<PAGE> 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 March 31, 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 April 28, 2000 there were 55,553,061 shares of Common Stock outstanding,
exclusive of treasury shares.
Page 1 of 13
<PAGE> 2
UNOVA, INC.
INDEX
REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
PAGE
NUMBER
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
<S> <C> <C>
Consolidated Statements of Operations
Three Months Ended March 31, 2000 and 1999 (unaudited).........3
Consolidated Balance Sheets
March 31, 2000 and December 31, 1999 (unaudited)...............4
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2000 and 1999 (unaudited).........5
Notes to Consolidated Financial Statements (unaudited).........6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..................9
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K...............................12
Signatures .............................................................13
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNOVA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(thousands of dollars, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------------
2000 1999
------------ ------------
<S> <C> <C>
Sales and Service Revenues $ 484,827 $ 493,400
------------ ------------
Costs and Expenses
Cost of sales and service 363,385 352,309
Selling, general and administrative 97,615 109,668
Depreciation and amortization 17,019 16,583
Interest, net 7,612 9,082
------------ ------------
Total Costs and Expenses 485,631 487,642
------------ ------------
Earnings (Loss) before Taxes on Income (804) 5,758
Taxes on Income 310 (2,303)
============ ============
Net Earnings (Loss) $ (494) $ 3,455
============ ============
Basic and Diluted Earnings (Loss) per Share $ (0.01) $ 0.06
============ ============
Shares Used in Computing Basic
Earnings (Loss) per Share 55,552,772 54,943,091
Shares Used in Computing Diluted
Earnings (Loss) per Share 55,552,772 54,943,988
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
UNOVA, INC.
CONSOLIDATED BALANCE SHEETS
(thousands of dollars)
(unaudited)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
----------- -----------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 16,746 $ 25,239
Accounts receivable, net 531,935 596,885
Inventories, net of progress billings 298,717 310,175
Deferred tax assets 157,514 158,170
Other current assets 20,583 19,873
----------- -----------
Total Current Assets 1,025,495 1,110,342
----------- -----------
Property, Plant and Equipment, at Cost 473,526 472,229
Less Accumulated Depreciation (207,556) (201,330)
----------- -----------
Property, Plant and Equipment, Net 265,970 270,899
----------- -----------
Goodwill and Other Intangibles, Net 394,205 399,131
----------- -----------
Other Assets 126,898 123,167
----------- -----------
Total Assets $ 1,812,568 $ 1,903,539
=========== ===========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities
Accounts payable and accrued expenses $ 396,565 $ 509,188
Payroll and related expenses 84,951 89,309
Notes payable and current portion
of long-term obligations 92,930 64,002
----------- -----------
Total Current Liabilities 574,446 662,499
----------- -----------
Long-term Obligations 365,389 365,386
----------- -----------
Deferred Tax Liabilities 46,054 44,777
----------- -----------
Other Long-term Liabilities 97,887 99,577
----------- -----------
Commitments and Contingencies
Shareholders' Investment
Common stock 556 556
Additional paid-in capital 652,777 652,157
Retained earnings 90,766 91,260
Accumulated other comprehensive loss -
cumulative currency translation adjustment (15,307) (12,673)
----------- -----------
Total Shareholders' Investment 728,792 731,300
----------- -----------
Total Liabilities and Shareholders' Investment $ 1,812,568 $ 1,903,539
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
UNOVA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(thousands of dollars)
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash and Cash Equivalents at Beginning of Period $ 25,239 $ 17,708
--------- ---------
Cash Flows from Operating Activities:
Net earnings (loss) (494) 3,455
Adjustments to reconcile net earnings (loss) to net
cash used in operating activities:
Depreciation and amortization 17,019 16,583
Change in prepaid pension costs, net (4,412) (4,276)
Deferred taxes (2,589) (2,209)
Changes in operating assets and liabilities:
Accounts receivable 65,271 (3,335)
Inventories 11,458 3,845
Other current assets (710) (1,264)
Accounts payable and accrued expenses (112,341) (66,845)
Payroll and related expenses (5,811) (4,953)
Other operating activities (1,041) 4,452
--------- ---------
Net Cash Used in Operating Activities (33,650) (54,547)
--------- ---------
Cash Flows from Investing Activities:
Capital expenditures (9,677) (14,836)
Other investing activities 5,283 216
--------- ---------
Net Cash Used in Investing Activities (4,394) (14,620)
--------- ---------
Cash Flows from Financing Activities:
