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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________
FORM 8-K/A
AMENDMENT No. 1 to CURRENT REPORT, dated October 22, 2004,
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) December 22, 2004
________________________________________________________________________________
UNISYS CORPORATION
_______________________________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-8729 38-0387840
_______________________________________________________________________________
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
Unisys Way,
Blue Bell, Pennsylvania 19424
_______________________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(215) 986-4011
_______________________________________________________________________________
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
(a) In Item 5.02 of its Current Report on Form 8-K dated October 22,
2004, Unisys Corporation disclosed the election of Joseph W. McGrath as the
company's President and Chief Executive Officer, effective January 1, 2005. At
that time, the company and Mr. McGrath had not yet entered into an employment
agreement with respect to this position.
On December 22, 2004, the company and Mr. McGrath signed an employment agreement
covering the terms and conditions of Mr. McGrath's employment as President and
Chief Executive Officer for the period from January 1, 2005 through December 31,
2007. The agreement provides for a minimum base salary of $900,000 per year,
subject to periodic review by the Compensation Committee of the Board of
Directors. He is eligible to receive an annual bonus award at a target bonus
level of not less than 100% of base salary. The actual bonus payable, if any,
will be determined by the Board in its sole discretion. Pursuant to the
agreement, Mr. McGrath was also awarded a stock option grant for 250,000 shares
of Unisys common stock at an exercise price equal to the fair market value of
Unisys stock on December 22, 2004. Mr. McGrath is eligible to participate in
the benefit programs generally made available to executive officers and is
eligible to receive stock option and other long-term incentive awards under the
company's long-term incentive plan. If Mr. McGrath's employment is terminated
under certain circumstances, the agreement provides for him to receive continued
payment of his base salary and annual bonus (in an amount equal to the average
annual bonus paid to him for the three years preceding termination) for the
remainder of the term, but not less than one year's compensation. He will also
be entitled to continued medical and dental coverage through the later of the
term of the agreement or his attaining age 55, full vesting in outstanding
awards under the company's long-term incentive plan, and continued benefit
accrual under the company's Elected Officer Pension Plan through the remaining
term of the agreement. Any such salary and bonus payments made to Mr. McGrath
will be reduced by the amount of any cash compensation he receives for services
rendered to any entity other than Unisys. A copy of the employment agreement is
filed as Exhibit 10 hereto.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS
(c) See Item 1.01 above for a description of the employment
agreement between the company and Joseph W. McGrath.
(d) The company's Board of Directors has elected Mr. McGrath a
director of the company, effective January 1, 2005.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) The following exhibit is being filed herewith:
10 Agreement, dated December 22, 2004, between Unisys
Corporation and Joseph W. McGrath.
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 hereunto duly authorized.
UNISYS CORPORATION
Date: December 22, 2004 By: /s/ Nancy Straus Sundheim
-------------------------
Nancy Straus Sundheim
Senior Vice President,
General Counsel and
Secretary
EXHIBIT INDEX
-------------
Exhibit
No.
- ------
10 Agreement, dated December 22, 2004, between Unisys Corporation and
Joseph W. McGrath.
December 22, 2004
Mr. Joseph W. McGrath
c/o Unisys Corporation
Unisys Way
Blue Bell, Pennsylvania 19424
Dear Mr. McGrath:
You are presently employed by Unisys Corporation (the "Corporation") as
President and Chief Operating Officer. Effective January 1, 2005, you
will become President and Chief Executive Officer of the Corporation.
This letter agreement (the "Agreement") describes the terms and
conditions of your employment with the Corporation on and after January
1, 2005 and through December 31, 2007. The effective date of this
Agreement is January 1, 2005. The provisions of this Agreement are as
follows:
1. Base Salary. You will serve as President and Chief Executive
Officer of the Corporation with a base salary at the annual rate of not
less than $900,000 per year, effective January 1, 2005. Your base
salary level will be reviewed periodically by the Compensation Committee
(the "Committee") of the Board of Directors or its successor.
