<PAGE>
 
                                  SCHEDULE 14A 
                                 (RULE 14a-101)

                    INFORMATION REQUIRED IN PROXY STATEMENT
                                        
                            SCHEDULE 14A INFORMATION
          PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                     EXCHANGE ACT OF 1934 (AMENDMENT NO.  )

Filed by the Registrant [X]
 
Filed by a Party other than the Registrant [ ]
 
Check the appropriate box:
 
[ ]  Preliminary Proxy Statement    [ ]  Confidential, for Use of the Commission
                                         Only (as permitted by Rule 14a-6(e)(2))
[X]  Definitive Proxy Statement
[ ]  Definitive Additional Materials
[ ]  Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
                                        
                         
                               UNISYS CORPORATION
--------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)
 
--------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
[X]  No fee required.
 
[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
     (1)  Title of each class of securities to which transaction applies:
 
        ------------------------------------------------------------------------
 
     (2)  Aggregate number of securities to which transaction applies:
 
        ------------------------------------------------------------------------
 
     (3)  Per unit price or other underlying value of transaction computed
          pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
          filing fee is calculated and state how it was determined):
 
        ------------------------------------------------------------------------
 
     (4)  Proposed maximum aggregate value of transaction:
 
        ------------------------------------------------------------------------
 
     (5)  Total fee paid:
 
        ------------------------------------------------------------------------
 
[ ]  Fee paid previously with preliminary materials.
 
[ ]  Check box if any part of the fee is offset as provided by Exchange Act Rule
     0-11(a)(2) and identify the filing for which the offsetting fee was paid
     previously. Identify the previous filing by registration statement number,
     or the form or schedule and the date of its filing.
 
     (1)  Amount previously paid:
 
        ------------------------------------------------------------------------
 
     (2)  Form, schedule or registration statement no.:
 
        ------------------------------------------------------------------------
 
     (3)  Filing party:
 
        ------------------------------------------------------------------------
 
     (4)  Date filed:
 
        ------------------------------------------------------------------------

<PAGE>
 
                                                       Unisys Corporation
                                                       Unisys Way
                                                       Blue Bell, PA 19424-0001
 
[UNISYS LOGO]
 
March 14, 2003
 
Dear Fellow Stockholder:
 
     It is my pleasure to invite you to the Unisys 2003 Annual Meeting of
Stockholders. This year's meeting will be held on Thursday, April 24, 2003, at
The Hilton Inn at Penn, which is located at 3600 Sansom Street in Philadelphia,
Pennsylvania. The meeting will begin at 9:30 a.m.
 
     Unisys delivered a strong performance in 2002. Despite a continued
uncertain business environment worldwide, we sharply increased our profitability
and achieved the earnings targets that we set at the beginning of the year. We
also signed a number of significant long-term services contracts and built our
backlog of annuity-based business. Our focus on value-added, end-to-end business
opportunities is delivering consistent results in a very difficult period for
the industry. Our strategy is working, and we believe we're well positioned for
continued earnings growth in 2003.
 
     Whether or not you plan to attend the annual meeting, I urge you to take a
moment to vote on the items in this year's proxy statement. Most stockholders
have a choice of voting their shares over the Internet, by telephone, or by
completing, signing, and returning a proxy card. Voting by any of these means
takes only a few minutes, and it will ensure that your shares are represented at
the meeting. If you vote over the Internet, you will also be given the
opportunity to access future proxy statements and annual reports over the
Internet instead of receiving paper copies in the mail. Electronic access saves
the company the cost of producing and mailing these documents. I encourage you
to take advantage of it.
 
     I look forward to seeing you at the annual meeting and to reporting on our
accomplishments in 2002 and our priorities for 2003.
 
                                          Sincerely,
 
                                          /s/ Larry A. Weinbach
                                          Lawrence A. Weinbach
                                          Chairman, President and
                                          Chief Executive Officer

<PAGE>
 
                                 [UNISYS LOGO]
 

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
 
                                 APRIL 24, 2003
 
     Unisys Corporation will hold its 2003 Annual Meeting of Stockholders at The
Hilton Inn at Penn, 3600 Sansom Street, Philadelphia, Pennsylvania, on Thursday,
April 24, 2003, at 9:30 a.m. to:
 
          1. elect three directors;
 
          2. ratify the selection of independent auditors for 2003;
 
        3. approve the Unisys Corporation 2003 Long-Term Incentive and Equity
     Compensation Plan;
 
          4. approve the amended and restated Unisys Corporation Employee Stock
     Purchase Plan; and
 
          5. transact any other business properly brought before the meeting.
 
     Only holders of Unisys Common Stock of record at the close of business on
February 28, 2003 will be entitled to vote at the annual meeting.
 
                                          By Order of the Board of Directors,
 
                                          /s/ Nancy Straus Sundheim
                                          Nancy Straus Sundheim
                                          Senior Vice President, General Counsel
                                          and Secretary
 
Blue Bell, Pennsylvania
M
arch 14, 2003
 
                                   IMPORTANT
 
YOUR VOTE IS IMPORTANT. MOST STOCKHOLDERS WILL HAVE A CHOICE OF VOTING OVER THE
INTERNET, BY TELEPHONE, OR BY USING A TRADITIONAL PROXY CARD. PLEASE CHECK THE
INFORMATION YOU HAVE RECEIVED TO SEE WHICH OPTIONS ARE AVAILABLE TO YOU.

<PAGE>
 
                               TABLE OF CONTENTS
 

<Table>
<S>                                                           <C>
PROXY STATEMENT
  Required Vote.............................................    1
  Voting Procedures and Revocability of Proxies.............    1
ELECTION OF DIRECTORS.......................................    2
  Information Regarding Nominees and Directors..............    2
  Board Meetings............................................    6
  Committees................................................    6
  Audit Committee Report....................................    7
  Corporate Governance Guidelines...........................    8
  Stock Ownership Guidelines................................    9
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS...........    9
APPROVAL OF THE UNISYS CORPORATION 2003 LONG-TERM INCENTIVE
  AND EQUITY COMPENSATION PLAN..............................   10
APPROVAL OF THE AMENDED AND RESTATED UNISYS CORPORATION
  EMPLOYEE STOCK PURCHASE PLAN..............................   15
EQUITY COMPENSATION PLAN INFORMATION........................   18
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND
  MANAGEMENT................................................   19
EXECUTIVE COMPENSATION......................................   21
  Summary Compensation Table................................   21
  Option Grants in Last Fiscal Year.........................   22
  Option Exercises and Fiscal Year-End Values...............   23
  Pension Plans.............................................   23
  Employment Agreements.....................................   24
  Change in Control Employment Agreements...................   25
  Transactions with Management..............................   25
  Compensation of Directors.................................   25
REPORT OF THE CORPORATE GOVERNANCE AND COMPENSATION
  COMMITTEE.................................................   26
  Compensation Program and Policies.........................   26
  Base Salary...............................................   26
  Variable Incentive Compensation...........................   27
  Long-Term Incentive Awards................................   27
  Compensation of the Chief Executive Officer...............   27
  Deductibility of Executive Compensation...................   28
STOCK PERFORMANCE GRAPH.....................................   29
GENERAL MATTERS.............................................   30
  Section 16(a) Beneficial Ownership Reporting Compliance...   30
  Policy on Confidential Voting.............................   30
  Stockholder Proposals and Nominations.....................   30
  Electronic Access to Proxy Materials and Annual Report....   30
  Householding of Proxy Statement and Annual Report.........   31
  Other Matters.............................................   31
APPENDIX A
Audit Committee Charter.....................................  A-1
APPENDIX B
Unisys Corporation 2003 Long-Term Incentive and Equity
  Compensation Plan.........................................  B-1
APPENDIX C
Unisys Corporation Employee Stock Purchase Plan, as amended
  and restated..............................................  C-1
</Table>


<PAGE>
 
                               UNISYS CORPORATION
 
                                PROXY STATEMENT
 
                         ANNUAL MEETING OF STOCKHOLDERS
 
                                 APRIL 24, 2003
 
     The Board of Directors of Unisys Corporation solicits your proxy for use at
the 2003 Annual Meeting of Stockholders to be held on April 24, 2003 and at any
adjournments. At the annual meeting, stockholders will be asked to elect
directors, to ratify the selection of independent auditors, to approve a new
long-term incentive and equity compensation plan, and to approve an amended and
restated employee stock purchase plan.
 
     The record date for the annual meeting is February 28, 2003. Only holders
of record of Unisys common stock as of the close of business on the record date
are entitled to vote at the meeting. On the record date, 327,418,508 shares of
common stock were outstanding. The presence, in person or by proxy, of a
majority of those shares will constitute a quorum at the meeting.
 
     This proxy statement, the proxy/voting instruction card, and the annual
report of Unisys, including the financial statements for 2002, are being mailed
and made available on the Internet on or about March 14, 2003.
 
REQUIRED VOTE
 
     Each share of Unisys common stock outstanding on the record date is
entitled to one vote on each matter to be voted upon. Directors will be elected
by a plurality of the votes cast (i.e., the nominees receiving the greatest
number of votes will be elected). Abstentions and broker non-votes are not
counted for purposes of the election of directors. Each of the other matters
scheduled to come before the annual meeting will be approved if it receives the
affirmative vote of a majority of shares present, in person or by proxy, and
entitled to vote. Abstentions will be included in the vote totals for these
matters, and therefore will have the same effect as a negative vote; broker
non-votes will not be included in the vote totals and therefore will have no
effect on the vote.
 
VOTING PROCEDURES AND REVOCABILITY OF PROXIES
 
     Your vote is important. Shares may be voted at the annual meeting only if
you are present in person or represented by proxy. Most stockholders have a
choice of voting (a) by completing a proxy/voting instruction card and mailing
it in the postage-paid envelope provided, (b) over the Internet, or (c) by
telephone using a toll-free telephone number. Check the materials you have
received to see which options are available to you and to obtain the applicable
web site or telephone number. If you elected to receive proxy materials over the
Internet, you should have already received e-mail instructions on how to vote
electronically. Please be aware that if you vote over the Internet, you may
incur costs associated with your electronic access, such as usage charges from
Internet access providers and telephone companies, for which you will be
responsible.
 
     The telephone and Internet voting procedures are designed to authenticate
stockholders' identities by use of a control number, to allow stockholders to
give their voting instructions, and to confirm that stockholders' instructions
have been recorded properly. The Company has been

<PAGE>
 
advised by counsel that the telephone and Internet voting procedures are
consistent with the requirements of applicable law.
 
     You may revoke your proxy at any time before it is exercised by writing to
the Secretary of Unisys, by timely delivery of a properly executed later-dated
proxy (including an Internet or telephone vote), or by voting in person at the
meeting.
 
     The method by which you vote will in no way limit your right to vote at the
meeting if you later decide to attend in person. If your shares are held in the
name of a bank, broker, or other holder of record, you must obtain a proxy,
executed in your favor, from the holder of record to be able to vote at the
meeting.
 
     If you properly complete and return your proxy, and do not revoke it, the
proxy holders will vote your shares in accordance with your instructions. If
your properly completed proxy gives no instructions, the proxy holders will vote
your shares FOR the election of directors, FOR the selection of independent
auditors, FOR the approval of the Unisys Corporation 2003 Long-Term Incentive
and Equity Compensation Plan, FOR the approval of the amended and restated
Unisys Corporation Employee Stock Purchase Plan, and in their discretion on any
other matters that properly come before the annual meeting.
 
     If you are a participant in the Unisys Savings Plan, the proxy/voting
instruction card will serve as voting instructions to the plan trustee for any
whole shares of Unisys common stock credited to your account as of February 28,
2003. The trustee will vote those shares in accordance with your instructions if
it receives your completed proxy by April 18, 2003. If the proxy is not timely
received, or if you give no instructions on a matter to be voted upon, the
trustee will vote the shares credited to your account in the same proportion as
it votes those shares for which it received proper instructions from other
participants.
 
                             ELECTION OF DIRECTORS
 
     The Board of Directors currently consists of ten members, divided into
three classes. One class of directors is elected each year to hold office for a
three-year term. The three directors whose terms expire in 2003, Gail D. Fosler,
Melvin R. Goodes and Edwin A. Huston, have been nominated for reelection. The
remaining seven directors will continue to serve as set forth below. Each of the
nominees has agreed to serve as a director if elected, and Unisys believes that
each nominee will be available to serve. However, the proxy holders have
discretionary authority to cast votes for the election of a substitute should
any nominee not be available to serve as a director.
 
INFORMATION REGARDING NOMINEES AND DIRECTORS
 
     The names and ages of the nominees and directors, their principal
occupations and employment during the past five years, and other information
regarding them are as follows.
 
                                        2

<PAGE>
 
                         NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
 
[FOSLER PHOTO]
                  GAIL D. FOSLER
                  Ms. Fosler, 55, is Senior Vice President and Chief Economist
                  of The Conference Board, a business-sponsored, nonprofit
                  research organization. She is a Director of Baxter
                  International Inc., Caterpillar, Inc., H. B. Fuller Company
                  and DBS Holdings (Singapore). She has served as a Director of
                  Unisys since 1993 and is a member of the Audit Committee and
                  the Finance Committee.
 
[GOODES PHOTO]
                  MELVIN R. GOODES
                  Mr. Goodes, 67, is a retired Chairman and Chief Executive
                  Officer of Warner-Lambert Company, a diversified worldwide
                  health care, pharmaceutical, and consumer products company. He
                  has served as a Director of Unisys since 1987 and is a member
                  of the Corporate Governance and Compensation Committee.
 
[HUSTON PHOTO]
                  EDWIN A. HUSTON
                  Mr. Huston, 64, is a retired Vice Chairman of Ryder System,
                  Inc., an international logistics and transportation solutions
                  company. He has also served as Senior Executive Vice
                  President -- Finance and Chief Financial Officer of that
                  company. He is a Director of Answerthink, Inc., Enterasys
                  Networks, Inc. and Kaman Corporation. He has served as a
                  Director of Unisys since 1993 and is a member of the Audit
                  Committee and the Nominating Committee.
 
                                        3

<PAGE>
 
                      MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
                                      TERM EXPIRING IN 2004
 
[DUQUES PHOTO]
                  HENRY C. DUQUES
                  Mr. Duques, 59, is a retired Chairman and Chief Executive
                  Officer of First Data Corporation, an electronic commerce and
                  payment services company. He is a Director of First Data
                  Corporation, CheckFree Corporation and SunGard Data Systems,
                  Inc. He has served as a Director of Unisys since 1998 and is a
                  member of the Corporate Governance and Compensation Committee.
 
[MARTIN PHOTO]
                  THEODORE E. MARTIN
                  Mr. Martin, 63, is a retired President and Chief Executive
                  Officer of Barnes Group Inc., a manufacturer and distributor
                  of automotive and aircraft components and maintenance
                  products. He has also held the position of Executive Vice
                  President -- Operations of that company. He is a Director of
                  Ingersoll-Rand Company and Applera Corporation. He has served
                  as a Director of Unisys since 1995 and is a member of the
                  Audit Committee and the Finance Committee.
 
[WEINBACH PHOTO]
                  LAWRENCE A. WEINBACH
                  Mr. Weinbach, 63, is Chairman of the Board, President and
                  Chief Executive Officer of Unisys. He previously served in the
                  position of Managing Partner -- Chief Executive of Andersen
                  Worldwide, a global professional services organization. He is
                  a Director of Avon Products, Inc. and UBS AG. He has served as
                  a Director of Unisys since 1997.
 
                                        4

<PAGE>
 
                            MEMBERS OF THE BOARD CONTINUING IN OFFICE
                                      TERM EXPIRING IN 2005
 
[BOLDUC PHOTO]
                  J. P. BOLDUC
                  Mr. Bolduc, 63, is Chairman and Chief Executive Officer of JPB
                  Enterprises, Inc., a merchant banking, venture capital, and
                  real estate investment holding company. He previously served
                  in the positions of President and Chief Executive Officer,
                  Vice Chairman, and Chief Operating Officer of W. R. Grace &
                  Co., a specialty chemicals and health care company. He is a
                  Director of Proudfoot PLC and EnPro Industries, Inc. He has
                  served as a Director of Unisys since 1992 and is a member of
                  the Finance Committee and the Nominating Committee.
 
                  In February 2003, the SEC and Mr. Bolduc settled public
                  administrative and cease-and-desist proceedings. Without
                  admitting or denying the SEC's findings, Mr. Bolduc consented
                  to the entry of a cease-and-desist order in which the SEC
                  found that, between 1991 and 1995, while Mr. Bolduc was
                  president and either chief operating officer or chief
                  executive officer of W. R. Grace & Co. and a member of its
                  board of directors, Grace fraudulently used reserves to defer
                  income earned by a subsidiary, primarily to smooth earnings of
                  its health care segment, in violation of the antifraud
                  provisions of the federal securities laws, as well as the
                  provisions that require public companies to keep accurate
                  books and records, maintain appropriate internal accounting
                  controls and file accurate annual and quarterly reports. The
                  order generally finds that Mr. Bolduc, through his actions or
                  omissions, was a cause of these violations. The order also
                  notes that, during the period in question, Mr. Bolduc did not
                  sell any of the substantial number of Grace shares that he
                  owned. The SEC ordered Mr. Bolduc to cease and desist from
                  committing or causing any violation or future violation of the
                  antifraud and reporting requirements of the federal securities
                  laws. It did not impose any fines, penalties or bars on Mr.
                  Bolduc.
 
[DUDERSTADT PHOTO]
                  JAMES J. DUDERSTADT
                  Dr. Duderstadt, 60, is President Emeritus and University
                  Professor of Science and Engineering at the University of
                  Michigan. He is a Director of CMS Energy Corporation. He has
                  served as a Director of Unisys since 1990 and is a member of
                  the Audit Committee.
 
                                        5

<PAGE>
 
[FLETCHER PHOTO]
                  DENISE K. FLETCHER
                  Ms. Fletcher, 54, is Executive Vice President and Chief
                  Financial Officer of MasterCard International, an
                  international payment solutions company. Before joining
                  MasterCard, she served as Chief Financial Officer of Bowne
                  Inc., a global document management and information services
                  provider, from 1996 to 2000. She has served as a Director of
                  Unisys since 2001 and is a member of the Audit Committee.
 
[MACKE PHOTO]
                  KENNETH A. MACKE
                  Mr. Macke, 64, is General Partner of Macke Partners, a venture
                  capital firm. He previously served as Chairman and Chief
                  Executive Officer of Dayton Hudson Corporation, a general
                  merchandise retailer. He has served as a Director of Unisys
                  since 1989 and is a member of the Corporate Governance and
                  Compensation Committee and the Nominating Committee.
 
BOARD MEETINGS
 
     The Board of Directors held seven meetings in 2002. During 2002, all
directors attended at least 75 percent of the meetings of the Board of Directors
and standing Committees on which they served.
 
COMMITTEES
 
     The Board of Directors has a standing Audit Committee, Corporate Governance
and Compensation Committee, Finance Committee, and Nominating Committee.
 
     The Audit Committee assists the Board in its oversight of the integrity of
the Company's financial statements and its financial reporting and disclosure
practices, the soundness of its systems of internal financial and accounting
controls, the independence and qualifications of its independent auditors, the
performance of its internal and independent auditors, and the Company's
compliance with legal and regulatory requirements and the soundness of its
ethical and environmental compliance programs. The Audit Committee held 11
meetings in 2002. Its members are Dr. Duderstadt, Ms. Fletcher, Ms. Fosler, Mr.
Huston, and Mr. Martin. The Board has determined that each of Ms. Fletcher, Mr.
Huston, and Mr. Martin is an audit committee financial expert, as defined by the
SEC, who meets the independence requirements of the New York Stock Exchange.
 