Net proceeds from notes payable and credit facility 28,886 65,916
Other financing activities 665 45
--------- ---------
Net Cash Provided by Financing Activities 29,551 65,961
--------- ---------
Resulting Decrease in Cash and Cash Equivalents (8,493) (3,206)
--------- ---------
Cash and Cash Equivalents at End of Period $ 16,746 $ 14,502
========= =========
Supplemental disclosure of cash flow information
Interest paid $ 11,587 $ 12,615
Income taxes paid (refunded) $ 162 $ (4,278)
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
UNOVA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000
(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:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------- ---------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Raw materials and work in process $ 283,202 $ 289,656
Finished goods 44,230 44,336
Less progress billings (28,715) (23,817)
--------- ---------
Inventories, net of progress billings $ 298,717 $ 310,175
========= =========
</TABLE>
3. Interest, net was composed of the following:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
2000 1999
------- -------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Interest expense $ 8,385 $ 9,588
Interest income (773) (506)
------- -------
Interest, net expense $ 7,612 $ 9,082
======= =======
</TABLE>
4. For the three months ended March 31, 2000 and December 31, 1999, basic
earnings per share is calculated using the weighted average number of
common shares outstanding and issuable for the 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. For the three months ended March 31, 2000, diluted weighted
average shares excludes 251 incremental shares related to stock options
because their effect is antidilutive due to the Company reporting a net
loss.
6
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Shares used for basic and diluted earnings per share were computed as
follows:
THREE MONTHS ENDED
MARCH 31,
2000 1999
---------- ----------
Basic weighted average shares 55,552,772 54,943,091
Dilutive effect of stock options - 897
---------- ----------
Diluted weighted average shares 55,552,772 54,943,988
========== ==========
At March 31, 2000 and December 31, 1999, Company employees and directors
held options to purchase 5,943,420 and 5,524,700 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 loss amounts were computed as follows:
THREE MONTHS ENDED
MARCH 31,
2000 1999
---------------------
(THOUSANDS OF DOLLARS)
Net earnings (loss) $ (494) $ 3,455
Change in equity due to foreign
currency translation adjustments (2,634) (4,111)
------- -------
Comprehensive (loss) $(3,128) $ (656)
======= =======
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.
OPERATIONS BY BUSINESS SEGMENT
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
INDUSTRIAL AUTOMATION
SYSTEMS
---------------------------
QUARTER AUTOMATED INTEGRATED ADVANCED CORPORATE
ENDED DATA PRODUCTION MANUFACTURING AND OTHER
MARCH 31, SYSTEMS SYSTEMS EQUIPMENT AMOUNTS TOTAL
--------- --------- ---------- ------------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Sales 2000 $209.5 $207.2 $ 68.1 $484.8
1999 208.0 202.9 82.5 493.4
Operating profit (loss) 2000 4.4 8.1 2.3 $ (8.0) 6.8
1999 7.6 11.9 2.0 (6.7) 14.8
</TABLE>
7
<PAGE> 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
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 $0.2 million and $0.1 million for the three
months ended March 31, 2000 and March 31,1999, respectively.
8. In April 2000, the Company signed a letter of intent to sell its
Amtech Transportation Systems subsidiary, subject to finalization of
sale terms and approvals by the Company's and buyer's boards of
directors. The net assets and results of operations of Amtech
Transportation Systems are not material to the Company's consolidated
financial statements for all periods presented.
8
<PAGE> 9
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
served: Integrated Production Systems ("IPS") and Advanced Manufacturing
Equipment ("AME"). Sales and service revenues and segment operating profit for
the three months ended March 31, 2000 and 1999 were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------
2000 1999
-------- --------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
SALES AND SERVICE REVENUES
Automated Data Systems $209,553 $207,985
Industrial Automation Systems:
Integrated Production Systems 207,170 202,946
Advanced Manufacturing Equipment 68,104 82,469
-------- --------
Total Sales and Service Revenues $484,827 $493,400
======== ========
SEGMENT OPERATING PROFIT
Automated Data Systems $ 4,431 $ 7,650
Industrial Automation Systems:
Integrated Production Systems 8,113 11,900
Advanced Manufacturing Equipment 2,267 1,982
-------- --------
Total Segment Operating Profit $ 14,811 $ 21,532
======== ========
</TABLE>
Sales and Service Revenues and Segment Operating Profit
Total sales and service revenues decreased $8.6 million, or 2%, for the three
months ended March 31, 2000, compared with the corresponding prior year period.