2. Annual Bonus. You will participate in the Executive Variable
Compensation ("EVC") Plan (or any successor bonus plan) and your target
will not be less than 100% of your annual paid salary. The actual EVC
paid to you, if any, will be determined by the Board of Directors in its
sole discretion after receiving a recommendation from the Committee, and
will be based on such factors as the Board and the Committee deem
appropriate. Your actual EVC payments, if any, will be made in cash at
the time of the award, subject to your election to defer receipt of all
or any portion of the EVC award in accordance with the terms of the
Unisys Corporation Deferred Compensation Plan (or any successor deferred
compensation program).
3. Long-Term Incentive Awards. (a) On the date that this Agreement is
executed both by you and by the Corporation, you will receive a stock
option grant under the terms of the 2003 Unisys Long-Term Incentive and
Equity Compensation Plan ("2003 LTIP")for 250,000 shares of Unisys
common stock, which will vest 25% per year starting on the first
anniversary of the date of grant. The option price for this grant will
be the Fair Market Value (as defined in the 2003 LTIP) of Unisys common
stock on the date of grant.
(b) You will be eligible to receive stock option awards under the
terms of the 2003 LTIP, or any successor equity compensation plan, and
will receive stock option awards in each year in which such awards are
made to other executive officers generally. You will also be eligible
to receive long-term performance awards, restricted share (or restricted
share unit) awards and any other incentive award under the terms of the
2003 LTIP, or any successor thereto, in each year in which such awards
are made to executive officers generally.
4. Benefit Programs; Perquisites. During your employment hereunder,
you will participate in the retirement, welfare, incentive, fringe and
perquisite programs generally made available to executive officers of
the Corporation and at such benefit levels appropriate for the President
and Chief Executive Officer of the Corporation.
5. Service on Other Boards. During the term of your employment
hereunder, you shall render your full-time attention to the business
affairs of the Corporation. You may serve on the board of directors of
other companies only as expressly approved in advance by the Board of
Directors of the Corporation in its discretion.
6. Death or Disability. In the event of your disability or death, all
future compensation under this Agreement (other than those amounts and
benefits described in the following sentence) shall terminate. You or
your estate shall receive (a) if termination of employment by reason of
disability or death occurs prior to the EVC payout date for the previous
EVC award year, an EVC award for such previous award year determined
under Section 2 as if you had continued to be employed through the EVC
payout date, such payment to be made at the same time that such EVC
payment would have been made had you continued to be employed, (b) an
annual EVC award for the year in which your employment is terminated by
reason of disability or death in an amount equal to a pro rata portion,
based on the period of service rendered in such year, of the EVC amount
paid for the previous year, (c) benefits under the retirement, welfare,
incentive, fringe and perquisite programs generally available to
executive officers upon disability or death and (d) any deferred account
balance under the Unisys Deferred Compensation Plan (or any successor
deferred compensation program) in accordance with the terms of such
plan. For purposes of this Agreement, disability means a mental or
physical injury or illness that renders you incapable of substantially
performing your duties hereunder for a period of six consecutive months
and shall commence for purposes of this Agreement at the end of such
six-month period. In the event of your disability or death, you will be
entitled to the benefits described in this Section 6, and not those
described in Section 7.
7. Termination of Employment.
(a) Your employment may be terminated by the Corporation at any
time with or without cause. In the event that you are terminated for
"cause" (as defined below) or you terminate your employment for other
than "good reason" (as defined below), no further amounts shall be paid
to you hereunder except as otherwise provided under the normal terms of
the retirement, welfare, incentive, fringe, and perquisite programs in
which you participated at your date of termination.
(b) Upon termination by the Corporation without cause or your
termination for good reason, you shall be entitled to the following:
(1) An amount equal to 100% of the compensation payable for
the remaining term of employment hereunder as if you had continued
to work through such remaining term of employment, but in no event
less than one year's compensation. For purposes of this Section
7(b), compensation consists of base salary (at its then current
rate on the date of termination) and annual bonus (in an amount
equal to the average percentage of your target bonus paid for the
three years preceding your date of termination times your target
bonus amount as in effect at your date of termination). Such
termination payments shall be paid in the same manner and at the
same times as the salary and annual bonus due hereunder during
employment.
