UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) February 9, 2006
________________________________________________________________________________
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) Consulting Agreement with Lawrence A. Weinbach
On February 9, 2006, the Board of Directors of Unisys Corporation approved a
consulting agreement between Unisys Corporation and Lawrence A. Weinbach. The
consulting agreement provides for Mr. Weinbach to provide such consulting
services to Unisys as are requested by its Board of Directors or its Chairman
during the period beginning February 1, 2006 and ending February 1, 2007. The
agreement provides for Mr. Weinbach to bill Unisys at the rate of $8,000 per day
for his services. The Board of Directors may, in its discretion, pay Mr.
Weinbach an additional fee at the conclusion of the agreement based on the value
of the services he provides, but in no event may the total amount paid to Mr.
Weinbach under the agreement exceed $1,000,000. Mr. Weinbach retired from
Unisys on January 31, 2006. He had been executive Chairman of the Board. The
consulting agreement is filed as Exhibit 10.1 to this report.
(b) Executive Officer Salary and Bonus Arrangements
On February 9, 2006, the Compensation Committee and/or the Board of Directors of
Unisys Corporation approved the 2006 base salaries and target bonus percentages
set forth on Exhibit 10.2 hereto with respect to certain of the company's
executive officers.
(c) Turnaround Cash Incentive Program
On February 9, 2006, the Compensation Committee of the Board of Directors
approved a turnaround cash incentive program to incent certain key employees of
the Company, including certain officers, to execute the turnaround of the
company. Under this program, up to $12.6 million will be available for payment
as a turnaround incentive. Amounts payable, if any, will be based on the
achievement by each participant of individual revenue, cost management and/or
cash management targets, and will be subject to the discretion of the
Compensation Committee and the Chief Executive Officer. Any payments under the
program will be made in the first quarter of 2007. Participants may receive
from 0 to 100% of target depending on the degree to which their incentive
targets are achieved.
(d) Compensation of Directors
In 2005, non-employee directors received an annual retainer of $50,000 and an
annual attendance fee of $10,000 for regularly scheduled Board and committee
meetings. Chairs of committees other than the audit committee also received an
annual $5,000 retainer; the annual retainer for the chair of the audit committee
was $20,000. All of these retainers and fees were paid 50% in cash and 50% in
the form of common stock equivalent units. In addition, non-employee directors
received a cash meeting fee of $1,500 for attendance at certain additional Board
and committee meetings. In 2005, each non-employee director also received an
option to purchase 12,000 shares of Unisys common stock.
On February 9, 2006, the Board of Directors determined that the annual retainer,
annual meeting attendance fee, retainers for chairs of committees and fee for
attendance at additional meetings set forth above will continue in 2006.
However, these fees will now be payable 100% in cash. The Board also approved
the payment of an additional $100,000 annual retainer to the non-executive
Chairman of the Board. Prior to February 2006, the Chairman of the Board had
been an employee of the company. Finally, the Board of Directors also approved
an annual grant to each non-employee director of restricted stock units having a
value of $100,000 (based on the fair market value of Unisys common stock on the
date of grant). Accordingly, on February 9, 2006 each non-employee director
received a grant of 15,397 restricted stock units. The restricted stock units
vest in three annual installments beginning one year after the date of grant and
will be settled in shares of Unisys common stock. The grant of restricted stock
units was made in lieu of stock option grants.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS
(d) On February 9, 2006, the Board of Directors elected Leslie F. Kenne as a
director of Unisys Corporation. Ms. Kenne, 58, is a retired Lieutenant General
of the United States Air Force. Prior to retiring from the Air Force in 2003 as
Deputy Chief of Staff, Warfighting Integration, Pentagon, she had a 32-year
military career including technical training, command experience and
responsibility for large aircraft test, evaluation and acquisition programs.
