**Exhibit 10.2**

 

UNOVA, Inc.

6001 36th Avenue West

Everett, WA 98203-1264

 

**UNOVA,INC.**

**2001STOCK INCENTIVE PLAN**

**INCENTIVESTOCK OPTION AGREEMENT**

 
|  [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, subjectto your acceptance of the terms and conditions hereof, UNOVA, Inc. (the **“Company”**) has granted to you Stock Options to purchase             shares of the Common Stock of the Company (**“Stock”**) at thepurchase price of $            per share.

 

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

 

**Inorder for this grant to become effective, you must sign and return to the Company’sSecretary one copy of this Agreement [or accept it electronically asinstructed] within 30 days following the date at the end of thisAgreement.  In the event you fail to doso, this Agreement shall be deemed canceled, null, and void.**

 

**2.         The options granted by this Agreementare intended to be Incentive Stock Options, as that term is defined in Section422 of the Internal Revenue Code of 1986, as amended; *provided,however,* that to the extent the terms of these options, or anyaction taken with respect thereto, fail to satisfy the requirements of Section422, these options shall be Non-Qualified Stock Options, as that term isdefined in the Plan.**

** **

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

** **
| **Number  of Shares** | ** ** | **Date Options May  First Be Exercised** | ** ** | **Expiration Date  of Options** | ** ** |
|-----------------------|------------|------------------------------------------|------------|---------------------------------|------------|
|                  |       | [Grant Date + 1 year]                    |       | [Grant Date + 10 years]         |       |
|                  |       | [Grant Date + 2 years]                   |       | [Grant Date + 10 years]         |       |
|                  |       | [Grant Date + 3 years]                   |       | [Grant Date + 10 years]         |       |
|                  |       | [Grant Date + 4 years]                   |       | [Grant Date + 10 years]         |       |
|                  |       | [Grant Date + 5 years]                   |       | [Grant Date + 10 years]         |       |

 

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# 4.         You hereby acknowledgethat 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 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 at www.unova.com.

 

5.       (a)  Subject to theprovisions of this Section 5, Stock Options then exercisable may be exercised,in whole or in part, at any time during the option term by giving writtennotice of exercise to the Company on the form furnished by the Company for thatpurpose specifying the number of shares of Stock subject to the Stock Option tobe purchased.  Each exercise mustencompass at least one installment or 100 shares of Stock, whichever is less.

 

(b)  The option price of Stock to be purchasedupon exercise of any Stock Option shall be paid in full in cash in UnitedStates dollars (by certified or bank check or such other instrument payable tothe order of “UNOVA, Inc.” as the Company may accept) or may also be paid inthe form of unrestricted Stock already owned by you for a period of at leastsix months and based in any such instance on the Fair Market Value of the Stockon the date the Stock Option is exercised.

 

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

 

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

 

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

 

6.         You may transfer any or all Non-Qualified Stock Optionsgranted under the Plan by way of gift to any family member, provided that anysuch transferee shall agree in writing with the optionee and the Company, as acondition to such transfer, to be bound by the provisions of all agreements andother instruments, including without limitation, the Plan, and shall agree inwriting to such other terms as the Company may reasonably require to assurecompliance with applicable 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

 

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optionee) own more than50 percent of the voting interests.  AllStock Options shall be exercisable, subject to the terms of the Plan, only byyou, your guardian or legal representative, or any person to whom such optionis transferred pursuant to this paragraph, it being understood that the term “holder”and “optionee” include such guardian, legal representative and other trustee.

 

7.       (a)  In the event ofyour Termination of Employment due to death, any Stock Option held by you maythereafter be exercised for a period of one year from the date of such death oruntil the expiration of the stated term of such Stock Option, whichever periodis the 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 Employmentdue to death, if any portion of the Incentive Stock Options granted hereby isexercised after the expiration of the exercise periods that apply for purposesof Section 422 of the Code, such portion of Stock Options will thereafter betreated as Non-Qualified Stock Options.

 

**8.         Subject to the provisions ofsubparagraph 10(b) below, in the event of your Termination of Employment byreason of Disability, any Stock Option held by you may thereafter be exercisedby you, to the extent it was exercisable at the time of termination, for aperiod of three years from the date of such Termination of Employment or untilthe expiration of the stated term of such Stock Option, whichever period is theshorter; provided, however, that if you die within such period, any unexercisedStock Option held by you shall, notwithstanding the expiration of such period,continue to be exercisable to the extent to which it was exercisable at thetime of death for a period of 12 months from the date of such death or untilthe expiration of the stated term of such Stock Option, whichever period is theshorter. **“Disability” means your permanent and total disability as morespecifically defined in the Plan.  In theevent of Termination of Employment by reason of Disability, 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, suchportion of Stock Options will thereafter be treated as Non-Qualified StockOptions.