(2) Continued participation, at the same costs applicable to
active employees, through attainment of age 55, or, if later,
through the remaining term of this Agreement, in the Unisys Medical
and Dental Plans (or, if such participation is prohibited by
applicable law or the terms of the plans, participation in
arrangements that will provide benefits substantially similar to
those available under the Unisys Medical and Dental Plans) for you
and your eligible dependents, subject, however, to the generally
applicable terms of such plans;
(3) Upon attainment of age 55, you shall be entitled to
receive the post-retirement medical and post-retirement life
insurance coverage generally available to other retired executive
officers;
(4) Immediate and full vesting in all stock options,
restricted shares and other awards made under the 2003 LTIP (or
under any predecessor or successor incentive plan thereto); for
purposes of stock option, SAR and other equity-based award exercise
rights under the applicable incentive plans, you shall be treated
as if your date of termination were your normal retirement date;
(5) A noncontributory retirement benefit calculated under
the terms of the Unisys Elected Officer Pension Plan (or any
successor pension plan thereto) as if you had satisfied the vesting
requirements described in the Plan and as if you had continued
employment through the remaining term of this Agreement. Such
benefit will be payable at such times and in such manner as is
prescribed under the terms of the Elected Officer Pension Plan.
(c) For purposes of this Section 7, "cause" shall mean
intentional dishonesty or gross neglect of your duties. "Good reason"
shall mean (i) a reduction in your aggregate compensation target (base
salary plus bonus target), as such amounts may be increased during the
term of this Agreement, unless such reduction is due to your continued
failure to adequately perform your duties (provided that the Corporation
has provided you notice identifying the manner in which the Corporation
believes that you have failed to adequately perform your duties, and you
have failed to discontinue your inadequate performance within 90 days of
receiving such notice) or is due to a reduction in compensation
generally applicable to executive officers or (ii) a reduction in your
duties or authority or your removal as Chief Executive Officer of the
Corporation or its successor, unless such reduction or removal is for
cause, as defined above, or is on account of your inability to
substantially perform your duties for an aggregate of 120 days within
any consecutive 12 month period due to a mental or physical injury or
illness, and provided that your resignation occurs within 120 days after
such reduction or removal.
(d) You shall not be entitled to receive payments under the
Unisys Income Assistance Plan or any successor severance or income
assistance plan generally applicable to employees of the Corporation.
(e) The payments specified in this Section 7 will be reduced by
the amount of cash compensation, if any, earned by you if you become
"employed" (as defined below) after your termination of employment with
the Corporation. You will promptly advise the Senior Vice President,
Worldwide Human Resources of the Corporation of any facts that could
cause such a reduction in the amounts payable to you under this Section
7. Upon written notice from the Corporation, you will promptly
reimburse to the Corporation any overpayments made to you as a result of
your receipt of the cash compensation described above. For purposes of
this Section 7, you will be considered to be "employed" if you provide
services to any other entity as an employee, independent contractor,
consultant, officer or director (provided that service as an outside
director of another entity will not be considered as employment to the
extent that the fees received by you for such services are based on the
same fee structure as is paid to other outside directors of the entity).
(f) In the event that you become entitled to termination payments
under this Section 7 and payments under your Executive Employment
Agreement dated January 5, 1999 (the "Executive Employment Agreement"),
then you shall not receive duplicate payments under both agreements.
Instead, if you are entitled to benefits under both agreements, the
provisions of this Agreement as to any matter or the corresponding
provisions of your Executive Employment Agreement, whichever is more
favorable to you or provides you with the greater benefit as determined
by a nationally recognized accounting firm mutually agreed to by the
parties, shall be used in determining your status, compensation and
benefits, and other rights and obligations.
