock Option held by you maythereafter be exercised by you (or your estate or personal representative), tothe extent it was vested at the time of such Retirement, until the expirationof the stated term of such Stock Option or, if earlier, 12 months from the dateof your death.  **“Retirement”**means “Normal Retirement” or “Early Retirement” as defined in the Plan.  In the event of your Termination ofEmployment by reason of Retirement, if any portion of the Incentive StockOptions granted hereby is exercised after the expiration of the exerciseperiods that apply for purposes of Section 422 of the Code, such portionof Stock Options will thereafter be treated as Non-Qualified Stock Options.

 

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

 

(b) **“Termination of Employment”** means thetermination of your employment with the Company or any Subsidiary or Affiliate.  You shall also be deemed to incur aTermination of Employment if the Subsidiary or Affiliate ceases to be such aSubsidiary or Affiliate, as the case may be, and if you do not immediatelythereafter become an employee of the Company or another Subsidiary or Affiliate.  Temporary absences from employment because ofillness, vacation, or leave of absence and transfers among the Company and itsSubsidiaries and Affiliates shall not be considered Terminations ofEmployment.  If so determined by theCommittee, you shall be deemed not to have incurred a Termination of Employmentfollowing Retirement or Disability if you enter into a contract with theCompany or any Subsidiary or Affiliate providing for the rendering by you ofconsulting services to the Company or such Subsidiary or Affiliate on termsapproved by the Committee; however, your Termination of Employment shall bedeemed to occur when such contract ceases to be in effect.  In the event of such Retirement or Disabilityand subsequent assumption by you of the status of a consultant, any portion ofthe Incentive Stock Options granted hereby which is exercised after theapplicable period for purposes of Section 422 of the Code shall be treatedas Non-Qualified Stock Options.

 

11.           Nolater than the date as of which an amount first becomes includable in yourgross income for federal income tax purposes with respect to any Stock Optiongranted by this Agreement, you shall pay to the Company, or make arrangementssatisfactory to the Company regarding the payment of, any federal, state orlocal, and foreign taxes of any kind required by law to be withheld by theCompany with respect to such amount.  Theminimum amount of statutory withholding obligations may be settled withunrestricted Stock having a Fair Market Value on the date of the exercise ofthe 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 thewithholding requirement.  Taxwithholdings in excess of the statutory minimum amount may not be satisfied inStock but may, if desired, be paid in cash. The obligations of the Company under the Plan shall be conditional onsuch payment or arrangements having been made, and the Company and itsSubsidiaries shall, to the extent permitted by law, have the right to deductany such taxes from any payment otherwise due you.

 

12.           ThePlan is established voluntarily by the Company, it is discretionary in natureand it may be modified, amended, suspended or terminated by the Company at anytime, unless otherwise provided in the Plan and this Agreement.  Grants of Stock Options and other Stockawards under the Plan are made from time to time in the sole discretion of theCommittee.  The grant of a Stock Optionor other award does not create any contractual or other right to receive futuregrants of Stock Options, or benefits in lieu of Stock Options, even if StockOptions have been granted repeatedly in the past.  You acknowledge that future grants under thePlan, if any,

 

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will be at the solediscretion of the Committee, including the timing of any grant, the number ofoptions, the vesting provisions, and the exercise price. The grant of a StockOption to you in any year shall give you neither any right to similar grants infuture years nor any right to be retained in the employ of the Company or itsSubsidiaries and Affiliates, such employment being terminable to the sameextent as if the Plan and this Agreement were not in effect.  The right and power of the Company and itsSubsidiaries and Affiliates to dismiss or discharge you is specifically andunqualifiedly unimpaired by this Agreement.

 

Youacknowledge that your participation in the Plan is voluntary and the value of theStock Option is an extraordinary item that does not constitute compensation ofany kind for services of any kind rendered to the Company or its Subsidiariesand Affiliates, and which is outside the scope of any employment contract youmay have, unless such contract specifically provides otherwise.  As such, you understand that any Stock Optionis not part of normal or expected compensation for purposes of calculating anyseverance, resignation, redundancy, end of service payments, bonuses, long-termservice awards, pension or retirement benefits, or similar payments and in noevent should be considered as compensation for, or relating in any way to, pastservices for the Company or its Subsidiaries.

 

13.           Ifemployed by a Subsidiary or Affiliate of the Company, you authorize and directsuch Subsidiary or Affiliate or any agent of the Company or such Subsidiary orAffiliate administering the Plan or providing plan recordkeeping services todisclose to the Company or any of its Subsidiaries or Affiliates suchinformation and data as it shall request in order to facilitate the grant ofStock Options and the administration of the Plan, and you waive any dataprivacy rights you may have with respect to such information.  By accepting this Agreement, you authorizethe Company and the Subsidiary or Affiliate by which you are employed, ifapplicable, to store and transmit such information in electronic form.

 

14.           Itis 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 oralnotification of the imminent expiration of any Stock Option having monetaryvalue.  You acknowledge that the Companyand its Subsidiaries and agents shall have no liability or responsibility inthe event you should fail to receive any such “courtesy notice” and your StockOption expires unexercised.  Youacknowledge that the obligation to monitor the schedule of exercisabilityand expiration of options awarded under this Agreement, and to procure currentquotations regarding the market value of the Stock, is solely your obligationand not that of the Company or any Subsidiary or Affiliate by which you areemployed or the agents of either of them.

 

15.           Each notice relating tothis Agreement shall be in writing and delivered in person or by mail to theCompany 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 befurnished to you in writing.  All noticesto you or other person or persons then entitled to exercise any right pursuantto this Agreement shall be delivered to you or such other person as you or suchother person may specify in writing to the Secretary of the Company by a noticedelivered in accordance with this paragraph.

 

16.           The Company may, in itssole discretion, decide to deliver any documents related to the Stock Optiongranted under and participation in the Plan or future options (if any) that maybe granted under the Plan by electronic means or to request your consent toparticipate 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 orelectronic

 

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systemestablished and maintained by the Company or another third party designated bythe Company.

 

17.           The terms and conditions of this Agreement and of thePlan incorporated by reference herein comprise the whole terms and conditionsbetween you and the Company with respect to the subject matter of thisAgreement and shall be governed by and construed in accordance with the laws ofthe State of Delaware, United States of America.  The Committee may amend the terms andconditions of this Agreement at any time, prospectively or retroactively, tothe extent permitted by Section 12 of the Plan.  The provisions of this Agreement are severableand if any one or more provisions are determined to be illegal or otherwiseunenforceable, in whole or in part, the remaining provisions shall neverthelessbe binding and enforceable.

 

18.           ThisAgreement shall inure to the benefit of and be binding upon each successor ofthe 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, legalrepresentatives, and successors and upon any person to whom a transfer of aStock Option permitted by paragraph 6 of this Agreement has been made.

 

INWITNESS WHEREOF, this Agreement has been executed by you and by the Companythrough 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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