 

9.         Subject to the provisions of subparagraph 10(b) below, inthe event of your Termination of Employment by reason of Retirement, any StockOption held by you may thereafter be exercised by you (or your estate orpersonal representative), to the extent it was exercisable at the time of suchRetirement, until the expiration of the stated term of such Stock Option or, ifearlier, 12 months from the date of your death. **“Retirement”** means retirement fromactive 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 ofthe Company or a Subsidiary under which you may receive retirementbenefits.  In the event of 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 portion ofStock 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 thandeath, Disability, or Retirement, any Stock Option held by you, to the extentit was exercisable at the time of termination, may be exercised for the lesserof three months from the date of such Termination of Employment or the balanceof such Stock Option’s term; *provided, however,*that if you die within such three-month period, any unexercised Stock Optionheld by you shall, notwithstanding the expiration of such three-month period,continue to be exercisable to the extent to which it was exercisable at thetime of death for a period of 12 months from the date of such death or untilthe expiration of the stated term of such Stock Option, whichever period is theshorter.  Notwithstanding the foregoing,after a Change in Control, Stock Options shall remain exercisable following aTermination of Employment described in this Section 10 for seven monthsfollowing such termination or until expiration of the stated term of such StockOption, whichever period is shorter.

 

(b)  **“Termination of Employment”**means the termination of your employment with the Company and anySubsidiary.  You shall also be deemed toincur a Termination of Employment if the Subsidiary ceases to be such aSubsidiary, and if you do not immediately thereafter become an employee of theCompany or another Subsidiary.  Temporaryabsences from employment because of illness, vacation, or leave of absence andtransfers among the Company and its Subsidiaries shall not be consideredTerminations of Employment.  If sodetermined by the Committee, you shall be deemed not to have incurred aTermination of Employment following Retirement or Disability if you enter intoa contract with the Company or any Subsidiary providing for the rendering byyou of consulting services to the Company or such Subsidiary on terms approvedby the Committee; however, your Termination of Employment shall be deemed tooccur 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 treated asNon-Qualified Stock Options.

 

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

 

12.       The grant of Stock Options and otherStock awards under the Plan are made from time to time in the sole discretionof the Committee.  The grant of a StockOption or other award does not assure an additional award at any futuretime.  You acknowledge that future grantsunder the Plan, if any, will be at the sole discretion of the Committee,including the timing of any grant, the number of options, the vestingprovisions, and the exercise price. The grant of a Stock Option to you in anyyear shall give you neither any right to similar grants in future years nor anyright to be retained 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

 

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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 of compensation outside the scope of any employment contractyou may 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.

 

13.       If employed by a Subsidiary of theCompany, you authorize and direct such Subsidiary or any agent of the Companyor such Subsidiary administering the Plan or providing plan recordkeeping servicesto disclose to the Company or any of its Subsidiaries such information and dataas it shall request in order to facilitate the grant of Stock Options and theadministration of the Plan, and you waive any data privacy rights you may havewith respect to such information.  Byaccepting this Agreement, you authorize the Company and the Subsidiary by whichyou are employed, if applicable, to store and transmit such information inelectronic form.

 

14.       It is the present practice of the Companyto provide participants in the Plan, solely as a courtesy and not as a Companypolicy, with written or oral notification of the imminent expiration of anyStock Option having monetary value.  Youacknowledge that the Company and its Subsidiaries and agents shall have noliability or responsibility in the event you should fail to receive any such “courtesynotice” and your Stock Option expires unexercised.  You acknowledge that the obligation tomonitor the schedule of exercisability and expiration of options awarded under thisAgreement, and to procure current quotations regarding the market value of theStock, is solely your obligation and not that of the Company or any Subsidiaryby which you are employed or the agents of either of them.

 

15.       Each notice relating to this Agreementshall be in writing and delivered in person or by mail to the Company at itsoffice, 6001 36th Avenue West, Everett, WA 98203-1264, to theattention 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 terms and conditions of thisAgreement and of the Plan incorporated by reference herein comprise the wholeterms and conditions between you and the Company with respect to the subjectmatter of this Agreement and shall be governed by and construed in accordancewith the laws of the 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 9 of the Plan.

 

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

 

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IN WITNESS WHEREOF, thisAgreement has been executed by you and by the Company through its dulyauthorized officer, all as of the Grant Date indicated above.

 

DATE:

 
| ** **                          | **UNOVA, Inc.** |
|-------------------------------------|-----------------|
| ** **                          | ** **      |
| ** **                          | ** **      |
|                                | By:             |   |   |
|                                |            |
| **IMPORTANT**                       | ** **      |
| **PLEASE ACCEPT ELECTRONICALLY OR** | ** **      |
| **SIGN AND RETURN PROMPTLY**        |            |
| ** **                          |            |
| ** **                          |            |
| ** **                          |            |   |

 

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