     The Corporate Governance and Compensation Committee oversees the Company's
corporate governance, the compensation of the Company's executives, the
Company's executive management structure, and the compensation-related policies
and programs involving the Company's executive management and the level of
benefits of officers and key employees. It also oversees the Company's diversity
programs. The Corporate Governance and
 
                                        6

<PAGE>
 
Compensation Committee held ten meetings in 2002. Its members are Mr. Duques,
Mr. Goodes, and Mr. Macke.
 
     The Finance Committee oversees the Company's financial affairs, including
its capital structure, financial arrangements, capital spending, and acquisition
and disposition plans. It also oversees the management and investment of funds
in the pension, savings, and welfare plans sponsored by the Company. The Finance
Committee held six meetings in 2002. Its members are Mr. Bolduc, Ms. Fosler, and
Mr. Martin.
 
     The Nominating Committee identifies and reviews candidates and recommends
to the Board of Directors nominees for membership on the Board of Directors. In
fulfilling this responsibility, the Nominating Committee will consider
recommendations received from stockholders and other qualified sources.
Stockholder recommendations must be in writing and addressed to the Chairman of
the Nominating Committee, c/o Corporate Secretary, Unisys Corporation, Unisys
Way, Blue Bell, Pennsylvania 19424. The Nominating Committee held two meetings
in 2002. Its members are Mr. Bolduc, Mr. Huston, and Mr. Macke.
 
AUDIT COMMITTEE REPORT
 
     The Audit Committee's specific functions and responsibilities are set forth
in the Audit Committee Charter, which is attached as Appendix A to this Proxy
Statement. The Committee consists entirely of directors who meet the
independence requirements of the New York Stock Exchange.
 
     In performing its oversight responsibilities, the Audit Committee reviewed
and discussed the audited financial statements with management and with Ernst &
Young LLP, the Company's independent auditors. The Committee also discussed with
Ernst & Young LLP the matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees). In addition, the
Committee has discussed with Ernst & Young LLP their independence and has
received from them the written disclosures required by the Independence
Standards Board. The Committee has also considered the compatibility of the
services discussed below with the auditors' independence.
 
     Based on these reviews and discussions, the Committee recommended to the
Board of Directors that the audited financial statements be included in the
Annual Report on Form 10-K for the year ended December 31, 2002 for filing with
the SEC.
 
     Ernst & Young LLP has billed the Company the following fees for
professional services rendered in respect of the years ended December 31, 2002
and 2001 (in millions of dollars):
 

<Table>
<Caption>
                                                 2002   2001
                                                 ----   ----
<S>                                              <C>    <C>
Audit Fees.....................................  $3.3   $2.9
Audit-Related Fees.............................   1.6    1.4
Tax Fees.......................................   2.0    2.0
All Other Fees.................................    .2     .1
</Table>

 
     Audit fees consist of fees for the audit and review of the Company's
financial statements, statutory audits, comfort letters, consents, and
assistance with and review of documents filed with the SEC. Audit-related fees
consist of fees for employee benefit plan audits, accounting
 
                                        7

<PAGE>
 
advice regarding specific transactions, internal control reviews, and various
attestation engagements. Tax fees generally represent fees for tax compliance
and advisory services.
 
                                                                 Audit Committee
 
                                                             James J. Duderstadt
                                                              Denise K. Fletcher
                                                                  Gail D. Fosler
                                                                 Edwin A. Huston
                                                              Theodore E. Martin
 
CORPORATE GOVERNANCE GUIDELINES
 
     The Board of Directors has adopted Guidelines on Significant Corporate
Governance Issues. Among other matters, the guidelines cover the following:
 
           1. A majority of the Board of Directors shall qualify as independent
     under the listing standards of the New York Stock Exchange.
 
           2. The Corporate Governance and Compensation Committee reviews
     annually with the Board the independence of outside directors. Following
     this review, only those directors who meet the independence qualifications
     prescribed by the New York Stock Exchange and who the Board affirmatively
     determines have no material relationship with the Company will be
     considered independent. The following commercial or charitable
     relationships will not be considered to be material relationships that
     would impair independence: (a) if a director is an executive officer or
     partner of, or owns more than a ten percent equity interest in, a company
     that does business with Unisys, and sales to or purchases from Unisys are
     less than one percent of the annual revenues of that company and (b) if a
     director is an officer, director, or trustee of a charitable organization,
     and Unisys donates less than one percent of that organization's charitable
     receipts.
 
           3. Directors should not, except in rare circumstances approved by the
     Board, draw any consulting, legal, or other fees from the Company. In no
     event shall any member of the Audit Committee receive any compensation from
     the Company other than directors' fees.
 
           4. Membership on the Audit, Corporate Governance and Compensation,
     and Nominating Committees is limited to independent directors.
 
           5. Directors may not stand for election after age 70 or continue to
     serve beyond the annual stockholders' meeting following the attainment of
     age 70.
 
           6. Directors should volunteer to resign from the Board upon a change
     in position, including retirement, from the position they held when they
     were elected to the Board. The Board, through the Nominating Committee,
     will then make a determination whether continued Board membership is
     appropriate under the circumstances. In addition, if the Company's chief
     executive officer resigns from that position, he is expected to offer his
     resignation from the Board at the same time.
 
           7. The Nominating Committee is responsible for determining the
     appropriate skills and characteristics required of Board members in the
     context of its current make-up, and will consider factors such as
     independence, experience, strength of character, mature judgment, technical
     skills, diversity, and age in its assessment of the needs of the Board.
 
                                        8

<PAGE>
 
           8. The Company should maintain an orientation program for new
     directors and continuing education programs for all directors.
 
           9. The Board will conduct an annual self-evaluation to determine
     whether it and its committees are functioning effectively.
 
          10. The non-management directors should meet in executive session,
     without the chief executive officer and other members of management, on a
     regularly scheduled basis. They may also meet in executive session at any
     time upon request. Either the chairman of the Corporate Governance and
     Compensation Committee or the chairman of the Finance Committee will chair
     these meetings, based upon the nature of the matter to be considered.
 
          11. The non-management directors will evaluate the performance of the
     chief executive officer annually and will meet in executive session to
     review this performance. The evaluation is based on objective criteria,
     including performance of the business, accomplishment of long-term
     strategic objectives, and development of management. The evaluation is used
     by the Corporate Governance and Compensation Committee in its consideration
     of the compensation of the chief executive officer.
 
          12. To assist the Board in its planning for the succession to the
     position of chief executive officer, the chief executive officer is
     expected to provide an annual report on succession planning to the
     Corporate Governance and Compensation Committee.
 
          13. Board members have complete access to Unisys management. Members
     of senior management who are not Board members regularly attend Board
     meetings, and the Board encourages senior management, from time to time, to
     bring into Board meetings other managers who can provide additional
     insights into the matters under discussion.
 
          14. The Board and its committees have the right at any time to retain
     independent outside financial, legal, or other advisors.
 
STOCK OWNERSHIP GUIDELINES
 
     In 1998, the Board established stock ownership guidelines for both
directors and elected officers in order to more closely link their interests
with those of stockholders. Under the guidelines, directors and elected officers
are expected to own, within specified time periods, Unisys stock or stock units
having a value equal to a multiple of their annual retainer, in the case of
directors, or their base salary, in the case of elected officers. Stock options,
including vested stock options, do not count toward fulfillment of the ownership
guidelines.
 
               RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
 
     The Audit Committee has selected and the Board of Directors has ratified
the selection of the firm of Ernst & Young LLP as independent auditors to audit
the Company's books and accounts for the year ending December 31, 2003. Ernst &
Young LLP has served as independent auditors for Unisys since 1986. Its
representatives will be present at the annual meeting and will have the
opportunity to make a statement if they desire to do so and to respond to
appropriate questions asked by stockholders.
 
     The Board of Directors considers Ernst & Young LLP to be well qualified to
serve as the independent auditors for Unisys. If, however, stockholders do not
ratify the selection of Ernst & Young LLP, the appointment will be reconsidered.
 
                                        9

<PAGE>
 
     THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE
SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR 2003.
 
        APPROVAL OF THE UNISYS CORPORATION 2003 LONG-TERM INCENTIVE AND
                            EQUITY COMPENSATION PLAN
 
     On February 13, 2003, the Board of Directors unanimously approved and
adopted the Unisys Corporation 2003 Long-Term Incentive and Equity Compensation
Plan (the "2003 Plan"), authorized 20,000,000 shares for issuance under the
plan, and directed that the plan be submitted to stockholders for approval. The
2003 Plan will become effective when it is approved by stockholders.
 
     The purposes of the 2003 Plan are to support the Company's ongoing efforts
to attract, retain, and develop exceptional talent and to enable the Company to
provide incentives directly linked to the Company's short and long-term
objectives and to increases in stockholder value. In addition, if the 2003 Plan
is approved by stockholders, the Company will have the ability to grant
performance-based compensation awards that meet the requirements of section
162(m) of the Internal Revenue Code, thereby preserving the Company's ability to
receive tax deductions for the awards.
 
     The 2003 Plan will replace the Unisys 1990 Long-Term Incentive Plan (the
"1990 Plan") and the 2002 Stock Option Plan (the "2002 Plan"). The 1990 Plan was
adopted by stockholders in 1990 and provides for the award of stock options and
stock-based awards to elected officers, outside directors, and key employees of
the Company. The 2002 Plan was adopted by the Board of Directors in 2002 and
provides for the award of stock options to all employees other than elected
officers. Once the 2003 Plan becomes effective, no further awards will be made
under the 1990 Plan or the 2002 Plan. Any authorized but unissued shares that
had been reserved for future issuance under those plans, other than shares
subject to outstanding options and other awards previously made under the plans,
will no longer be available for future issuance under those plans.
 
SUMMARY DESCRIPTION OF THE 2003 PLAN
 
     The following is a summary of the material features of the 2003 Plan. This
summary is subject in all respects to the complete text of the 2003 Plan, which
is attached as Appendix B.
 
     SHARES AVAILABLE.  20,000,000 shares of the Company's common stock are
authorized for issuance under the 2003 Plan. All these shares may be issued
pursuant to the exercise of stock options, but no more than 10,000,000 shares
may be issued with respect to awards other than stock option awards. The Company
believes that generally a share of restricted stock is more valuable than a
share subject to a stock option. Therefore, if in the future, for example, the
Company grants awards with a combination of restricted shares and stock options,
it anticipates that the awards will be for fewer combined shares than if solely
stock option shares were granted. The Company anticipates that the number of
authorized shares will cover awards made under the plan for at least the next
four years. The number of authorized shares is subject to adjustment in the
event of a merger, reorganization, consolidation, recapitalization, share
exchange, stock dividend, stock split, reverse stock split, split-up, spin-off,
issuance of rights or warrants, or other similar event.
 
     ELIGIBILITY.  All employees, officers, and non-employee directors of the
Company and its subsidiaries and affiliates are eligible to receive awards under
the 2003 Plan. The Corporate
 
                                        10

<PAGE>
 
Governance and Compensation Committee (the "Committee") of the Board of
Directors has the authority to select participants and to determine the amount,
type, and terms of each award. In 2003, stock option awards under the 1990 Plan
and the 2002 Plan have been made to the 14 elected officers of the Company, the
nine non-employee directors and approximately 870 non-officer employees of the
Company and its subsidiaries.
 
     TYPES OF AWARDS.  The Committee may award stock options (including
nonqualified options and incentive stock options), stock appreciation rights
("SARs"), restricted shares, other stock-based awards, and cash incentive
awards.
 
     Stock Options.  A stock option represents the right to purchase a share of
common stock at a predetermined exercise price. Stock options granted under the
2003 Plan may be in the form of incentive stock options ("ISOs") or nonqualified
stock options, as determined in the discretion of the Committee. The terms of
each stock option, including the number of shares, exercise price, vesting
period, and option duration, will be set forth in an award agreement. Stock
options may be exercised, in whole or in part, by payment in full of the
exercise price in cash. In addition, if authorized by the Committee, payment in
full or in part may also be made in the form of stock already owned by the
participant or through a broker cashless exercise program authorized by the
Company. Stock options expire on the earlier of the expiration date of the stock
option (as set forth in the applicable award agreement) or the participant's
termination of employment. Under certain conditions, a stock option may be
exercised after a participant's termination of employment (e.g., retirement,
death, disability, termination at or after attainment of age 55 with 5 years of
service), but not later than the expiration date for the option.
 
     Stock Appreciation Rights.  A SAR represents the right to receive a
payment, in cash, shares of common stock, or both (as determined by the
Committee), equal to the spread value (the excess of the fair market value of
common stock on the date the SAR is exercised over the grant price of the SAR).
"Fair market value" for purposes of the 2003 Plan means, on any date, the
average of the high and low sales price of a share of Unisys stock on such date.
The grant price of a SAR will be set forth in the applicable award agreement.
Subject to the terms of the applicable award agreement, a SAR will be
exercisable, in whole or in part, by giving written notice of exercise to the
Company.
 
     Restricted Shares.  Restricted shares are shares of stock that are awarded
to a participant and that are subject to forfeiture during a pre-established
period if certain conditions (e.g., continued employment or performance goals)
are not met. The terms of a participant's restricted share award are determined
by the Committee and are set forth in an award agreement. Restricted shares may
not be sold, assigned, transferred, pledged, or otherwise encumbered while the
shares are subject to forfeiture. A participant generally will have all the
rights of a holder of common stock, including the rights to receive any
dividends and to vote, during the restricted period. Any dividends with respect
to restricted shares that are payable in common stock will be paid in the form
of restricted shares.
 
     Other Stock-Based Awards.  Other stock-based awards are awards, other than
stock options, SARs, or restricted shares, that are denominated or valued in
whole or in part by reference to, or otherwise based on or related to, the value
of common stock. The purchase, exercise, exchange, or conversion of other
stock-based awards will be on such terms and conditions and by such methods as
will be specified by the Committee.
 
     Incentive Awards.  Incentive Awards are performance-based awards that are
expressed in U.S. currency, but that may be payable in the form of cash, stock,
or a combination of both, and
 
                                        11

<PAGE>
 
are payable upon the satisfaction of pre-determined performance goals over
performance periods. Incentive awards may be either annual incentive awards
(that measure performance over a period of one year or less) or long-term
incentive awards (that measure performance over a period in excess of one year).
The terms of a participant's incentive award will be established by the
Committee and will be set forth in an award agreement.
 
     AWARDS GRANTED AT FAIR MARKET VALUE.  The exercise price of a stock option
and the grant price of a SAR may not be less than 100% of the fair market value
of common stock on the date of grant. In addition, if the value of an other
stock-based award is based on spread value, the grant price for the other
stock-based award may not be less than 100% of the fair market value on the date
of grant. The only exception is for awards made in substitution for awards made
to a participant under a predecessor company plan that has been assumed by the
Company as a result of a reorganization, merger, consolidation, or other similar
transaction.
 
     MINIMUM VESTING PERIOD FOR AWARDS.  Except in the case of a new-hire award
or under such other circumstances deemed appropriate by the Committee, no stock
option, stock appreciation right, restricted share or other stock-based award
will be granted with a vesting period of less than one year.
 
     STOCK OPTION REPRICING.  Stock options may not be repriced (whether through
modification of the exercise price of options after the date of grant or through
an option exchange program) without the approval of the Company's stockholders.
 
     AWARD LIMITATIONS.  The total number of restricted shares and other shares
of stock underlying stock options, SARs, and other stock-based awards awarded to
any participant during any year may not exceed (i) 2,000,000 shares multiplied
by (ii) the number of calendar years during which the participant has been
eligible to participate in the 2003 Plan, and reduced by (iii) the number of
shares with respect to which the participant has received awards of restricted
shares, stock options, SARs, and/or other stock-based awards under the 2003
Plan. An annual incentive award paid to a participant may not exceed $5,000,000.
A long-term incentive award paid to a participant may not exceed $3,000,000
times the number of years in the performance cycle applicable to the award.
 
     PERFORMANCE-BASED AWARDS.  Any award granted under the 2003 Plan may be
conditioned on the attainment of one or more performance goals over a specified
performance cycle. If the Committee intends that an award made to a "covered
employee" (generally the Chief Executive Officer and the four most highly
compensated executive officers) will constitute "performance-based" compensation
within the meaning of section 162(m) of the Internal Revenue Code, then the
performance goals will be based on one or more of the following criteria:
earnings per share, total stockholder return, operating income, net income, cash
flow, free cash flow, return on equity, return on capital, earnings before
interest, taxes, depreciation and amortization ("EBITDA"), stock price,
debt-to-capital ratio, stockholders' equity per share, operating income as a
percent of revenue, gross profit expense, selling, general and administrative
expenses as a percent of revenue, operating cash flow, operating margin, orders,
revenue, and customer value. The performance goals may relate to results
obtained by the individual, the Company, a subsidiary, or any business unit,
division, or geographic region thereof.
 
     CHANGE IN CONTROL.  In the event of a change in control, as defined in the
2003 Plan, all stock options and SARs will become fully vested and immediately
exercisable. Elected officers who choose to surrender their stock options within
the 60-day period following the change in control will receive a cash payment in
an amount per share equal to the excess of the highest
 
                                        12

<PAGE>
 
fair market value of a share of common stock during the 60-day period ending on
the date of the change in control over the exercise price or grant price of the
stock option.
 
     All restrictions applicable to outstanding restricted shares and other
stock-based awards that are not performance-related will lapse. In addition,
outstanding incentive awards and other stock-based awards that are
performance-related will become vested and will be paid out on a prorated basis,
based on the targeted award opportunity of such awards and the number of months
elapsed compared with the total number of months in the performance cycle.
 
     PLAN ADMINISTRATION.  The 2003 Plan will be administered by the Committee,
which will have the power to interpret the plan and to adopt such rules and
guidelines for carrying out the plan as it may deem appropriate. The Committee
will have the authority to adopt such modifications, procedures, and subplans as
may be necessary or desirable to comply with the laws, regulations, compensation
practices, and tax and accounting principles of the countries in which the
Company or a subsidiary may operate to assure the viability of the benefits of
awards made to individuals employed in such countries and to meet the objectives
of the plan. Subject to the terms of the plan, the Committee will have the
authority to determine those individuals eligible to receive awards and the
amount, type, and terms of each award and to establish and administer any
performance goals applicable to such awards. The Committee may delegate its
authority and power under the plan in whole or in part to a subcommittee
consisting of two or more non-employee directors (who are "outside directors"
within the meaning of section 162(m) of the Internal Revenue Code) or, with
respect to determinations and decisions regarding participants who are not
elected officers or non-employee directors, to one or more officers of the
Company, subject to guidelines prescribed by the Committee.
 
     AMENDMENT AND TERMINATION.  The Board may amend or terminate the 2003 Plan
at any time, provided that no such amendment will be made without stockholder
approval if such approval is required under applicable law, or if such amendment
would increase the total number of shares of common stock that may be
distributed under the plan. Except as set forth in any award agreement, no
amendment or termination of the plan may materially and adversely affect any
outstanding award under the plan without the award recipient's consent.
 
NEW PLAN BENEFITS
 
     Because benefits under the 2003 Plan will depend on the discretion of the
Committee and the fair market value of the Company's common stock at various
future dates, it is not possible to determine the benefits that will be received
if the 2003 Plan is approved by stockholders. The table below shows, for the
annual grants made on February 13, 2003 under the 1990 Plan and 2002 Plan, the
number of shares underlying stock option awards granted to the executive
officers named on page 21, to all current elected officers as a group, to all
non-employee directors as a group, and to all other employees as a group. All
stock option awards had an exercise price equal to the fair market value of
Unisys common stock on the date of grant ($8.415 per share).
 
