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                                                                    EXHIBIT 10.7

                                                                    [UNOVA LOGO]

                     CHANGE OF CONTROL EMPLOYMENT AGREEMENT

        AGREEMENT by and between UNOVA, INC., a Delaware corporation (the
"Company"), and NAME, dated as of the (DAY) of (MONTH) (YEAR).

        The Board of Directors of the Company (the "Board"), has determined that
it is in the best interests of the Company and its shareholders to assure that
the Company will have the continued dedication of the Executive, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined below)
of the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

        NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

        1. Certain Definitions.

            (a) The "Effective Date" shall mean the first date during the Change
of Control Period (as defined in Section 1(b) on which a Change of Control (as
defined in Section 2) occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's employment
with the Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change of Control or (ii) otherwise
arose in connection with or anticipation of a Change of Control, then for all
purposes of this Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination of employment.

            (b) The "Change of Control Period" shall mean the period commencing
on the date hereof and ending on the fourth anniversary of the date hereof;
provided, however, that commencing on the date two years after the date hereof,
and on each second anniversary of such date (such date and each such second
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate four years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to the Executive that the Change of Control Period shall not be so extended.

        2. Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:

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            (a) An acquisition by any individual, entity, or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30 percent or
more of either (i) the then outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (ii) the combined voting power of
the then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company Voting Securities");
excluding, however, the following acquisitions of Outstanding Company Common
Stock and Outstanding Company Voting Securities: (i) any acquisition directly
from the Company, other than an acquisition by virtue of the exercise of a
conversion privilege unless the security being so converted was itself acquired
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (iv)
any acquisition by any Person pursuant to a transaction which complies with
clauses (i), (ii), and (iii) of subsection (c) of this Section 2; or

            (b) Individuals who, as of the effective date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual who becomes a
member of the Board subsequent to such effective date hereof whose election, or
nomination for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but provided further, that any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board shall not be so considered as a
member of the Incumbent Board; or

            (c) The approval by the shareholders of the Company of a
reorganization, merger, or consolidation or sale or other disposition of all or
substantially all of the assets of the Company ("Business Combination") or if
consummation of such Business Combination is subject, at the time of such
approval by shareholders, to the consent of any government or governmental
agency, obtaining of such consent (either explicitly or implicitly by
consummation); excluding, however, such a Business Combination pursuant to which
(i) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination will beneficially own, directly or indirectly, more than 60 percent
of, respectively, the outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person (other than any
employee benefit plan (or related

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trust) sponsored or maintained by the Company or any corporation controlled by
the Company or such corporation resulting from such Business Combination) will
beneficially own, directly or indirectly, 30 percent or more of, respectively,
the outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election of
directors except to the extent that such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination will have
been members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

            (d) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

        3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the second anniversary of
such date (the "Employment Period").

        4. Terms of Employment.

            (a) Position and Duties.

                (i) During the Employment Period, (A) the Executive's position
(including status, offices, titles, and reporting requirements), authority,
duties, and responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised, and assigned at any
time during the 120-day period immediately preceding the Effective Date and (B)
the Executive's services shall be performed at the location where the Executive
was employed immediately preceding the Effective Date or any office or location
less than 35 miles from such location.

                (ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic, or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements, or
teach at educational institutions, and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.

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            (b) Compensation.

                (i) Base Salary. During the Employment Period, the Executive
shall receive an annual base salary ("Annual Base Salary"), which shall be paid
at a monthly rate, at least equal to twelve times the highest monthly base
salary paid or payable, including any base salary which has been earned but
deferred, to the Executive by the Company and its affiliated companies in
respect of the twelve-month period immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Annual Base Salary
shall be reviewed no more than 12 months after the last salary increase awarded
to the Executive prior to the Effective Date and thereafter at least annually.
Any increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary shall not
be reduced after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased. As used in
this Agreement, the term "affiliated companies" shall include any company
controlled by, controlling, or under common control with the Company.

