**Exhibit 10.4**

 

UNOVA, Inc.

600136th Avenue West

Everett, WA 98203-1264

 

**UNOVA, INC.**

**2001 STOCK INCENTIVE PLAN**

**NON-QUALIFIED 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 grantedto you subject to the UNOVA, Inc. 2001 Stock Incentive Plan (the **“Plan”**).  As of theGrant Date indicated above, subject to your acceptance of the terms andconditions hereof, UNOVA, Inc. (the **“Company”**) hasgranted to you Stock Options to purchase [#Shares]shares of the Common Stock of the Company (the **“Stock”**)at the purchase price of $xx.xxxper 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 becomeeffective, you must accept it electronically or sign and return one copy ofthis Agreement to the Company’s Secretary no later than [Date].  In the event you fail to do so, thisAgreement shall be deemed canceled, null, and void.**

 

2.             The options granted by this Agreement areintended to be Non-Qualified Stock Options, as that term is defined in thePlan.

 

3.             The options granted hereunder shall, subjectto the provisions of the Plan, become exercisable in installments on the datesset forth below and shall remain cumulatively exercisable until the expirationdate 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 the optionsgranted hereby are subject to the terms and conditions of the Plan, which isincorporated herein by reference, and you hereby acknowledge that you havereceived or have access to a copy of the Plan. You are also encouraged to review the Company’s most recent Form 10-Kand proxy statement, which may be found at www.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 exercise must encompass at least oneinstallment or 100 shares of Stock, whichever is less.

 

(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.” asthe Company may accept).  The optionprice may also be paid in the form of unrestricted Stock already owned by youfor a period of at least six months and based in any such instance on the averageof the highest and lowest per share sales prices of the Stock during normal tradinghours on the New York Stock Exchange (the “Fair Market Value”) on the date theStock Option is exercised.

 

(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* thatany 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 allagreements and other instruments, including without limitation, the Plan, andshall agree in writing to such other terms as the Company may reasonablyrequire to assure compliance with applicable federal and state securities andother laws.  For purposes of thepreceding 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 personsharing your household (other than a tenant or employee), a trust in whichthese persons have more than 50 percent of the beneficial interest, afoundation in which these persons (or the optionee) control the management ofassets, and any other entity in which these persons (or the optionee) own morethan 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.             Inthe event of your Termination of Employment due to death, any Stock Option heldby you may thereafter be exercised for a period of one year from the date ofsuch 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                                      | %          |

 

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 more specifically defined in thePlan.

 

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 retirement from active employment with the Company or a Subsidiary (i) ator after age 65 or (ii) pursuant to the early retirement provisions of thebasic pension plan of the Company or a Subsidiary under which you may receiveretirement benefits.

 

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 vestedat the time of termination, may be exercised for the lesser of three monthsfrom the date of such Termination of Employment or the balance of such StockOption’s term; *provided, however,* that if youdie within such three-month period, any unexercised Stock Option held by youshall, notwithstanding the expiration of such three-month period, continue tobe exercisable to the extent to which it was vested at the time of death for aperiod of 12 months from the date of such death or until the expiration of thestated term of such Stock Option, whichever period is the shorter.  Notwithstanding the foregoing, after a Changeof Control, Stock Options shall remain exercisable following a Termination ofEmployment described in this Section 10 for seven months following suchtermination or until expiration of the stated term of such Stock Option,whichever period is shorter.

 

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(b) **“Termination of Employment”** means thetermination of your employment with the Company or any Subsidiary.  You shall also be deemed to incur aTermination of Employment if the Subsidiary ceases to be such a Subsidiary, andif you do not immediately thereafter become an employee of the Company oranother Subsidiary.  Temporary absencesfrom employment because of illness, vacation, or leave of absence and transfersamong the Company and its Subsidiaries 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 providing for the rendering by you of consultingservices to the Company or such Subsidiary on terms approved by the Committee;however, your Termination of Employment shall be deemed to occur when suchcontract ceases to be in effect.

 

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 in Stockbut 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, will be at the sole discretion of the Committee, including thetiming of any grant, the number of options, the vesting provisions, and theexercise price. The grant of a Stock Option to you in any year shall give youneither any right to similar grants in future years nor any right to beretained in the employ of the Company or its Subsidiaries, such employmentbeing terminable to the same extent as if the Plan and this Agreement were notin effect.  The right and power of theCompany and its Subsidiaries to dismiss or discharge you is specifically andunqualifiedly unimpaired by this Agreement.

 

You acknowledge that yourparticipation in the Plan is voluntary and the value of the Stock Option is anextraordinary item that does not constitute compensation of any kind forservices of any kind rendered to the Company or its Subsidiaries, and which is outsidethe scope of any employment contract you may have, unless such contractspecifically provides otherwise.  Assuch, you understand that any Stock Option is not part of normal or expectedcompensation for purposes of calculating any severance, resignation,redundancy, end of service payments, bonuses, long-term service awards, pensionor retirement benefits, or similar payments and in no event should beconsidered as compensation for, or relating in any way to, past services forthe Company or its Subsidiaries.

 

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13.           Ifemployed by a Subsidiary of the Company, you authorize and direct suchSubsidiary or any agent of the Company or such Subsidiary administering thePlan or providing plan recordkeeping services to disclose to the Company or anyof its Subsidiaries such information and data as it shall request in order tofacilitate the grant of Stock Options and the administration of the Plan, andyou waive any data privacy rights you may have with respect to suchinformation.  By accepting this Agreement,you authorize the Company and the Subsidiary 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 by which you are employed or theagents 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 system established and maintained by the Company or another thirdparty designated by the Company.

 

17.           Theterms and conditions of this Agreement and of the Plan incorporated byreference herein comprise the whole terms and conditions between you and theCompany with respect to the subject matter of this Agreement and shall begoverned by and construed in accordance with the laws of the State of Delaware,United States of America.  The Committeemay amend the terms and conditions of this Agreement at any time, prospectivelyor retroactively, to the extent permitted by Section 9 of the Plan.  The provisions of this Agreement areseverable and if any one or more provisions are determined to be illegal orotherwise unenforceable, in whole or in part, the remaining provisions shallnevertheless be 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.

 

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**INWITNESS WHEREOF**, this Agreement has been executed by you andby the Company through its duly authorized officer, all as of the Grant Dateindicated above.

 

 
|                                 | UNOVA, Inc.       |   |
|--------------------------------------|------------------------|--------|
|                                 |                   |   |
|                                 |                   |   |   |
|                                 | By:                    |   |   |
|                                 |                   |   |   |
| **IMPORTANT**                        |                   |   |   |
| **PLEASE  ACCEPT ELECTRONICALLY OR** |                   |   |   |
| **SIGN  AND RETURN PROMPTLY**        |                   |   |   |
|                                 |                   |   |   |
|                                 |                   |   |
|                                 | [Name: First MI. Last] |   |

 

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