                                        13

<PAGE>
 

<Table>
<Caption>
NAME AND POSITION                                             NUMBER OF SHARES
-----------------                                             ----------------
<S>                                                           <C>
Lawrence A. Weinbach........................................       300,000
  Chairman, President and Chief Executive Officer
George R. Gazerwitz.........................................       100,000
  Executive Vice President
Joseph W. McGrath...........................................       100,000
  Executive Vice President
Janet B. Haugen.............................................        80,000
  Senior Vice President and Chief Financial Officer
Janet B. Wallace............................................        75,000
  Senior Vice President
Executive Group.............................................     1,055,000
Non-Executive Director Group................................       108,000
Non-Executive Officer Employee Group........................     3,357,055
</Table>

 
U.S. FEDERAL INCOME TAX CONSEQUENCES
 
     The following is a brief description of the principal U.S. federal income
tax consequences, based on current law, of awards under the 2003 Plan.
 
     TAX CONSEQUENCES TO PARTICIPANTS.  Generally, when a participant receives
an award under the 2003 Plan, the participant's receipt of cash or Company stock
in settlement of the award is conditioned on the participant's performing future
services for the Company and/or the attainment of performance goals. The award,
therefore, is not taxable at grant. Instead, when and if a participant later
receives cash in settlement of the award, he or she will have income, taxable at
ordinary income rates, equal to the amount of cash received. Similarly, when and
if a participant receives Company stock in settlement of an award, he or she
will, subject to special rules described below, have income, taxable at ordinary
income rates, equal to the excess of the fair market value of the stock on that
date over the amount, if any, the participant paid for the stock.
 
     Thus, participants generally will be taxable on any cash or the fair market
value of any stock received in settlement of an incentive award or other
stock-based award or upon exercise of a stock appreciation right. Similarly,
participants will have taxable income on exercise of a nonqualified stock option
equal to the difference between the fair market value of the stock subject to
the option and the exercise price of the option.
 
     Special rules apply in the case of an incentive stock option. Participants
generally recognize no taxable income on exercise of an ISO. Instead, they have
gain, taxable at capital gains rates, upon the disposition of the stock acquired
on exercise of the ISO in an amount equal to the excess of the amount realized
on disposition of the stock over the exercise price of the ISO. (In some cases,
participants may become subject to tax as the result of the exercise of an ISO,
because the excess of the fair market value of the stock at exercise over the
exercise price is an adjustment item for alternative minimum tax purposes.) The
special tax treatment afforded to ISOs is only available, however, if the
participant does not dispose of the stock acquired upon exercise of the ISO
before the first anniversary of the date on which he or she exercised the ISO
or, if later, the second anniversary of the date on which the ISO was granted.
If the participant disposes of stock before the expiration of this holding
period, a "disqualifying disposition" occurs and the participant will recognize
income, taxable at ordinary income rates, in the year of the disqualifying
disposition. The amount of this income will generally be equal to
 
                                        14

<PAGE>
 
the excess, if any, of the lesser of (i) the fair market value of the stock on
the date of exercise and (ii) the amount realized upon disposition of the stock
over the exercise price paid for the stock. If the amount realized upon a
disqualifying disposition is greater than the fair market value of the stock on
the date of exercise, the difference will be taxable to the employee as capital
gain.
 
     Special rules also apply to awards of restricted shares. A participant
generally will not recognize taxable ordinary income when he or she receives
restricted shares. Instead, the participant will have taxable income in the
first year in which the shares cease to be subject to a substantial risk of
forfeiture, generally when all applicable restrictions lapse. The participant
will then have taxable income equal to the fair market value of the stock at
that time over the amount, if any, the participant paid for the stock. The
participant may, however, make an election to include in income, when the
restricted stock is first transferred to him or her, an amount equal to the
excess of the fair market value of the stock at that time over the amount, if
any, paid for the stock. The result of this election is that appreciation in the
value of the stock after the date of transfer is then taxable as capital gain,
rather than as ordinary income.
 
     TAX CONSEQUENCES TO THE COMPANY.  Generally, any time a participant
recognizes taxable income, as opposed to capital gain, as the result of the
settlement of any award under the 2003 Plan, the Company will be entitled to a
deduction equal to the amount of income recognized by the participant.
 
     OTHER U.S. FEDERAL INCOME TAX CONSIDERATIONS.  Internal Revenue Code
section 162(m) places a $1,000,000 annual limit on the compensation deductible
by the Company paid to covered employees (as described above). The limit,
however, does not apply to "qualified performance-based compensation." The
Company believes that awards of stock options, SARs, and other awards payable
upon the attainment of performance goals under the 2003 Plan will qualify as
qualified performance-based compensation. Also, awards that are granted,
accelerated, or enhanced upon the occurrence of a change in control may give
rise, in whole or in part, to "excess parachute payments" within the meaning of
Internal Revenue Code section 280G and, to such extent, will be non-deductible
by the Company and subject to a 20% excise tax on the participant.
 
     State tax consequences may in some cases differ from the federal tax
consequences. In addition, awards under the 2003 Plan may be made to
participants who are subject to tax in jurisdictions other than the United
States and may result in consequences different from those described above.
 
     The foregoing summary of the income tax consequences in respect of the 2003
Plan is for general information only. Interested parties should consult their
own advisors as to specific tax consequences, including the application and
effect of foreign, state, and local tax laws.
 
     THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE UNISYS
CORPORATION 2003 LONG-TERM INCENTIVE AND EQUITY COMPENSATION PLAN.
 
APPROVAL OF THE AMENDED AND RESTATED UNISYS CORPORATION EMPLOYEE STOCK PURCHASE
                                      PLAN
 
     The Unisys Corporation Employee Stock Purchase Plan (the "Stock Purchase
Plan") was unanimously approved and adopted by the Board of Directors effective
July 1, 1998. The Board of Directors has previously authorized 13,000,000 shares
of the Company's common stock for issuance under the plan. As of January 1,
2003, approximately 11,300,000 shares had been
 
                                        15

<PAGE>
 
issued under the plan, leaving approximately 1,700,000 shares available for
future issuance. On February 13, 2003, the Board approved an amendment and
restatement of the Stock Purchase Plan to authorize an additional 10,000,000
shares for issuance under the plan and directed that the plan be submitted to
stockholders for approval.
 
     The Stock Purchase Plan was established to encourage and facilitate the
purchase of the Company's common stock by employees of the Company and its
subsidiaries, thereby providing an additional incentive to them to promote the
best interests of the Company and the opportunity to participate directly in the
Company's future. The plan provides employees the opportunity to purchase shares
at a discount. The Stock Purchase Plan is not intended to qualify under section
423 of the Internal Revenue Code.
 
SUMMARY DESCRIPTION OF THE PLAN
 
     The following is a summary of the material features of the Stock Purchase
Plan, as amended and restated. This summary is subject in all respects to the
complete text of the plan, which is attached as Appendix C.
 
     SHARES AVAILABLE.  13,000,000 shares of the Company's common stock have
been previously authorized for issuance under the Stock Purchase Plan by the
Board of Directors, and approximately 1,700,000 of those shares are currently
available for issuance under the plan. Upon approval of the plan by
stockholders, an additional 10,000,000 shares will be authorized for issuance.
The number of shares authorized for issuance under the plan is subject to
adjustment in the event of a merger, reorganization, consolidation, share
exchange, stock dividend, stock split, reverse stock split, split-up, spin-off,
issuance of rights or warrants, or other similar event.
 
     PURCHASE PRICE.  The purchase price per share for any purchase period is
equal to 85% of the lesser of (i) the fair market value of a share of common
stock on the first day of the purchase period and (ii) the fair market value of
a share of common stock on the last day of the purchase period. "Fair market
value" for purposes of the Stock Purchase Plan means the sales price of a share
of common stock as of the close of the New York Stock Exchange on the applicable
date. No fees are charged to a participant for the purchase of shares under the
Stock Purchase Plan. After the shares are purchased, they are deposited in an
individual brokerage account established for each participant with the
designated plan broker. Once the shares are deposited in a participant's
brokerage account, the participant may elect to retain or sell the shares in
his/her discretion.
 
     ELIGIBILITY.  All regular full-time and part-time employees of the Company
and its participating subsidiaries, including elected officers of the Company,
who are eligible to participate in the employee benefit plans sponsored by the
Company or a participating subsidiary are eligible to participate in the Stock
Purchase Plan. The Senior Vice President, Worldwide Human Resources of the
Company has the authority to designate the subsidiaries that will participate in
the Stock Purchase Plan and the terms and conditions under which each
participating subsidiary will participate in the plan. Non-employee directors of
the Company are not eligible to participate in the Stock Purchase Plan. As of
December 31, 2002, 35,362 employees were eligible to participate in the plan and
5,267 were participating in the plan.
 
     PLAN PARTICIPATION.  An eligible employee may elect to participate in the
Stock Purchase Plan by authorizing his/her employer to withhold from his/her pay
any amount from 1% to 10% (not to exceed $25,000 in any calendar year) and to
apply those amounts to purchase shares of the Company's common stock. There are
four quarterly stock purchase periods beginning on
 
                                        16

<PAGE>
 
January 1, April 1, July 1, and October 1 each year. A participant's accumulated
payroll deductions in each period are used to purchase shares of common stock
from the Company on the first day following the purchase period.
 
     ADMINISTRATION.  The Plan is administered by the Company's Employee
Benefits Administrative Committee (the "Committee"), a management committee
appointed by the Board of Directors to administer the Company's benefit plans.
The Committee has the discretionary authority to promulgate rules and
regulations for the administration of the plan, to interpret the provisions and
supervise the administration of the plan, and to take any and all action that it
deems necessary for the proper administration of the plan. Decisions of the
Committee are final and binding on all employees.
 
     PLAN AMENDMENT AND TERMINATION/SPECIAL RULES FOR PARTICIPATING
SUBSIDIARIES.  The Company reserves the right to amend or terminate the Stock
Purchase Plan or to terminate the participation of any participating subsidiary
or group of employees at any time and for any reason. In addition, special terms
and conditions of the plan applicable to any participating subsidiary or group
of employees may be established or changed at any time by the Senior Vice
President, Worldwide Human Resources.
 
NEW PLAN BENEFITS
 
     Because benefits under the Stock Purchase Plan will depend on employee
elections and the fair market value of the Company's common stock, it is not
possible to determine the benefits that will be received if the plan is approved
by stockholders. The table below lists the number of shares of common stock
purchased under the Stock Purchase Plan by the executive officers named on page
21, by all elected officers as a group, and by all other employees as a group in
2002.
 

<Table>
<Caption>
                                                                 NUMBER OF
NAME AND POSITION                                                  SHARES
-----------------                                                ---------
<S>                                                           <C>
Lawrence A. Weinbach........................................       --
  Chairman, President and Chief Executive Officer
George R. Gazerwitz.........................................       --
  Executive Vice President
Joseph W. McGrath...........................................       --
  Executive Vice President
Janet B. Haugen.............................................         5,483
  Senior Vice President and Chief Financial Officer
Janet B. Wallace............................................         2,767
  Senior Vice President
Executive Group.............................................        22,558
Non-Executive Director Group................................       --
Non-Executive Officer Employee Group........................     3,176,753
</Table>

 
U.S. FEDERAL INCOME TAX CONSEQUENCES
 
     The following is a brief description of the U.S. federal income tax
consequences generally arising from the purchase and sale of shares under the
plan.
 
     TAX CONSEQUENCES TO PARTICIPANTS.  A participant will recognize taxable
income when he or she purchases stock under the plan. The amount of income will
be equal to the excess of the
 
                                        17

<PAGE>
 
fair market value of the common stock on the day of purchase (which, for this
purpose, will be the fair market value on the last day of the purchase period)
over the purchase price.
 
     TAX CONSEQUENCES TO THE COMPANY.  The Company will generally be entitled to
claim a deduction for federal income tax purposes equal to the amount of income
recognized by the participants as a result of their purchases of stock under the
plan. This deduction may be limited to the extent that the purchase of stock
under the plan causes any "covered employee," within the meaning of section
162(m) of the Internal Revenue Code, to have compensation for the year in excess
of $1,000,000.
 
     The Plan is not subject to the Employee Retirement Income Security Act of
1974.
 
     The foregoing summary of the income tax consequences in respect of the
Stock Purchase Plan is for general information only. Interested parties should
consult their own advisors as to specific tax consequences, including the
application and effect of foreign, state, and local tax laws.
 
     THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDED AND
RESTATED UNISYS CORPORATION EMPLOYEE STOCK PURCHASE PLAN.
 
                      EQUITY COMPENSATION PLAN INFORMATION
 
     The following table sets forth information as of January 1, 2003 with
respect to compensation plans under which Unisys common stock is authorized for
issuance.
 

<Table>
<Caption>
                                                                                   NUMBER OF SECURITIES
                               NUMBER OF SECURITIES                               REMAINING AVAILABLE FOR
                                   TO BE ISSUED           WEIGHTED-AVERAGE         FUTURE ISSUANCE UNDER
                                 UPON EXERCISE OF        EXERCISE PRICE OF       EQUITY COMPENSATION PLANS
                               OUTSTANDING OPTIONS,     OUTSTANDING OPTIONS,       (EXCLUDING SECURITIES
                               WARRANTS AND RIGHTS      WARRANTS AND RIGHTS      REFLECTED IN COLUMN (A))
PLAN CATEGORY                          (A)                      (B)                         (C)
-------------                 ----------------------   ----------------------   ---------------------------
<S>                           <C>                      <C>                      <C>
Equity compensation
plans approved by
security holders............    33.435                       $ 21.06(2)                9.029 million(3)
                                  million(1)
Equity compensation
plans not approved by
security holders(4).........     5.455                       $ 11.59(5)               11.548 million(6)
                                  million(5)
Total.......................    38.890                       $ 19.73                  20.577 million
                                  million
</Table>

 
---------------
 
(1) Includes approximately 5,000 shares of common stock to be issued upon
    exercise of outstanding options under compensation plans assumed in
    connection with acquisitions.
 
(2) Weighted-average exercise price of outstanding options under compensation
    plans assumed in connection with acquisitions is $28.61.
 
(3) All shares shown are issuable under the 1990 Plan. The number of shares
    available for issuance under that plan is increased each January 1 by an
    amount equal to 2% of the total number of outstanding shares (exclusive of
    shares issued under the 1990 Plan) as of that January 1. The number shown in
    the table includes this amount (6.125 million shares), calculated as of
    January 1, 2003.
 
(4) Comprises the Stock Purchase Plan, which is described beginning at page 15,
    the Unisys Corporation Director Stock Unit Plan (the "Stock Unit Plan")
    described at page 25, and the 2002 Plan. Under the 2002 Plan, stock options
    may be granted to key employees other than officers to purchase the
    Company's common stock at no less than 100% of fair market value at the date
    of grant. Options generally have a maximum duration of ten years and become
    exercisable in four equal annual installments beginning one year after the
    date of grant.
 
(5) 2002 Plan only.
 
(6) Comprises 9.545 million shares under the 2002 Plan, approximately 280,000
    shares under the Stock Unit Plan, and 1.723 million shares under the Stock
    Purchase Plan.
 
                                        18

<PAGE>
 

         SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     Shown below is information with respect to persons or groups that
beneficially own more than five percent of Unisys common stock. This information
is derived from Schedules 13G filed by such persons or groups in 2003.
 

<Table>
<Caption>
N
AME AND ADDRESS OF                                           NUMBER OF SHARES    PERCENT
BENEFICIAL OWNER                                              OF COMMON STOCK     OF CLASS
-------------------                                           ----------------    --------
<S>                                                           <C>                 <C>
Brandes Investment Partners, LLC............................     41,496,633(1)      12.8
Brandes Investment Partners, Inc.
Brandes Worldwide Holdings, LP
Charles H. Brandes
Glenn R. Carlson
Jeffrey A. Busby
11988 El Camino Real, Suite 500
San Diego, CA 92130
Merrill Lynch & Co. Inc. ...................................     22,312,931(2)      6.88
(on behalf of Merrill Lynch Investment
Managers)
World Financial Center, North Tower
250 Vesey Street
New York, NY 10381
</Table>

 
---------------
 
(1) Shared dispositive power has been reported for 41,496,633 shares. Shared
    voting power has been reported for 31,680,786 shares.
 
(2) Shared dispositive and shared voting power has been reported for all shares.
 
                                        19

<PAGE>
 
     Shown below are the number of shares of Unisys common stock (or stock
units) beneficially owned as of March 1, 2003, by all directors and nominees,
each of the executive officers named on page 21, and all directors and officers
of Unisys as a group. No individual named below beneficially owns more than one
percent of the outstanding shares of Unisys common stock. All directors and
officers as a group beneficially own 1.7% of the shares of Unisys common stock
deemed outstanding.
 

<Table>
<Caption>
                                                                            ADDITIONAL SHARES OF
                                                    NUMBER OF SHARES         COMMON STOCK DEEMED
BENEFICIAL OWNER                                 OF COMMON STOCK(1)(2)    BENEFICIALLY OWNED(1)(3)
----------------                                 ----------------------   -------------------------
<S>                                              <C>                      <C>
J. P. Bolduc...................................          32,571                      15,500
James J. Duderstadt............................          17,167                      15,500
Henry C. Duques................................          21,580                      15,500
Denise K. Fletcher.............................           4,277                       3,000
Gail D. Fosler.................................          30,837                      15,500
George R. Gazerwitz............................          59,477                     531,250
Melvin R. Goodes...............................          32,432                      15,500
Janet B. Haugen................................          22,178                     216,000
Edwin A. Huston................................          19,230                      15,500
Kenneth A. Macke...............................          53,448                          --
Theodore E. Martin.............................          52,751                      15,500
Joseph W. McGrath..............................          48,331                     273,750
Janet B. Wallace...............................           7,784                     148,750
Lawrence A. Weinbach...........................         255,274                   2,513,000
All directors and officers as a group..........         806,953                   5,000,925
</Table>

 
---------------
 
(1) Includes shares reported by directors and officers as held directly or in
    the names of spouses, children, or trusts as to which beneficial ownership
    may have been disclaimed.
 
(2) Includes:
 
     (a) Shares held under the Unisys Savings Plan, a qualified plan under
         Sections 401(a) and 401(k) of the Internal Revenue Code, as follows:
         Mr. Gazerwitz, 2,340; Ms. Haugen, 642; Mr. McGrath, 598; Ms. Wallace,
         592; Mr. Weinbach, 631; officers as a group, 21,283. With respect to
         such shares, plan participants have authority to direct voting.
 
     (b) Stock units deferred under the Unisys Corporation Deferred Compensation
         Plan as follows: Mr. Gazerwitz, 13,000; Mr. McGrath, 34,894; officers
         as a group, 83,186. Deferred stock units are payable in shares of
         Unisys common stock upon termination of employment or any date at least
         five years (two years for stock units deferred after January 1, 2001)
         after the deferral. They may not be voted.
 
     (c) Stock units, as described on page 25, for directors as follows: Mr.
         Bolduc, 16,571; Dr. Duderstadt, 16,117; Mr. Duques, 16,580; Ms.
         Fletcher, 4,277; Ms. Fosler, 14,687; Mr. Goodes, 25,492; Mr. Huston,
         18,230; Mr. Macke, 52,248; and Mr. Martin, 32,751.
 
(3) Shares shown are shares subject to options exercisable within 60 days
    following March 1, 2003
 
                                        20

<PAGE>
 

                             EXECUTIVE COMPENSATION
 
SUMMARY COMPENSATION TABLE
 
     The following table sets forth information concerning the annual and
long-term compensation paid to the chief executive officer and the other four
most highly compensated executive officers of Unisys in 2002 (the "Named
Officers") for services rendered in all capacities to Unisys for 2002, 2001, and
2000.
 