She is also a director of EDO Corporation and Harris Corporation.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) The following Exhibits are filed herewith:
10.1 Consulting Agreement dated as of February 1, 2006 between Unisys
Corporation and Lawrence A. Weinbach
10.2 Description of salary and bonus arrangements with certain executive
officers
SIGNATURE
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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: February 15, 2006 By: /s/ Nancy Straus Sundheim
-------------------------
Nancy Straus Sundheim
Senior Vice President,
General Counsel and
Secretary
EXHIBIT INDEX
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Exhibit
No.
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10.1 Consulting Agreement dated as of February 1, 2006 between Unisys
Corporation and Lawrence A. Weinbach
10.2 Description of salary and bonus arrangements with certain
executive officers
CONSULTING AGREEMENT
This Agreement is made and entered into as of the 1st day of February,
2006, by and between Unisys Corporation ("Unisys), a Delaware corporation, and
Lawrence A. Weinbach ("Consultant").
WHEREAS, Unisys requires Consultant's special knowledge, skills and
abilities; and
WHEREAS, Unisys and Consultant desire to enter into a consulting agreement.
THEREFORE, in consideration of the mutual promises set forth herein and
intending to be legally bound, it is agreed by and between Unisys and
Consultant as follows:
1. Term of Agreement
This Agreement will begin on February 1, 2006 (the Effective Date), and
end on February 1, 2007, unless sooner terminated as provided for herein.
2. Statement of Work/Performance
A. Based on the terms and conditions as set forth herein, the
Consultant agrees to perform such services for Unisys as are requested by its
Board of Directors or its Chairman. Consultant shall report to
Henry C. Duques, the Chairman of Unisys.
B. Progress meetings shall be conducted at times and places as may be
requested from time to time to discuss the progress of the work and other
related matters.
3. Best Effort
The Consultant agrees to apply his best efforts in providing services to
Unisys. Consultant shall put in the appropriate amount of time to perform
these services but in no event shall Consultant work more than fifty percent of
the time he worked for Unisys, on average, during the years 2003 through 2005.
4. Statement of Services/Payment/Taxes
A. Statement of Services
1. Consultant will bill Unisys at the rate of Eight Thousand
Dollars ($8,000) per day. The Unisys Board of Directors may, in its
discretion, pay Consultant an additional fee at the conclusion of this
Agreement based on the value of the services he provides, but in no event shall
the total amount paid to Consultant under this Agreement exceed One Million
Dollars ($1,000,000).
2. Unisys shall reimburse Consultant for reasonable and
appropriate travel and other expenses consistent with the applicable Unisys
policies.
B. Payment
1. Consultant shall submit for approval an invoice at the end of
each month for services rendered and travel and other expenses incurred during
the month. Each invoice shall include the following information:
(a) Unisys purchase order number related to this Agreement;
(b) Consultant's invoice number and date;
(c) Time period covered and work performed under the invoice;
(d) Amount billed for the services; and
(e) Travel and other expenses, if any, supported by receipts.
2. Unisys shall pay all approved invoiced amounts to Consultant
within thirty (30) days after receipt of invoice.
C. Taxes
1. Consultant shall be responsible for payment of all taxes
including Federal, State and local taxes arising out of the Consultant's
activities in accordance with this contract, including by way of illustration
but not limitation, Federal and State income taxes, Social Security tax,
Medicare tax, Unemployment Insurance taxes, and any other taxes or business
license fees as required.
2. Because the compensation (excluding authorized travel expense
reimbursements) contemplated under this Agreement will exceed $600, Unisys will
furnish Form 1099-MISC to the Consultant and the IRS by January 31 of the
following year reporting such compensation.
5. Termination/Cancellation
A. Termination for Convenience
1. Unisys and the Consultant shall have the right to terminate
this Agreement or the work to be performed hereunder in whole or in part for
convenience at any time. Any notice of termination given by Unisys or the
Consultant shall be effective thirty (30) days after transmittal by Unisys or
the Consultant, and Consultant shall terminate the work as quickly as possible
upon receiving notice. Unisys shall have no liability to Consultant based on
any such termination except to pay all amounts due Consultant up to the date of
termination in accordance with the compensation provisions of paragraph 4.