8. Conduct after Termination. (a) From and after the termination of
your employment for any reason and for a period equal to the greater of
(i) 12 months from the date of termination of your employment or (ii)
the period during which the Corporation is actually making payments to
you under Section 7(b)(1) above (it being understood that you may notify
the Corporation at any time after one year from the date your employment
terminates that you no longer wish to receive such payments, and the
Corporation will honor such request):
(1) You shall not engage in or become employed as a business
owner, employee, agent, representative or consultant in any activity
which is in competition with any line of business of Unisys (or its
subsidiaries or affiliates) existing as of your termination date, except
with the express prior written consent of the Committee, provided,
however, you shall be deemed not to be in competition for purposes of
Section 8 of this Agreement (A) if you are an employee of or a
consultant to an entity a unit of which is in competition with Unisys,
provided that it can be demonstrated to the reasonable satisfaction of
the Committee that procedures are in place to assure that any unit that
is in competition with Unisys and any director, officer, employee,
consultant or other representative of such unit cannot directly or
indirectly avail itself or themselves of your services, (B) if you are
an employee of or a consultant to an entity that provides consulting
services to other entities, one or more of which are in competition with
Unisys, provided that it can be demonstrated to the reasonable
satisfaction of the Committee that procedures are in place to assure
that no entity that is in competition with Unisys nor any director,
officer, employee, consultant or other representative of such unit can
directly or indirectly avail itself or themselves of your services, (C)
if you invest in securities which are listed for trading on a national
exchange or NASDAQ and your investment does not exceed 1% of the issued
and outstanding shares of stock or (D) if you acquire an ownership
interest in a non-public company, provided that such ownership
represents a passive investment;
(2) You shall not negatively comment publicly or privately about
Unisys (or its subsidiaries or affiliates), any of its products,
services or other businesses, its present or past Board of Directors,
its officers, or employees, nor shall you in any way discuss the
circumstances of your termination of employment, except that (A) you may
give truthful testimony before a court or governmental agency, (B) you
may make comments about the circumstances of your termination with the
prior written approval of the Corporation, (C) you may respond publicly
to any untrue public comment made by the Corporation, (D) you may
discuss the circumstances of your termination with your attorneys, your
financial and tax advisers, members of your family and any prospective
employer, provided that you take all necessary steps to assure that each
such person does not, as a result of your discussions with them, make
any such negative comment prohibited under this Section 8(a)(2) and (E)
you may make comments to an arbitrator or court for the purpose of
determining or enforcing your rights under this Agreement or any
entitlement under any agreement, plan, award, policy or program with or
sponsored by Unisys (or any of its subsidiaries or affiliates);
(3) You shall not, directly or indirectly, induce or attempt to
induce any employee of Unisys (or any of its subsidiaries or affiliates)
to render services for any other person, firm or business entity, except
that you will be permitted to give recommendations, if requested, for
employees seeking employment outside of Unisys;
(4) Unisys (and its subsidiaries and affiliates) agrees not to
negatively comment publicly or privately about you or the circumstances
of your termination of employment, except (A) Unisys may give truthful
testimony before a court or governmental agency, (B) Unisys may make
comments about the circumstances of your termination with your prior
written approval, (C) Unisys may respond publicly to any untrue public
comment made by you, (D) Unisys may discuss the circumstances of your
termination with its attorneys and its financial and tax advisers,
provided that it takes reasonable steps to assure that each such
person does not, as a result of Unisys discussions with them, make any
such negative comment prohibited under this Section 8(a)(4) and (E)
Unisys may make comments to an arbitrator or court for the purpose of
determining its rights under this Agreement or any agreement, plan,
award, policy or program with or sponsored by Unisys (or any of its
subsidiaries or affiliates).