<Table>
<Caption>
                                                                                        LONG-TERM COMPENSATION
                                                                            ----------------------------------------------
                           ANNUAL COMPENSATION                                      AWARDS                  PAYOUTS
-------------------------------------------------------------------------   -----------------------   --------------------
                                                                OTHER                    SECURITIES
                                                                ANNUAL      RESTRICTED   UNDERLYING    LTIP     ALL OTHER
                                                               COMPEN-        STOCK       OPTIONS/    PAYOUTS    COMPEN-
NAME AND                            SALARY(1)    BONUS(1)     SATION(2)      AWARD(S)     SARS(3)       (3)     SATION(4)
PRINCIPAL POSITION           YEAR      ($)          ($)          ($)           ($)          (#)         ($)        ($)
------------------           ----   ----------   ---------   ------------   ----------   ----------   -------   ----------
<S>                          <C>    <C>          <C>         <C>            <C>          <C>          <C>       <C>
Lawrence A. Weinbach.......  2002   1,380,000    1,050,000     249,689       --          1,500,000      --       332,813
  Chairman, President and    2001   1,320,000       --         155,115       --            500,000     --        332,213
  Chief Executive Officer    2000   1,320,000      396,000     566,920       --            400,000     --        332,213
 
George R. Gazerwitz........  2002     500,012      275,000      --           --            400,000     --        115,494
  Executive Vice             2001     491,679       --          --           --            100,000     --        114,894
  President                  2000     450,012      180,000      --           --            100,000     --        114,894
 
Joseph W. McGrath..........  2002     533,340      310,000       9,725       --            400,000     --         74,461
  Executive Vice             2001     450,000       --          --           --             75,000     --         73,861
  President                  2000     450,000       75,000      --           --             75,000     --         76,861
 
Janet B. Haugen............  2002     433,333      210,000      11,041       --            250,000     --         25,800
  Senior Vice President      2001     350,000       --           1,252       --             50,000     --         24,350
  and Chief Financial        2000     299,172       90,000      --           --             65,000     --         24,350
  Officer
 
Janet B. Wallace...........  2002     435,000      200,000      --           --            250,000     --         48,441
  Senior Vice President      2001     360,000       --          --           --             60,000     --         46,991
                             2000     360,000      120,000      13,457       --             50,000     --         47,841
</Table>

 
---------------
(1) Amounts shown include compensation deferred under the Unisys Savings Plan or
    the Unisys Corporation Deferred Compensation Plan.
 
(2) Amounts shown for 2002 for Mr. Weinbach are tax reimbursements and personal
    benefits, including $51,244 for supplemental long-term disability insurance.
    Amounts shown for Mr. McGrath and Ms. Haugen for 2002 are tax
    reimbursements.
 
(3) Although the Company's long-term incentive plan permits grants of
    free-standing stock appreciation rights and the payment of performance
    awards, no such grants or payments were made to any of the Named Officers
    during the years presented.
 
(4) Amounts shown for 2002 for each Named Officer consist of Company matching
    contributions under the Unisys Savings Plan and the full amount of premiums
    paid by Unisys for life insurance, respectively, as follows: Mr.
    Weinbach -- $4,000, $328,813; Mr. Gazerwitz -- $4,000, $111,494; Mr.
    McGrath -- $4,000, $70,461; Ms. Haugen -- $4,000, $21,800; Ms.
    Wallace -- $4,000, $44,441.
 
                                        21

<PAGE>
 
OPTION GRANTS IN LAST FISCAL YEAR
 
     The following table sets forth information on grants of stock options
during 2002 to the Named Officers. No stock appreciation rights were granted
during 2002.
 

<Table>
<Caption>
                                                                              POTENTIAL REALIZABLE VALUE
                                                                                AT ASSUMED ANNUAL RATES
                                                                              OF STOCK PRICE APPRECIATION
                           INDIVIDUAL GRANTS(1)                                   FOR OPTION TERMS(2)
---------------------------------------------------------------------------   ---------------------------
                              NUMBER
                                OF          % OF
                            SECURITIES     TOTAL
                            UNDERLYING    OPTIONS     EXERCISE
                             OPTIONS     GRANTED TO   OR BASE
                             GRANTED     EMPLOYEES    PRICE(3)   EXPIRATION
NAME                           (#)        IN 2002      ($/SH)     DATE(4)        5%($)          10%($)
----                        ----------   ----------   --------   ----------   ------------   ------------
<S>                         <C>          <C>          <C>        <C>          <C>            <C>
Lawrence A. Weinbach......   500,000        3.6       12.1050     2/14/12      3,806,400      9,646,150
                             500,000(5)     3.6       25.40(6)    4/25/12         --          2,770,250
                             500,000(7)     3.6       24.21       2/14/12         --          3,593,650
George R. Gazerwitz.......   200,000        1.4       12.1050     2/14/12      1,522,560      3,858,460
                             200,000        1.4       24.21       2/14/12         --          1,437,460
Joseph W. McGrath.........   200,000        1.4       12.1050     2/14/12      1,522,560      3,858,460
                             200,000        1.4       24.21       2/14/12         --          1,437,460
Janet B. Wallace..........   125,000        0.9       12.1050     2/14/12        951,600      2,411,538
                             125,000        0.9       24.21       2/14/12         --            898,413
Janet B. Haugen...........   125,000        0.9       12.1050     2/14/12        951,600      2,411,538
                             125,000        0.9       24.21       2/14/12         --            898,413
</Table>

 
---------------
 
(1) Except as otherwise noted for Mr. Weinbach, options were granted on February
    14, 2002 and become exercisable in four equal annual installments, beginning
    one year after the date of grant. Options become immediately exercisable in
    the event of a change in control (as defined in the long-term incentive
    plan).
 
(2) Illustrates value that might be realized upon exercise of options
    immediately prior to the expiration of their term, assuming specified annual
    rates of appreciation on Unisys common stock over the term of the options.
    Assumed rates of appreciation are not necessarily indicative of future stock
    performance.
 
(3) The exercise price per share of $12.1050 is the fair market value
    (calculated as the average of the high and low quoted sales prices through
    the official close of the New York Stock Exchange at 4:00 p.m.) of a share
    of Unisys common stock on February 14, 2002, the date of grant. The exercise
    price of $24.21 is two times the fair market value of a share of Unisys
    common stock on February 14, 2002.
 
(4) The options were granted for a term of ten years, subject to earlier
    termination in certain events related to termination of employment.
 
(5) Option was granted on April 25, 2002. Option becomes exercisable in five
    equal annual installments, beginning one year after the date of grant.
 
(6) The exercise price per share is two times the fair market value of a share
    of Unisys common stock on April 25, 2002.
 
(7) Option was granted on July 25, 2002. Option becomes exercisable in four
    equal annual installments beginning on February 14, 2003.
 
                                        22

<PAGE>
 
OPTION EXERCISES AND FISCAL YEAR-END VALUES
 
     The following table sets forth information with respect to option exercises
during 2002 and unexercised stock options held by the Named Officers at December
31, 2002.
 

<Table>
<Caption>
                                                   NUMBER OF SECURITIES
                                                  UNDERLYING UNEXERCISED         VALUE OF UNEXERCISED
                                                        OPTIONS AT              IN-THE-MONEY OPTIONS AT
                         SHARES                      DECEMBER 31, 2002           DECEMBER 31, 2002(1)
                        ACQUIRED      VALUE                 (#)                           ($)
                       ON EXERCISE   REALIZED   ---------------------------   ---------------------------
NAME                       (#)         ($)      EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
----                   -----------   --------   -----------   -------------   -----------   -------------
<S>                    <C>           <C>        <C>           <C>             <C>           <C>
Lawrence A.
  Weinbach...........    --            --        1,847,250      2,165,750        --            --
George R.
  Gazerwitz..........    --            --          350,000        556,250       263,563        --
Joseph W. McGrath....    --            --          116,250        513,750        --            --
Janet B. Haugen......    --            --          123,500        327,500       119,321         6,171
Janet B. Wallace.....    --            --           58,750        326,250        --            --
</Table>

 
---------------
 
(1) Difference between the closing price for Unisys common stock on December 31,
    2002 and the exercise price.
 
PENSION PLANS
 
     The table below shows the aggregate annual amounts at age 62 that would be
received from the Unisys Pension Plan (the "Pension Plan"), the Supplemental
Executive Retirement Plan (the "Supplemental Plan"), and the Elected Officer
Pension Plan (the "Officer Plan").
 
     The Pension Plan and Supplemental Plan generally are available to all
employees located in the United States. The Officer Plan is available to
officers, including the Named Officers, who satisfy certain minimum service
requirements. The aggregate pension amount payable under the Officer Plan is
offset by benefits paid under the Pension Plan, the Supplemental Plan, and any
applicable subsidiary plan. The amounts shown in the table are computed on a
single life annuity basis and are subject to a reduction equal to 50% of the
participant's primary social security benefit.
 

<Table>
<Caption>
                                               YEARS OF SERVICE
   ASSUMED FINAL       -----------------------------------------------------------------
AVERAGE COMPENSATION      5          10         15         20         25      30 OR MORE
--------------------   --------   --------   --------   --------   --------   ----------
<S>                    <C>        <C>        <C>        <C>        <C>        <C>
     $  200,000        $ 40,000   $ 80,000   $ 90,000   $100,000   $110,000    $120,000
        300,000          60,000    120,000    135,000    150,000    165,000     180,000
        400,000          80,000    160,000    180,000    200,000    220,000     240,000
        500,000         100,000    200,000    225,000    250,000    275,000     300,000
        600,000         120,000    240,000    270,000    300,000    330,000     360,000
        700,000         140,000    280,000    315,000    350,000    385,000     420,000
        800,000         160,000    320,000    360,000    400,000    440,000     480,000
        900,000         180,000    360,000    405,000    450,000    495,000     540,000
      1,000,000         200,000    400,000    450,000    500,000    550,000     600,000
</Table>

 
     Final Average Compensation generally corresponds to the amounts shown in
the Summary Compensation Table under the headings Salary and Bonus. However,
Final Average Compensation is calculated using the individual's highest 60
consecutive months of compensation out of the final 120 months of employment and
thus will differ somewhat from the amounts shown in the Summary Compensation
Table. Final Average Compensation for the Named Officers as of March 1, 2003 is
as follows: G. R. Gazerwitz -- $680,010; J. W. McGrath -- $507,587; J. B.
Haugen -- $422,503; J. B. Wallace -- $427,895. Full years of credited service
under the pension plans for the Named Officers as of March 1, 2003 are as
 
                                        23

<PAGE>
 
follows: G. R. Gazerwitz -- 21 years; J. W. McGrath -- four years; J. B.
Haugen -- six years; J. B. Wallace -- three years.
 
     Pursuant to the employment agreement described below, Lawrence A. Weinbach
is vested in an annual pension benefit as follows: 4 years of
service -- $570,000; 5 years -- $710,000; 6 years -- $860,000; 7 or more
years -- $1,000,000. He is currently credited with five full years of service.
 
EMPLOYMENT AGREEMENTS
 
     On April 25, 2002, the Company entered into a new employment agreement with
Lawrence A. Weinbach, covering the terms and conditions of Mr. Weinbach's
employment as Chairman of the Board, President and Chief Executive Officer for
the period from April 1, 2002 through January 31, 2005. The agreement provides
for a minimum base salary of $1,400,000 per year, effective April 1, 2002,
subject to annual review by the Corporate Governance and Compensation Committee.
Under the agreement, Mr. Weinbach's salary will be increased to not less than
$1,500,000 in 2003 if the Company meets certain 2002 financial targets. He is
eligible for an annual bonus award at a target bonus level of not less than 100%
of base salary. The actual bonus payable, if any, is to be determined by the
Corporate Governance and Compensation Committee in its sole discretion but may
not exceed 200% of target. Pursuant to the agreement, Mr. Weinbach was also
awarded a stock option grant for 500,000 shares of Unisys common stock with an
exercise price of two times the fair market value of Unisys stock on April 25,
2002. Mr. Weinbach is eligible to participate in the benefit programs generally
made available to executive officers, is entitled to the pension benefits
discussed above, and is eligible to receive stock option and other long-term
incentive awards under the Company's long-term incentive plan. If Mr. Weinbach's
employment is terminated under certain circumstances, the agreement provides for
him to receive continued payment of his base salary for the remainder of the
term (but in no event less than one year's base salary) and, for the one-year
period following the date of termination, a bonus in an amount equal to his
target bonus percentage times the base salary paid during such period. He will
also be entitled to continued medical and dental coverage through the remaining
term of the agreement, full vesting in outstanding awards under the long-term
incentive plan, and one additional year of service for pension purposes. Salary
continuation amounts paid to Mr. Weinbach after two years from the date of
employment termination will be reduced by the amount of any cash compensation he
receives for services rendered to any entity other than Unisys. Mr. Weinbach is
also party to a change in control agreement with the Company, as described
below. He is not entitled to receive duplicate payments under the change in
control agreement and his employment agreement.
 
     The Company and Joseph W. McGrath are parties to an agreement that
terminates on December 31, 2004. Under this agreement, if Mr. McGrath's
employment terminates under certain circumstances, he will be entitled to
receive continued payment of his base salary, annual bonuses under the Company's
executive variable compensation plan, continued benefit accrual under the
Elected Officer Pension Plan, and continued medical and dental benefits for two
years from the date of termination. Payments made to Mr. McGrath under this
agreement will be reduced by the amount of any cash compensation he receives for
services rendered to any entity other than Unisys. Mr. McGrath is also party to
a change in control agreement. He is not entitled to receive duplicate payments
under the change in control agreement and this agreement.
 
                                        24

<PAGE>
 
CHANGE IN CONTROL EMPLOYMENT AGREEMENTS
 
     The Company has entered into change in control employment agreements with
its executive officers including the Named Officers. The agreements are intended
to retain the services of these executives and provide for continuity of
management in the event of any actual or threatened change in control. A change
in control is generally defined as (i) the acquisition of 20% or more of Unisys
common stock, (ii) a change in the majority of the Board of Directors unless
approved by the incumbent directors (other than as a result of a contested
election), and (iii) certain reorganizations, mergers, consolidations,
liquidations, or dissolutions. Each agreement has a term ending on the third
anniversary of the date of the change in control. These agreements, which are
the same in substance for each executive, provide that in the event of a change
in control each executive will have specific rights and receive certain
benefits. Those benefits include the right to continue in the Company's employ
during the term, performing comparable duties to those being performed
immediately prior to the change in control and at compensation and benefit
levels that are at least equal to the compensation and benefit levels in effect
immediately prior to the change in control. Upon a termination of employment
under certain circumstances following a change in control, the terminated
executive will be entitled to receive special termination benefits, including a
lump sum payment equal to three years base salary and bonus and the actuarial
value of the pension benefit the executive would have accrued had the executive
remained employed for three years following the termination date. The special
termination benefits are payable if the Company terminates the executive without
cause, the executive terminates employment for certain enumerated reasons
(including a reduction in the executive's compensation or responsibilities or a
change in the executive's job location), or the executive voluntarily terminates
employment for any reason during the 30-day period following the first
anniversary of the date of the change in control. If any payment or distribution
by the Company to the executive is determined to be subject to the excise tax
imposed by section 4999 of the Internal Revenue Code, the executive is entitled
to receive a payment on an after-tax basis equal to the excise tax imposed. The
executive is under no obligation to mitigate amounts payable under these
agreements, and to the extent the executive has a separate employment agreement
with the Company with conflicting rights, the executive is allowed the greater
entitlement.
 
T
RANSACTIONS WITH MANAGEMENT
 
     During 2002, the law firm Pepper Hamilton LLP provided legal services to
Unisys for fees of approximately $642,000. The husband of Nancy Straus Sundheim
is a partner in that firm. Ms. Sundheim is Senior Vice President, General
Counsel and Secretary of Unisys.
 
C
OMPENSATION OF DIRECTORS
 
     The Company's non-employee directors receive an annual retainer of $50,000,
an annual attendance fee of $10,000 for regularly scheduled Board and committee
meetings, and a meeting fee of $1,000 for attendance at each Board and committee
meeting other than a regularly scheduled meeting. Chairmen of committees other
than the nominating committee also receive an annual $5,000 retainer. During
2002, each non-employee director also received an option to purchase 12,000
shares of Unisys common stock. Stock options vest in four equal annual
installments beginning one year after the date of grant. The annual retainers
and annual attendance fee are paid in monthly installments, with 50% of each
installment paid in cash and 50% in the form of common stock equivalent units.
The value of each stock unit at any point in time is equal to the value of one
share of Unisys common stock. Stock units are recorded in a
 
                                        25

<PAGE>
 
memorandum account maintained for each director. A director's stock unit account
is payable in Unisys common stock, either upon termination of service or on any
date at least five years (two years for stock units awarded after January 1,
2001) after the stock units are awarded, at the director's option. Directors do
not have the right to vote with respect to any stock units. Directors also have
the opportunity to defer until termination of service, or until any date at
least two years after the deferral, all or a portion of their cash fees. Any
deferred cash amounts, and earnings or losses thereon, are recorded in a
memorandum account maintained for each director. The right to receive future
payments of deferred cash accounts is an unsecured claim against the Company's
general assets. Directors who are employees of the Company do not receive any
cash, stock units, or stock options for their services as directors.
 
         REPORT OF THE CORPORATE GOVERNANCE AND COMPENSATION COMMITTEE
 
COMPENSATION PROGRAM AND POLICIES
 
     The Corporate Governance and Compensation Committee oversees the Company's
executive compensation program. In this capacity, the Committee reviews
compensation levels of elected officers, evaluates performance, considers
management succession and related matters, and administers the Company's
incentive plans, including the Executive Variable Compensation Plan (the "EVC
Plan") and the 1990 Plan.
 
     The Company's executive compensation program is designed to attract and
retain executives responsible for the Company's long-term success, to reward
executives for achieving both financial and strategic company goals, to align
executive and stockholder interests through long-term, equity-based plans, and
to provide a compensation package that recognizes individual contributions as
well as overall business results. As a result, a substantial portion of each
executive's total compensation is intended to be variable and to be tied closely
to the achievement of specific business objectives and corporate financial
goals, as well as the attainment of the executive's individual performance
objectives. The Company's executive compensation program also takes into account
the compensation practices of companies with whom Unisys competes for executive
talent. These companies (the "peer companies") include the principal companies
included in the peer group indices in the Performance Graph on page 29 of this
proxy statement and additional companies in various industries.
 
     The three key components of the Company's executive compensation program
are base salary, variable incentive compensation, and long-term incentive awards
in the form of stock options. Overall compensation is intended to be competitive
for comparable positions at the peer companies.
 
BASE SALARY
 
     Each executive's base salary is initially determined with reference to
competitive pay practices and is dependent upon the executive's level of
responsibility and experience. The Committee uses its discretion, rather than a
formal weighting system, to evaluate these factors and to determine individual
base salary levels. Thereafter, base salaries are reviewed periodically, and
increases are made based on the Committee's subjective assessment of individual
performance, as well as the factors discussed above.
 
                                        26

<PAGE>
 
VARIABLE INCENTIVE COMPENSATION
 
     For 2002, all of the Company's executive officers participated in the EVC
Plan. This plan's stated purpose is to motivate and reward elected officers and
other key executives for the attainment of corporate and/or individual
performance goals. Under the plan, the Committee has the discretion to determine
the conditions (including performance objectives) applicable to annual award
payments and the amounts of such awards. For 2002, the EVC Plan operated as
follows.
 
     Executives were assigned target award amounts for the year, which were
typically stated as a percentage of base salary (ranging, in the case of elected
officers other than the chief executive officer, from 45% to 75%). Performance
goals were also established based upon the financial performance of Unisys
(generally, achievement of pre-established objectives for revenue, earnings per
share, cash flow, and services backlog). The amount available to fund awards
under the EVC Plan was dependent upon the degree to which corporate financial
goals were met. For 2002, the amount in the fund reflected the attainment of all
performance goals other than revenue. In addition, since the Company exceeded
its cash flow objectives by 300%, the Committee approved a discretionary amount
to be added to the EVC fund for superior performance on this metric. Actual
award amounts payable from this fund could range from zero to 150% of target for
all elected officers other than the chief executive officer and from zero to
200% of target for the chief executive officer, depending upon the Committee's
assessment of the individual's performance.
 