Total segment operating profit decreased $6.7 million, or 31%, for the three
months ended March 31, 2000, compared to the corresponding prior year period.
Automated Data Systems: ADS segment revenues increased $1.6 million, or 1%, and
operating profit decreased $3.2 million, or 42%, for the three months ended
March 31, 2000, compared with the corresponding prior year period. The increase
in sales was due to significant systems and solutions contracts at Intermec's
European operations, partially offset by postponed projects for Direct Store
Delivery (DSD) customers in the beverage industry. The decrease in operating
profit was due to the sales mix containing a larger proportion of lower margin
products and services.
Integrated Production Systems: IPS segment revenues increased $4.2 million, or
2%, and related operating profit decreased $3.8 million, or 32%, for the three
months ended March 31, 2000, compared with the corresponding prior year period.
The increase in revenues is primarily attributable to strong domestic
engineering orders, partially offset by low order levels and contracts in the
early stages of completion at the UK operations. The decrease in operating
profit was due to unabsorbed overhead and the resulting reduced margins caused
by the decline in European sales. IPS backlog decreased from $627.7 million at
December 31, 1999 to $603.6 million at March 31, 2000.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
Advanced Manufacturing Equipment: AME segment revenues decreased $14.4 million,
or 17%, while related operating profit increased $0.3 million, or 14%, for the
three months ended March 31, 2000, compared with the corresponding prior year
period. The decrease in revenues reflects a continuing decline in the general
machine tool market. Operating profit as a percentage of sales increased due to
headcount reductions and cost structure improvements made in response to the
weak market conditions and the elimination of certain unprofitable and
low-margin activities. AME backlog decreased from $102.5 million at December 31,
1999 to $89.0 million at March 31, 2000.
Costs and Expenses
Cost of sales increased $11.1 million from $352.3 million for the three months
ended March 31, 1999 to $363.4 million for the three months ended March 31,
2000. The increase was due primarily to unabsorbed overhead at IPS' UK
operations and the ADS sales mix containing a larger proportion of lower margin
products and services.
Selling, general and administrative ("SG&A") expenses decreased $12.1 million
from $109.7 million for the three months ended March 31, 1999 to $97.6 million
for the three months ended March 31, 2000. As a percentage of sales, SG&A
decreased from 22% in 1999, to 20% in 2000. The percentage decrease is
attributable to headcount reductions and cost-structure improvements in both the
ADS and AME segments, partially offset by additional costs from the sale of
undivided interests in UNOVA's trade accounts receivable.
Depreciation and amortization expense increased from $16.6 million for the three
months ended March 31, 1999 to $17.0 million for to the three months ended March
31, 2000 due to an increase in the machinery and equipment component of fixed
assets.
Net interest expense was $7.6 million and $9.1 million for the three months
ended March 31, 2000 and 1999, respectively. The decrease is attributable to
lower outstanding debt during the three months ended March 31, 2000 as compared
to the same period in 1999, partially offset by increased short-term borrowing
rates.
LIQUIDITY AND CAPITAL RESOURCES
Cash and marketable securities decreased from $25.2 million at December 31, 1999
to $16.7 million at March 31, 2000. Total debt increased from $429.4 million at
December 31, 1999 to $458.3 million at March 31, 2000 due to the normal capital
expenditures and working capital needs of the Company.
The Company maintains two unsecured committed credit facilities with banks from
which it may borrow up to $500.0 million. Under these credit facilities, the
Company may borrow at the prime rate, the London Inter Bank Offered Rate, rates
borne by certificates of deposit or other rates that are mutually acceptable to
the banks and the Company, plus a respective rate margin that varies based on
outstanding borrowing levels and the Company's credit rating. At April 28, 2000,
$300.0 million of these credit facilities was available for the Company's
general use.
In April 2000, the Company signed a letter of intent to sell its Amtech
Transportation Systems subsidiary, subject to finalization of sale terms and
approvals by the Company's and buyer's boards of directors. The net assets and
results of operations of Amtech Transportation Systems are not material to the
Company's consolidated financial statements for all periods presented.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
In June 1999, a financing subsidiary of UNOVA entered into an agreement to sell
undivided interests in a revolving pool of the Company's trade accounts
receivable to a financial institution which issues its short-term debt backed by
receivables acquired in similar transactions. The financing subsidiary purchased
these receivables, irrevocably and without recourse, from the Company under a
separate agreement. Under the terms of these agreements, UNOVA is entitled to
receive up to $100.0 million of proceeds from the sale of undivided interests in
the receivables. At March 31, 2000 and December 31, 1999 net proceeds from these
agreements of approximately $100.0 million have been reflected as a reduction of
accounts receivable on the consolidated balance sheet. Costs associated with
these agreements were $1.6 million for the three months ended March 31, 2000 and
have been classified as selling, general and administrative expenses.
