-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FYtdbeV2FONQCtGSa1PyWLFNiRYQgEW4qpvTHMbYCVsYHQZArRFLSVnqkfjiA8Xg 7grMsFMuk7NVTRmdQBOV0w== /in/edgar/work/20000810/0000950148-00-001671/0000950148-00-001671.txt : 20000921 0000950148-00-001671.hdr.sgml : 20000921 ACCESSION NUMBER: 0000950148-00-001671 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNOVA INC CENTRAL INDEX KEY: 0001044590 STANDARD INDUSTRIAL CLASSIFICATION: [3550 ] IRS NUMBER: 954647021 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13279 FILM NUMBER: 691627 BUSINESS ADDRESS: STREET 1: 360 NORTH CRESCENT DRIVE CITY: BEVERLY HILLS STATE: CA ZIP: 90210 BUSINESS PHONE: 3108882500 MAIL ADDRESS: STREET 1: 360 NORTH CRESCENT DRIVE CITY: BEVERLY HILLS STATE: CA ZIP: 90210 10-Q 1 e10-q.txt FORM 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-13279 UNOVA, INC. (Exact name of registrant as specified in its charter) DELAWARE 95-4647021 (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 21900 BURBANK BOULEVARD WOODLAND HILLS, CALIFORNIA 91367-7418 WWW.UNOVA.COM (Zip Code) (Address of principal executive offices and internet site) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (818) 992-3000 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] On July 31, 2000 there were 55,938,760 shares of Common Stock outstanding, exclusive of treasury shares. Page 1 of 15 2 UNOVA, INC. INDEX REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2000
PAGE NUMBER PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Consolidated Statements of Operations (unaudited) Six months ended June 30, 2000 and 1999.................. 3 Consolidated Statements of Operations (unaudited) Three Months Ended June 30, 2000 and 1999................. 4 Consolidated Balance Sheets (unaudited) June 30, 2000 and December 31, 1999 ...................... 5 Consolidated Statements of Cash Flows (unaudited) Six Months Ended June 30, 2000 and 1999................... 6 Notes to Consolidated Financial Statements (unaudited)..... 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............... 10 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K............................. 14 Signatures 15
2 3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS UNOVA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
SIX MONTHS ENDED JUNE 30, --------------------------------- 2000 1999 ------------ ------------ Sales and Service Revenues ................... $ 965,059 $ 987,831 ------------ ------------ Costs and Expenses Cost of sales and service ................ 733,271 703,335 Selling, general and administrative ...... 204,404 221,436 Depreciation and amortization ............ 34,832 32,714 Interest, net ............................ 15,781 19,005 ------------ ------------ Total Costs and Expenses ............... 988,288 976,490 ------------ ------------ Other Income, Net ............................ 40,186 ------------ Earnings before Taxes on Income .............. 16,957 11,341 Taxes on Income .............................. (1,187) (4,536) ------------ ------------ Net Earnings ................................. $ 15,770 $ 6,805 ============ ============ Basic and Diluted Earnings per Share ......... $ 0.28 $ 0.12 ============ ============ Shares Used in Computing Basic Earnings per Share ....................... 55,555,421 54,944,359 Shares Used in Computing Diluted Earnings per Share ....................... 55,555,676 54,947,033
See accompanying notes to consolidated financial statements. 3 4 UNOVA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
THREE MONTHS ENDED JUNE 30, --------------------------------- 2000 1999 ------------ ------------ Sales and Service Revenues .................. $ 480,232 $ 494,431 ------------ ------------ Costs and Expenses Cost of sales and service ............... 369,886 351,026 Selling, general and administrative ..... 106,789 111,768 Depreciation and amortization ........... 17,813 16,131 Interest, net ........................... 8,169 9,923 ------------ ------------ Total Costs and Expenses .............. 502,657 488,848 ------------ ------------ Other Income, Net ........................... 40,186 ------------ Earnings before Taxes on Income ............. 17,761 5,583 Taxes on Income ............................. (1,497) (2,233) ------------ ------------ Net Earnings ................................ $ 16,264 $ 3,350 ============ ============ Basic and Diluted Earnings per Share ........ $ 0.29 $ 0.06 ============ ============ Shares Used in Computing Basic Earnings per Share ...................... 55,558,069 54,945,613 Shares Used in Computing Diluted Earnings per Share ...................... 55,558,578 54,950,064
See accompanying notes to consolidated financial statements. 4 5 UNOVA, INC. CONSOLIDATED BALANCE SHEETS (thousands of dollars) (unaudited) ASSETS
JUNE 30, DECEMBER 31, 2000 1999 ----------- ----------- Current Assets Cash and cash equivalents .................................... $ 7,059 $ 25,239 Accounts receivable, net ..................................... 472,040 596,885 Inventories, net of progress billings ........................ 263,430 310,175 Deferred tax assets .......................................... 159,100 158,170 Other current assets ......................................... 21,911 19,873 ----------- ----------- Total Current Assets ...................................... 923,540 1,110,342 ----------- ----------- Property, Plant and Equipment, at Cost ............................ 462,448 472,229 Less Accumulated Depreciation ..................................... (212,768) (201,330) ----------- ----------- Property, Plant and Equipment, Net ........................... 249,680 270,899 ----------- ----------- Goodwill and Other Intangibles, Net ............................... 378,295 399,131 ----------- ----------- Other Assets ...................................................... 130,332 123,167 ----------- ----------- Total Assets ...................................................... $ 1,681,847 $ 1,903,539 =========== ===========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
JUNE 30, DECEMBER 31, 2000 1999 ----------- ----------- Current Liabilities Accounts payable and accrued expenses ........................ $ 332,513 $ 509,188 Payroll and related expenses ................................. 83,795 89,309 Notes payable and current portion of long-term obligations ... 14,316 64,002 ----------- ----------- Total Current Liabilities ................................. 430,624 662,499 ----------- ----------- Long-term Obligations ............................................. 365,317 365,386 ----------- ----------- Deferred Tax Liabilities .......................................... 47,457 44,777 ----------- ----------- Other Long-term Liabilities ....................................... 96,006 99,577 ----------- ----------- Commitments and Contingencies...................................... Shareholders' Investment Common stock ................................................. 559 556 Additional paid-in capital ................................... 655,820 652,157 Retained earnings ............................................ 107,030 91,260 Accumulated other comprehensive loss - cumulative currency translation adjustment ................ (20,966) (12,673) ----------- ----------- Total Shareholders' Investment ............................ 742,443 731,300 ----------- ----------- Total Liabilities and Shareholders' Investment .................... $ 1,681,847 $ 1,903,539 =========== ===========
See accompanying notes to consolidated financial statements. 5 6 UNOVA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (thousands of dollars) (unaudited)