                (ii) Annual Bonus. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus in cash at least equal to the higher of (A) the
Executive's highest award or awards for any fiscal year under the UNOVA, Inc.
Management Incentive Compensation Plan (effective for the 1999 fiscal year and
thereafter) or under any predecessor or successor plan or plans which provide
for the grant of annual cash bonuses or other short-term cash incentive awards
during the last three full fiscal years prior to the Effective Date or (B) the
Target Bonus (as that term is defined in the UNOVA, Inc. Management Incentive
Compensation Plan) applicable to the Executive for the fiscal year during which
the Effective Date occurs, or if the Management Incentive Compensation Plan is
not in effect for such fiscal year, the target bonus or award which the
Executive would earn for such year under any plan or arrangement in which the
Executive participates or is eligible to participate assuming the attainment of
any performance goals or similar criteria to the extent necessary for the
Executive to qualify to receive the target award thereunder. The amount which is
the higher of the amounts described in clause (A) and clause (B) above is
hereinafter called the "Annual Bonus."

                Notwithstanding the foregoing, the following additional
provisions shall be applicable to the definition of "award" or "awards" or
"bonus" or "bonuses" as those terms are used in the preceding paragraph:

                    (1) When made under the UNOVA, Inc. Management Incentive
Compensation Plan or any other annual incentive plan which provides that a
portion of an annual award shall be deposited in a so-called "Bonus Bank" and
shall remain "at risk," the award or bonus, in such case, shall (except as
provided in clause (2) below ) comprise ONLY the portion of the annual award
which is paid to the Executive on a current basis and shall NOT include any
amount of the award required to be deposited to a Bonus Bank. However, the award
or bonus shall also include any amount paid to the Executive as a periodic
payment from the Bonus Bank during the year with respect to which the amount was
made (but shall not include any payment from the Bonus Bank made solely as a
result of termination of employment);

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                    (2) The award or bonus for any fiscal year or portion
thereof shall include any part of such bonus or award, the payment of which is
deferred to a subsequent fiscal year or years at the election of the Executive;
and

                    (3) In the case of any bonus or award made with respect to a
period other than a full fiscal year, the amount of such bonus shall not be
annualized, and the bonus or award, if it related to more than one fiscal year,
shall be prorated so that only the portion thereof attributable to a particular
fiscal year shall be counted as part of the total award or bonus for that fiscal
year.

                Any Annual Bonus plus unpaid but due amounts from prior awards
plus any amounts payable from a so called Bonus Bank shall be paid in accordance
with the applicable plan but in no event later than the last day of the
Employment Period. In no event shall the Executive forfeit any balance in a
Bonus Bank upon termination of employment for any reason following a Change of
Control.

                (iii) Incentive, Savings, and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
incentive (including stock option or similar incentive plans), savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company and its affiliated companies, but in no event
shall such plans, practices, policies, and programs provide the Executive with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the Executive under
such plans, practices, policies, and programs as in effect at any time during
the 120-day period immediately preceding the Effective Date or if more favorable
to the Executive, those provided generally at any time after the Effective Date
to other peer executives of the Company and its affiliated companies.

                (iv) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit plans,
practices, policies, and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death, and
travel accident insurance plans and programs) to the extent applicable generally
to other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies, and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies, and programs in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company and
its affiliated companies.

                (v) Expenses. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in

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accordance with the most favorable policies, practices, and procedures of the
Company and its affiliated companies in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.

                (vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without limitation,
if applicable, tax and financial planning services, use of an automobile and
payment of related expenses, in accordance with the most favorable plans,
practices, programs, and policies of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

                (vii) Office and Support Staff. During the Employment Period,
the Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the foregoing provided
to the Executive by the Company and its affiliated companies at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies.

                (viii) Vacation. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs, and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

        5. Termination of Employment.

            (a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the Executive's duties
with the Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative.

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            (b) Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean:

                (i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
is delivered to the Executive by the Board or the Chief Executive Officer of the
Company which specifically identifies the manner in which the Board or Chief
Executive Officer believes that the Executive has not substantially performed
the Executive's duties, or

                (ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions of the Chief Executive Officer or
a senior officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.