The Company expects that cash flow from operations, along with available
borrowing capacity, will be adequate to meet working capital and capital
expenditure requirements for the next 12 months.
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 and 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 the Company's ability to meet
its working capital and capital expenditure requirements. 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.
11
<PAGE> 12
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 March 31, 2000.
(b) See Exhibit Index included herein on page E-1.
12
<PAGE> 13
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
May 10, 2000
13
<PAGE> 14
UNOVA, INC.
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ----------------------
<TABLE>
<S> <C>
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.
</TABLE>
E-1
<PAGE> 15
INDEX TO EXHIBITS (CONTINUED)
<TABLE>
<S> <C>
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 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.
4.16 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.
</TABLE>
E-2
<PAGE> 16
INDEX TO EXHIBITS (CONTINUED)
<TABLE>
<S> <C>
4.17 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, Norman L. Roberts, Larry D. Brady,
Robert G. O'Malley 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, Robert G.
O'Malley 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 Charles E.
Wolfbauer and certain other 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 Employment Agreement between Intermec Corporation and Michael
Ohanian, dated May 18, 1995, as amended, filed on August 18, 1997
as exhibit 10J to the Company's Registration Statement on Form 10
No. 001-13279 and incorporated herein by reference.
10.9 Amendment No. 1 to Employment Agreement between Intermec
Corporation and Michael Ohanian, dated February 28, 1997, filed
as Exhibit 10.18 to the Company's 1997 Annual Report on Form
10-K, and incorporated herein by reference.
</TABLE>
E-3
<PAGE> 17
INDEX TO EXHIBITS (CONTINUED)
<TABLE>
<S> <C>
10.10 Amendment No. 2 to Employment Agreement between Intermec
Technologies Corporation and Michael Ohanian, dated February 28,
1998, filed as Exhibit 10.19 to the Company's 1997 Annual Report
on Form 10-K, and incorporated herein by reference.
10.11 Amendment No. 3 to Employment Agreement between Intermec
Technologies Corporation and Michael Ohanian, dated May 20, 1998,
filed as Exhibit 10.9 to the Company's 1998 Annual Report on Form
10-K, and incorporated herein by reference.
10.12 Amendment No. 4 to Employment Agreement between Intermec
Technologies Corporation and Michael Ohanian, dated February 28,
1999, filed as Exhibit 10.10 to the Company's 1998 Annual Report
on Form 10-K, and incorporated herein by reference.
10.13 Amendment No. 5 to Employment Agreement between Intermec
Technologies Corporation and Michael Ohanian, dated May 18, 1999,
filed as Exhibit 10.11 to the Company's June 30, 1999 Quarterly
Report on Form 10-Q, and incorporated herein by reference.
10.14 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.
10.15 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.
10.16 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.
10.17 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.
10.18 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.
10.19 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.
10.20 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.
10.21 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.
</TABLE>
E-4
<PAGE> 18
INDEX TO EXHIBITS (CONTINUED)
<TABLE>
<S> <C>
10.22 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.
10.23 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.
10.24 Amendment No. 3 to Supplemental Executive Retirement Agreement
between UNOVA, Inc. and Alton J. Brann, dated March 15, 2000.*
10.25 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.
10.26 Employment Agreement dated August 1997, between UNOVA, Inc., and
Clayton A. Williams, filed on October 1, 1997 as Exhibit 10K to
Amendment No. 1 to the Company's Registration Statement on Form
10 No. 001-13279 and incorporated herein by reference.
10.27 Amendment No. 1 to Employment Agreement between UNOVA, Inc. and
Clayton A. Williams, dated March 24, 1998, filed as Exhibit 10.20
to the Company's 1997 Annual Report on Form 10-K, and
incorporated herein by reference.
10.28 Amendment No. 2 to Employment Agreement between UNOVA, Inc. and
Clayton A. Williams, dated May 18, 1998, filed as Exhibit 10.21
to the Company's 1998 Annual Report on Form 10-K, and
incorporated herein by reference.
10.29 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.