SIX MONTHS ENDED JUNE 30, --------------------------- 2000 1999 --------- --------- Cash and Cash Equivalents at Beginning of Period ................ $ 25,239 $ 17,708 --------- --------- Cash Flows from Operating Activities: Net earnings ............................................... 15,770 6,805 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Gain on sale of business ................................ (44,686) Depreciation and amortization ........................... 34,832 32,714 Change in prepaid pension costs, net .................... (8,258) (8,554) Deferred taxes .......................................... (1,880) (10,326) Proceeds from the sale of accounts receivable ........... 82,000 Changes in operating assets and liabilities: Accounts receivable ................................... 108,254 (13,530) Inventories ........................................... 33,038 30,342 Other current assets .................................. 6,166 2,645 Accounts payable and accrued expenses ................. (176,430) (87,814) Payroll and related expenses .......................... (7,480) (6,721) Other operating activities .............................. (5,273) 5,722 --------- --------- Net Cash Provided by (Used in) Operating Activities ... (45,947) 33,283 --------- --------- Cash Flows from Investing Activities: Proceeds from sale of business ............................. 88,000 Capital expenditures ....................................... (19,376) (35,220) Other investing activities ................................. 6,350 9,044 --------- --------- Net Cash Provided by (Used in) Investing Activities ... 74,974 (26,176) --------- --------- Cash Flows from Financing Activities: Net decrease in notes payable and credit facilities ........ (49,776) (16,731) Other financing activities ................................. 2,569 3,189 --------- --------- Net Cash Used in Financing Activities ................. (47,207) (13,542) --------- --------- Resulting Decrease in Cash and Cash Equivalents ................. (18,180) (6,435) --------- --------- Cash and Cash Equivalents at End of Period ...................... $ 7,059 $ 11,273 ========= ========= Supplemental disclosure of cash flow information: Interest paid .............................................. $ 16,161 $ 19,885 Income taxes paid (refunded) ............................... $ 2,844 $ (274)
See accompanying notes to consolidated financial statements. 6 7 UNOVA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. UNOVA, Inc. and subsidiaries ("UNOVA" or the "Company") became an independent public company on October 31, 1997 (the "Distribution Date"), when all of the UNOVA common stock was distributed to holders of common stock of Western Atlas Inc. ("WAI"), in the form of a dividend (the "Distribution"). Every WAI shareholder of record on October 24, 1997 was entitled to receive one share of UNOVA common stock for each WAI share of common stock held. The amounts included in this report are unaudited; however in the opinion of management, all adjustments necessary for a fair presentation of results of operations, financial position and cash flows for the stated periods have been included. These adjustments are of a normal recurring nature. It is suggested that these consolidated financial statements be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. The results of operations for the interim periods presented are not necessarily indicative of operating results for the entire year. 2. Inventories, net of progress billings consisted of the following (thousands of dollars):
June 30, December 31, 2000 1999 --------- --------- Raw materials and work in process ...... $ 272,357 $ 289,656 Finished goods ......................... 28,002 44,336 Less progress billings ................. (36,929) (23,817) --------- --------- Inventories, net of progress billings .. $ 263,430 $ 310,175 ========= =========
3. Interest, net was composed of the following (thousands of dollars):
Six Months Ended Three Months Ended June 30, June 30, ------------------------- ------------------------- 2000 1999 2000 1999 -------- -------- -------- -------- Interest expense ...... $ 16,977 $ 19,519 $ 8,592 $ 9,931 Interest income ....... (1,196) (514) (423) (8) -------- -------- -------- -------- Interest, net ......... $ 15,781 $ 19,005 $ 8,169 $ 9,923 ======== ======== ======== ========
4. Basic earnings per share is calculated using the weighted average number of common shares outstanding and issuable for the applicable period. Diluted earnings per share is computed using basic weighted average shares plus the dilutive effect of outstanding stock options using the "treasury stock" method. 7 8 UNOVA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. (continued) Shares used for basic and diluted earnings per share were computed as follows:
Six Months Ended Three Months Ended June 30, June 30, ---------------------------- ---------------------------- 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Basic weighted average shares ...... 55,555,421 54,944,359 55,558,069 54,945,613 Dilutive effect of stock options ... 255 2,674 509 4,451 ---------- ---------- ---------- ---------- Diluted weighted average shares .... 55,555,676 54,947,033 55,558,578 54,950,064 ========== ========== ========== ==========
At June 30, 2000 and 1999, Company employees and directors held options to purchase 5,502,620 and 3,957,100 shares, respectively, of Company common stock that were antidilutive to the diluted earnings per share computation. These options could become dilutive in future periods if the average market price of the Company's common stock exceeds the exercise price of the outstanding options. 5. The Company's comprehensive income (loss) amounts were computed as follows (thousands of dollars):
Six Months Ended Three Months Ended June 30, June 30, ------------------------- ------------------------- 2000 1999 2000 1999 -------- -------- -------- -------- Net earnings ........................... $ 15,770 $ 6,805 $ 16,264 $ 3,350 Change in equity due to foreign currency translation adjustments .... (8,293) (7,965) (5,659) (3,854) -------- -------- -------- -------- Comprehensive income (loss) ............ $ 7,477 $ (1,160) $ 10,605 $ (504) ======== ======== ======== ========
6. The Company operates in two primary businesses: Automated Data Systems ("ADS") and Industrial Automation Systems ("IAS"). The IAS businesses are further disaggregated into two reportable segments based on their respective markets: Integrated Production Systems and Advanced Manufacturing Equipment. The Company uses operating profit, which is defined as earnings before taxes on income and net interest expense, to evaluate performance. Corporate and other amounts include corporate operating costs and currency transaction gains and losses. There were no material intersegment transactions. 8 9 UNOVA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6. (continued) (Millions of Dollars)
Integrated Advanced Automated Production Manufacturing Corporate Data Systems Systems Equipment and Other Total ------------ ---------- ------------- --------- ------ Six Months Ended June 30: Sales ........................ 2000 $399.0 $429.7 $136.4 $965.1 1999 418.4 413.6 155.8 987.8 Operating profit (loss) ...... 2000 22.4(a) 23.4 3.5 $(16.6) 32.7 1999 10.3 32.7 1.5 (14.2) 30.3 Three Months Ended June 30: Sales ........................ 2000 189.4 222.5 68.3 480.2 1999 210.4 210.6 73.4 494.4 Operating profit (loss) ...... 2000 18.0(a) 15.3 1.2 (8.6) 25.9 1999 2.7 20.8 (0.5) (7.5) 15.5
