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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) April 6, 2004
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UNISYS CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-8729 38-0387840
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(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification No.)
Incorporation)
Township Line and Union Meeting Roads,
Blue Bell, Pennsylvania 19424
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(Address of Principal Executive Offices) (Zip Code)
(215) 986-4011
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(Registrant's telephone number, including area code)
Item 5. Other Events and Required FD Disclosure
Unisys Corporation has announced the following organizational changes
effective April 6, 2004:
- -- Lawrence A. Weinbach, the company's Chairman of the Board and Chief
Executive Officer, will continue to serve as Chairman of the Board through
January 31, 2006. Mr. Weinbach plans to resign as the company's Chief
Executive Officer effective February 1, 2005.
- -- The Board has elected Joseph W. McGrath, formerly an Executive Vice
President of the company and President of its Enterprise Transformation
Services business, as the company's Chief Operating Officer and President.
- -- The Board has elected George R. Gazerwitz, formerly an Executive Vice
President of the company, as Vice Chairman. He will also continue to lead the
company's Systems and Technology business.
Item 7. Exhibits.
(c) The following exhibit is being furnished herewith:
10 Agreement, dated April 6, 2004, between Lawrence A. Weinbach and
Unisys Corporation
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
UNISYS CORPORATION
Date: April 6, 2004 By: /s/ Nancy Straus Sundheim
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Nancy Straus Sundheim
Senior Vice President,
General Counsel and Secretary
EXHIBIT INDEX
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Exhibit
No.
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10 Agreement, dated April 6, 2004, between Lawrence A. Weinbach and
Unisys Corporation
April 6, 2004
Mr. Lawrence A. Weinbach
c/o Unisys Corporation
Unisys Way
Blue Bell, Pennsylvania 19424
Dear Mr. Weinbach:
You are presently employed by Unisys Corporation (the "Corporation") as
Chairman of the Board, President and Chief Executive Officer under the terms
of a letter agreement dated April 25, 2002. This letter agreement (the
"Agreement") supersedes and replaces the letter agreement dated April 25, 2002
pursuant to Section 17 below, and describes the terms and conditions of your
employment with the Corporation on and after April 6, 2004 and through January
31, 2006. The provisions of this Agreement are as follows:
1. POSITION. Effective April 6, 2004, you will resign as President of the
Corporation and you will continue to serve as Chairman of the Board and Chief
Executive Officer of the Corporation until January 31, 2005. Effective
February 1, 2005, you will resign as Chief Executive Officer of the
Corporation, but you will continue to remain employed with the Corporation as
Chairman of the Board through January 31, 2006; provided, however, that if the
Board of Directors requests that you continue to serve as Chief Executive
Officer after January 31, 2005, you will continue to serve as Chairman and
Chief Executive Officer until a successor Chief Executive Officer is appointed
by the Board.
2. BASE SALARY. For your services as Chairman of the Board and Chief
Executive Officer of the Corporation, you will receive a base salary at the
annual rate of not less than $1,400,000 per year. If you resign as Chief
Executive Officer of the Corporation, but continue to remain employed as
Chairman of the Board, your base salary rate will be $1,000,000 per year.
3. ANNUAL BONUS. (a) You will participate in the Executive Variable
Compensation ("EVC") Plan and your target will be 100% of your annual paid
salary and your maximum potential award under the EVC Plan will be 200% of
your EVC target. The actual EVC paid to you, if any, will be determined by
the Compensation Committee of the Board of Directors (the "Committee") in its
sole discretion and will be based on such factors as it deems appropriate.
Your actual EVC payment, if any, will be made in cash at the time of the
award, subject to your election to defer receipt of all or any portion of the
EVC award in accordance with the terms of the Unisys Corporation Deferred
Compensation Plan (or any successor deferred compensation program). Subject
to the provisions of Sections 10 and 11 below, (1) if you continue to be
employed with the Corporation through January 31, 2005, but terminate your
employment with the Corporation before the 2004 EVC payout date, you will be
eligible to receive an EVC award for the 2004 award year and (2) if you
continue to be employed with the Corporation through January 31, 2006, but
terminate your employment before the 2005 EVC payout date, you will be
eligible to receive an EVC award for the 2005 award year, each such payment to
be determined under this Section 3(a) as if you had continued to be employed
through the applicable EVC payout date, and each such payment to be made at
the same time as if you had continued to be employed.