10.30 Removed and reserved.
10.31 UNOVA, Inc. Executive Severance (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.
10.32 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.
10.33 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.
10.34 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.
</TABLE>
E-5
<PAGE> 19
INDEX TO EXHIBITS (CONTINUED)
<TABLE>
<S> <C>
10.35 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.
10.36 UNOVA, Inc. Management Incentive Compensation Plan, filed as
Annex B to the Company's 1999 Proxy Statement, and incorporated
herein by reference.
10.37 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.
10.38 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, filed as Exhibit 10.32 to the Company's June
30, 1999 Quarterly Report on Form 10-Q, and incorporated herein
by reference.
10.39 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.
10.40 Letter of Offering Employment to Robert O'Malley as President of
Intermec Technologies Corporation, as accepted by Mr. O'Malley on
May 26, 1999, filed as Exhibit 10.40 to the Company's 1999 Annual
Report on Form 10-K, and incorporated herein by reference.
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.
</TABLE>
E-6
<PAGE> 1
EXHIBIT 10.24
AMENDMENT NO. 3 TO
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This Amendment No. 3 to Supplemental Executive Retirement Agreement
(this "Amendment"), made and entered into as of this 15th day of March, 2000, by
and between UNOVA, Inc., a Delaware corporation (the "Company"), and Alton J.
Brann, its Chairman and Chief Executive Officer (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company and the Executive have previously entered into a
certain Supplemental Executive Retirement Agreement dated as of October 31,
1997, as amended by Amendment No. 1 thereto dated September 23, 1998, and
Amendment No. 2 thereto dated March 11, 1999 (as so amended, the "Retirement
Agreement"); and
WHEREAS, the Company and the Executive deem it desirable that the
Retirement Agreement be further amended as hereinafter set forth;
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Section 2.3 of the Retirement Agreement is hereby further amended so
that said Section 2.3 shall read in its entirety as follows:
Section 2.3 "Average Earnings" shall mean the average of gross base
salary payments plus Bonuses as defined in Section 2.6 from the Company
(as used in this Section 2.3 and hereinafter the term "Company" shall
have the meaning specified in Section 2.12) to the Executive in any
three twelve consecutive month periods (with no overlap), in which such
Executive's gross base salary payments plus gross Bonuses are the
highest, in the Executive's final 120 months of employment. For all
purposes of calculating "Average Earnings" under this Supplemental Plan
"gross base salary" shall include all payments credited to Executive
related to base compensation before subtracting any amounts deferred
pursuant to Section 401(k) or 125 of the Code or deferred at the
election of the Executive pursuant to any plan of the Company which
permits such deferral, but does not include any amounts credited as
compensation to Executive as a result of the grant or exercise of any
award under any Company stock-based plan.
(a). Average Earnings for purposes of calculating Disability or
Death Benefit for or with respect to Executive shall be calculated using
the 120 months that include and precede the month that his Disability
commenced. If Executive has returned to active employment with the
Company after a period of Disability but 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).
<PAGE> 2
(b). Average Earnings in the case Executive dies while employed by
the Company and prior to attaining age 62 shall be calculated using the
120 months that include and precede the month of Executive's death (or
Disability, in the case Executive dies while Disabled).
(c). For purposes of calculating a lump sum payment pursuant to
Section 3.1(c) in the event of a Change of Control, with respect to
Executive (other than while Disabled or when deceased) and who is an
Active Participant as of the date of such calculation, Average Earnings
shall be calculated as if Executive's employment with the Company ended
on such date or the date as revised pursuant to the terms of any Change
of Control Agreement existing between the Company and the Executive
("Change of Control Agreement" shall mean any agreement between the
Company and the Executive which provides for the employment of Executive
and/or the payment of compensation to Executive upon or following a
Change of Control).
(d). For purposes of calculating Average Earnings, Executive's
gross base salary plus gross Bonuses received while employed by Western
Atlas or Litton, 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 to the extent Executive'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").
(e). Notwithstanding the foregoing, the Committee may determine
Average Earnings for the purposes of this Section by another
methodology, if that method is more advantageous to Executive.
2. Clause (1) of subsection (a) of Section 3.1 of the Retirement
Agreement is hereby amended to read in its entirety as follows:
"(1) attained age 60";
3. Subsection (b) of Section 3.1 of the Retirement Agreement is hereby
amended to delete the reference to the number "62" in the title and in the text
of such subsection and to substitute in lieu thereof the number "60."