            (c) Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean:

                (i) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status, offices, titles,
and reporting requirements), authority, duties, or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other action by the
Company which results in a diminution in such position, authority, duties, or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;

                (ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial, and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

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                (iii) the Company's requiring the Executive to be based at any
office or location other than as provided in Section 4(a)(i)(B) hereof or the
Company's requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the Effective
Date;

                (iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or

                (v) any failure by the Company to comply with and satisfy
Section 11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.

            (d) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated, and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

            (e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination, and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.

        6. Obligations of the Company Upon Termination.

            (a) Good Reason; Other Than for Cause, Death or Disability. If,
during the Employment Period, the Company shall terminate the Executive's
employment other than for Cause or Disability or the Executive shall terminate
employment for Good Reason:

                (i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the following
amounts:

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                    A. the sum of (1) the Executive's Annual Base Salary through
the Date of Termination to the extent not theretofore paid, (2) the product of
(x) the Annual Bonus, and (y) a fraction, the numerator of which is the number
of days in the current fiscal year through the Date of Termination, and the
denominator of which is 365, and (3) any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon), any awards
under the Performance Award Plan or any comparable or successor plan and any
accrued vacation pay, in each case to the extent not theretofore paid (the sum
of the amounts described in clauses (1), (2), and (3) shall be hereinafter
referred to as the "Accrued Obligations"); and

                    B. the amount equal to the product of (1) two and (2) the
sum of (x) the Executive's Annual Base Salary and (y) the Annual Bonus, or if
higher, any bonus paid with respect to any fiscal year during the Employment
Period; and

                    C. utilizing actuarial assumptions no less favorable to the
Executive than those in effect immediately prior to the Effective Date, an
amount equal to the excess of (a) the actuarial equivalent of the benefit under
the Company's qualified defined benefit retirement plan (the "Retirement Plan")
and any excess or supplemental retirement plan in which the Executive
participates (together, the "SERP") which the Executive would receive if the
Executive's employment continued for two years after the Date of Termination
assuming for this purpose that all accrued benefits are fully vested, and,
assuming that the Executive's compensation in each of the three years is that
required by Section 4(b)(i) and Section 4(b)(ii), over (b) the actuarial
equivalent of the Executive's actual benefit (paid or payable), if any, under
the Retirement Plan and the SERP as of the Date of Termination;

                (ii) for two years after the Executive's Date of Termination, or
such longer period as may be provided by the terms of the appropriate plan,
practice, policy, or program, the Company shall continue benefits to the
Executive and/or the Executive's family at least equal to those which would have
been provided to them in accordance with the plans, programs, practices, and
policies described in Section 4(b)(iv) of this Agreement if the Executive's
employment had not been terminated or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies and their families, provided, however,
that if the Executive becomes reemployed with another employer and is eligible
to receive medical or other welfare benefits under another employer provided
plan, the medical and other welfare benefits described herein shall be secondary
to those provided under such other plan during such applicable period of
eligibility. For purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits pursuant to such
plans, practices, programs, and policies, the Executive shall be considered to
have remained employed until two years after the Date of Termination and to have
retired on the last day of such period;

                (iii) the Company shall, at its sole expense as incurred,
provide the Executive with outplacement services the scope and provider of which
shall be selected by the Executive in his or her sole discretion; and

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                (iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive
under any plan, program, policy, or practice or contract or agreement of the
Company and its affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").

            (b) Death. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination. With respect to the provision of
Other Benefits, the term Other Benefits as utilized in this Section 6(b) shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices, and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.

            (c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 6(c)
shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices, and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive and/or the Executive's family, as in effect at
any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.

            (d) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period or if the Executive
voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the Executive
(x) his or her Annual Base Salary through the Date of Termination, (y) the
amount of any compensation previously deferred by the Executive, and (z) Other
Benefits, in each case to the extent theretofore unpaid. In such case, all
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination.

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        7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, practice,
policy, or program provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to Section 12(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plan, policy, practice, or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, practice, policy, or program or contract or agreement except as explicitly
modified by this Agreement.