LONG-TERM INCENTIVE AWARDS
 
     Under the 1990 Plan, stock options may be granted to the Company's
executive officers and other key employees. The size of stock option awards is
based primarily on individual performance, level of responsibilities with
Unisys, and the competitive marketplace. The Committee does not determine the
size of such awards by reference to the amount or value of stock options
currently held by an executive officer.
 
     Stock options are designed to align the interests of executives with those
of stockholders. In 2002, executive officers received stock options with an
exercise price equal to the fair market value of Unisys common stock on the date
of grant and, as a further long-term incentive, also received options with an
exercise price of two times fair market value on the date of grant. Current
grants vest over four years. This approach is designed to encourage the creation
of stockholder value over the long term since no benefit is realized unless the
price of the common stock rises over a number of years.
 
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
 
     On April 25, 2002, Lawrence A. Weinbach, the Company's Chairman, President
and Chief Executive Officer and the Company entered into the new employment
agreement described at page 24. Under this employment agreement, Mr. Weinbach is
entitled to a base salary at the rate of $1,400,000 per year, effective April 1,
2002, subject to annual review by the Committee. He is also eligible for an
annual bonus at a target of 100% of base salary, with the actual amount of bonus
paid to be determined by the Committee in its sole discretion, based upon such
factors as the Committee deems appropriate. As discussed above, for 2002, the
Company attained all of its performance goals other than revenue. In light of
this, the Committee awarded Mr. Weinbach a bonus of $1,050,000, or 75% of
target, for the year. In 2002, Mr. Weinbach was granted the stock options
described on page 22.
 
                                        27

<PAGE>
 
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
 
     Section 162(m) of the Internal Revenue Code imposes a $1 million annual
limit on the amount of compensation that may be deducted by the Company with
respect to each Named Officer employed as of the last day of the applicable
year. The limitation does not apply to compensation based on the attainment of
objective performance goals. The Committee has considered the impact of the
deduction limitation and has determined that it is not in the best interests of
the Company or its stockholders to base compensation solely on objective
performance criteria. Rather, the Committee believes that it should retain the
flexibility to base compensation on its subjective evaluation of performance as
well as on the attainment of objective goals.
 
     The 2003 Long-Term Incentive and Equity Compensation Plan has been
submitted to the Company's stockholders for their approval at the 2003 annual
meeting. That plan will permit the Committee to design compensation awards to
Named Officers that will meet the requirements of section 162(m) of the Internal
Revenue Code. If the 2003 Plan is approved by stockholders, the Committee may
grant awards under the plan that meet the requirements of section 162(m) of the
Internal Revenue Code at such times as the Committee believes that such awards
are in the best interests of the Company.
 
                                 Corporate Governance and Compensation Committee
 
                                                                 Henry C. Duques
                                                                Melvin R. Goodes
                                                                Kenneth A. Macke
 
                                        28

<PAGE>
 
 
                           STOCK PERFORMANCE GRAPH
 
     The following graph compares the yearly percentage change in the cumulative
total stockholder return on Unisys common stock during the five fiscal years
ended December 31, 2002 with the cumulative total return on the Standard &
Poor's 500 Stock Index, the Standard & Poor's Computers (Hardware) Index, and
the Standard & Poor's 500 IT Consulting and Services Index. The comparison
assumes $100 was invested on December 31, 1997 in Unisys common stock and in
each of such indices and assumes reinvestment of any dividends.
 
                                  [Line Graph]
 

<Table>
<Caption>
------------------------------------------------------------------------------------------------------------------
                                              1997        1998        1999        2000        2001        2002
------------------------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>         <C>         <C>         <C>         <C>
 Unisys Corporation                            100         248         230         105          90          71
 S & P 500                                     100         129         156         141         125          97
 S & P 500 IT Consulting & Services            100         169         199         142         150          65
 S & P 500 Computers (Hardware)                100         175         253         160         158         111
</Table>

 
                                        29

<PAGE>
 
                                GENERAL MATTERS
 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     The Company's directors and officers are required to file reports with the
SEC relating to their ownership of Unisys equity securities. During 2002, each
of Richard D. Badler and Jack A. Blaine had one late report covering one
transaction. Mr. Badler is an officer of Unisys. Mr. Blaine is a former officer
who retired from Unisys in 2002.
 
P
OLICY ON CONFIDENTIAL VOTING
 
     It is the Company's policy that all stockholder proxies, ballots, and
voting materials that identify the vote of a specific stockholder shall, if
requested by that stockholder on such proxy, ballot, or materials, be kept
permanently confidential and shall not be disclosed to the Company, its
affiliates, directors, officers, and employees or to any third parties, except
as may be required by law, to pursue or defend legal proceedings, or to carry
out the purpose of, or as permitted by, the policy. Under the policy, vote
tabulators and inspectors of election are to be independent parties who are
unaffiliated with and are not employees of the Company. The policy provides that
it may, under certain circumstances, be suspended in the event of a proxy
solicitation in opposition to a solicitation of management. The Company may at
any time be informed whether or not a particular stockholder has voted. Comments
written on proxies or ballots, together with the name and address of the
commenting stockholder, will also be made available to the Company.
 
STOCKHOLDER PROPOSALS AND NOMINATIONS
 
     Stockholder proposals submitted to the Company for inclusion in the proxy
materials for the 2004 annual meeting of stockholders must be received by the
Company by November 15, 2003.
 
     Any stockholder who intends to present a proposal at the 2004 annual
meeting and has not sought to include the proposal in the Company's proxy
materials must deliver notice of the proposal to the Company no later than
January 25, 2004.
 
     Any stockholder who intends to make a nomination for the Board of Directors
at the 2004 annual meeting must deliver a notice to the Company no later than
January 30, 2004 setting forth (i) the name, age, business and residence
addresses of each nominee, (ii) the principal occupation or employment of each
nominee, (iii) the number of shares of Unisys capital stock beneficially owned
by each nominee, (iv) a statement that the nominee is willing to be nominated,
and (v) any other information concerning each nominee that would be required by
the SEC in a proxy statement soliciting proxies for the election of the nominee.
 
ELECTRONIC ACCESS TO PROXY MATERIALS AND ANNUAL REPORT
 
     This proxy statement and the 2002 annual report are available on the
Company's Internet site at WWW.UNISYS.COM/ABOUT__UNISYS/INVESTORS/PROXY2003 and
WWW.UNISYS.COM/ABOUT__UNISYS/INVESTORS/ANNUAL2002. Most stockholders can elect
to view future proxy statements and annual reports over the Internet instead of
receiving paper copies in the mail and thus can save the Company the cost of
producing and mailing these documents. If you vote your shares over the Internet
this year, you will be given the opportunity to choose electronic access at the
time you vote. Most stockholders who choose electronic access will receive an
e-mail next year containing the Internet address to access the proxy statement
and
 
                                        30

<PAGE>
 
annual report. Your choice will remain in effect until you cancel it. You do not
have to elect Internet access each year.
 
HOUSEHOLDING OF PROXY STATEMENT AND ANNUAL REPORT
 
     This year, a number of brokers with accountholders who are owners of Unisys
common stock will be "householding" our proxy materials. This means that only
one copy of this proxy statement and the 2002 annual report may have been sent
to you and the other Unisys stockholders who share your address. Householding is
designed to reduce the volume of duplicate information that stockholders receive
and the Company's printing and mailing expenses.
 
     If your household has received only one copy of our proxy statement and
annual report, and you would prefer to receive separate copies of these
documents, either now or in the future, please call us at 215-986-5777, or write
us at Investor Relations, A2-15, Unisys Corporation, Unisys Way, Blue Bell, PA
19424-0001. We will deliver separate copies promptly. If you are now receiving
multiple copies of our proxy materials and would like to have only one copy of
these documents delivered to your household in the future, please contact us in
the same manner.
 
OTHER MATTERS
 
     At the date of this proxy statement, the Board of Directors knows of no
matter that will be presented for consideration at the annual meeting other than
those described in this proxy statement. If any other matter properly comes
before the annual meeting, the persons appointed as proxies will vote thereon in
their discretion.
 
     The Company will bear the cost of soliciting proxies. Such cost will
include charges by brokers and other custodians, nominees, and fiduciaries for
forwarding proxies and proxy material to the beneficial owners of Unisys common
stock. Solicitation may also be made personally, or by telephone or telegraph,
by the Company's directors, officers, and regular employees without additional
compensation. In addition, the Company has retained Morrow & Co., Inc. to assist
in the solicitation of proxies for a fee of approximately $15,000, plus
expenses.
 
                                          By Order of the Board of Directors,
 
                                          /s/ Nancy Straus Sundheim
                                          Nancy Straus Sundheim
                                          Senior Vice President, General Counsel
                                          and Secretary
Dated: March 14, 2003
 
                                        31

<PAGE>
 
                                                                      APPENDIX A
 
                               UNISYS CORPORATION
 
                            AUDIT COMMITTEE CHARTER
             (AMENDED BY THE BOARD OF DIRECTORS FEBRUARY 13, 2003)
 
PURPOSE
 
     The Audit Committee shall assist the Board of Directors in its oversight of
(1) the integrity of the Corporation's financial statements and its financial
reporting and disclosure practices, (2) the soundness of the Corporation's
systems of internal controls regarding finance and accounting compliance, (3)
the independence and qualifications of the Corporation's independent auditors,
(4) the performance of the Corporation's internal audit function and its
independent auditors, and (5) the Corporation's compliance with legal and
regulatory requirements and the soundness of the Corporation's ethical and
environmental compliance programs. The Audit Committee is also responsible for
preparing the report required to be included in the Corporation's proxy
statement.
 
MEMBERSHIP
 
     The Audit Committee shall consist of at least three Directors. The members
of the Audit Committee shall meet the independence and expertise requirements of
the New York Stock Exchange and the Securities and Exchange Commission.
 
     No member of the Audit Committee may serve on the audit committee of more
than three public companies, including the Corporation, unless the Board (1)
determines that such simultaneous service would not impair the ability of the
member to effectively serve on the Audit Committee and (2) discloses this
determination in the Corporation's proxy statement.
 
     The members of the Audit Committee shall be appointed at least annually by
the Board, with one of the members appointed as Committee Chair. Audit Committee
members may be replaced by the Board.
 
RESPONSIBILITIES
 
     In performing its oversight responsibilities, the Audit Committee shall:
 
Financial Statement and Disclosure Matters
 
          1. Review and discuss the Corporation's quarterly financial
     statements, including disclosures made in "Management's Discussion and
     Analysis of Financial Condition and Results of Operations", with management
     and the independent auditors prior to the filing of the Corporation's
     quarterly report on Form 10-Q, including a discussion with the independent
     auditors of the matters required to be discussed by Statement of Auditing
     Standards No. 61 ("SAS No. 61"), as amended.
 
          2. Review and discuss the Corporation's annual financial statements,
     including disclosures made in "Management's Discussion and Analysis of
     Financial Condition and Results of Operations", with management and the
     independent auditors prior to the filing of the Corporation's annual report
     on Form 10-K, including a discussion with the independent auditors of the
     matters required to be discussed by SAS No. 61, as amended.
 
                                       A-1

<PAGE>
 
          3. Discuss with management the Corporation's earnings press releases
     (paying particular attention to the use of any "pro forma" or "adjusted"
     non-GAAP information), as well as the nature of financial information and
     earnings guidance provided to securities analysts and rating agencies. The
     Audit Committee's discussion in this regard may be general in nature and
     need not take place in advance of each instance in which the Corporation
     may provide financial information or earnings guidance.
 
          4. Discuss with management the Corporation's major financial risk
     exposures and the steps management has taken to monitor and control such
     exposures, including the Corporation's risk assessment and risk management
     policies.
 
          5. Review, with management, the internal auditors and the independent
     auditors, major issues regarding accounting principles and financial
     statement presentations, including any significant changes in the
     Corporation's selection or application of accounting principles, and major
     issues as to the adequacy of the Corporation's internal controls and any
     special audit steps adopted in light of material control deficiencies. In
     this regard, the Audit Committee should obtain and discuss with management
     and the independent auditors reports and analyses from management and the
     independent auditors concerning: (a) all critical accounting policies and
     practices to be used by the Corporation, (b) significant financial
     reporting issues and judgments made in connection with the preparation of
     the financial statements, including all alternative treatments of financial
     information within generally accepted accounting principles ("GAAP") that
     have been discussed with management, the ramifications of the use of the
     alternative disclosures and treatments, and the treatment preferred by the
     independent auditors, and (c) any other material written communications
     between the independent auditors and management.
 
          6. Review with the independent auditors (a) any audit problems or
     other difficulties encountered during the course of the audit process,
     including any restrictions on the scope of the independent auditors'
     activities or access to required information and any significant
     disagreements with management and (b) management's response to such
     matters.
 
          7. Resolve any disagreements between management and the independent
     auditors regarding financial reporting.
 
          8. Review periodically the effect of regulatory and accounting
     initiatives, as well as off-balance sheet structures, on the financial
     statements of the Corporation.
 
Oversight of the Corporation's Relationship with its Independent Auditors
 
          9. Appoint or replace the Corporation's independent auditors (subject,
     if applicable to stockholder ratification), and approve all fees payable to
     the independent auditors. The independent auditors shall report directly to
     the Audit Committee.
 
          10. Approve, in advance, all audit services, and all non-audit
     services provided by the Corporation's independent auditors that are not
     specifically prohibited under the Sarbanes-Oxley Act. Non-audit services
     need not be approved in advance only if (a) the aggregate amount of all
     such non-audit services are not more than 5% of all amounts paid to the
     independent auditors during the fiscal year, (b) they were not recognized
     to be non-audit services at the time of the engagement and (c) they are
     promptly brought to the attention of the Audit Committee and approved prior
     to the completion of the audit. The Committee may delegate pre-approval
     authority to one or more members of the Committee, but all
 
                                       A-2

<PAGE>
 
     such decisions must be presented to the full Committee at its next
     regularly scheduled meeting.
 
          11. Review, at least annually, the qualifications, performance and
     independence of the independent auditors. In conducting its review and
     evaluation, the Committee should:
 
             (a) Obtain and review a report by the Corporation's independent
        auditors describing: (i) the auditing firm's internal quality-control
        procedures; (ii) any material issues raised by the most recent internal
        quality-control review, or peer review, of the auditing firm, or by any
        inquiry or investigation by governmental or professional authorities,
        within the preceding five years, respecting one or more independent
        audits carried out by the auditing firm, and any steps taken to deal
        with any such issues; and (iii) all relationships between the
        independent auditors and the Corporation;
 
             (b) Review and evaluate the lead audit partner;
 
             (c) Assure the rotation of the lead audit partner and the audit
        partner responsible for reviewing the audit as required by law;
 
             (d) Discuss with the independent auditors any disclosed
        relationships or services that may impact the objectivity and
        independence of the independent auditors;
 
             (e) Consider whether, in order to assure continuing auditor
        independence, there should be regular rotation of the audit firm itself;
 
             (f) Take into account the opinions of management and the
        Corporation's internal auditors;
 
             (g) Present its conclusions with respect to the independent
        auditors to the Board and, if necessary, recommend that the Board take
        appropriate action to satisfy itself of the qualifications, performance
        and independence of the independent auditors.
 
          12. Set clear hiring policies for employees or former employees of the
     independent auditors. At a minimum, these policies should provide that any
     registered public accounting firm may not provide audit services to the
     Corporation if the CEO, controller, CFO, chief accounting officer or any
     person serving in an equivalent capacity for the Corporation was employed
     by such accounting firm and participated in the audit of the Corporation
     within one year of the initiation of the current audit.
 
Oversight of the Corporation's Internal Audit Function
 
          13. Review the scope and effectiveness of internal auditing
     activities.
 
          14. Review and discuss with the independent auditors the
     responsibilities, budget and staffing of the Corporation's internal audit
     function.
 
Compliance Oversight
 
          15. Review, with the Corporation's general counsel, any legal matter
     that could have a significant impact on the Corporation's financial
     statements.
 
                                       A-3

<PAGE>
 
          16. Annually review the Corporation's compliance program for its Code
     of Ethical Conduct and the results of internal audit's review of the
     expense accounts of the Corporation's elected officers.
 
          17. Annually review the status of the Corporation's environmental
     compliance program.
 
          18. Establish procedures for (a) the receipt, retention and treatment
     of complaints received by the Corporation regarding accounting, internal
     accounting controls or auditing matters and (b) the confidential, anonymous
     submission by employees of the Corporation of concerns regarding
     questionable accounting or auditing matters.
 
MEETINGS; OPERATIONAL MATTERS AND REPORTS
 
     The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate.
 
     The Audit Committee is to meet periodically in separate executive sessions
with each of management, the Corporation's independent auditors and its internal
auditor.
 
     The Audit Committee may form and delegate authority to subcommittees when
appropriate.
 
     In connection with its duties and responsibilities, the Audit Committee
shall have the authority to retain outside legal, accounting or other advisors,
including the authority to approve the fees payable by the Corporation to such
advisors and other retention terms.
 
     The Audit Committee shall annually review its performance. In addition, the
Audit Committee shall review and reassess the adequacy of this Charter annually
and recommend to the Board any changes it considers necessary or advisable.
 
     The Audit Committee shall report regularly to the Board, including with
respect to any issues that arise with respect to the quality or integrity of the
Corporation's financial statements, the Corporation's compliance with legal or
regulatory requirements, the performance and independence of the Corporation's
independent auditors or the performance of the internal audit function.
 
LIMITATION OF AUDIT COMMITTEE'S ROLE
 
     The Audit Committee's role is one of oversight. Management is responsible
for preparing the Corporation's financial statements, and the independent
auditors are responsible for auditing those financial statements. Management is
responsible for the fair presentation of the information set forth in the
financial statements in conformity with GAAP. The independent auditors'
responsibility is to provide their opinion, based on their audits, that the
financial statements fairly present, in all material respects, the financial
position, results of operations and cash flows of the Corporation in conformity
with GAAP. While the Audit Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Audit Committee to plan or
conduct audits or to determine that the Corporation's financial statements and
disclosures are complete and accurate and are in conformity with GAAP. Further,
it is not the duty of the Audit Committee to assure compliance with applicable
laws and regulations, the Corporation's Code of Ethical Conduct or its
environmental compliance program.
 
                                       A-4

<PAGE>
 
                                                                      APPENDIX B
 
                             THE UNISYS CORPORATION
             2003 LONG-TERM INCENTIVE AND EQUITY COMPENSATION PLAN
 
SECTION 1.  PURPOSE; DEFINITIONS
 
     The purpose of the Plan is to support the Company's ongoing efforts to
attract, retain and develop exceptional talent and enable the Company to provide
incentives directly linked to the Company's short and long-term objectives and
to increases in shareholder value.
 
     For purposes of the Plan, the following terms are defined as set forth
below:
 
          a. "AFFILIATE" means an entity which is not a Subsidiary, but in which
     the Company has an equity interest.
 
          b. "ANNUAL INCENTIVE AWARD" means an Incentive Award made pursuant to
     Section 10 with a Performance Cycle of one year or less.
 
          c. "AWARDS" mean grants under the Plan of Incentive Awards, Stock
     Options, Stock Appreciation Rights, Restricted Share or Other Stock-Based
     Awards.
 
          d. "BENEFICIARY" means the individual, trust or estate who or which by
     designation of the participant or operation of law succeeds to the rights
     and obligations of the Participant under the Plan and Award agreement upon
     the participant's death.
 
          e. "BOARD" means the Board of Directors of the Company.
 
          f. "CODE" means the Internal Revenue Code of 1986, as amended from
     time to time, and any successor thereto.
 
          g. "COMMISSION" means the Securities and Exchange Commission or any
     successor agency.
 
          h. "COMMITTEE" means the Corporate Governance and Compensation
     Committee of the Board or a subcommittee thereof, any successor thereto or
     such other committee or subcommittee as may be designated by the Board to
     administer the Plan.
 
          i. "COMMON STOCK" or "STOCK" means the common stock of the Company,
     par value $0.01 per share.
 
          j. "COMPANY" means Unisys Corporation or any successor thereto.
 
          k. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
     amended from time to time, and any successor thereto.
 
          l. "FAIR MARKET VALUE" means, on any date, the average of the high and
     the low sales price of a share of Stock as reported on the New York Stock
     Exchange for that day, but not later than the earlier of the official close
     of the New York Stock Exchange or 4:00 p.m. US Eastern Standard Time or
     Eastern Daylight Time, as the case may be.
 
          m. "INCENTIVE AWARD" means any Award made pursuant to Section 10 that
     is either an Annual Incentive Award or a Long-Term Incentive Award.
 
          n. "INCENTIVE STOCK OPTION" means any Stock Option that complies with
     section 422 of the Code.
 