4. The first sentence of Section 3.2 of the Retirement Agreement is
hereby amended so as to read in its entirety as follows:
"Executive's annual Retirement Benefit shall be the amount resulting
from (A) multiplying Average Earnings by the Percentage Factor set forth
in Exhibit A attached hereto and made a part hereof corresponding to the
age of Executive at the earlier of the date of Executive's retirement or
the age of Executive upon Executive's termination of employment for any
reason other than a Change of Control or the age of Executive while an
Active Participant as of the date of a Change of Control except as such
Retirement Benefit is adjusted pursuant to Section 3.1(c) and Section
3.6(c) and (B) subtracting from the product so obtained
-2-
<PAGE> 3
the Offset Amount; provided however, that if payment of the Retirement
Benefit commences prior to the Executive's 62nd birthday, and no Change
of Control has occurred, the amount computed pursuant to this Section
3.2 shall be reduced by 1/2 of 1% for each month by which the
commencement of payment of the Executive's Retirement Benefit precedes
the Executive's 62nd birthday."
5. Section 3.3 of the Retirement Agreement is hereby amended to delete
both references to the number "62" and to substitute in lieu thereof the number
"60."
6. Subsection (b) of Section 3.4 of the Retirement Agreement is hereby
deleted in its entirety."
7. The final sentence of subsection (b) of Section 3.5 is hereby amended
to read in its entirety as follows:
"If Executive, who has satisfied the conditions of Section 3.1(a)(3)
(including consideration of Years of Service accrued for Disabled or
deceased Participants pursuant to Section 2.1), dies prior to the
commencement of the payment of Retirement Benefits, and was married at
the date of death, the spouse Beneficiary of Executive shall have the
right to a survivor Retirement Benefit, commencing at the date Executive
would have attained age 62, except for the fact that the Participant
died prior to attaining age 62, or at the election of the spouse
Beneficiary of Executive, a date on which Executive would have attained
an age between 60 and 62 (subject to the reduction factor specified in
Section 3.2), or commencing on the first day of the month following the
month in which the Executive died, if the Executive continued in
continuous employment with the Company after attaining age 62 and until
the date of Executive's death, calculated under Section 3.2 as if the
Executive had survived to such entitlement date and begun receiving
payment of the Retirement Benefit at such entitlement date as a joint
and 100% survivor annuity and then died on the following date."
8. Section 4.3 of the Retirement Agreement is hereby amended to read in
its entirety as follows:
"Section 4.3 Spouse Retirement Benefit. To the extent that a spouse
Beneficiary is receiving a Death Benefit on the date the Executive would
have attained age 62, or such earlier age elected by the spouse
Beneficiary of Executive under Section 3.5, the spouse Beneficiary
thereafter shall receive a Retirement Benefit pursuant to Article III,
if eligible, in the amount calculated pursuant to Article III, and no
further Death Benefit payments shall be payable to the spouse
Beneficiary or to any Dependent Children Beneficiaries or otherwise."
9. Section 6.2 of the Retirement Agreement is hereby amended to delete
the four references therein to the number "62" and to substitute in lieu thereof
the number "60."
10. Except as specifically amended hereby, each and every term of the
Retirement Agreement is hereby ratified, approved, and confirmed.
-3-
<PAGE> 4
11. This Amendment shall be deemed effective for all purposes on and as
of the date hereof.
12. This Amendment shall be governed by the laws of Delaware.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.
UNOVA, INC.
By: /s/ Virginia S. Young
------------------------------------
Title: VP & Secretary
---------------------------------
/s/ Alton J. Brann
---------------------------------------
Alton J. Brann
-4-
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<PERIOD-START> JAN-01-2000
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<RECEIVABLES> 531,935
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<CURRENT-ASSETS> 1,025,495
<PP&E> 473,526
<DEPRECIATION> 207,556
<TOTAL-ASSETS> 1,812,568
<CURRENT-LIABILITIES> 574,446
<BONDS> 458,319
0
0
<COMMON> 556
<OTHER-SE> 728,236
<TOTAL-LIABILITY-AND-EQUITY> 1,812,568
<SALES> 484,827
<TOTAL-REVENUES> 484,827
<CGS> 363,385
<TOTAL-COSTS> 363,385
<OTHER-EXPENSES> 114,634
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<INTEREST-EXPENSE> 8,385
<INCOME-PRETAX> (804)
<INCOME-TAX> (310)
<INCOME-CONTINUING> (494)
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