(b) Notwithstanding Section 3(a), if you resign as Chief Executive Officer
effective February 1, 2005 and continue to remain employed as Chairman of the
Board, you will not be eligible to participate in the EVC Plan for the 2005
award year as provided under Section 3(a), but you will participate in a
special Chairman Bonus Plan and your target bonus for 2005 will be $1,000,000.
The actual bonus paid to you for 2005, if any, will be determined by the
Committee in its sole discretion and will be based on such factors as it deems
appropriate. Your actual bonus payment, if any, will be made in cash at the
time of the award, subject to your election to defer receipt of all or any
portion of the bonus award in accordance with the terms of the Unisys
Corporation Deferred Compensation Plan (or any successor deferred compensation
program). Subject to the provisions of Sections 10 and 11 below, if you
continue to be employed with the Corporation through January 31, 2006, you
will be eligible to receive a bonus award for the 2005 award year determined
under this Section 3(b) as if you had continued to be employed through the
bonus payout date, such payment to be made at the same time as if you had
continued to be employed.
4. LONG-TERM INCENTIVE AWARDS. (a) You will be eligible to receive stock
option awards under the terms of the Unisys Corporation 2003 Long-Term
Incentive and Equity Compensation Plan ("2003 LTIP")(or any successor stock
option plan) and will receive stock option awards in each year in which such
awards are made to other executive officers generally. You will also be
eligible to receive long-term performance awards and restricted share/share
unit awards under the terms of the 2003 LTIP (or any successor thereto) in
each year in which such awards are made to executive officers generally. In
either case, such awards will be made on a basis no less favorable to you than
to other executives generally.
(b) In addition to any awards that you may receive under Section 4(a), on
February 1, 2005 you will be granted a performance-based restricted share
unit award under the terms of the 2003 LTIP with a value equal to $1,000,000.
The number of restricted share units awarded to you will be based on the "Fair
Market Value" (as defined in the 2003 LTIP) of Unisys common stock on such
date. The award will vest on the one-year anniversary of the effective date
of grant, provided that the performance goals established by the Committee
have been met, and will be subject to such other terms and conditions as are
deemed appropriate by the Committee.
5. BENEFIT PROGRAMS; PERQUISITES. You will receive all the supplemental
executive benefits associated with the position of Chairman and Chief
Executive Officer, including a company car allowance of $900 per month, and if
you continue to be employed by the Corporation after January 31, 2005, such
benefits will continue after January 31, 2005 through your termination of
employment. You also will be eligible for a membership in two approved
luncheon clubs, an annual executive physical, supplemental life insurance
equal to four times the sum of annual base salary plus target EVC (in addition
to the Corporation's Group Term Life Insurance), post-retirement life
insurance in an amount equal to the greater of $1,000,000 or two and one-half
times your annual base salary rate in effect on the date of this Agreement (or
any higher salary rate that may be in effect before your termination of
employment), umbrella personal liability insurance up to $5,000,000 and
contribution toward financial counseling services of $7,500 per year. Unisys
will, during your employment with the Corporation through January 31, 2005,
continue to provide you the long-term disability insurance provided by Lloyd's
of London as of the date of this Agreement (the "Supplemental LTD Policy"), on
a basis and with terms no less favorable than as provided at the date of this
Agreement, provided that the issuer of the Supplemental LTD Policy may be
changed by Unisys with your prior written agreement, not unreasonably to be
withheld. In addition, you and your eligible dependents will be eligible to
participate in all basic retirement, welfare (including post-retirement
medical and other welfare benefits) and other benefit arrangements generally
applicable to executive officers, in accordance with the terms of such
arrangements, provided, however, that effective February 1, 2005, you will no
longer be eligible to participate in any long-term disability plan sponsored
by the Corporation. You will be entitled to receive four weeks of vacation
each year. Reasonable expenses associated with the performance of the duties
of your position will be reimbursed in accordance with normal Unisys policies.
You are also eligible to join a country club of your choice and Unisys will
pay your initiation fees and annual dues. Unisys shall reimburse you for
reasonable legal expenses incurred by you in negotiating this Agreement.
