**Exhibit 10.5**

 

**UNOVA, INC.**

 

**RESTRICTED STOCK UNIT AGREEMENT**

 

This Restricted Stock Unit Agreement(the **“Agreement”**) is made as of the      day of                    ,             ,between UNOVA, Inc., a Delaware corporation (the **“Company”**) and                                    (the **“Grantee”**).

 

**WHEREAS**, the UNOVA, Inc. 2004 Omnibus IncentiveCompensation Plan (the **“Plan”**) wasadopted by the Board of Directors of the Company on March 11, 2004, and wasapproved by the shareholders of the Company on May 6, 2004; and

 

**WHEREAS**, as an inducement to the Grantee to remainin the employ of the Company or one of its Subsidiaries or Affiliates, theCompany desires to award the Grantee Restricted Stock Units (as that term isdefined in the Plan) in accordance with the terms and conditions of the Planand this Agreement.

 

**NOW,THEREFORE**, inconsideration of the premises, the mutual covenants hereinafter set forth, andother good and valuable consideration, the Company and the Grantee hereby agreeas follows:

 

1.         The Company hereby grants the Grantee, as a matter ofseparate inducement and agreement, and not in lieu of salary or othercompensation for services, an Award of               Restricted Stock Units (**“RSUs”**) comprisingthe right to receive shares of the common stock, par value $.01 per share, ofthe Company (the **“Common Stock”**) on the terms andconditions hereinafter set forth (the **“AwardedShares”**), such number of Awarded Shares to be subject to adjustmentas provided in Section 3 of the Plan. The Grantee shall have no obligation topay the Company additional consideration for the Awarded Shares.

 

**In order for this Award to become effective, the Grantee must sign andreturn to the Company’s Secretary one copy of this Agreement [or accept itelectronically as instructed] within 30 days following the date at the end ofthis Agreement.  In the event the Granteefails to do so, this Agreement shall be deemed cancelled, null and void.**

 

2.         The Plan, a copy of which has been made available to theGrantee, is incorporated herein by reference and is made part of this Agreementas if fully set forth herein. Capitalized terms used in this Agreement whichare not defined herein shall have the meanings assigned to such terms in thePlan, it being understood that the terms **“Restricted Stock Units”** and **“RSUs”** shall mean and refer to the right to receive only theAwarded Shares. This Agreement is subject to, and the Company and the Granteeagree to be bound by, all of the terms and conditions of the Plan as the sameexist at the time this Agreement became effective. The Plan shall control inthe event there is any express conflict between the Plan and the terms hereofand with respect to such matters as are not expressly covered in thisAgreement. The Company hereby reserves the right to alter, amend, modify,restate, suspend or terminate the Plan and this Agreement in accordance withSection 12 of the Plan, but no such subsequent amendment, modification, restatement,or termination of the Plan or this Agreement shall adversely affect in anymaterial way the Grantee’s rights under this Agreement without the Grantee’swritten consent.  This Agreement shall besubject, without further action by the Company or the Grantee, to suchamendment, modification, or restatement.

 

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3.         Subject to the provisions of Paragraph 5 of this Agreement,there shall be a Period of Restriction (the **“RestrictionPeriod”**).  [Insert terms ofRestriction Period.]  Exceptas otherwise provided in Paragraph 5 hereof, all RSUs still subject torestriction on the date of Grantee’s Termination of Employment shall beforfeited by the Grantee.

 

4.         Until the earlier of (a) the end of the Restriction Periodwith respect to any of the RSUs granted hereunder or (b) the vesting of suchRSUs in accordance with the provisions of this Agreement or the Plan, theGrantee shall not be permitted to sell, assign, transfer, pledge, or otherwiseencumber the RSUs or the Awarded Shares.

 

5.         Notwithstanding any other provision of this Agreement, allRSUs granted hereunder still subject to restriction shall become fully vestedand free of all restrictions and deferral limitations to the full extent of theoriginal grant upon the occurrence of any of the following events: (a) theTermination of Employment of the Grantee by reason of the Grantee’s death; (b)the Termination of Employment of the Grantee by reason of the Grantee’sDisability; [or] (c) the occurrence of a Change of Control as defined inSection 13(b) of the Plan; [or (d) the Termination of Employment of the Granteenot by reason of the Grantee’s Disability or death and not due to the Grantee’svoluntary Termination of Employment with the Company or the Company’stermination of Grantee’s employment for cause].

 

6.         If and when the Restriction Period ends with respect to RSUsawarded hereunder without a prior forfeiture of such RSUs, or if and when RSUsvest pursuant to the provisions of Paragraph 5 hereof, and subject to thepayment of withholding taxes as provided in Paragraph 8 hereof, the Companywill direct its transfer agent to issue to the Grantee in uncertificated form thenumber of unrestricted shares of Common Stock equal to the number of RSUs as towhich the Restriction Period has ended or that have vested pursuant toParagraph 5.

 

7.         Except as otherwise provided in this Agreement or the Plan,the Grantee shall not have any rights of a shareholder with respect to the RSUsor, prior to vesting, the Awarded Shares.