(a) includes net other income of $40.2 million 7. The Company leases executive offices that are located in a building owned by the UNOVA Master Trust, an entity which holds the assets of the Company's primary U.S. pension plans. Rental expense under the provisions of this lease was $0.5 million and $0.3 million for the six and three month periods ended June 30, 2000, respectively. Rental expense for the six and three month periods ended June 30, 1999 was $0.4 million and $0.2 million, respectively. 8. Net other income of $40.2 million is comprised of a one-time gain from the sale of the ADS segment's Amtech transportation systems operations ("Amtech"), partially offset by severance charges related to the ADS segment's North American manufacturing activities. In June 2000, the Company sold Amtech and received preliminary cash proceeds of approximately $88 million. The net assets and results of operations of Amtech are not material to the Company's consolidated financial statements for all periods presented. 9. During the second quarter of 2000 the Company significantly reduced its annual effective tax rate to reflect the recognition of expected tax benefits from previously incurred losses. 9 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS The Company operates in two primary businesses: Automated Data Systems ("ADS") and Industrial Automation Systems ("IAS"). The IAS businesses are further disaggregated into two reportable segments based on their respective markets: Integrated Production Systems ("IPS") and Advanced Manufacturing Equipment ("AME"). Sales and service revenues and segment operating profit (loss) for the six and three months ended June 30, 2000 and 1999 were as follows:
SIX MONTHS ENDED THREE MONTHS ENDED JUNE 30, JUNE 30, 2000 1999 2000 1999 -------------------------- ------------------------------ (thousands of dollars) (thousands of dollars) Sales and Service Revenues Automated Data Systems ................. $ 399,018 $ 418,426 $ 189,465 $ 210,441 Industrial Automation Systems: Integrated Production Systems ....... 429,686 413,561 222,516 210,615 Advanced Manufacturing Equipment .... 136,355 155,844 68,251 73,375 --------- --------- --------- --------- Total Sales and Service Revenues ....... $ 965,059 $ 987,831 $ 480,232 $ 494,431 ========= ========= ========= ========= Segment Operating Profit (Loss) Automated Data Systems ................. $(17,788)(a) $ 10,315 $ (22,219)(a) $ 2,665 Industrial Automation Systems: Integrated Production Systems ....... 23,425 32,716 15,312 20,816 Advanced Manufacturing Equipment .... 3,510 1,462 1,243 (520) --------- --------- --------- --------- Segment Operating Profit (Loss) ........ $ 9,147 $ 44,493 $ (5,664) $ 22,961 ========= ========= ========= ========= (a) excludes net other income of $40,186
Sales and Service Revenues and Segment Operating Profit Total sales and service revenues for the six months ended June 30, 2000 were $965.1 million, a decrease of $22.8 million, or 2%, from the corresponding prior year period. Total segment operating profit of $9.1 million for the six months ended June 30, 2000 represents a decrease of $35.3 million, or 79%, compared to the corresponding prior year period. For the three months ended June 30, 2000, total sales and service revenues of $480.2 million represents a decrease of $14.2 million, or 3%, compared with the corresponding prior year quarter. For the three months ended June 30, 2000, the Company reported a total segment operating loss of $5.7 million compared to total segment operating profit of $23.0 million for the corresponding prior year quarter. Automated Data Systems: ADS segment revenues decreased $19.4 million, or 5%, for the six months ended June 30, 2000, and $21.0 million, or 10%, for the three months ended June 30, 2000, compared to the corresponding prior year periods. The sales decline was caused primarily by continuing weakness in the Direct Store Delivery (DSD) market and sales force disruption as the Company's Intermec subsidiary shifts from a geographic sales orientation to a named-account/vertical marketing structure. As a result of its 1999 ERP system issues and current sales force disruption, Intermec has not participated in its overall market growth. For the six and three month periods ended June 30, 2000, ADS reported segment operating losses of $17.8 million and $22.2 million, respectively, compared to segment operating profit of $10.3 million and $2.7 million in the corresponding prior year periods. The significant operating loss for the 2000 second quarter was primarily a result of lower sales volume which contributed less margin to cover reduced overhead and selling, general and administrative expenses. 10 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Integrated Production Systems: IPS segment revenues increased $16.1 million, or 4%, and $11.9 million, or 6%, for the six and three month periods ended June 30, 2000, respectively, compared to the corresponding prior year periods. Strong domestic activity for the segment's engineering and design products and precision grinding systems was the primary contributor to revenue growth for the first half of 2000. Domestic revenue growth was partially offset by declines in foreign sales due to weakness in UK markets. Related operating profit decreased $9.3 million, or 28%, for the six months ended June 30, 2000, and $5.5 million, or 26%, for the three months ended June 30, 2000 compared with the corresponding prior year periods. The IPS operating profit decline was attributed to operating losses incurred at foreign operations due to unabsorbed costs. IPS backlog decreased from $627.7 million at December 31, 1999 to $546.8 million at June 30, 2000 due to an increase in project delays by automotive customers. The Company believes that the decline in backlog may indicate an overall softness in its automotive related markets. Advanced Manufacturing Equipment: AME segment revenues decreased $19.5 million, or 13%, and $5.1 million, or 7%, for the six and three month periods ended June 30, 2000, compared to the corresponding prior year periods, respectively. The decrease in revenues reflects continued weakness in the general machine tool market. AME reported operating profit of $3.5 million for the six months ended June 30, 2000, compared to $1.5 million for the corresponding prior year period. For the 2000 second quarter, AME reported operating profit of $1.2 million compared to an operating loss of $0.5 million for the second quarter of 1999. AME achieved marginal operating profits, despite the revenue decline, due to 1999 headcount reductions and cost structure improvements. AME backlog decreased from $102.5 million at December 31, 1999 to $81.5 million at June 30, 2000. Costs and Expenses Cost of sales increased $30.0 million to $733.3 million for the six months ended June 30, 2000 from $703.3 million for the six months ended June 30, 1999. Cost of sales increased $18.9 million to $369.9 million for the three months ended June 30, 2000 from $351.0 million for the three months ended June 30, 1999. Cost of sales as a percentage of sales increased to 76% and 77% for the six and three month periods ended June 30, 2000, respectively, from 71% in each of the corresponding periods in the prior year due to the above-mentioned factors contributing to fluctuations in revenue and operating profit. Selling, general and administrative expenses ("SG&A") decreased $17.0 million to $204.4 million for the six months ended June 30, 2000, from $221.4 million for the six months ended June 30, 1999. SG&A decreased $5.0 million to $106.8 million for the three months ended June 30, 1999, from $111.8 million for the three months ended June 30, 1999. The decrease in SG&A was due primarily to the decline in sales from the prior year. SG&A as a percentage of sales was 21% and 22% for the six and three months periods ended June 30, 2000, respectively. For the six and three months periods ended June 30, 1999, SG&A as a percentage of sales was 22% and 23%, respectively. Depreciation and amortization expense increased to $34.8 million and $17.8 million for the six and three months ended June 30, 2000 from $32.7 million and $16.1 million for the corresponding periods in the prior year due to an increase in the machinery and equipment component of fixed assets. Net interest expense was $15.8 million and $19.0 million for the six months ended June 30, 2000 and 1999, respectively, and $8.2 million and $9.9 million for the three months ended June 30, 2000 and 1999, respectively. The decrease was attributable to lower outstanding debt during the six months and three months ended June 30, 2000 as compared to the same periods in 1999, partially offset by the effect of increased interest rates. 