6. SUPPLEMENTAL PENSION.
(a) You will be entitled to a pension benefit for your life fully vested
from your first day of employment and commencing on the first day of the month
following the termination of your employment, (provided, however, that in the
event termination is for "disability", as defined in Section 10, payment of
your benefit under this Section 6 shall begin on the first day of the month
following the date payments cease to be made to you under the Supplemental LTD
Policy, unless, at any time, the net after-tax benefit to you would be greater
under this Section 6 than under the Supplemental LTD Policy and, if
applicable, the Unisys Long-Term Disability Plan, in which case the benefit
under this Section 6 shall commence on the first day of the month following
the date at which your net after-tax benefit will be greater under this
Section 6), determined as follows:
FULL YEARS OF SERVICE ANNUAL ACCRUED BENEFIT
6 $860,000
7 or more $1,000,000
A "full year of service" shall be the period from September 23 of one year
through September 22 of the following year, commencing from September 23,
1997. The benefit provided to you under this Section 6 will be provided in
accordance with the terms of the Unisys Corporation Elected Officer Pension
Plan ("EOPP") as modified by the terms of this Agreement, and will be offset
by any pension benefit paid to you under the terms of the Unisys Pension Plan
(or any successor qualified pension plan) and the Unisys Supplemental Employee
Retirement Income Plan ("SERIP") (or any successor non-qualified excess
pension benefit plan). In the event that your termination is for
"disability", as defined in Section 9, and your benefits under this Section 6
have not commenced because you are receiving payments under the Supplemental
LTD Policy, you shall not be eligible to commence receipt of benefits under
either the Unisys Pension Plan or the SERIP until such time that you commence
receipt of benefits under the EOPP as modified under this Section 6. If
termination of employment occurs prior to the completion of seven full years
of service, your benefit will be determined (i) in accordance with the terms
of this Section 6 and the provisions of Section 10 or 11 of this Agreement if
applicable and (ii) if such termination of employment occurs other than on the
date a full year of service is completed, by increasing the annual accrued
benefit applicable to your then-completed full years of service by an amount
equal to a pro-rata portion of the difference between the annual accrued
benefit that would have been payable had you completed the current year of
service and the benefit payable with respect to your actual full years of
service. Such pro-rata portion will be based on the number of full months of
employment completed since your last full year of service divided by 12.
(b) Notwithstanding the foregoing, if you would receive a larger after-tax
benefit if calculated in accordance with Section 5.01 of the EOPP, the amount
of your benefit pursuant to this Section 6 will be calculated in accordance
with that Section of the EOPP, rather than Section 6(a) above.
(c) Your spouse will, upon your death, be entitled to a life annuity under
this Section 6 equal to 50% of the annual benefit (before offsets in
accordance with Section 6(a)) which you were receiving at the date of your
death (less any amounts due alternate payees under any qualified domestic
relations orders). If you die prior to commencement of your benefit under this
Section 6, your spouse will be entitled to such survivor's benefit based on
the assumption that you had retired and had been receiving retirement payments
at the time of your death based on your credited service to that date. Such
survivor's benefit shall be offset by any other survivor's pension benefit
provided to your spouse under the Unisys Pension Plan (or any other successor
qualified pension plan) and the SERIP (or any successor non-qualified excess
pension benefit plan).
(d) Except as otherwise provided in this Agreement, your pension benefit
shall be determined in accordance with the provisions of the EOPP as in effect
on the date of this Agreement, or as subsequently modified, if such
modifications are favorable to you. If, prior to January 31, 2005, (i) your
employment is terminated by the Corporation for "cause" (as defined in Section
11(c)) or (ii) you terminate your employment voluntarily, other than for
"disability" (as defined in Section 10) or "good reason" (as defined in
Section 11(c)), your benefit will be subject to suspension and forfeiture
under the provisions of Section 6.04 of the EOPP, provided, however, that (i)
service on the board of directors of other companies will not cause a
suspension or forfeiture of benefits under Section 6.04 of the EOPP; (ii)
service as an employee of or consultant to an entity a unit of which is in
competition with Unisys will not cause a suspension or forfeiture of benefits
under Section 6.04 of the EOPP, provided that it can be demonstrated to the
reasonable satisfaction of the Committee that procedures are in place to
assure that the unit that is in competition with Unisys and any director,
officer, employee, consultant or other representative of such unit cannot
directly or indirectly avail itself of your services, (iii) service as an
employee of or consultant to an entity that provides consulting services to
other entities, one or more of which are in competition with Unisys, will not
cause a suspension or forfeiture of benefits under Section 6.04 of the EOPP,
provided that it can be demonstrated to the reasonable satisfaction of the
Committee that procedures are in place to assure that no entity that is in
competition with Unisys nor any director, officer, employee, consultant or
other representative of such unit can directly or indirectly avail itself of
your services, (iv) "cause" in Section 6.04(b) of the EOPP shall be deemed to
be defined as provided in this Agreement; (v) your investment in securities
that are listed for trading on a national exchange or NASDAQ (provided that
your investment does not exceed 1% of the issued and outstanding shares of
stock) and your acquisition of a passive ownership interest in a non-public
company will not cause a suspension or forfeiture of benefits under Section
6.04 of the EOPP and (vi) no activity in which you engage while employed under
this Agreement which you have undertaken in the good faith belief that it is
in the best interests, or that it is not opposed to the best interests, of
Unisys shall be deemed the basis for suspending or forfeiting your benefits
under Section 6.04 of the EOPP. Your benefit shall not be subject to
suspension or forfeiture under any circumstances other than as provided in
this Section 6(d).