 

8.         No later than the date as of which an amount first becomesincludable in the gross income of the Grantee for federal income tax purposeswith respect to any Awarded Shares, the Grantee shall pay to the Company, ormake arrangements satisfactory to the Company regarding the payment of, anyfederal, state, local, or foreign taxes of any kind required by law to bewithheld by the Company with respect to such amount. Unless otherwisedetermined by the Committee, withholding obligations (up to the minimumstatutory amount required to be withheld by the Company) may be settled with sharesof Common Stock, including the Awarded Shares that give rise to the withholdingrequirement or shares of Common Stock already owned by the Grantee for a periodof at least six months. The obligations of the Company under the Plan shall beconditional on such payment or arrangements, and the Company, and its Subsidiariesand its Affiliates shall, to the extent permitted by law, have the right todeduct any such taxes from any payment otherwise due to the Grantee. Grantee,therefore, hereby unconditionally and irrevocably elects, notwithstandinganything to the contrary in this Paragraph 8 or elsewhere in this Agreement, tosatisfy any and all federal, state, local, and foreign taxes of any kind thatmay be withheld by the Company in connection with Grantee’s Awarded Shares (the**“Withholding Taxes”**) by electingone of the following options; *provided* thatin all cases, the Company shall have the right to receive not less than theminimum amount of the Withholding Taxes that the Company is required by law towithhold (the **“Mandatory Withholding Taxes”**);and *further provided* that an amount equal tothe Mandatory Withholding

 

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Taxes in respect of any cash payment to Granteeshall be withheld from any such cash payment:

 

**OPTION 1**:

 

o                                    Authorizing and directing the Company todeduct from the total number of shares of Company common stock issued anddeliverable to Grantee pursuant to this Agreement the number of shares having avalue equal to the Mandatory Withholding Taxes.

 

**OPTION 2**:

 

o                                    Tendering to the Company the number ofunrestricted shares of Company common stock owned by the Grantee for a periodof at least six months prior to the date on which Withholding Taxes are due andhaving a value equal to the Mandatory Withholding Taxes.

 

**OPTION 3**:

 

o                                    Paying to the Company incash an amount up to the Withholding Taxes but not less than the MandatoryWithholding Taxes.

 

**In the event that none of the payment options setforth above is specified, the Grantee’s election shall be deemed to be Option 1,and the Company shall proceed accordingly.**

 

9.     Grantee understands and acknowledges thatGrantee is one of a limited number of employees of the Company and itsSubsidiaries and Affiliates who have been selected to receive grants of RSUs andthat Grantee’s Award is considered Company confidential information. Granteehereby covenants and agrees not to disclose the Award of RSUs pursuant to thisAgreement to any other person except (a) Grantee’s immediate family and legalor financial advisors who agree to maintain the confidentiality of thisAgreement, (b) as required in connection with the administration of thisAgreement and the Plan as it relates to this Award or under applicable law, and(c) to the extent the terms of this Award have been publicly disclosed.

 

10.       The grant of RSUs to the Grantee in any year shall give theGrantee neither any right to similar grants in future years nor any right to beretained in the employ of the Company or its Subsidiaries or Affiliates, suchemployment being terminable to the same extent as if the Plan and thisAgreement were not in effect. The right and power of the Company and its Subsidiariesand Affiliates to dismiss or discharge the Grantee is specifically andunqualifiedly unimpaired by this Agreement.

 

11.       Each notice relating to this Agreement shall be in writing anddelivered in person or by mail to the Company at its office, 6001 36th AvenueWest, Everett, WA 98203-1264, to the attention of the Company’s Secretary or atsuch other address as the Company may specify in writing to the Grantee by anotice delivered in accordance with this paragraph. All notices to the Granteeshall be delivered to the Grantee at the Grantee’s address specified below orat such other address as the Grantee may specify in writing to the Secretary ofthe Company by a notice delivered in accordance with this paragraph.

 

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12.       This Agreement, including the provisions of the Planincorporated by reference herein, comprises the whole Agreement between theparties hereto with respect to the subject matter hereof, and shall be governedby and construed in accordance with the laws of the State of Delaware, withoutreference to principles of conflicts of law. This Agreement shall become effective when it has been executed or acceptedelectronically by the Company and the Grantee.

 

13.       This Agreement shall inure to the benefit of and be bindingupon each successor of the Company and, to the extent specifically providedherein and in the Plan, shall inure to the benefit of and shall be binding uponthe Grantee’s heirs, legal representatives, and successors.

 

14.       If any provision of this Agreement shall be invalid orunenforceable, such invalidity or unenforceability shall not affect thevalidity and enforceability of the remaining provisions of this Agreement.

 

15.       This Agreement may be executed in separate counterparts, eachof which when so executed and delivered will be an original, but all of whichtogether will constitute one and the same instrument. In pleading or provingthis Agreement, it will not be necessary to produce or account for more thanone such counterpart.

 

**INWITNESS WHEREOF**, thisAgreement is executed by the Grantee and by the Company through its dulyauthorized officer or officers as of the day and year first above written.

 
| DATE:  | **UNOVA, INC.**                                              |   |
|--------|--------------------------------------------------------------|--------|
|   | ** **                                                   |   |
|   |                                                         |   |
|   | By:                                                          |   |
|   | [Name]                                                       |
|   | [Title]                                                      |
|   |                                                         |   |
|   | **GRANTEE:**                                                 |   |
|   | *(One of  the boxes under Paragraph 8 must be checked)* |   |
|   |                                                         |   |
|   |                                                         |
|   | Signature                                                    |
|   |                                                         |
|   | Address                                                      |
|   |                                                         |
|   | Social  Security Number                                      |
|        |                                                              |        |  |

 

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