11 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Other Income, Net Net other income of $40.2 million is comprised of a one-time gain from the sale of the ADS segment's Amtech transportation systems operations ("Amtech"), partially offset by severance charges related to the ADS segment's North American manufacturing activities. In June 2000, the Company sold Amtech and received preliminary cash proceeds of approximately $88 million. The net assets and results of operations of Amtech are not material to the Company's consolidated financial statements for all periods presented. Taxes on Income During the second quarter of 2000 the Company significantly reduced its annual effective tax rate to reflect the recognition of expected tax benefits from previously incurred losses. LIQUIDITY AND CAPITAL RESOURCES Cash and marketable securities decreased to $7.1 million at June 30, 2000 from $25.2 million at December 31, 1999. Total debt decreased to $379.6 million at June 30, 2000 from $429.4 million at December 31, 1999. Proceeds from the sale of Amtech were used to reduce outstanding debt incurred for the normal capital expenditures and working capital needs of the company. The Company maintains two unsecured committed variable-rate credit facilities with banks from which it may borrow up to $500.0 million. Outstanding borrowings under these facilities were $150.0 million at June 30, 2000. The Company sells interests in a revolving pool of its trade accounts receivable to a financial institution which issues short-term debt backed by receivables acquired in similar transactions. At June 30, 2000 and December 31, 1999 net proceeds of $100.0 million have been reflected as a reduction of accounts receivable on the consolidated balance sheet. Costs associated with the asset securitization agreements are $3.3 million for the six months ended June 30, 2000 and $1.7 million for the three months ended June 30, 2000 and are classified as selling, general and administrative expenses. During the second quarter of 2000, the Company engaged Credit Suisse First Boston to analyze and advise management on strategic alternatives to accelerate value generation for the Company's stakeholders. The Company believes that cash flow from operations, along with available borrowing capacity, will be adequate to meet anticipated working capital and capital expenditure requirements for the next 12 months. 12 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) NEW ACCOUNTING PRONOUNCEMENTS In June 2000, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101B, Second Amendment - Revenue Recognition in Financial Statements, that defers the effective date of Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, until no later than the fourth fiscal quarter of fiscal years beginning after December 15, 1999. The Company believes the adoption of SAB 101 will not have a material impact on its revenue recognition practices. In June 1999, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 137, Accounting for Derivative Instruments and Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133 (an amendment of FASB Statement No. 133). Under the provisions of this statement, the effective date of Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS No. 133"), is deferred to fiscal years beginning after June 15, 2000. The Company is currently evaluating the impact of adopting SFAS No. 133. FORWARD-LOOKING STATEMENTS The Company cautions readers that included in this quarterly report are certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on management's beliefs as well as on assumptions made by and information currently available to management. They include, but are not limited to, statements about market outlook, the Company's ability to meet its working capital and capital expenditure requirements, future available borrowing capacity, the impact of new accounting pronouncements, and the Company's ability to implement any strategic alternatives it may choose to accelerate value generation for its stakeholders. Such forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which could cause the Company's future results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. This report should be read in conjunction with the Company's Annual Report on Form 10-K which contains a fuller discussion of such risks, uncertainties, and assumptions. Readers are cautioned not to place undue reliance on forward-looking statements. The Company disclaims any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. 13 14 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Reports on Form 8-K: No reports on Form 8-K have been filed by the Registrant during the quarter ended June 30, 2000. (b) See Exhibit Index included herein on page E-1. 14 15 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. UNOVA, INC. (Registrant) By /s/ Michael E. Keane --------------------------------- Michael E. Keane Senior Vice President and Chief Financial Officer August 10, 2000 15 16 UNOVA, INC. INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT - ----------- ---------------------- 2.1 Amended and Restated Purchase and Sale Agreement dated August 20, 1998, between UNOVA, Inc., UNOVA Industrial Automation Systems, Inc., and UNOVA UK Limited, on the one hand, and Cincinnati Milacron Inc., on the other hand, filed on October 2, 1998 as Exhibit 2 to the Company's Current Report on Form 8-K, and incorporated herein by reference. 3.1 Certificate of Incorporation of UNOVA, Inc., filed on October 22, 1997 as Exhibit 3A to Amendment No. 2 to the Company's Registration Statement on Form 10 No. 001-13279, and incorporated herein by reference. 3.2 By-laws of UNOVA, Inc., as amended on February 5, 1999, filed as Exhibit 3.2 to the Company's 1998 Annual Report on Form 10-K, and incorporated herein by reference. 4.1 $400,000,000 Credit Agreement dated September 24, 1997, among UNOVA, Inc., the Banks listed therein, and Morgan Guaranty Trust Company of New York, as Agent (the "$400,000,000 Credit Agreement"), filed on October 1, 1997 as Exhibit 10M to Amendment No. 1 to the Company's Registration Statement on Form 10 No. 001-13279, and incorporated herein by reference. 4.2 Amendment No. 1 to the $400,000,000 Credit Agreement, dated January 15, 1998, filed as Exhibit 4.4 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 4.3 Amendment No. 2 to the $400,000,000 Credit Agreement, dated May 15, 1998, filed as Exhibit 4.7 to the Company's June 30, 1998 Quarterly Report on Form 10-Q, and incorporated herein by reference. 4.4 Amendment No. 3 to the $400,000,000 Credit Agreement, dated September 24, 1998, filed as Exhibit 4.8 to the Company's September 30, 1998 Quarterly Report on Form 10-Q, and incorporated herein by reference. 4.5 Amendment No. 4 to the $400,000,000 Credit Agreement dated November 24, 1999, filed as Exhibit 4.5 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference. 4.6 Rights Agreement dated September 24, 1997, between UNOVA, Inc. and The Chase Manhattan Bank, as Rights Agent, to which is annexed the form of Right Certificate as Exhibit A, filed on October 22, 1997 as Exhibit 3C to Amendment No. 2 to the Company's Registration Statement on Form 10 No. 001-13279, and incorporated herein by reference. 4.7 Indenture dated as of March 11, 1998 between the Company and The First National Bank of Chicago, Trustee, providing for the issuance of securities in series, filed as Exhibit 4.5 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference.