        8. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense, or other claim, right, or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code").

        9. Certain Additional Payments by the Company.

            (a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Executive (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional payments
required under this Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as
(the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after payment
by the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.

            (b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the

                                      -11-
<PAGE>   12

amount of such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by Deloitte & Touche or such other
certified public accounting firm as may be designated by the Executive (the
"Accounting Firm") which shall provide detailed supporting calculations both to
the Company and the Executive within 15 business days of the receipt of notice
from the Executive that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity, or group effecting the Change
of Control, the Executive shall appoint another nationally recognized accounting
firm to make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to this Section 9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive. As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 9(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.

            (c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

                (i) give the Company any information reasonably requested by the
Company relating to such claim,

                (ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,

                (iii) cooperate with the Company in good faith in order
effectively to contest such claim, and

                (iv) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses

                                      -12-
<PAGE>   13

(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses. Without limitation on the foregoing provisions of this Section
9(c), the Company shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Executive
to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

            (d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

        10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge, or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge, or data to anyone other than the Company and those
designated by it. In no event shall an asserted violation of the provisions

                                      -13-
<PAGE>   14

of this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

        11. Successors.

            (a) This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.

            (b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.

            (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid.

        12. Miscellaneous.

            (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

            (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

             If to the Executive:   Mr. Charles A. Cusumano
                                    22307 Dunmore Drive
                                    Calabasas, CA 91302

             If to the Company:     UNOVA, Inc.
                                    Attention:  General Counsel
                                    21900 Burbank Boulevard
                                    Woodland Hills, CA 91367-7418

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                                      -14-
<PAGE>   15

            (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

            (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local, or foreign taxes as shall be required to
be withheld pursuant to any applicable law or regulation.

            (e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

            (f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will"
and, subject to Section 1(a) hereof, prior to the Effective Date, the
Executive's employment and/or this Agreement may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which case
the Executive shall have no further rights under this Agreement. From and after
the Effective Date this Agreement shall supersede any other agreement between
the parties with respect to the subject matter hereof.

        IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

                                    --------------------------------------------
                                                     Name

                                    UNOVA, INC.

                                    By
                                       -----------------------------------------

CS/99-10 COC VP
Corp Secy's Office

                                      -15-<PAGE>   1

                                                                   EXHIBIT 10.20

                         AMENDMENT NO. 3 TO UNOVA, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

        WHEREAS, UNOVA, Inc. (the "Company") has previously adopted the UNOVA,
Inc. Supplemental Executive Retirement Plan as amended by Amendment No. 1
thereto dated September 23, 1998 and Amendment No. 2 thereto dated March 11,
1999 (the "Plan"); and

        WHEREAS, the Board of Directors of the Company deems it desirable that
the Plan be further amended in the manner set forth hereinafter;

        NOW, THEREFORE, this Amendment No. 3 to the Plan is hereby adopted by
the Company with the following effect:

1. Section 2.3 of the Plan is hereby amended so that the such Section 2.3 shall
read in its entirely as follows:

        "Average Earnings" shall mean the average of gross base salary payments
        plus Bonuses as defined in Section 2.7 (except, for a Retired
        Participant receiving a Retirement Benefit as of the Distribution Date,
        Bonuses shall mean gross cash payments of Bonuses) from the Company to
        the Participant in the three twelve consecutive month periods (with no
        overlap), in which such Participant's gross base salary payments plus
        gross Bonuses are the highest, in the Participant's final 120 months of
        employment. For all purposes of calculating "Average Earnings" under
        this Supplemental Plan "gross base salary" shall include (i) any amounts
        deferred pursuant to Section 401(k) or Section 125 of the Code, (ii) any
        amounts deferred at the election of the Participant pursuant to any plan
        of the Company which permits such deferral, and (iii) cash payments,
        during the relevant period, of commissions payable to a Participant as a
        regular part of the Participant's compensation, e.g. to a person engaged
        in sales or marketing; however, commissions not payable as a regular
        part of a Participant's compensation shall not be included in the
        calculation of Average Earnings. Commissions or portions thereof
        otherwise included in the calculation of Average Earnings pursuant to
        the preceding sentence which are deferred (other than at the election of
        a Participant) shall be included in the calculation of Average Earnings
        in the relevant period in which cash payments are made. For purposes of
        calculating Average Earnings under this Supplemental Plan salary
        (including relevant commission payments and bonuses) paid in a non-U.S.
        currency shall be converted to U.S. dollar equivalents using the
        quarterly UNOVA, Inc. official rates of exchange, as determined by the
        Chief Financial Officer and as utilized generally for corporate
        purposes.