(b) From and after the termination of your employment for any reason,
you shall not use, furnish or divulge to any other person, firm or
business entity any confidential information relating to Unisys business
(or that of any of its subsidiaries or affiliates), or any trade
secrets, processes, contracts or arrangements involved in any such
business, except (1) when required to do so by a court of law, by any
governmental agency having supervisory authority over the business of
Unisys or by any administrative or legislative body (including a
committee thereof) with apparent jurisdiction to order you to divulge,
disclose or make accessible such information, (2) to an attorney as
necessary to enforce your rights under this Agreement, or any other
agreement, plan, policy, award or program with or sponsored by Unisys or
(3) after such information becomes known to the public or within the
relevant industry to which such confidential information pertains.
(c) You and Unisys mutually agree that the obligations contained in
this Section 8 are reasonable and necessary for each party's mutual
protection and that one party cannot be reasonably or adequately
compensated in damages in an action at law in the event that the other
party breaches such obligations. You and Unisys expressly agree that, in
addition to any other rights or remedies which each may possess, each
shall be entitled to injunctive and other equitable relief to prevent a
breach of this Section 8 by the other party, including a temporary
restraining order or temporary injunction from any court of competent
jurisdiction restraining any threatened or actual violation, and you and
Unisys each consents to the entry of such an order and injunctive relief
and waives the making of a bond as a condition for obtaining such
relief. Such right shall be cumulative in addition to any other legal
or equitable rights and remedies the parties may have. In addition, in
the event that you should materially breach your obligations under
Section 8(a)(2) or you should breach any other obligation described in
this Section 8, Unisys shall have the right to terminate any remaining
payments due under Section 7(b)(1).
9. Plan Documents; Code of Ethical Conduct. Each of the above-
described benefits which are more fully described in an applicable
Unisys plan document (including, without limitation EVC, stock option
and restricted share award documents) are subject to the terms of such
plan or award document (as may be amended by Unisys from time to time)
and, except as expressly provided in this Agreement, each such plan
document or award document will govern the benefit payable hereunder and
thereunder. In addition, you agree that the Unisys policies and
procedures applicable to all Unisys employees, including, without
limitation, the Unisys Code of Ethics and Business Conduct, shall be
applicable to you as in effect as of the date of this Agreement.
10. Successors. This agreement shall be binding upon Unisys and its
successors and assigns.
11. Indemnification. You will be entitled to the indemnification
rights contained in the Restated Certificate of Incorporation of Unisys
Corporation, dated September 27, 1999 and the By-Laws of Unisys
Corporation, dated April 22, 2004, as either of them may be amended from
time to time. Unisys agrees to maintain directors and officers
liability insurance covering you to the extent that Unisys provides such
coverage for its other directors and officers.
12. Miscellaneous. Except as expressly set forth herein, this
Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof and supersedes all prior
agreements. For the avoidance of doubt, your Executive Employment
Agreement dated as of January 5, 1999 will continue in full force and
effect. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and the Chairman of the Committee or his
designee. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania without giving effect to the provisions thereof relating to
conflicts of laws.
13. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force and
effect.
14. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in Philadelphia, Pennsylvania in accordance with the rules
of the American Arbitration Association. Any arbitration award will be
final and conclusive upon the parties, and a judgment enforcing such
award may be entered in any court of competent jurisdiction. Costs of
arbitration shall be borne by Unisys. Unless the arbitrator determines
that you did not have a reasonable basis for asserting your position
with respect to the dispute in question, Unisys shall also reimburse you
for your reasonable attorneys' fees incurred with respect to any
arbitration.
15. Corporate Authority. Unisys represents and warrants that it is
fully authorized and empowered to enter into this Agreement. This
Agreement and any necessary determination under or modification of, any
plan, program or arrangement of the Corporation required by this
Agreement, have been authorized by the Board and approved by the
Committee.
If the foregoing sets forth our agreement with you, please sign and
return to us the enclosed copy of this Agreement.
Very truly yours,
UNISYS CORPORATION The foregoing is accepted:
By: /s/ Henry C, Duques /s/ Joseph W. McGrath
------------------- ---------------------
Henry C. Duques, Chairman Joseph W. McGrath
Compensation Committee
Board of Directors Date: December 22, 2004
Date: December 22, 2004