                                       B-1

<PAGE>
 
          o. "LONG-TERM INCENTIVE AWARD" means an Incentive Award made pursuant
     to Section 10 with a Performance Cycle of more than one year.
 
          p. "NONQUALIFIED STOCK OPTION" means any Stock Option that is not an
     Incentive Stock Option.
 
          q. "NORMAL RETIREMENT DATE" means the date on which the participant is
     eligible to retire with unreduced benefits under a defined benefit pension
     plan or arrangement of the Company or one of its Subsidiaries or Affiliates
     or, in the event that the participant is not a member of such a plan or
     arrangement, the date on which the participant attains age 65.
 
          r. "OTHER STOCK-BASED AWARD" means an Award made pursuant to Section
     9.
 
          s. "PARTICIPANT" shall mean an eligible employee or non-employee
     director who has been selected to receive an Award under the Plan in
     accordance with Section 3.
 
          t. "PERFORMANCE CYCLE" means the period selected by the Committee
     during which the performance of the Company or any Subsidiary, Affiliate or
     unit thereof or any individual is measured for the purpose of determining
     the extent to which an Award subject to Performance Goals has been earned.
 
          u. "PERFORMANCE GOALS" mean the objectives for the Company or any
     Subsidiary, Affiliate or any unit, division or geographic region thereof or
     any individual that may be established by the Committee for a Performance
     Cycle with respect to any performance-based Awards made under the Plan. The
     Performance Goals for Awards that are intended to constitute
     "performance-based" compensation within the meaning of section 162(m) of
     the Code will be based on one or more of the following criteria: earnings
     per share, total shareholder return, operating income, net income, cash
     flow, free cash flow, return on equity, return on capital, earnings before
     interest, taxes, depreciation and amortization ("EBITDA"), stock price,
     debt-to-capital ratio, stockholders' equity per share, operating income as
     a percent of revenue, gross profit expense, selling, general and
     administrative expenses as a percent of revenue, operating cash flow,
     operating margin, orders, revenue, and customer value.
 
          v. "PLAN" means The Unisys Corporation 2003 Long-Term Incentive and
     Equity Compensation Plan, as set forth herein and as may be amended from
     time to time.
 
          w. "RESTRICTED PERIOD" means the period during which an Award may not
     be sold, assigned, transferred, pledged or otherwise encumbered.
 
          x. "RESTRICTED SHARE" means an Award of shares of Stock pursuant to
     Section 8.
 
          y. "SPREAD VALUE" means, with respect to a share of Stock subject to
     an Award, an amount equal to the excess of the Fair Market Value, on the
     date such value is determined, over the Award's exercise or grant price, if
     any.
 
          z. "STOCK APPRECIATION RIGHT" or "SAR" means a right granted pursuant
     to Section 7.
 
          aa. "STOCK OPTION" means an option granted pursuant to Section 6.
 
          bb. "SUBSIDIARY" shall have the meaning set forth in Section 425(f) of
     the Code.
 
          cc. "TERMINATION OF EMPLOYMENT" means the voluntary or involuntary
     termination of a participant's employment with the Company or a Subsidiary
     or Affiliate for any reason, including death, disability, retirement or as
     a result of the divestiture of the participant's employer or any similar
     transaction in which the participant's employer ceases to be the
 
                                       B-2

<PAGE>
 
     Company or one of its Subsidiaries or Affiliates. The Committee, in its
     sole discretion, shall determine whether a Termination of Employment is a
     result of disability, and shall determine whether military or other
     government or eleemosynary service constitutes a Termination of Employment.
 
     In addition, the terms "Business Combination," "Change in Control," "Change
in Control Price," "Incumbent Board," "Outstanding Stock," "Outstanding Voting
Securities" and "Person" have the meanings set forth in Section 11.
 
SECTION 2.  ADMINISTRATION
 
     The Plan will be administered by the Committee, which will have the power
to interpret the Plan and to adopt such rules and guidelines for carrying out
the Plan, as it may deem appropriate. The Committee will have the authority to
adopt such modifications, procedures and subplans, consistent with the
objectives of the Plan, as may be necessary or desirable to comply with the
laws, regulations, practices and tax and accounting principles of the countries
in which the Company or a Subsidiary or Affiliate may operate and/or to assure
the economic viability of Awards made to individuals employed in such countries.
 
     Subject to the terms of the Plan, the Committee will have the authority to
determine those individuals eligible to receive Awards and the amount, type and
terms of each Award and to establish and administer any Performance Goals
applicable to such Awards, but, at the discretion of the Board, these
determinations may be made subject to ratification by the Board.
 
     The Committee may delegate its authority and power under the Plan in whole
or in part to a subcommittee consisting of two or more non-employee directors
who are "outside directors" within the meaning of section 162(m) of the Code.
The Committee may similarly delegate its authority or power under the Plan to
one or more officers of the Company, subject to guidelines prescribed by the
Committee, with respect to participants who are not subject to Section 16 of the
Exchange Act and who are not "covered employees" within the meaning of section
162(m) of the Code.
 
     Any determination made by the Committee or pursuant to delegated authority
in accordance with the provisions of the Plan with respect to any Award will be
made in the sole discretion of the Committee or such delegate, and all decisions
made by the Committee or any appropriately designated officer pursuant to the
provisions of the Plan will be final and binding on all persons, including the
Company and Plan participants, but subject to ratification by the Board if the
Board so provides.
 
SECTION 3.  ELIGIBLE PARTICIPANTS
 
     Participants in the Plan shall be such employees of the Company and its
Subsidiaries or Affiliates, including elected officers, and non-employee
directors of the Company, that are selected by the Committee, in its sole
discretion, from time to time to receive an Award under the Plan. The Plan is
discretionary in nature, and the grant of Awards by the Committee is voluntary
and occasional. The Committee's selection of an eligible employee to receive an
Award in any year or at any time shall not require the Committee to select such
employee to receive an Award in any other year or at any other time. The
selection of an employee to receive one type of Award under the Plan does not
require the Committee to select such employee to receive any other type of Award
under the Plan. The Committee shall consider such factors as it deems pertinent
in selecting Participants and in determining the type and amount of their
respective Awards.
 
                                       B-3

<PAGE>
 
SECTION 4.  STOCK SUBJECT TO PLAN
 
     The number of shares of Stock authorized for issuance under the Plan will
be 20.0 million shares. Any or all of the authorized shares may be issued
pursuant to the exercise of Stock Options awarded under the Plan, but no more
than a total of 10.0 million shares may be issued with respect to Awards other
than Stock Options. If any Award is exercised, cashed out or terminates or
expires without a payment being made to the Participant in the form of Stock,
the shares subject to such Award, if any, will again be available for issuance
in connection with Awards under the Plan. Any shares of Stock that are used by a
Participant as full or partial payment of withholding or other taxes or as
payment for the exercise or conversion price of an Award will be available for
issuance in connection with Awards under the Plan.
 
     In the event of any merger, reorganization, consolidation,
recapitalization, share exchange, stock dividend, stock split, reverse stock
split, split-up, spin-off, issuance of rights or warrants or other change in
corporate structure affecting the Stock after adoption of the Plan by the Board,
the Board is authorized to make substitutions or adjustments in the aggregate
number and kind of shares reserved for issuance under the Plan, in the number,
kind and price of shares subject to outstanding Awards and in the Award limits
set forth in Sections 4 and 5, provided, however, that any such substitutions or
adjustments will be, to the extent deemed appropriate by the Board, consistent
with the treatment of shares of Stock not subject to the Plan, and that the
number of shares subject to any Award will always be a whole number.
 
SECTION 5.  AWARDS -- GENERAL TERMS AND LIMITATIONS
 
     (a)  AWARDS GRANTED AT FAIR MARKET VALUE.  The exercise price of a Stock
Option and the grant price of an SAR may not be less than 100% of the Fair
Market Value on the date of grant. In addition, to the extent that the value of
an Other Stock-Based Award is based on Spread Value, the grant price for the
Other Stock-Based Award may not be less than 100% of the Fair Market Value on
the date of grant. Notwithstanding the foregoing, in connection with any
reorganization, merger, consolidation or similar transaction in which the
Company or any Subsidiary or Affiliate of the Company is a surviving
corporation, the Committee may grant Stock Options, SARs or Other Stock-Based
Awards in substitution for similar awards granted under a plan of another party
to the transaction, and in such a case the exercise price or grant price of the
substituted Stock Options, SARs or Other Stock-Based Awards granted by the
Company may equal or exceed 100% of the Fair Market Value on the date of grant
reduced by any unrealized gain existing as of the date of the transaction in the
option, stock appreciation right or other award being replaced.
 
     (b)  ANNUAL AWARD LIMITATION.  The total number of shares of Restricted
Stock and other shares of Stock subject to or underlying Stock Options, SARs and
Other Stock-Based Awards awarded to any Participant during any year may not
exceed (i) two million shares, multiplied by (ii) the number of calendar years
during which the Participant was eligible to participate in the Plan in
accordance with Section 3 above, and reduced by (iii) the number of shares with
respect to which the participant has received awards of Restricted Stock, Stock
Options, SARs and/or Other Stock-Based Awards under the Plan. An Annual
Incentive Award paid to a participant with respect to any Performance Cycle may
not exceed $5,000,000. A Long-Term Incentive Award paid to a participant with
respect to any Performance Cycle may not exceed $3,000,000 times the number of
years in the Performance Cycle.
 
                                       B-4

<PAGE>
 
     (c)  PERFORMANCE-BASED AWARDS.  Any Awards granted pursuant to the Plan
may, at the discretion of the Committee, be in the form of performance-based
Awards through the application of Performance Goals over a specified Performance
Cycle.
 
     (d)  MINIMUM VESTING PERIODS.  Except in the case of a new-hire Award or
under such other circumstances deemed appropriate by the Committee, no Stock
Option, Stock Appreciation Right, Restricted Share or Other Stock-Based Award
may be granted with a vesting period of less than one year.
 
SECTION 6.  STOCK OPTIONS
 
     (a)  STOCK OPTION AWARDS.  A Stock Option represents the right to purchase
a share of Stock at a predetermined exercise price. Stock Options granted under
the Plan will be in the form of Incentive Stock Options or Nonqualified Stock
Options. The terms and conditions of each Stock Option Award, including the
Stock Option term, exercise price, applicable vesting periods and any other
restrictions/conditions on exercise, will be determined in the sole discretion
of the Committee and will be set forth in an Award agreement.
 
     (b)  DURATION OF STOCK OPTIONS.  Stock Options will terminate after the
first to occur of the following:
 
          (1)  Expiration of the Stock Option as provided in the applicable
     Award agreement;
 
          (2)  Termination of the Stock Option Award, as provided in Section
     6(d), following the participant's Termination of Employment;
 
          (3)  In the case of an Incentive Stock Option, ten years from the date
     of grant.
 
     (c)  ACCELERATION/EXTENSION OF EXERCISE TIME.  The Committee, in its sole
discretion, shall have the right (but shall not in any case be obligated) to
permit purchase of shares under any Stock Option prior to the time such Option
would otherwise vest under the terms of the applicable Award agreement. In
addition, the Committee, in its sole discretion, shall have the right (but shall
not in any case be obligated) to permit any Stock Option granted under the Plan
to be exercised after its termination date described in Section 6(d), but in no
event later than the last day of the term of the Stock Option as set forth in
the applicable Award agreement.
 
     (d)  EXERCISE OF STOCK OPTIONS UPON TERMINATION OF EMPLOYMENT.  Except as
otherwise provided in this Section 6(d) or in Section 6(c), or as otherwise
expressly provided in a Participant's Award agreement as authorized by the
Committee, the right of the Participant to exercise Stock Options shall
terminate upon the Participant's Termination of Employment, regardless of
whether or not the Stock Options were vested in whole or in part on the date of
Termination of Employment.
 
        (1)  Disability or Normal Retirement.  Upon a Participant's Termination
     of Employment by reason of disability or retirement on a Normal Retirement
     Date, a participant may, within five years after the Termination of
     Employment, exercise all or a part of his/her Stock Options that were
     vested upon such Termination of Employment (or which became vested at a
     later date pursuant to Section 6(d)(3) below). In no event, however, may
     any Stock Option be exercised later than the last day of the term of the
     Stock Option as set forth in the applicable Award agreement.
 
          (2)  Death.  In the event of the death of a Participant while employed
     by the Company or a Subsidiary or Affiliate, or within the additional
     period of time from the date of Termination of Employment and prior to the
     termination of the Stock Option as permitted
 
                                       B-5

<PAGE>
 
     under Section 6(d)(1) or Section 6(d)(3)(B), to the extent that the right
     to exercise the Stock Option had vested as of the date of the Participant's
     death, the right of the Participant's Beneficiary to exercise the vested
     portion of the Stock Option shall expire on the earliest of (A) five years
     from the date of the Participant's death, (B) five years from the date of
     the Participant's Termination of Employment, (C) the last day of the term
     of the Stock Option as set forth in the applicable Award agreement or (D)
     such other date set forth in the Award agreement as authorized by the
     Committee.
 
        (3)  Termination of Employment at Age 55 with Five Years of Service.
     Notwithstanding anything in this Section 6 to the contrary, if Termination
     of Employment occurs after the participant has attained age 55 and
     completed five years of service with the Company and/or its Subsidiaries or
     Affiliates, (A) the participant shall continue to vest in each of his/her
     Stock Options in accordance with the vesting schedules set forth in the
     applicable Award agreements, and (B) the participant may exercise his/her
     Stock Options, to the extent that the Stock Options have vested as of the
     Termination of Employment or thereafter in accordance with Section
     6(d)(3)(A), for a period of five years from the date of the participant's
     Termination of Employment. In no event, however, may any Stock Option be
     exercised later than the last day of the term of the Stock Option as set
     forth in the applicable Award agreement.
 
     (e)  EXERCISE PROCEDURES.  Subject to the applicable Award agreement, Stock
Options may be exercised, in whole or in part, by giving written notice of
exercise to the Company or its designee specifying the number of shares to be
purchased. This notice must be accompanied by payment in full of the exercise
price by certified or bank check or such other instrument as the Company or its
designee may accept. If authorized by the Committee, payment in full or in part
may also be made (1) in the form of Stock already owned by the Participant
valued at the Fair Market Value on the date the Stock Option is exercised,
provided, however, that this Stock may not have been acquired within the
preceding six months upon the exercise of a Stock Option or received in
connection with an Award granted under the Plan or any other plan maintained at
any time by the Company or any Subsidiary or an Affiliate, or (2) through a
cashless exercise program authorized by the Company.
 
     (f)  INCENTIVE STOCK OPTIONS.  Except as otherwise expressly provided in
the Plan, the Committee may designate, at the time of grant, that the Stock
Option is an Incentive Stock Option under Section 422 of the Code. Whenever
possible, each provision of the Plan and applicable Award agreement shall be
interpreted in such a manner as to entitle the Stock Option to the tax treatment
afforded by Section 422 of the Code. If any provision of the Plan or any Option
designated by the Committee as an Incentive Stock Option shall be held not to
comply with requirements necessary to entitle such Option to such tax treatment,
then (1) such provision shall be deemed to have contained from the outset such
language as shall be necessary to entitle the Option to the tax treatment
afforded under Section 422 of the Code, and (2) all other provisions of the Plan
and the Award Agreement shall remain in full force and effect. If any agreement
covering a Stock Option designated by the Committee to be an Incentive Stock
Option under this Plan shall not explicitly include any terms required to
entitle such Incentive Stock Option to the tax treatment afforded by Section 422
of the Code, all such terms shall be deemed implicit in the designation of such
Option and the Option shall be deemed to have been granted subject to all such
terms.
 
                                       B-6

<PAGE>
 
SECTION 7.  STOCK APPRECIATION RIGHTS
 
     (a)  STOCK APPRECIATION RIGHTS AWARDS.  A SAR represents the right to
receive a payment, in cash, shares of Stock or both (as determined by the
Committee), equal to the Spread Value on the date the SAR is exercised. The
grant price of a SAR and all other applicable terms and conditions will be
established by the Committee in its sole discretion and will be set forth in the
applicable Award agreement. Subject to the terms of the applicable Award
agreement, a SAR will be exercisable, in whole or in part, by giving written
notice of exercise to the Company.
 
SECTION 8.  RESTRICTED STOCK
 
     (a)  RESTRICTED SHARE AWARDS.  The Committee may grant to any Participant
an Award of shares of Common Stock in such quantity, and on such terms,
conditions and restrictions (whether based on Performance Goals, periods of
service or otherwise) as the Committee shall establish in its sole discretion.
The terms of any Restricted Share Award granted under this Plan shall be set
forth in an Award agreement.
 
          (1)  Issuance of Restricted Shares.  As soon as practicable after the
     Date of Grant of a Restricted Share Award by the Committee, Unisys shall
     register in the books of the Company, shares of Common Stock, evidencing
     the Restricted Shares covered by the Award, but subject to forfeiture to
     Unisys as of the Date of Grant if an Award agreement with respect to the
     Restricted Shares covered by the Award is not duly executed by the
     Participant and timely returned to the Company. At the discretion of the
     Company, the shares will be registered on behalf of the Participant in book
     entry form or will be registered in the name of the Participant with a
     stock certificate, appropriately legended to reference the applicable
     restrictions, duly issued. All shares of Common Stock covered by Awards
     under this Section 8 shall be subject to the restrictions, terms and
     conditions contained in the Award agreement.
 
          (2)  Stockholder Rights.  Beginning on the date of grant of the
     Restricted Share Award and subject to execution of the Award Agreement
     provided for in Section 8(a)(1), the Participant will become a stockholder
     of Unisys with respect to all shares represented under the Award agreement
     and shall have all of the rights of a stockholder, including, but not
     limited to, the right to vote such shares and the right to receive any
     dividends (or dividend equivalents) paid on such shares; provided, however,
     that any shares of Common Stock distributed as a dividend or otherwise with
     respect to any Restricted Shares as to which the restrictions have not yet
     lapsed shall be subject to the same restrictions as such Restricted Shares
     and shall be represented by book entry and held as prescribed in Section 8.
 
          (3)  Restriction on Transferability.  None of the Restricted Shares
     may be assigned or transferred (other than by will or the laws of descent
     and distribution, or to an inter vivos trust with respect to which the
     Participant is treated as the owner under sections 671 through 677 of the
     Code), pledged or sold prior to the lapse of the restrictions applicable to
     the shares.
 