<PAGE>   2

               (a). Average Earnings for purposes of calculating a Disability or
        Death Benefit for or with respect to a Disabled Participant shall be
        calculated using the 120 months that include and precede the month that
        his or her Disability commenced. If a formerly Disabled Participant who
        has returned to active employment with the Company does not have a
        minimum of 36 consecutive calendar months of employment with the Company
        after such return to active employment, then Average Earnings shall be
        calculated by the Committee in accordance with subparagraph (e).

               (b). Average Earnings in the case of an Active Participant who
        dies prior to attaining age 65 shall be calculated using the 120 months
        that include and precede the month of the Participant's death (or
        Disability, in the case of a Disabled Participant who dies). For
        purposes of calculating a lump sum payment pursuant to Section 4.1(d) in
        the event of a Change of Control, with respect to a person (other than a
        Disabled or deceased Participant) who is an Active Participant as of the
        date of such calculation, Average Earnings shall be calculated as if the
        person's employment with the Company ended on such date.

               (c). For purposes of calculating Average Earnings, the
        Participant's gross base salary plus gross Bonuses received while
        employed by Western Atlas (beginning on or after March 17, 1994) or
        Litton (prior to such date), if and to the extent such Western Atlas or
        Litton employment is included within the period of 120 months to be used
        in such calculation, shall be taken into account, provided that the
        Participant's benefits under the Western Atlas retirement plans were
        transferred to the Company pursuant to the Employee Benefits Agreement
        between Western Atlas and UNOVA, Inc.
        (the "Employee Benefits Agreement").

               (d). If a Participant is eligible to receive payments under the
        Supplemental Plan but does not have 36 consecutive months of employment
        with Western Atlas and the Company, then Average Earnings shall be
        calculated by the Committee in accordance with subparagraph (e).

               (e). Notwithstanding the foregoing, the Committee may determine
        Average Earnings for the purposes of this Section by another methodology
        which it determines to be more appropriate under the facts and
        circumstances; provided, however, that, following a Change of Control,
        the authority of the Committee under this subparagraph (e) shall be
        limited to matters referred to in the last sentence of subparagraph (a)
        above and the matters referred to in subparagraph (d) above unless the

                                       2
<PAGE>   3

        methodology for determining Average Earnings selected by the Committee
        is more advantageous to the Participant.

2. Except as specifically provided in this Amendment No. 3, each and every
provision of the Plan is hereby ratified, approved, and confirmed.

3. This Amendment No. 3 shall be deemed effective for all purposes on and as of
the date hereof, except that this Amendment No. 3 shall not be effective with
respect to any Participant who retired from the Company subsequent to the
Distribution Date and commenced receiving a Retirement Benefit under the Plan
prior to the date hereof.

4. This Amendment No. 3 shall be governed by the laws of Delaware except to the
extent preempted by ERISA.

5. Capitalized terms used in this Amendment No. 3 and not defined herein shall
have the meaning assigned to such terms in the Plan.

        IN WITNESS HEREOF, the Company has caused this Amendment No. 3 to be
executed by its duly authorized officers this 15th day of March, 2000.

                                         UNOVA, Inc.

WITNESS: /s/ Virginia S. Young           By: /s/ Michael E. Keane
        -----------------------------       ------------------------------------
                                             Michael E. Keane

WITNESS: /s/ Christine McVeigh           By: /s/ Charles A. Cusumano
        -----------------------------       ------------------------------------
                                             Charles A. Cusumano

                                       3

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