(e) Notwithstanding anything to the contrary, if any provision of this
Agreement is inconsistent with any term or provision of the EOPP, including
without limitation Section 6.04 thereof, the provisions of this Agreement
shall prevail, and if the EOPP is terminated, it shall be deemed to continue
for purposes of providing the benefit in this Section 6.
(f) Upon your termination of employment, the Corporation will purchase and
transfer to you (or to your spouse upon your death) an annuity, as provided in
this Section 6(f), unless prior to January 31, 2005, (1) your employment is
terminated by the Corporation for "cause" (as defined in Section 10(c)) or (2)
you terminate your employment voluntarily other than for "disability" (as
defined in Section 10), "good reason" (as defined in Section 11(c)) or an
"approved personal reason" (as defined in this Section 6(f)). The annuity
provided to you (or to your spouse upon your death) will be an individual
fixed annuity that, together with benefits payable from the Unisys Pension
Plan (or any successor qualified pension plan), will pay to you 40% of the
pension benefit, computed prior to offsets for payments due under the terms of
the Unisys Pension Plan and the SERIP, payable under this Section 6 (and/or
the appropriate survivor benefit to your spouse). The annuity will pay you a
monthly benefit for your life with a 50% surviving spouse benefit, will be
purchased from an insurance company rated at least AA or an equivalent rating
by at least two of the three following rating agencies, A.M. Best, Moody's and
Standard and Poor's, and will be subject to your reasonable review (or that of
your spouse or personal representative, in the event of your death or
disability) of the terms of the annuity contract, which will contain terms
regarding the nonassignability of the contract by the issuer in the ordinary
course of business without your agreement (or that of your spouse or personal
representative, in the event of your death or disability), and such other
terms as you may reasonably request upon the advice of counsel. The
Corporation shall be liable for the remaining 60% of the pension benefit
provided for in this Section 6. In addition, the Corporation will make a
gross-up payment to you (the "Section 6 gross-up payment") for federal, state
and local income and employment taxes in an amount such that after payment by
you of all such taxes imposed as a result of the transfer of the individual
annuity and the payment of the Section 6 gross-up payment, you will have been
reimbursed 100% by the Corporation for the amount of all such taxes, including
taxes on the Section 6 gross-up payment. Anything in this Section 6(f) to the
contrary notwithstanding, the Corporation will be liable for the benefits
payable to you (or your spouse) under the EOPP as modified by Section 6 of
this Agreement regardless of the circumstances of your termination, unless
such circumstances constitute a reason for suspension or forfeiture of
benefits under Section 6.04 of the EOPP, if applicable pursuant to Section
6(d). "Approved personal reason" means (i) you are advised by a licensed
physician that continuation of your employment will result in an immediate and
serious hazard to your health, (ii) the health of your spouse makes it
impossible for you, in your good faith judgment, to meet your obligations
under this Agreement and, at the same time, your responsibilities to your
spouse or (iii) such other circumstance that following your written request,
the Committee may conclude, in the reasonable exercise of its discretion,
warrants approval of such termination, pursuant to this Section 6(f), as a
termination for an "approved personal reason". If you intend to terminate
your employment voluntarily for purposes of an "approved personal reason", (y)
you need to provide the Committee at least 30 days' prior written notice of
your intent to terminate your employment, stating with specificity the reason
for your termination, and if the condition of your health or your spouse's
health is the reason, a detailed description of the medical condition that is
the reason for your termination, and (z) in such case, the Committee may, in
its reasonable discretion, request an independent medical examination of you
or your spouse, as applicable, by a licensed physician mutually agreed to
between you and the Corporation in order to verify the medical condition that
serves as the basis for your termination for an "approved personal reason".