          (4)  Delivery of Shares Upon Vesting.  Upon the expiration or earlier
     termination of the forfeiture period without forfeiture and the
     satisfaction of or release from any other conditions prescribed by the
     Committee, or at such earlier time as provided under the provisions of
     Section 8(b)(2), the restrictions applicable to the Restricted Shares shall
     lapse. As promptly as administratively feasible thereafter, the Company
     shall deliver to the
 
                                       B-7

<PAGE>
 
     Participant or, in case of the Participant's death, to the Participant's
     Beneficiary, a stock certificate for the appropriate number of shares of
     Common Stock, free of all such restrictions, except for any restrictions
     that may be imposed by law, unless the Company has made arrangements to
     have shares of Common Stock held at a bank or other appropriate institution
     in non-certified form. The appropriate number of shares shall equal the
     number of Restricted Shares with respect to which the restrictions have
     lapsed, less the number of shares of Common Stock, rounded up for any
     fraction to the next whole number, whose Fair Market Value as of the date
     on which the restrictions lapse is equal to such amount as is determined by
     Unisys to be sufficient to satisfy applicable federal, state or local
     withholding tax requirements. Unisys shall remit in a timely manner to the
     appropriate taxing authorities the amount so withheld with any partial
     share excess applied to federal withholding. Although the stock certificate
     delivered to the Participant or the Participant's beneficiary will be for a
     net number of shares, the Participant or the Participant's beneficiary
     shall be considered, for tax purposes, to have received a number of shares
     of Common Stock equal to the full number of Restricted Shares with respect
     to which the restrictions have lapsed.
 
     (b)  TERMS OF RESTRICTED SHARES.
 
          (1)  Forfeiture of Restricted Shares.  Subject to Section 8(b)(2) and
     Section 11, all of the Restricted Shares with respect to a Restricted Share
     Award shall be forfeited and returned to Unisys and all rights of the
     Participant with respect to such Restricted Shares shall terminate unless
     the Participant continues in the service of the Company or a Subsidiary or
     an Affiliate as an employee until the expiration of the forfeiture period
     and satisfies any other conditions set forth in the Award agreement.
 
          (2)  Waiver of Forfeiture Period.  Notwithstanding anything contained
     in this Section 8 to the contrary, the Committee may, in its sole
     discretion, waive the forfeiture period and any other conditions set forth
     in any Award agreement under certain circumstances (including the death,
     disability or retirement of the Participant or a material change in
     circumstances arising after the date of an Award) and subject to such terms
     and conditions (including forfeiture of a proportionate number of the
     Restricted Shares) as the Committee shall deem appropriate.
 
SECTION 9.  OTHER STOCK-BASED AWARDS
 
     (a)  OTHER STOCK-BASED AWARDS.  The Committee may grant Awards, other than
Stock Options, SARs or Restricted Shares, that are denominated in, valued in
whole or in part by reference to, or otherwise based on or related to, Stock.
The purchase, exercise, exchange or conversion of Other Stock-Based Awards
granted under this Section 9 and all other terms and conditions applicable to
the Awards will be determined by the Committee in its sole discretion and will
be set forth in an applicable Award agreement.
 
SECTION 10.  INCENTIVE AWARDS
 
     (a)  INCENTIVE AWARDS.  Incentive Awards are performance-based Awards that
are expressed in U.S. currency, but that may be payable in the form of cash,
Stock or a combination of both. Incentive Awards may be either Annual Incentive
Awards or Long-Term Incentive Awards. The target amount of the Award, the
Performance Goals and applicable Performance Cycle, the form of payment and
other terms and conditions applicable to an Incentive Award will be determined
in the sole discretion of the Committee and will be set forth in an Award
 
                                       B-8

<PAGE>
 
agreement. In the discretion of the Committee, the Incentive Award may be
designated as a performance-based award intended to qualify as
"performance-based compensation" within the meaning of Code Section 162(m).
 
SECTION. 11  CHANGE IN CONTROL PROVISIONS
 
     (a) IMPACT OF EVENT. Notwithstanding any other provision of the Plan to the
contrary, and except to the extent expressly provided otherwise in an Award
agreement, in the event of a Change in Control:
 
          (1) Stock Options. All Stock Options outstanding as of the date the
     Change in Control occurs will become fully vested and will be exercisable
     in accordance with procedures established by the Committee. In addition, a
     Participant who is an elected officer of the Company will be permitted to
     surrender for cancellation within 60 days after the Change in Control any
     Stock Option or portion of a Stock Option to the extent not exercised and
     to receive a cash payment in an amount equal to the excess, if any, of (A)
     the Change in Control Price, over (B) the exercise price of the Stock
     Option. The provisions of this Section 11(a)(1) will not be applicable to
     any Stock Options granted to a Participant if the Change in Control results
     from the Participant's beneficial ownership (within the meaning of Rule
     13d(3) under the Exchange Act) of Stock or Voting Securities.
 
          (2) Stock Appreciation Rights. All SARs outstanding as of the date the
     Change in Control occurs will become fully vested and will be exercisable
     in accordance with procedures established by the Committee. The provisions
     of this Section 11(a)(2) will not be applicable to any SARs granted to a
     Participant if the Change in Control results from the Participant's
     beneficial ownership (within the meaning of Rule 13d(3) under the Exchange
     Act) of Stock or Voting Securities.
 
          (3) Restricted Shares. The restrictions and other conditions
     applicable to any Restricted Shares held by the Participant will lapse and
     Restricted Shares will become fully vested.
 
          (4) Incentive Awards. Any Incentive Awards relating to Performance
     Cycles before the Performance Cycle in which the Change in Control occurs
     that have been earned but not paid will become immediately payable in cash.
     In addition, each Participant who has been awarded an Incentive Award for a
     Performance Cycle that has not been completed will be deemed to have earned
     a pro-rata Incentive Award determined by multiplying the Participant's
     target award opportunity for the Performance Cycle by a fraction, the
     numerator of which is the number of whole months that have elapsed since
     the beginning of such Performance Cycle to the date on which the Change in
     Control occurs and the denominator of which is the total number of months
     in such Performance Cycle. Such pro-rata amount will be payable immediately
     upon the Change in Control in cash. To the extent a Participant remains in
     the employment of the Company or its Subsidiaries or Affiliates after a
     Change in Control and through the end of any Performance Cycle with respect
     to which payment had been accelerated pursuant to the preceding sentence,
     and to the extent that the attainment of Performance Goals or other
     performance measurements through the end of the Performance Cycle would
     have resulted in the Participant's receiving an amount in excess of the
     amount paid as a result of the Change in Control, the Participant will be
     entitled to receive an amount equal to that excess.
 
                                       B-9

<PAGE>
 
          (5) Other Stock-Based Awards. Other Stock-Based Awards that vest
     solely on the basis of the passage of time will be treated in connection
     with a Change in Control in the same manner as are Awards of Restricted
     Shares, as described in Section 11(a)(3) above. Other Stock-Based Awards
     that vest on the basis of the satisfaction of performance criteria will be
     treated in connection with a Change in Control in the same manner as are
     Incentive Awards, as described in Section 11(a)(4) above.
 
     (b) DEFINITION OF CHANGE IN CONTROL. A "Change in Control" means any of the
following events:
 
          (1) The acquisition by any individual, entity or group (within the
     meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Person"))
     of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
     the Exchange Act) of 20% or more of either (A) the then outstanding shares
     of Stock (the "Outstanding Stock") or (B) the combined voting power of the
     then outstanding voting securities of the Company entitled to vote
     generally in the election of directors (the "Outstanding Voting
     Securities"), provided, however, that the following acquisitions will not
     constitute a Change in Control: (1) any acquisition directly from the
     Company, (2) any acquisition by the Company, (3) any acquisition by any
     employee benefit plan (or related trust) sponsored or maintained by the
     Company or any corporation controlled by the Company or (4) any acquisition
     by any corporation pursuant to a transaction described in clauses (A), (B)
     and (C) of paragraph (3) of this Section 11(b); or
 
          (2) Individuals who, as of the effective date of the Plan, constitute
     the Board (the "Incumbent Board") cease for any reason to constitute at
     least a majority of the Board, provided, however, that any individual's
     becoming a director after the effective date of the Plan whose election, or
     nomination for election by the stockholders of the Company, was approved by
     a vote of at least a majority of the directors then comprising the
     Incumbent Board will be considered as though the individual were a member
     of the Incumbent Board, but excluding, for this purpose, any individual
     whose initial assumption of office occurs as a result of an actual or
     threatened election contest with respect to the election or removal of
     directors or other actual or threatened solicitation of proxies or consents
     by or on behalf of a Person other than the Board; or
 
          (3) Consummation of a reorganization, merger or consolidation or sale
     or disposition of all or substantially all of the assets of the Company (a
     "Business Combination"), unless, in each case following such Business
     Combination, (A) all or substantially all of the individuals and entities
     who were the beneficial owners, respectively, of the Outstanding Stock and
     Outstanding Voting Securities immediately before the Business Combination
     beneficially own, directly or indirectly, more than 50% of, respectively,
     the then outstanding shares of common stock and the combined voting power
     of the then outstanding voting securities entitled to vote generally in the
     election of directors, as the case may be, of the corporation resulting
     from such Business Combination (including, without limitation, a
     corporation that as a result of the transaction owns the Company or all or
     substantially all of the assets of the Company either directly or
     indirectly through one or more Subsidiaries) in substantially the same
     proportions as their ownership, immediately prior to such Business
     Combination of the Outstanding Stock and Outstanding Voting Securities, as
     the case may be, (B) no Person (excluding any employee benefit plan (or
     related trust) of the Company or the corporation resulting from the
     Business Combination) beneficially owns, directly or indirectly, 20% or
     more of, respectively, the then outstanding shares of common stock of
 
                                       B-10

<PAGE>
 
     the corporation resulting from the Business Combination or the combined
     voting power of the then outstanding voting securities of the corporation
     except to the extent that the Person owned 20% or more of the Outstanding
     Stock or Outstanding Securities before the Business Combination, and (C) at
     least a majority of the members of the board of directors of the
     corporation resulting from the Business Combination were members of the
     Incumbent Board at the time of the execution of the initial agreement, or
     of the action of the Board, providing for the Business Combination; or
 
          (4) Approval by the stockholders of the Company of a complete
     liquidation or dissolution of the Company.
 
     (c) DEFINITION OF CHANGE IN CONTROL PRICE. "Change in Control Price" means
the greater of (1) the highest Fair Market Value of a share of Stock during the
60-day period ending on the date of the Change in Control, and (2) the highest
price per share of Stock paid to holders of Stock in any transaction (or series
of transactions) constituting or resulting from the Change in Control, provided,
however, that, in the case of Incentive Stock Options, unless the Committee
otherwise provides, such price will be based only on transactions occurring on
the date on which the Incentive Stock Options are cashed out.
 
SECTION 12.  PLAN AMENDMENT AND TERMINATION
 
     The Board may amend, suspend or terminate the Plan at any time, provided
that no such amendment will be made without stockholder approval if such
approval is required under applicable law, or if such amendment would increase
the total number of shares of Stock that may be distributed under the Plan.
Except as otherwise provided under Section 4, Stock Options may not be repriced
(whether through modification of the exercise price of the Stock Option after
the date of grant or through an option exchange program) without the approval of
the Company's stockholders.
 
     Except as set forth in any Award agreement, no amendment or termination of
the Plan may materially and adversely affect any outstanding Award under the
Plan without the Award recipient's consent.
 
SECTION 13.  PAYMENTS AND PAYMENT DEFERRALS
 
     Payment of Awards may be in the form of cash, Stock, other Awards or
combinations thereof as the Committee may determine, and with such restrictions
as it may impose. The Committee, either at the time of grant or by subsequent
amendment, may require or permit deferral of the payment of Awards under such
rules and procedures as it may establish. It also may provide that deferred
settlements include the payment or crediting of interest or other earnings on
the deferred amounts, or the payment or crediting of dividend equivalents where
the deferred amounts are denominated in Stock equivalents.
 
SECTION 14.  DIVIDENDS AND DIVIDEND EQUIVALENTS
 
     The Committee may provide that any Awards under the Plan earn dividends or
dividend equivalents. Such dividends or dividend equivalents may be paid
currently or may be credited to a participant's Plan account. Any crediting of
dividends or dividend equivalents may be subject to such restrictions and
conditions as the Committee may establish, including reinvestment in additional
shares of Stock or Stock equivalents to the extent permitted by applicable law.
 
                                       B-11

<PAGE>
 
SECTION 15.  TRANSFERABILITY
 
     Except to the extent permitted by the Award agreement, either initially or
by subsequent amendment, Awards will not be transferable or assignable other
than by will or the laws of descent and distribution, and will be exercisable
during the lifetime of the recipient only by the recipient.
 
SECTION 16.  AWARD AGREEMENTS
 
     Each Award under the Plan will be evidenced by a written agreement (which
need not be signed by the recipient unless otherwise specified by the Committee
or otherwise provided under the Plan) that sets forth the terms, conditions and
limitations for each Award. Such terms may include, but are not limited to, the
term of the Award, vesting and forfeiture provisions, and the provisions
applicable in the event the recipient's employment terminates. The Committee may
amend an Award agreement, provided that no such amendment may materially and
adversely affect an outstanding Award without the Award recipient's consent.
 
SECTION 17.  UNFUNDED STATUS OF PLAN
 
     It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Stock or make payments; however, unless the Committee otherwise
determines, the structure of such trusts or other arrangements must be
consistent with the "unfunded" status of the Plan.
 
SECTION 18.  GENERAL PROVISIONS
 
     (a) The Committee may require each person acquiring shares of Stock
pursuant to an Award to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to the distribution thereof.
The certificates for such shares may include any legend that the Committee deems
appropriate to reflect any restrictions on transfer.
 
     All certificates for shares of Common Stock or other securities delivered
under the Plan will be subject to such stock transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Commission, any stock exchange upon which the
Stock is then listed and any applicable Federal, state or foreign securities
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
 
     (b) Nothing contained in this Plan will prevent the Company or a Subsidiary
or Affiliate from adopting other or additional benefit arrangements for its
employees or directors.
 
     (c) The adoption of the Plan will not confer upon any employee any right to
continued employment nor will it interfere in any way with the right of the
Company or a Subsidiary or Affiliate to terminate the employment of any employee
at any time. To the extent that an employee of a Subsidiary or Affiliate
receives an Award under the Plan, that Award can in no event be understood or
interpreted to mean that the Company is the employee's employer or that the
employee has an employment relationship with the Company.
 
     (d) Except as otherwise provided under Section 8(a)(4), no later than the
date as of which an amount first becomes includible in the gross income of the
Participant for Federal, state, local, or foreign income or social security tax
purposes with respect to any Award under the Plan, the Participant will pay to
the Company, or make arrangements satisfactory to the
 
                                       B-12

<PAGE>
 
Company regarding the payment of, any Federal, state, local or foreign taxes of
any kind required by law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, withholding obligations arising from an
Award may be settled with Stock, including Stock that is part of, or is received
upon exercise or conversion of, the Award that gives rise to the withholding
requirement. The obligations of the Company under the Plan will be conditional
on such payment or arrangements, and the Company and its Subsidiaries or
Affiliates will, to the extent permitted by law, have the right to deduct any
such taxes from any payment otherwise due to the Participant. The Committee may
establish such procedures as it deems appropriate, including the making of
irrevocable elections, for the settling of withholding obligations with Stock.
 
     (e) On receipt of written notice of exercise, the Committee may elect to
cash out all or a portion of the shares of Stock for which a Stock Option is
being exercised by paying the Participant an amount, in cash or Stock, equal to
the Spread Value of such shares on the date such notice of exercise is received.
 
     (f) The Plan and all Awards made and actions taken thereunder will be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania.
 
     (g) If any provision of the Plan is held invalid or unenforceable, the
invalidity or unenforceability will not affect the remaining parts of the Plan,
and the Plan will be enforced and construed as if such provision had not been
included.
 
     (h) Any reference in the Plan to a provision of the Code, the Exchange Act
or other law may be interpreted by the Committee, in its discretion, to
encompass any successor provision of the law.
 
     (i) If approved by stockholders of the Company, the Plan will be effective
as of April 24, 2003.
 
                                       B-13

<PAGE>
 
                                                                      APPENDIX C
 
                               UNISYS CORPORATION
                          EMPLOYEE STOCK PURCHASE PLAN
                  (AS AMENDED AND RESTATED FEBRUARY 13, 2003)
 
1.  PURPOSE
 
     The purpose of the Plan is to provide an opportunity for Employees of
Unisys Corporation and Related Corporations designated as Participating
Employers to purchase Common Stock of the Corporation and thereby to have an
additional incentive to contribute to the prosperity of the Corporation. The
Plan is not intended to be an "Employee Stock Purchase Plan" under Section 423
of the Internal Revenue Code of 1986, as amended.
 
2.  DEFINITIONS
 
     (a)  "Board" shall mean the Board of Directors of the Corporation.
 
     (b)  "Committee" shall mean the Unisys Corporation Employee Benefits
Administrative Committee.
 
     (c)  "Common Stock" shall mean the Common Stock of the Corporation.
 
     (d)  "Compensation" shall mean an Employee's regular salary or wages paid
by the Participating Employer for a payroll period, including bonus payments,
overtime and commissions. Compensation does not include wage or salary
substitution payments during approved paid leaves of absences, expense
reimbursement, relocation allowances, long-term disability payments, tuition
reimbursement, adoption assistance benefits, earnings related to stock options
or other equity incentives and post-employment payments that may be computed
from eligible compensation, such as severance benefits, salary continuation
after termination of service, redundancy pay or termination indemnities.
 
     (e)  "Corporation" shall mean Unisys Corporation, a Delaware corporation,
(or any successor corporation).
 
     (f)  "Effective Date" shall mean July 1, 1998, provided, however, that the
Effective Date with respect to one or more Participating Employers or business
units may be a date later than July 1, 1998 as determined in the discretion of
the Vice-President, Worldwide Human Resources.
 
     (g)  "Employee" shall mean an individual who (a) is classified as a regular
full or part time employee by the Corporation or a Related Corporation on their
payroll records during the relevant participation period and (b) who is eligible
to participate in the employee benefit plans maintained by the Corporation or
Participating Employer. No other individual will be considered as an Employee,
including any temporary employee, independent contractor, non-employee
consultant, an employee of any entity other than the Corporation or Related
Corporation or other service provider, even if such classification is determined
to be erroneous, or is retroactively revised by a governmental agency, by court
order or as a result of litigation, or otherwise. In the event the
classification of a person who was excluded from the definition of Employee
under the preceding sentence is determined to be erroneous or is retroactively
revised, the person shall nonetheless continue to be excluded from treatment as
an Employee for all periods prior to the date the Employer specifically
determines, for the purpose of eligibility in the Plan, that its classification
of the person should be revised.
 
                                       C-1

<PAGE>
 
     (h)  "Fair Market Value" shall mean on any date the sales price, in U.S.
Dollars, of the Common Stock as of the official close of the New York Stock
Exchange at 4:00 p.m. US Eastern Standard Time on such date. In lieu of the
forgoing, the Committee may in good faith determine the Fair Market Value on any
other reasonable basis. Such determination shall be conclusive and binding on
all persons.
 
     (i)  "Option Period" shall mean a quarterly, semi-annual or other period as
determined by the Board. In the absence of a Board determination, the Option
Period shall be calendar quarters.
 
     The first Option Period under the Plan will begin on July 1, 1998 and end
on September 30, 1998.
 
     (j)  "Participant" shall mean a participant in the Plan as described in
Section 4 of the Plan.
 
     (k)  "Participating Employer" shall mean the Corporation, a Related
Corporation or a business unit of the Corporation or a Related Corporation
designated by the Senior Vice-President, Worldwide Human Resources or his
successor to participate in the Plan.
 
     (l)  "Plan" shall mean the Unisys Corporation Employee Stock Purchase Plan.
 
     (m)  "Purchase Date" shall mean the first day following the end of the
Option Period.
 
     (n)  "Related Corporation" shall mean every non-U.S. subsidiary that is a
direct or indirect at least 100%-owned subsidiary of the Corporation. In the
event that the Senior Vice President, Worldwide Human Resources so designates,
any other non-U.S. affiliate of the Corporation will become a Related
Corporation.
 
     (o)  "Service" shall mean continuous regular employment with the
Corporation or a Related Corporation, even if a Participant can no longer make
contributions because he or she no longer works for a Participating Employer.
 
     (p)  "Shareholder" shall mean a record holder of shares entitled to vote
shares of Common Stock under the Corporation's by-laws.
 
