**Exhibit 10.1**

 

**UNOVA, Inc. 2004 Long-Term Performance Share Program**

** **
| **Name of Program**        |   | The  program will be called the UNOVA, Inc. 2004 Long-Term Performance Share  Program, and will be considered a “sub-plan” under the 2004 Omnibus Incentive  Compensation Plan (the “Plan”).                                                                                                     |
|----------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |   |                                                                                                                                                                                                                                                                                                                 |
| **Purpose**                |   | The primary purposes of the program are to:                                                                                                                                                                                                                                                                          |
| ** **                 |   |                                                                                                                                                                                                                                                                                                                 |
| ** **                 |   | •                                                                                                                                                                                                                                                                                                               | Reward officers for the overall success of UNOVA as  reflected through the Company’s financial performance and stock price; |
| ** **                 |   |                                                                                                                                                                                                                                                                                                                 |
| ** **                 |   | •                                                                                                                                                                                                                                                                                                               | Provide for cash payouts that can replace cash flow  that could be impacted by future changes to the Company’s Annual Bonus Plan;  and |
| ** **                 |   |                                                                                                                                                                                                                                                                                                                 |
| ** **                 |   | •                                                                                                                                                                                                                                                                                                               | Provide a competitive long-term incentive program. |
| ** **                 |   |                                                                                                                                                                                                                                                                                                                 |
| **Effective Date**         |   | The  effective date of the program is May 6, 2004. The program will remain in  effect until terminated by the Compensation Committee (the “Committee”) of  the Board.                                                                                                                                      |
|                       |   |                                                                                                                                                                                                                                                                                                                 |
| **Performance Period**     |   | The  performance period under the program is three years, with the first  performance period running from January 1, 2004 to December 31, 2006.                                                                                                                                                                      |
|                       |   |                                                                                                                                                                                                                                                                                                                 |
| **Grant Frequency**        |   | A  new three-year performance period will begin annually, which will create  overlapping performance periods.                                                                                                                                                                                                        |
|                       |   |                                                                                                                                                                                                                                                                                                                 |
| **Size of Awards**         |   | Target  awards will be established for each participant, denominated in shares.  Target award levels will be approved annually by the Committee.                                                                                                                                                                     |
|                       |   |                                                                                                                                                                                                                                                                                                                 |
| **Program Structure**      |   | Participants  can earn from 0 percent to 200 percent of their target shares based  on Company financial performance.                                                                                                                                                                                       |
|                       |   |                                                                                                                                                                                                                                                                                                                 |
| **Performance Measure(s)** |   | Before  the commencement of each performance period, the Committee shall select  performance measures from those set forth in Section 10(a) of the Plan. The  Committee may choose to include or exclude any of the events set forth in  Section 10(b) of the Plan to the evaluation of performance for such period. |

 

1

----

 
| **Dividends**                          |   | If  dividends are declared on the Company’s common stock during a performance  period, the Committee, in its sole discretion, may recommend to the Board  that dividend equivalents on the target award be accrued in the form of  additional performance share units.                                                                                                                                                                                                                                                                                                  |
|----------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **Form and Timing of Payout**          |   | For  participants that have met their minimum ownership level under the stock  ownership guidelines, all payouts from this program will be made in cash. For  participants that have not met their minimum ownership level, payouts will be  in cash or stock (or a mix), at the discretion of the Committee.                                                                                                                                                                                                                                                                |
| ** **                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| ** **                             |   | Cash  payouts will be calculated based on the average of the high and low daily  stock price for the last 30 trading days of the performance period. All  payouts will be made as soon as practicable following the end of the  performance period.                                                                                                                                                                                                                                                                                                                          |
|                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **Certain Terminations of Employment** |   | In  the event of a participant’s death, disability, or retirement at age 65 or  later, pro rata awards based on the number of full months worked during the  performance period will be calculated. Such awards will be based on goal  achievement over the entire performance period. Awards in these situations  will be calculated and paid after the end of the performance period. In the  case of death, however, the performance during the next-ending performance  period after death will be calculated as the performance for all open  performance periods. |
| ** **                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| ** **                             |   | Amounts  paid on account of death will be paid to a beneficiary designated by the  participant. If no beneficiary has been designated, amounts will be paid to  the participant’s estate.                                                                                                                                                                                                                                                                                                                                                                               |
|                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **Other Terminations of Employment**   |   | In  the event of a termination of employment not constituting a disability,  death, or retirement, as discussed above, the participant will forfeit any  right to any payout for all performance periods in progress under the  program.                                                                                                                                                                                                                                                                                                                                     |
|                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **Tax Withholding**                    |   | The  Company has the right to deduct any taxes or statutory deductions required by  law to be withheld from all payments under the program.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| **Change in Capitalization**           |   | Any  change in capitalization which results in a material change in the value of  UNOVA common stock (e.g., special dividend, spin-off) will result in an  adjustment in the number of shares earned at target to reflect the  recapitalization. While individual recapitalization “events” will be assessed  by the Committee on a case-by-case basis, the overriding objective will be to  avoid rewarding or penalizing participants specifically as a function of the  event.                                                                                  |

 

2

----

 
| **Change of Control**         |   | If a  change of control occurs (as defined in the Plan), then all outstanding award  cycles will automatically vest and be paid out (in cash) at the target level  or the actual performance level as of the change of control, whichever is  higher.                                                               |
|-------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                    |   |                                                                                                                                                                                                                                                                                                                |
| **Accounting Considerations** |   | The  employer must recognize an expense for compensation over the performance  period. An estimated expense is accrued by amortizing the initial value of  the awards and any subsequent appreciation over the performance period based  upon preestablished goals. The approach to expensing* *may  change*.* |
|                          |   |                                                                                                                                                                                                                                                                                                                |
| **Tax Considerations**        |   | The  Company will receive a tax deduction in the year in which the actual payout  is determinable. The employee must report taxable income in the year the  award is paid.                                                                                                                                          |

 

3

----