E-1 17 INDEX TO EXHIBITS (CONTINUED) 4.8 Form of 6.875% Notes due March 15, 2005 issued by the Company under such indenture, filed as Exhibit 4.6 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 4.9 Form of 7.00% Notes due March 15, 2008 issued by the Company under such indenture, filed as Exhibit 4.7 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 4.10 $100,000,000 Credit Agreement dated January 13, 1999, among UNOVA, Inc., the Banks listed therein, and Morgan Guaranty Trust Company of New York, as Agent, filed as Exhibit 4.9 to the Company's 1998 Annual Report on Form 10-K, and incorporated herein by reference. 4.11 Amended and Restated Credit Agreement (364 Day Agreement), among UNOVA, Inc., the banks listed therein, and Morgan Guaranty Trust Company of New York, as agent, dated December 1, 1999, filed as Exhibit 4.11 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference. Instruments defining the rights of holders of other long-term debt of the Company are not filed as exhibits because the amount of debt authorized under any such instrument does not exceed 10% of the total assets of the Company and its consolidated subsidiaries. The Company hereby undertakes to furnish a copy of any such instrument to the Commission upon request. 4.12 Transfer and Administration Agreement dated June 18, 1999, among Enterprise Funding Corporation, as Company, KCH Funding, L.L.C., as Transferor, UNOVA, Inc., Individually and as Servicer, and Nationsbank, N.A., as Lead Arranger, Agent and Bank Investor (the "Transfer and Administration Agreement"), filed as Exhibit 4.10 to the Company's June 30, 1999 Quarterly Report on Form 10-Q, and incorporated herein by reference. 4.13 Amendment No. 1 to the Transfer and Administration Agreement dated September 15, 1999, filed as Exhibit 4.13 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference. 4.14 Amendment No. 2 to the Transfer and Administration Agreement dated December 15, 1999, filed as Exhibit 4.14 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference. 4.15 Amendment No. 3 to the Transfer and Administration Agreement dated June 16, 2000.* 4.16 Receivables Purchase Agreement dated June 18, 1999, between UNOVA, Inc., as Seller, and KCH Funding, L.L.C., as Purchaser (the "Receivables Purchase Agreement"), filed as Exhibit 4.11 to the Company's June 30, 1999 Quarterly Report on Form 10-Q, and incorporated herein by reference. 4.17 Amendment No.1 to the Receivable Purchase Agreement dated December 15, 1999, filed as exhibit 4.16 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference.
E-2 18 INDEX TO EXHIBITS (CONTINUED) 4.18 Originator Receivables Purchase Agreement dated June 18, 1999, among UNOVA Industrial Automation Systems, Inc. and Intermec Technologies Corporation, as Sellers, and UNOVA, Inc., as Purchaser, filed as Exhibit 4.12 to the Company's June 30, 1999 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.1 Distribution and Indemnity Agreement dated October 31, 1997, between Western Atlas Inc. and UNOVA, Inc, filed as Exhibit 10.1 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.2 Tax Sharing Agreement dated October 31, 1997, between Western Atlas Inc., and UNOVA, Inc., filed as Exhibit 10.2 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.3 Employee Benefits Agreement dated October 31, 1997, between Western Atlas Inc., and UNOVA, Inc., filed as Exhibit 10.3 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.4 Intellectual Property Agreement dated October 31, 1997, between Western Atlas Inc., and UNOVA, Inc., filed as Exhibit 10.4 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.5 Form of Change of Control Employment Agreements with Alton J. Brann, Michael E. Keane, Larry D. Brady and certain other officers of the Company, filed as Exhibit 10.5 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.6 Amendment to the Form of Change of Control Employment Agreements with Alton J. Brann, Larry D. Brady, Michael E. Keane and certain other officers of the Company, filed as Exhibit 10.6 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference. 10.7 Form of Change of Control Employment Agreement with certain officers of the Company, filed as Exhibit 10.7 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference. 10.8 UNOVA, Inc. Director Stock Option and Fee Plan, filed as Exhibit 10.7 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.9 Amendment No. 1 to the UNOVA, Inc. Director Stock Option and Fee Plan filed as Exhibit 10.13 to the Company's September 30, 1999 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.10 UNOVA, Inc. Restoration Plan, filed on August 18, 1997 as Exhibit 10I to the Company's Registration Statement on Form 10 No. 001-13279 and incorporated herein by reference. 10.11 UNOVA, Inc. Supplemental Executive Retirement Plan, filed on October 1, 1997 as Exhibit 10H to Amendment No. 1 to the Company's Registration Statement on Form 10 No. 001-13279 and incorporated herein by reference.