Consultant shall promptly deliver to Unisys all work product, whether or not
completed, which is in Consultant's possession on the termination date
containing information related to the work, including a final report to be
prepared by Consultant describing results of the work up to the date of
termination.
B. Cancellation for Non-Performance
1. Unisys shall have the right to cancel this Agreement in the
event of any material breach by Consultant that Consultant fails to cure within
a reasonable time not to exceed thirty days after written notice of breach from
Unisys. Any such notice of cancellation shall become effective on the date of
written notice of breach, unless the Consultant fails to cure the breach on or
before the thirtieth day after transmittal of said notice. Notice of
cancellation rightfully given by Unisys for material breach by Consultant that
is not timely cured shall excuse Unisys from paying for any work performed by
Consultant after the date of notice of material breach given by Unisys. Unisys
shall have the option upon cancellation either to obtain delivery and retain
title and license rights, as provided herein, in and to all work completed or
in preparation on the date of cancellation in exchange for payments made and
owed as of such date.
2. Consultant shall have the right to cancel this Agreement and
the rights and licenses granted to Unisys only if Unisys fails to cure any
deficiency in making any payment due Consultant, which is not in good faith
dispute between the parties, within thirty days after receiving written notice
of such deficiency.
C. Additional Rights and Remedies
Unisys and Consultant shall retain all rights and remedies
available at law or equity; to the extent they are not inconsistent with this
Agreement, in the event of any termination or cancellation of this Agreement.
6. Service For Others
During the term of this Agreement, Consultant shall not engage directly or
indirectly in any undertaking that creates any legal impediment to or conflicts
with rights granted to Unisys by Consultant under this Agreement. Consultant
shall not undertake, during the term of this Agreement, to perform similar
services for any third party which would compromise the value of the work to
Unisys without providing Unisys prior written notice.
7. Assignment
Consultant shall not assign this Agreement or any rights hereunder or
delegate the work or any of Consultant's other obligations hereunder to any
third party and any attempted assignment shall be void. Unisys shall have the
right to assign this Agreement and its rights and duties hereunder to any
successor in interest by acquisition, merger, operation of law or otherwise.
8. Administration
The principal interface with Consultant on matters concerning the work and
any other matter related to this Agreement, including modifications thereof, or
any notices, shall be Mr. Duques. All notices given by either party to the
other shall be in writing and sent by hand delivery, fax, e-mail, or first
class mail to the addresses noted above.
9. Waivers
The failure of either party to assert any claim or right against the other
party regarding its obligations hereunder, in any one or more instances, shall
not constitute a waiver of such claim or right with respect to future
performance of such obligations and other obligations under the Agreement.
10. Severability
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect other provisions and the Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted.
11. Headings
All article and paragraph headings are for reference only and shall not be
used in construing this Agreement.
12. Governing Law
The laws of the Commonwealth of Pennsylvania shall govern the formation,
interpretation and performance of this Agreement.
13. Entire Agreement
This Agreement sets forth the entire agreement between the parties and
supersedes all prior oral and written agreements and understandings between the
parties with respect to the subject matter hereof. This Agreement may not be
modified or the parties released from their obligations hereunder except by an
instrument in writing signed by an authorized representative of the parties.
14. Compliance with Law
Consultant shall comply with all federal, state and local laws and
regulations pertaining to the performance of this Agreement and shall indemnify
Unisys for any liability and related costs, expenses and fees incurred by
Unisys as a result of Consultant's breach of such obligation.
15. Proprietary Information/Intellectual Property
Consultant acknowledges that he has signed the Unisys Proprietary
Information, Invention and Non-Competition Agreement and the Unisys Stock
Option Agreement and he agrees and understands that these agreements apply to
his conduct as Consultant as though fully set forth herein.
16. Business Practice Guidelines
Consultant acknowledges that he has received and will comply with the
Unisys Code of Ethics and Business Conduct, including, without limitation, that
he will not participate in any situation that would involve a conflict of
interest, or appearance of a conflict, with Unisys or its stockholders.