7. PENSION REPLACEMENT AWARD. If you continue to be actively employed by the
Corporation on and after January 31, 2005, you will not be permitted to
receive pension payments commencing on February 1, 2005 under the terms of the
EOPP, as amended by Section 6 of this Agreement, the SERIP and/or the Unisys
Pension Plan. As a replacement for the pension payments that you will forego
as a result of your continuing to be employed by the Corporation on and after
February 1, 2005, the Corporation will establish a special deferred
compensation program and will credit to a memorandum account (established on
your behalf on the books of the Corporation) $83,333.33 per month, commencing
on February 1, 2005 and continuing through your termination of employment.
Under the terms of the deferred compensation program, the amounts credited to
your memorandum account will be credited with earnings and losses in
accordance with the applicable investment measurements selected by you. The
investment measurement options will be the same options available under the
Unisys Deferred Compensation Plan. Your account balance will be paid to you
commencing on your termination of employment either in a lump sum or in annual
installments, as elected by you in accordance with the procedures established
under the program.
8. SERVICE ON OTHER BOARDS. During the term of your employment hereunder,
you will render substantially all of your business time to the business
affairs of the Corporation. You may serve on the board of directors of other
companies and non-profit organizations as expressly approved by the Board of
Directors in its discretion.
9. MANHATTAN OFFICE. For the one-year period following your termination of
employment, the Corporation will provide you with an office and secretarial
support in a Unisys facility in Manhattan.
10. DEATH OR DISABILITY. If you die while employed or your termination of
employment is due to your becoming "disabled" (as defined below), you or your
estate will be entitled to the following:
(a) All restrictions on any outstanding restricted stock grant will
immediately lapse and your outstanding stock option grants will continue to
vest in accordance with the vesting schedule described in your stock option
agreements;
(b) If termination of employment or death occurs prior to the bonus payout
date for the previous bonus award year, you will be eligible to receive a
bonus award for such previous award year determined under Section 3 as if you
had continued to be employed through the bonus payout date, such payment to be
made at the same time that such bonus payment would have been made had you
continued to be employed, and, if you are eligible to participate in a bonus
plan for the year in which you terminate your employment, a bonus payment for
the year in which you terminate employment in an amount equal to a pro rata
portion, based on the period of service rendered in such year, of the bonus
amount paid for the previous year, payable as soon as practicable after your
death or your termination of employment;
(c) Subject to Section 5, any benefits available under the retirement,
welfare, incentive, fringe benefit, deferred compensation and perquisite
programs generally available to executive officers upon disability or death or
under the terms of this Agreement; and
(d) Any benefits available under Section 6, provided, however, that if your
termination is due to disability, you will continue to accrue service for
purposes of calculating your benefit under Section 6 until the earlier to
occur of (i) the date on which your disability ends or (ii) the date on which
you commence receipt of benefits under the EOPP as modified by Section 6.
You will be considered "disabled" if you are determined to be eligible
to receive benefits for Total Disability under the Supplemental LTD Policy in
accordance with the procedures of the Supplemental LTD Policy, even if you are
no longer entitled to receive benefits under the Policy pursuant to section 5.
If you become disabled, you will be entitled to the benefits described in this
Section 10 and not those described in Section 11.
11. TERMINATION OF EMPLOYMENT. (a) Your employment may be terminated by the
Corporation at any time with or without cause. In the event that you are
terminated for "cause" (as defined below) or you terminate your employment for
other than "good reason" (as defined below), no further amounts will be paid
to you hereunder except as otherwise provided under the terms of this
Agreement, including, without limitation, Section 6 of this Agreement, and
under the normal terms of the retirement, welfare, incentive, fringe, and
perquisite programs in which you participated at your date of termination.
Your voluntary termination of your employment shall not be deemed a violation
of this Agreement.