E-3 19 INDEX TO EXHIBITS (CONTINUED) 10.12 Amendment No. 1 to UNOVA, Inc. Supplemental Executive Retirement Plan, dated September 23, 1998, filed as Exhibit 10.22 to the Company's September 30, 1998 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.13 Amendment No. 2 to UNOVA, Inc. Supplemental Executive Retirement Plan, dated March 11, 1999, filed as Exhibit 10.15 to the Company's 1998 Annual Report on Form 10-K, and incorporated herein by reference. 10.14 Amendment No. 3 to UNOVA, Inc. Supplemental Executive Retirement Plan, dated March 15, 2000, filed as Exhibit 10.20 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference. 10.15 Amendment No. 4 to UNOVA, Inc. Supplemental Executive Retirement Plan, dated July 11, 2000.* 10.16 Supplemental Retirement Agreement between UNOVA, Inc. and Alton J. Brann, filed on October 1, 1997 as Exhibit 10L to Amendment No. 1 to the Company's Registration Statement on Form 10 No. 001-13279 and incorporated herein by reference. 10.17 Amendment No. 1 to Supplemental Retirement Agreement between UNOVA, Inc. and Alton J. Brann, dated September 23, 1998, filed as Exhibit 10.21 to the Company's September 30, 1998 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.18 Amendment No. 2 to Supplemental Executive Retirement Agreement between UNOVA, Inc. and Alton J. Brann, dated March 11, 1999, filed as Exhibit 10.18 to the Company's 1998 Annual Report on Form 10-K, and incorporated herein by reference. 10.19 Amendment No. 3 to Supplemental Executive Retirement Agreement between UNOVA, Inc. and Alton J. Brann, dated March 15, 2000, filed as Exhibit 10.24 to the Company's March 31, 2000 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.20 Supplemental Executive Retirement Plan between UNOVA, Inc. and Larry D. Brady dated March 15, 2000, filed as Exhibit 10.25 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference. 10.21 UNOVA, Inc. 1997 Stock Incentive Plan, filed as Exhibit 10.12 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.22 UNOVA, Inc. Executive Severance Plan (As Amended November 18, 1999), filed as Exhibit 10.31 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference. 10.23 Board resolution dated July 25, 2000 amending the UNOVA, Inc. Executive Severance Plan.*
E-4 20 INDEX TO EXHIBITS (CONTINUED) 10.24 Form of Promissory Notes in favor of the Company given by certain officers and key employees, filed as Exhibit 10.14 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.25 Board resolution dated September 24, 1997 establishing the UNOVA, Inc. Incentive Loan Program, filed as Exhibit 10.15 to the Company's September 30, 1997 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.26 UNOVA, Inc. Executive Survivor Benefit Plan, filed as Exhibit 10.17 to the Company's 1997 Annual Report on Form 10-K, and incorporated herein by reference. 10.27 UNOVA, Inc. 1999 Stock Incentive Plan, filed as Annex A to the Company's definitive Proxy Statement relating to the Annual Meeting of Shareholders to be held on May 7, 1999 (the "1999 Proxy Statement"), and incorporated herein by reference. 10.28 UNOVA, Inc. Management Incentive Compensation Plan, filed as Annex B to the Company's 1999 Proxy Statement, and incorporated herein by reference. 10.29 UNOVA, Inc. Group Executive Medical Benefit Plan, filed as Exhibit 10.37 to the Company's 1999 Annual Report on Form 10-K, and incorporated herein by reference. 10.30 Letter Offering Employment to Larry D. Brady as President and Chief Operating Officer of UNOVA, Inc., as accepted by Mr. Brady on June 16, 1999 ("Brady Employment Offer"), filed as Exhibit 10.32 to the Company's June 30, 1999 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.31 Agreement of Amendment dated June 22, 2000, to Brady Employment offer.* 10.32 Restricted Stock Agreement between UNOVA, Inc. and Larry D. Brady, filed as Exhibit 10.34 to the Company's September 30, 1999 Quarterly Report on Form 10-Q, and incorporated herein by reference. 10.33 Amendment No. 1 to the Restricted Stock Agreement between UNOVA, Inc. and Larry D. Brady, dated June 22, 2000.* 27 Financial Data Schedule (filed only electronically with the Securities and Exchange Commission). * * Copies of these documents are included in this Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission.
E-5 EX-4.15 2 ex4-15.txt EXHIBIT 4.15 1 EXHIBIT 4.15 AMENDMENT NO. 3 TO TRANSFER AND ADMINISTRATION AGREEMENT AMENDMENT NO. 3 (this "Amendment") dated as of June 16, 2000 to the TRANSFER AND ADMINISTRATION AGREEMENT, dated as of June 18, 1999 (as amended by Amendment No. 1 dated September 15, 1999 and Amendment No. 2 dated as of December 15, 1999, the "Agreement"), by and among KCH FUNDING, L.L.C., a Delaware limited liability company, as transferor (in such capacity, the "Transferor"), UNOVA, INC., a Delaware corporation, as the parent of the Transferor (in such capacity, the "Parent") and as servicer (in such capacity the "Servicer"), ENTERPRISE FUNDING CORPORATION, a Delaware corporation (the "Company"), BANK OF AMERICA N.A., a national banking association ("Bank of America"), as Lead Arranger, as agent for the Company and the Bank Investors (in such capacity, the "Agent"), as Administrative Agent and as Bank Investor. PRELIMINARY STATEMENTS WHEREAS, the parties hereto have entered into the Agreement whereby the Transferor may convey, transfer, and assign from time to time undivided interests in certain accounts receivable, and the Company may, and the Bank Investors, if requested, shall accept such conveyance, transfer and assignment of such undivided percentage interests, subject to the terms and conditions of the Agreement; and WHEREAS, the parties to the Agreement desire to make a certain amendments to the Agreement. NOW, THEREFORE, the parties hereby agree as follows: 1. Definitions. Except as otherwise stated herein, capitalized terms not defined herein shall have the respective meanings assigned to them in the Agreement. 2. Amendments to the Agreement. (a) Section 1.1 of the Agreement is hereby amended by amending the definition of "Commitment Termination Date" to read in its entirety as follows: "Commitment Termination Date" means June 16, 2001, or such later date to which the Commitment Termination Date may be extended by the Transferor, the Agent and the Bank Investors not later than thirty (30) days prior to the then current Commitment Termination Date. 1 2 (b) Section 1.1 of the Agreement is further amended by amending the definition of "Loss Percentage" to read in its entirety as follows: "Loss Percentage" means, on any given day the greatest of (i) 2.0 times the highest Loss-to-Liquidation Ratio as of the last day of each of the twelve (12) calendar months preceding the then current month, (ii) 4 times the highest Concentration Factor of all Designated Obligors (exclusive of Class 2 Obligors, Class 3 Obligors and Special Concentration Obligors), or (iii) $10,000,000. (c) Section 1.1 of the Agreement is further amended by amending the definition of "Special Concentration Obligors" to read in its entirety as follows: "Special Concentration Obligors" means each Obligor listed in Annex 1 hereto. (d) Annex 1 to the Agreement is hereby amended to read in its entirety as set forth in Exhibit A hereto. 