3.  ELIGIBILITY
 
     3.1 An Employee employed by the Corporation or a Participating Employer is
eligible to participate in the Plan beginning with any payroll period that
begins on or after the Effective Date.
 
4.  PARTICIPATION
 
     4.1. An Employee who is eligible to participate in the Plan in accordance
with Section 3 may become a Participant by filing a completed payroll deduction
authorization and Plan enrollment form provided by the Corporation.
Participation in the Plan will become effective as soon as is administratively
feasible after receipt by the Corporation or Plan Recordkeeper of the completed
forms. An eligible Employee may authorize payroll deductions at the rate of any
whole percentage of the Employee's Compensation, between 1% and 10%, or such
lesser percentage as specified by the Committee. Contributions will be made by
payroll deductions only, unless prohibited by local law, in which case
contributions will be made by any method determined by the Committee to be
permissible and administratively feasible. All contributions may be held by the
Corporation and commingled with its other corporate funds. No interest shall be
paid or credited to the Participant with respect to such contributions, except
where required
 
                                       C-2

<PAGE>
 
by local law as determined by the Committee. A separate bookkeeping account for
each Participant will be maintained by the Corporation or Plan Recordkeeper
under the Plan and the amount of each Participant's contributions shall be
credited to such account. A Participant may not make any additional payments
into such account. A Participant may not make payroll deductions or any other
contributions for periods after his or her termination of Service even if he or
she is then being paid salary continuation or severance benefits.
Notwithstanding any other provision in the Plan to the contrary, the maximum
amount that any Employee is permitted to contribute to the Plan in any calendar
year (commencing with 2003) is $25,000, or the applicable local currency
equivalent.
 
     4.2. Each Participating Employer will be responsible for making payroll
deductions pursuant to the Plan (unless prohibited by local law), causing these
payroll deductions (or other form of contributions) to be sent to the
Corporation and sending the contribution detail (by Participant) to the Plan
Recordkeeper. Contributions in non-U.S. currency shall be converted to U.S.
Dollars under procedures established by the Committee.
 
     4.3. Under procedures established by the Committee, a Participant may
suspend or discontinue participation in the Plan at any time during an Option
Period by completing and filing with the Corporation or Plan Recordkeeper the
appropriate forms provided by the Corporation or by following electronic or
other procedures prescribed by the Committee. A Participant may resume, increase
or decrease his or her rate of contribution by completing and filing with the
Corporation or Plan Recordkeeper the appropriate forms provided by the
Corporation. A Participant's election to suspend or discontinue participation or
to resume, increase or decrease contributions will become effective as soon as
is administratively feasible after receipt by the Corporation or Plan
Recordkeeper of the completed forms. If a new election regarding the
Participant's contributions is not filed with the Corporation or Plan
Recordkeeper, the rate of contribution shall continue at the originally elected
rate throughout the Option Period unless the Corporation determines to change
the permissible rate.
 
     If a Participant suspends or discontinues participation during an Option
Period, his or her accumulated contributions will remain in the Plan for
purchase of shares as specified in Section 6 on the following Purchase Date, but
the Participant will not again participate until he or she completes a new
payroll deduction authorization (or other contribution authorization as is in
effect in his/her country) and Plan enrollment form. The Committee may establish
rules limiting the frequency with which Participants may suspend and resume
contributions under the Plan and may impose a waiting period on Participants
wishing to resume suspended contributions.
 
5.  OFFERING
 
     5.1. Effective April 24, 2003, an additional ten million shares of Common
Stock are authorized for issuance pursuant to the Plan, bringing the total
number of shares that have been authorized for issuance under the Plan to
twenty-three million shares. The Board may limit the number of shares available
for purchase during any Option Period.
 
     5.2. Option Periods under the Plan will be calendar quarters commencing
January 1, April 1, July 1 and October 1 and the Purchase Date shall be the date
described in Section 2(m). The Corporation shall have the power to change the
duration of future Option Periods or Purchase Dates, with respect to any
prospective offering, and without regard to the expectations of any
Participants.
 
                                       C-3

<PAGE>
 
     5.3. With respect to each Option Period, each eligible Employee who has
elected to participate as provided in Section 4.1 shall be granted an option to
purchase that number of shares of Common Stock that may be purchased with the
contributions accumulated on behalf of such Employee during such Option Period
at the purchase price specified in Section 5.4 below.
 
     5.4. The option price under each option shall be the lesser of (1) 85% of
the Fair Market Value of the Common Stock on the first trading day of the Option
Period or (2) 85% of the Fair Market Value on the last trading day of the Option
Period.
 
     5.5. If the total number of shares of Common Stock for which options
granted under the Plan are exercisable exceeds the remaining number of shares
available for offering under the Plan, the number of shares which may be
purchased by all Participants shall be reduced on a pro rata basis in as nearly
a uniform manner as shall be practicable and equitable. In this event,
contributions shall also be reduced or refunded accordingly. If an Employee's
contributions during any Option Period exceeds the purchase price for the
maximum number of shares permitted to be purchased, the excess shall be refunded
to the Participant without interest (except where otherwise required by local
law).
 
6.  PURCHASE OF STOCK
 
     On the Purchase Date, a Participant's option shall be exercised
automatically for the purchase of that number of full and fractional shares of
Common Stock which the accumulated contributions credited to the Participant's
account at that time shall purchase at the applicable price specified in Section
5.4.
 
     To the extent practicable, all of the Participant's contributions
accumulated during the Option Period will be applied to the purchase of shares
of Common Stock on the Purchase Date.
 
7.  PAYMENT AND DELIVERY
 
     Upon the exercise of an option, the Corporation shall deliver the Common
Stock purchased on behalf of the Participant to an account held by the Plan
Broker for the Participant. At any time after the purchased shares are credited
to the Participant's account, the Participant may elect to (a) direct the Plan
Broker to sell all or some of the shares credited to the Participant's account,
in which case applicable transaction fees will be charged, (b) receive a stock
certificate, at no charge, evidencing all or some of the whole number of shares
of stock credited to his/her account or (c) electronically transfer all or some
of the whole shares credited to his/her account, at no charge, to a broker
designated by the Participant. If a Participant elects to transfer or receive a
share certificate for all of the shares credited to his/her account, the value
of any fractional shares credited to the account will be paid to the Participant
in cash. The value of any fractional shares will be determined in accordance
with procedures established by the Committee.
 
     If a Participant elects to direct the Plan Broker to sell all or some of
his/her shares, the sales price for the shares will be the price obtained by the
Plan Broker when it sells the shares. For Participants residing outside of the
United States, the Plan Broker will convert sales proceeds from U.S. dollars to
the Participant's local currency before the proceeds are distributed under
procedures established by the Committee.
 
     The Corporation shall retain the amount of Employee contributions used to
purchase Common Stock as full payment for the Common Stock and the Common Stock
shall then be fully paid and non-assessable.
 
                                       C-4

<PAGE>
 
     No Participant shall have any voting, dividend, or other stockholder rights
with respect to shares subject to any option granted under the Plan until the
option has been exercised and shares issued. Participants will receive a
statement reflecting the status of their Plan account on a quarterly or other
periodic basis.
 
8.  TERMINATION OF EMPLOYMENT
 
     No purchases will be made on behalf of a Participant for an Option Period
if the Participant terminated his/her employment with the Corporation and all
Related Corporations before the Purchase Date for the Option Period. A refund of
payroll deductions and/or other contributions (without interest unless legally
prohibited) will be made to a Participant by reason of the Participant's
termination of employment during an Option Period.
 
     In the event any Participant terminates employment with the Corporation and
all of its Related Corporations for any reason (including death or retirement),
(a) the Participant's participation in the Plan shall terminate and (b) all
accumulated payroll deductions and/or other contributions shall be paid without
interest (except where required by local law) to the Participant or the
Participant's estate.
 
     Whether a termination of employment has occurred shall be determined by the
Committee. The Committee may also establish rules regarding when leaves of
absence or change of employment status (e.g., from full time to part time) will
be considered a termination of employment, and the Committee may establish
termination of employment procedures for this Plan which are independent of
similar rules established under other benefit plans of the Corporation and its
Related Corporations.
 
9.  WITHHOLDING
 
     If a Participant is subject to withholding taxes as a result of
participation in the Plan, then the Committee shall establish appropriate
procedures, which may include, but are not limited to, withholding required
amounts from the Participant's regular salary or wages.
 
10.  RECAPITALIZATION
 
     If after the grant of an option, but prior to the purchase of Common Stock
under the option, there is any increase or decrease in the number of outstanding
shares of Common Stock because of a stock split, stock dividend, combination or
recapitalization of shares subject to options, the number of shares to be
purchased pursuant to an option, the share limit of Section 5.3 and the maximum
number of shares specified in Section 5.1 shall be proportionately increased or
decreased, the terms relating to the purchase price with respect to the option
shall be appropriately adjusted by the Board, and the Board shall take any
further actions which, in the exercise of its discretion, may be necessary or
appropriate under the circumstances.
 
     The Board, if it so determines in the exercise of its sole discretion, also
may adjust the number of shares specified in Section 5.1, as well as the price
per share of Common Stock covered by each outstanding option and the maximum
number of shares subject to any individual option, in the event the Corporation
effects one or more reorganizations, recapitalizations, spin-offs, split-ups,
rights offerings or reductions of shares of its outstanding Common Stock.
 
     The Board's determinations under this Section 10 shall be conclusive and
binding on all parties.
 
                                       C-5

<PAGE>
 
11.  MERGER, LIQUIDATION, OTHER CORPORATION TRANSACTIONS
 
     In the event of the proposed liquidation or dissolution of the Corporation,
the Option Period will terminate immediately prior to the consummation of such
proposed transaction, unless otherwise provided by the Board in its sole
discretion, and all outstanding options shall automatically terminate and the
amounts of all payroll deductions will be refunded without interest to the
Participants.
 
     In the event of a proposed sale of all or substantially all of the assets
of the Corporation, or the merger or consolidation of the Corporation with or
into another corporation, then in the sole discretion of the Board, (1) each
option shall be assumed or an equivalent option shall be substituted by the
successor corporation or parent or subsidiary of such successor corporation, (2)
a date established by the Board on or before the date of consummation of such
merger, consolidation or sale shall be treated as a Purchase Date, and all
outstanding options shall be deemed exercisable on such date or (3) all
outstanding options shall terminate and the accumulated payroll deductions shall
be returned to the Participants.
 
12.  TRANSFERABILITY
 
     Options granted to Participants may not be voluntarily or involuntarily
assigned, transferred, pledged, or otherwise disposed of in any way, and any
attempted assignment, transfer, pledge, or other disposition shall be null and
void and without effect. If a Participant in any manner attempts to transfer,
assign or otherwise encumber his or her rights or interest under the Plan, such
act shall be treated as an election by the Participant to discontinue
participation in the Plan pursuant to Section 4.2.
 
13.  AMENDMENT OR TERMINATION OF THE PLAN
 
     The Corporation may, in its sole discretion, insofar as permitted by law,
terminate or suspend the Plan, or revise or amend it in any respect whatsoever,
except that, without approval of the Participant, no such revision or amendment
shall adversely affect any outstanding option under the Plan.
 
14.  ADMINISTRATION
 
     The Committee will have the authority and responsibility for the day-to-day
administration of the Plan, the authority and responsibility specifically
provided in this Plan and any additional duties, responsibility and authority
delegated to the Committee by the Board or any duly authorized officer of the
Corporation, which may include any of the functions assigned to the Board or any
officer in this Plan. The Committee shall have full power and authority to
promulgate any rules and regulations which it deems necessary for the proper
administration of the Plan, to interpret the provisions and supervise the
administration of the Plan, to take all action in connection with administration
of the Plan as it deems necessary or advisable, consistent with the delegation
from the Board, and to delegate to any one or more of its members or a third
party any of its powers or responsibilities. Decisions of the Board, any duly
authorized officer and the Committee shall be final and binding upon all
Participants. Any decision reduced to writing and signed by a majority of the
Participants of the Committee shall be fully effective as if it had been made at
a meeting of the Committee duly held. No Board member, or Committee member or
any other employee shall be liable for any action or determination made in good
faith with respect to the Plan or any option granted thereunder.
 
                                       C-6

<PAGE>
 
     The Committee may prescribe rules, regulations, requirements and fees
related to the delivery, retention, transfer or administration of shares
acquired pursuant to the Plan, including, but not limited to: (1) establishing a
requirement that share certificates be maintained with a financial institution
designated by the Corporation or the Committee; (2) establishing rules and
procedures relating to the termination of employment (e.g., including long-term
disability, military duty, approved unpaid leaves of absence, layoffs and
reductions in force); (3) establishing procedures and fees for the sale of
shares in a Participant's account; (4) establishing procedures and fees for the
transfer of shares in a Participant's account; (5) establishing rules,
procedures and fees for the delivery of share certificates for the shares in a
Participant's account; and (6) establishing regulations and procedures relating
to fractional shares.
 
15.  COMMITTEE RULES FOR FOREIGN JURISDICTIONS
 
     The Committee may adopt rules or procedures relating to the operation and
administration of the Plan in non-United States jurisdictions to accommodate the
specific requirements of local laws and procedures. Without limiting the
generality of the foregoing, the Committee is specifically authorized to adopt
rules and procedures regarding handling of payroll deductions or other forms of
employee contribution, payment of interest, conversion of local currency,
withholding procedure, handling of stock certificates, and death benefit and
beneficiary matters which vary with local requirements.
 
     The Committee may also adopt sub-plans applicable to particular
Participating Employers or locations. The rules of such sub-plans may take
precedence over other provisions of this Plan, with the exception of Section
5.1, but unless otherwise superseded by the terms of such sub-plan, the
provisions of this Plan shall govern the operation of such sub-plan.
 
16.  SECURITIES LAWS REQUIREMENTS
 
     The Corporation shall not be under any obligation to issue Common Stock
upon the exercise of any option unless and until the Corporation has determined
that: (i) it and the Participants have taken all actions required to register
the Common Stock under the Securities Act of 1933, or to perfect an exemption
from the registration requirements thereof; (ii) any applicable listing
requirement of any stock exchange on which the Common Stock is listed has been
satisfied; and (iii) all other applicable provisions of state, federal and
applicable foreign law have been satisfied.
 
17.  GOVERNMENTAL REGULATIONS
 
     This Plan and the Corporation's obligation to sell and deliver shares of
its stock under the Plan shall be subject to the approval of any governmental
authority required in connection with the Plan or the authorization, issuance,
sale, or delivery of stock hereunder.
 
18.  NO ENLARGEMENT OF EMPLOYEE RIGHTS
 
     Nothing contained in this Plan shall be deemed to give any Employee the
right to be retained in the employ of the Corporation or any Related Corporation
or to interfere with the right of the Corporation or Related Corporation to
discharge any Employee at any time.
 
     The Plan is entirely discretionary in nature, and any benefit derived from
it does not give rise to any contractual entitlement and shall not be included
for purposes of calculating severance, resignation, redundancy or similar pay,
if any.
 
                                       C-7

<PAGE>
 
19.  GOVERNING LAW
 
     This Plan shall be governed by Pennsylvania law.
 
                                       C-8

<PAGE>
PROXY

                               UNISYS CORPORATION

               PROXY FOR ANNUAL MEETING TO BE HELD APRIL 24, 2003
           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Melvin R. Goodes, Kenneth A. Macke and Lawrence
A. Weinbach, and each of them, proxies, with power of substitution, to vote all
shares of common stock which the undersigned is entitled to vote at the 2003
Annual Meeting of Stockholders of Unisys Corporation, and at any adjournments
thereof, as directed on the reverse side hereof with respect to the items set
forth in the accompanying proxy statement and in their discretion upon such
other matters as may properly come before the meeting. This card also provides
voting instructions (for shares credited to the account of the undersigned, if
any) to the trustee for the Unisys Savings Plan (the "Savings Plan") as more
fully described on page 2 of the proxy statement.


       IF YOU ARE VOTING BY MAIL, PLEASE MARK, DATE, SIGN AND RETURN THIS
             PROXY/VOTING INSTRUCTION CARD IN THE ENCLOSED ENVELOPE

                  (CONTINUED AND TO BE SIGNED ON REVERSE SIDE)


                                                                    SEE REVERSE
                                                                       SIDE
--------------------------------------------------------------------------------
                             -FOLD AND DETACH HERE-





                                  [UNISYS LOGO]


                         ANNUAL MEETING OF STOCKHOLDERS

                                 APRIL 24,2003
                                   9:30 A.M.

                             THE HILTON INN AT PENN
                               3600 SANSOM STREET
                           PHILADELPHIA, PENNSYLVANIA

                             YOUR VOTE IS IMPORTANT
                              THANK YOU FOR VOTING


<PAGE>

[X]  PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS, FOR THE SELECTION OF AUDITORS, FOR THE APPROVAL OF THE UNISYS
CORPORATION 2003 LONG-TERM INCENTIVE AND EQUITY COMPENSATION PLAN AND FOR THE
APPROVAL OF THE AMENDED AND RESTATED UNISYS CORPORATION EMPLOYEE STOCK PURCHASE
PLAN, AND THE TRUSTEE FOR THE SAVINGS PLAN WILL VOTE AS DESCRIBED ON PAGE 2 OF
THE PROXY STATEMENT.

         THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, 3 AND 4

1. ELECTION OF
   DIRECTORS
                              FOR ALL         WITHHELD    FOR ALL EXCEPT
NOMINEES:                                     FROM ALL       AS NOTED
01 Gail D. Fosler
02 Melvin R. Goodes             [ ]              [ ]            [ ]
03 Edwin A. Huston


---------------------------------
(EXCEPT NOMINEE(S) WRITTEN ABOVE)

                                FOR           AGAINST         ABSTAIN
2. RATIFICATION OF
   SELECTION OF                 [ ]             [ ]             [ ]
   INDEPENDENT AUDITORS

                                FOR           AGAINST         ABSTAIN
3. APPROVE THE UNISYS
   CORPORATION 2003             [ ]             [ ]             [ ]
   LONG-TERM INCENTIVE
   AND EQUITY COMPENSATION
   PLAN

                                FOR           AGAINST         ABSTAIN
4. APPROVE THE AMENDED
   AND RESTATED UNISYS          [ ]             [ ]             [ ]
   CORPORATION EMPLOYEE
   STOCK PURCHASE PLAN

MARK HERE TO HAVE YOUR VOTE REMAIN CONFIDENTIAL [ ]

Please sign exactly as name appears hereon. For joint accounts, both owners
should sign. When signing as executor, attorney, administrator, trustee,
guardian, corporate officer, etc., please give your full title.


------------------------------------------------


------------------------------------------------
    SIGNATURE(S)                       DATE


--------------------------------------------------------------------------------
 -FOLD AND DETACH HERE ONLY IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL-


                          VOTE BY TELEPHONE OR INTERNET

Unisys Corporation encourages you to take advantage of the convenient ways to
vote your shares on proposals covered in this year's Proxy Statement. You may
vote by mail, through the Internet or by telephone.

If you vote through the Internet or by telephone, please have your social
security number and proxy card available. The control number printed in the box
above, just below the perforation, and your social security number are necessary
to verify your vote. Your electronic vote authorizes the named proxies to vote
your shares in the same manner as if you marked, signed, dated and returned the
proxy card.


1.    VOTE BY MAIL. Mark, date, sign and return your proxy card in the enclosed
      envelope.

2.    VOTE BY TELEPHONE. Using a touch-tone telephone, call toll-free
      1-877-779-8683, 24 hours a day, 7 days a week from the U.S. and Canada.
      Follow the instructions that are provided.

3.    VOTE THROUGH THE INTERNET. Log onto the Internet at
      http://www.eproxyvote.com/uis, 24 hours a day, 7 days a week. Follow the
      instructions that are provided.

If you vote through the Internet or by telephone, do not return the proxy card.

                              THANK YOU FOR VOTING

                                  [UNISYS LOGO]