17. Arbitration
1. Any controversy or claim related to or arising from this Agreement
and/or the contracted services to be provided by Consultant shall be settled by
arbitration conducted on a confidential basis under the U.S. Arbitration Act
and the then current Commercial Arbitration Rules of the American Arbitration
Association, strictly in accordance with the terms of this Agreement and the
substantive law of the Commonwealth of Pennsylvania.
2. Neither party shall institute an arbitration proceeding unless, at
least sixty-(60) days prior thereto, such party shall have furnished to the
other written notice by registered mail of its intent to do so. Notice to
Unisys shall be addressed to Nancy Sundheim, its General Counsel, Unisys
Corporation, Unisys Way, Blue Bell, Pennsylvania 19424-0001.
3. Arbitration shall be conducted by three arbitrators, at least one of
whom shall be knowledgeable in data processing and business information systems
and one of whom shall be an attorney. The arbitrators shall have no authority
to award punitive damages or any other form of non-compensatory damages.
Judgment upon the arbitrators' award may be entered and enforced in any court
of competent jurisdiction.
4. Neither party shall be precluded from seeking provisional remedies
in the court of any jurisdiction to protect its rights and interests, but such
shall not be sought as a means to avoid or stay arbitration.
18. Insurance
Consultant agree(s) to maintain comprehensive liability insurance for all
operations necessary and incidental to the conduct of this Agreement and any
purchase orders issued pursuant to this Agreement, including coverage of all
automobile exposure, all property liability exposure and contractual liability
exposure to at least the following minimum amounts:
A. Comprehensive Automobile Liability Insurance, with a combined single
limit of $500,000 for bodily injury, death or property damage arising from any
one occurrence;
B. Comprehensive General Liability including Broad Form Contractual and
Completed Operations and Umbrella Liability, with a combined single limit of $1
million for bodily injury, death or property damage arising from any one
occurrence.
Such policies shall not be cancelled without ten (10) days prior written
notice to Unisys. Such insurance shall not be deemed a limitation of any
liability of the Consultant, but Consultant shall furnish Unisys with
certificates of insurance in form acceptable to Unisys.
Such insurance shall be primary, not contributing with, and not in excess
of, coverage which Unisys may carry. The insurance afforded by these policies
applies separately to each insured against whom claim is made or suit is
brought, in the same manner as such insured would be covered if the policy
insured only such party. The inclusion of such additional insured shall not
increase the policy limits.
19. Relationship of Parties
In performing the work, Consultant is acting as an independent contractor
and not as an employee, agent, or representative of Unisys. Consultant hereby
acknowledges that neither Consultant nor its personnel, if any, are entitled to
any of the benefits provided by Unisys to Unisys employees, including, but not
limited to workers compensation, medical benefits, and group life insurance
benefits, and Consultant expressly waives and releases any claims thereto other
than the benefits available as a retired executive officer of Unisys.
CONSULTANT UNISYS CORPORATION
By: /s/ Lawrence A. Weinbach By: /s/ Henry C. Duques
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Lawrence A. Weinbach Henry C. Duques
Chairman
Date: February 13, 2006 Date: February 9, 2006
Exhibit 10.2
SALARY AND BONUS ARRANGEMENTS WITH CERTAIN EXECUTIVE OFFICERS
The following 2006 base salaries and target bonus percentages were approved on
February 9, 2006.
2006 2006 2005
Base Bonus Bonus
Name and Title Salary Target* Payment
- ----------------- ------ ------ -------
Joseph W. McGrath $950,000 100% -
President and Chief
Executive Officer
Peter Blackmore $600,000 85% $224,658**
Executive Vice
President
Janet B. Wallace $500,000 75% -
Executive Vice President
Janet B. Haugen $525,000 85% -
Senior Vice President
and Chief Financial
Officer
- -------------------------------------------------
*Bonus targets are expressed as a percentage of base salary
** Mr. Blackmore joined the Company as an Executive Vice President in February
2005. In connection with his employment, he was guaranteed a bonus in the
amount of $224,658 for 2005.