3. Representations and Warranties. To induce the Company and the Bank Investors to enter this Amendment, each of the Transferor and the Parent hereby represents and warrants (each as to itself) as of the Effective Date (as hereinafter defined) that: (a) it has the power, authority and legal right to make and deliver this Amendment and to perform its obligations under the Agreement, as amended by this Amendment, without any notice, consent, approval or authorization not already obtained, and that it has taken all necessary action to authorize the same. (b) the making and delivery of this Amendment and the performance of the Agreement, as amended by this Amendment, do not violate any provision of law or any regulation, or its charter or by-laws, or result in the breach of or constitute a default under or require any consent under any indenture or other agreement or instrument to which it is a party or by which it or any of its properties may be bound or affected. The Agreement, as amended by this Amendment, constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by any applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors' rights generally. (c) the representations and warranties made by it contained in any Transaction Document are true and correct on and as of the date of this Amendment and after giving effect hereto. 2 3 (d) no Termination Event or Potential Termination Event has occurred and is continuing under the Agreement as of the date of this Amendment and after giving effect hereto. 4. Conditions to Closing. On or prior to the Effective Date, the Agent shall have received the payment of all fees due pursuant to the Fee Letter, dated as of June 6, 2000, among the Transferor, the Parent, the Company, and the Agent. 5. Effective Date. The effective date of this Amendment (the "Effective Date") is June 16, 2000. 6. Reference to and Effect on the Transaction Documents. On and after the Effective Date each reference in the Agreement to "This Agreement", "hereunder", "hereof" or words of like import, and each reference in any other Transaction Document to "the Transfer and Administration Agreement", "thereunder", "thereof" or words of like import, referring to the Agreement, shall mean and be a reference to the Agreement as amended hereby. 7. Agreement and all other Transaction Documents in Full Force and Effect. Except as specifically amended hereby, each Transaction Document shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lender, any Bank Investor or the Agent under any Transaction Document, nor constitute a waiver of any provision of any Transaction Document. 8. Counterparts. This Amendment may be signed in any number of counterparts, each of which shall be an original and all of which taken together shall constitute a single instrument with the same effect as if the signatures thereto and hereto were upon the same instrument. 9. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. 3 4 IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. ENTERPRISE FUNDING CORPORATION, as Company By: /s/ Kevin P. Burns ---------------------------------------- Vice President KCH FUNDING, L.L.C., as Transferor By: /s/ Elmer C. Hull, Jr. ---------------------------------------- Treasurer UNOVA, INC., as Parent and as Servicer By: /s/ Elmer C. Hull, Jr. ---------------------------------------- Vice President and Treasurer BANK OF AMERICA, N.A., as Agent and a Bank Investor By: /s/ Robert R. Wood ---------------------------------------- 4 5 EXHIBIT A Annex 1 Special Concentration Obligors
Name of Designated Obligor Concentration Factor Moody's Rating S&P Rating - -------------------------- -------------------- -------------- ---------- General Motors* 15% A2 A Ford* 15% A2 A Daimler Chrysler* 15% A2 A+ Caterpillar 10% A2 A+ Cummins Engine 7% Baa1 BBB+
*If the long-term unsecured debt obligation of such Special Concentration Obligor as rated by Moody's or Standard & Poor's falls to Baa2 or BBB or below, respectively, then the Concentration Factor will be reduced to ten percent (10%) for such Special Concentration Obligor. 5 EX-10.15 3 ex10-15.txt EXHIBIT 10.15 1 EXHIBIT 10.15 AMENDMENT N0. 4 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, Amendment No. 2 thereto dated March 11, 1999, and Amendment No. 3 thereto dated March 15, 2000 (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. 4 to the Plan is hereby adopted by the Company with the following effect: 1. Section 2.13 of the Plan is hereby amended so as to delete from the first sentence of Subsection (c) thereof the phrase "including, for this purpose, years of service prior to age 40." 2. Section 2.42 of the Plan is hereby amended so as to delete from clause (2) of Subsection (a) thereof the phrase "provided, however, the calculation of Years of Service shall not include any calendar months of employment preceding the calendar month in which the Active Participant attained age 40" and to revise the wording of the Clause which immediately follows the deleted clause to read as follows: "provided, however, that such calculation shall not include any calendar months of employment with the Company in any separate period of employment with the Company preceding the most recent and continuous employment with the Company." 3. Section 2.42 of the Plan is hereby further amended so as to delete from Subsection (b) thereof the phrase "and after the Participant attains age 40" in both instances where such phrase appears. 4. Section 3.1 of the Plan is hereby amended so as to delete the second sentence thereof which reads "A key employee shall not be designated as an Active Participant prior to attaining age 40." 5. Section 4.3 of the Plan is hereby amended so as to delete from clause (2) thereof the phrase "after attainment of age 40." 6. Except as specifically provided in this Amendment No. 4, each and every provision of the Plan is hereby ratified, approved, and confirmed. 7. This Amendment No. 4 shall be deemed effective for all purposes on and as of the date hereof, except that this Amendment No. 4 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. 2 8. This Amendment No. 4 shall be governed by the laws of Delaware except to the extent preempted by ERISA. 9. Capitalized terms used in this Amendment No. 4 and not defined herein shall have the meaning assigned to such terms in the Plan. IN WITNESS WHEREOF, the Company has caused this Amendment No. 4 to be executed by its duly authorized officers this 11th day of July, 2000. UNOVA, INC. WITNESS: /s/ Virginia Young By: /s/ Michael E. Keane ----------------------- --------------------------- Michael E. Keane WITNESS: /s/ Helen Gonzalez By: /s/ Charles A. Cusumano ----------------------- --------------------------- Charles A. Cusumano EX-10.23 4 ex10-23.txt EXHIBIT 10.23 1 EXHIBIT 10.23 UNOVA, INC. CERTIFICATION OF RESOLUTIONS OF THE BOARD OF DIRECTORS I, Virginia S. Young, duly elected Vice President and Secretary of UNOVA, INC., a corporation organized and existing under the laws of the State of Delaware, do hereby certify and say that the following is a true and correct copy of the resolution duly adopted by the Board of Directors of said corporation at a meeting of said Board held on July 11, 2000, in the City of Los Angeles, State of California, and that said resolution, not having been modified, amended, revoked, set aside, or rescinded, remains in full force and effect as of the date hereof: WHEREAS, this Board of Directors has adopted the UNOVA, Inc. Executive Severance Plan as previously amended on November 18, 1999; and WHEREAS, this Board of Directors deems it desirable that such Plan be further amended in the following respect; NOW, THEREFORE, BE IT RESOLVED, that Article II, clause (z), of the Executive Severance Plan, which comprises the definition of the term "Target Annual Bonus," be revised to read in its entirety as follows: "(z) Target Annual Bonus. The "Target Bonus" as that term is defined in the UNOVA, Inc. Management Incentive Compensation Plan as applicable to the Participant at the time of any relevant computation." IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of said Corporation at Woodland Hills, California, this 25th day of July, 2000. By /s/ Virginia Young -------------------------------- Virginia S. Young Vice President and Secretary [SEAL] EX-10.31 5 ex10-31.txt EXHIBIT 10.31 1 EXHIBIT 10.31 AGREEMENT OF AMENDMENT This Agreement of Amendment (this "Amendment") is made this 22nd day of June, 2000, between UNOVA, Inc., a Delaware corporation (the "Company"), and Larry D. Brady (the "Executive"). WHEREAS, the Company has previously executed and delivered a letter (the "Employment Offer") dated June 16, 1999, setting forth an offer to employ the Executive and outlining certain terms and conditions of the Executive's proposed employment, and the Executive agreed to accept employment in accordance with the Employment Offer; WHEREAS, the Executive commenced employment with the Company as its President and Chief Operating Officer on August 2, 1999; and WHEREAS, the Executive and the Company desire to amend the Employment Offer in the manner set forth herein; NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the Company and the Executive hereby agree as follows: 1. The section of the Employment Offer following the caption "SPECIAL SEVERANCE BENEFITS" is hereby amended so that such section shall read in its entirety as follows: SPECIAL SEVERANCE BENEFITS: It is contemplated that after you have served for a period of time as President and Chief Operating Officer of UNOVA, you shall become Chief Executive Officer of UNOVA. If for any reason, except a termination for cause, you do not become designated the Chief Executive Officer of UNOVA on or before March 1, 2001, then either you or the Company, upon written notice given to the other party during the period from March 1, 2001, to and including March 31, 2001, shall have the option to terminate your employment with UNOVA. In the event this option to terminate your employment is exercised by either party, you shall receive the following benefits on the date of termination of your employment. 1. The Restricted Stock awarded to you, as a replacement for the unvested FMC Restricted Stock, shall be immediately vested. However, the Company, in lieu thereof, reserves the right to pay you in cash an amount equal to the fair market value of the Company's Restricted Stock which you hold on the date such stock becomes vested. 1 2 2. A further cash payment equal to $2,500,000.00. In return for these additional benefits, prior to termination of your employment (if effected by the Company), you shall furnish the Company a waiver, in form and substance satisfactory to the Company, of all claims against the Company which you have or may have as a result of such termination of employment with the Company. If you are elected, appointed, or otherwise designated as the Chief Executive Officer of the Company on or prior to March 1, 2001 (regardless of whether or not you choose to accept the position of Chief Executive Officer), these special termination benefits will not be provided to you and shall be of no further force or effect. 2. Except as specifically amended hereby, each and every term of the Employment Offer is hereby ratified and confirmed and shall remain in full force and effect. 3. This Amendment shall be deemed effective for all purposes on and as of the date hereof. IN WITNESS WHEREOF, this Agreement is executed by the Executive and the Company acting through its duly authorized officer as of the day and year first herein written. UNOVA, INC. By: /s/ Virginia S. Young ------------------------------- /s/ Larry D. Brady ------------------------------- Larry D. Brady 2 EX-10.33 6 ex10-33.txt EXHIBIT 10.33 1 EXHIBIT 10.33 AMENDMENT NO. 1 TO RESTRICTED STOCK AGREEMENT This Amendment No. 1 to Restricted Stock Agreement (this "Amendment") is made this 22nd day of June, 2000, between UNOVA, Inc., a Delaware corporation (the "Company"), and Larry D. Brady (the "Grantee"). WHEREAS, the Company and the Grantee have previously entered into a certain Restricted Stock Agreement (the "Agreement") dated August 2, 1999, pursuant to which the Grantee was awarded 109,585 shares of the Company's Common Stock subject to the restrictions upon transfer set forth in the Agreement ("Restricted Stock"); and WHEREAS, the Company and the Grantee desire to amend the Agreement in the manner set forth herein; NOW THEREFORE, in consideration of the mutual benefits to be derived herefrom and other good and valuable consideration, the Company and the Grantee hereby agree as follows: 1. The second sentence of Section 5 of the Agreement is hereby amended so that such sentence shall read in its entirety as follows: With respect to 36,528 of such shares, the Restriction Period shall expire on the first anniversary of the date of this Agreement; with respect to 36,528 of such shares, the Restriction Period shall expire on the second anniversary of the date of this Agreement; and with respect to 36,529 of such shares, the Restriction Period shall terminate on the third anniversary of the date of this Agreement. 2. Section 7 of the Agreement is hereby amended so that the second paragraph and the first sentence of the third paragraph of such Section 7 shall read in their entirety as follows: For purposes of this Agreement, a Special Severance of the Grantee shall mean the Grantee's Termination of Employment under the following circumstances: (i) the Grantee shall have served as President and Chief Operating Officer of the Company continuously from the date hereof until March 1, 2001, unless the Grantee shall theretofore have assumed another position with the Company; (ii) on or before March 1, 2001, the Grantee (if not therefore elected, appointed, or otherwise designated Chief Executive Officer of the Company) shall fail to be elected, appointed, or otherwise designated Chief Executive Officer of the Company (regardless of whether or not the Grantee chooses to accept the 1 2 position of Chief Executive Officer); and (iii) within the period beginning March 1, 2001, to and including March 31, 2001, either the Company or the Grantee shall have given the other party written notice of such party's intention that the employment of the Grantee by the Company shall terminate. Notwithstanding the foregoing, a Special Severance of the Grantee will not be deemed to have occurred if, at any time prior to March 1, 2001, the Grantee's employment shall have been terminated for Cause. 3. Except as specifically hereby amended, each and every term of the Agreement is hereby ratified and confirmed and shall remain in full force and effect. 4. This Amendment shall be deemed effective for all purposes on and as of the date hereof. 5. This Amendment shall be governed by the laws of the state of Delaware without reference to principles of conflicts of law. IN WITNESS WHEREOF, this Amendment is executed by the Grantee and by the Company through its duly authorized officer as of the day and year first herein written. UNOVA, INC. By: /s/ Virginia S. Young -------------------------------- /s/ Larry D. Brady -------------------------------- Larry D. Brady 2 EX-27 7 ex27.txt EXHIBIT 27
5 1,000 U.S. DOLLARS 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 1 7,059 0 472,040 0 263,430 923,540 462,448 212,768 1,681,847 430,624 379,633 0 0 559 741,884 1,681,847 965,059 965,059 733,271 733,271 239,236 0 16,977 16,957 1,187 15,770 0 0 0 15,770 .28 .28
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