(b) Upon termination by the Corporation without cause or your termination
for good reason, you will be entitled to the following:
(1) If your termination occurs before February 1, 2005, you will continue
to receive your base salary (at its then current rate on the date of
termination) for a period of twelve months following your termination of
employment and if your termination occurs on or after February 1, 2005, you
will continue to receive your base salary (at its then current rate on the
date of termination) payable from your date of termination through January 31,
2006 as if you had continued to work through such date. Such termination
payments will be paid in the same manner and at the same times as the base
salary payments would have been paid during employment and the period during
which such payments are to be made will be referred to as the "Salary
Continuation Period";
(2) If termination of employment occurs prior to the bonus payout date for
the previous bonus award year, you will be eligible to receive a bonus award
for such previous award year in an amount determined under Section 3 as if you
had continued to be employed through the bonus payout date. Such payment
will be made at the same time that such bonus payment would have been made had
you continued to be employed;
(3) A bonus payment for the year in which such termination occurs,
provided that you were eligible to participate in a bonus plan for such year,
in an amount equal to your target bonus payment or percentage, as applicable,
for the year in which such termination occurs. Such payment will be made
promptly following your termination of employment;
(4) If such termination of employment occurs before February 1, 2005, an
annual bonus award payable for the one-year period following your termination
of employment in an amount equal to your target bonus percentage as of your
date of termination times the payments made to you under Section 11(b)(1)
during such one-year period. Such payment will be made promptly following the
expiration of the one-year period;
(5) Continued participation, at the same costs applicable to active
employees, through the Salary Continuation Period, in the Unisys Medical and
Dental Plans (or, if such participation is prohibited by applicable law or the
terms of the plans, participation in arrangements that will provide benefits
substantially similar to those available under the Unisys Medical and Dental
Plans) for you and your eligible dependents, subject, however, to the
generally applicable terms of such plans;
(6) Any other benefits available under this Agreement or under the
retirement, welfare, incentive, fringe benefit, deferred compensation and
perquisite programs generally available to executive officers upon termination
of employment under similar circumstances;
(7) Immediate and full vesting in, and lapse of any remaining restrictions
on, all stock options, restricted share and other awards made under the 1990
Unisys Long-Term Incentive Plan or 2003 LTIP (or under any successor incentive
plan thereto); for purposes of stock option, SAR and other equity-based award
exercise rights under the 1990 Unisys Long-Term Incentive Plan or 2003 LTIP
(or any successor incentive plan thereto), your date of termination will be
treated as a Normal Retirement Date as defined therein; and
(8) Your benefit under the EOPP, as modified under Section 6 of this
Agreement, will be calculated as if you had continued to be employed for one
year following your date of termination.
(c) For purposes of this Section 11, "cause" means (1) in carrying out your
duties, you engage in conduct that constitutes willful gross neglect or
willful gross misconduct resulting, in either case, in material economic harm
to the Corporation, unless you believed in good faith that such action or non-
action was in, or not opposed to, the best interests of the Corporation or (2)
your conviction of a felony involving moral turpitude. You will not be
terminated for "cause" under Section 11(c)(1) unless (A) the Corporation has
provided you with written notice stating the basis for the termination and you
have been given fifteen days to cure the basis of such claim and (B) you have
been given the opportunity for a hearing before the Board of Directors and,
after such hearing, at least two-thirds of the Board members who are not
employees of the Company vote in favor of your termination for "cause". "Good
reason" means (i) a reduction in your aggregate compensation target (base
salary plus EVC or bonus target), as such amounts may be increased during the
term of this Agreement or a material reduction of any employee benefit enjoyed
by you, unless such reduction is due to a reduction in compensation or
benefits generally applicable to executive officers or as otherwise provided
in this Agreement (ii) a reduction in your duties or authority, a change in
reporting structure such that you report to someone other than the Board of
Directors, or your removal as Chairman of the Board or Chief Executive Officer
of the Corporation or its successor, except as otherwise provided in this
Agreement, unless such reduction, change or removal is (x) for cause, as
defined above, (y) is done with your written consent, or (z) is on account of
your inability to substantially perform your duties for an aggregate of 90
days within any consecutive 12 month period due to your becoming "disabled"
(within the meaning of the Supplemental LTD Policy, provided that such
determination will be made in accordance with the procedures of the
Supplemental LTD Policy after the 90-day period described in this Section
11(c)(ii)(z), even if you are no longer entitled to receive benefits under the
Policy pursuant to section 5), and provided that your resignation occurs
within 90 days after such reduction, change or removal or (iii) the failure of
the Corporation to obtain the assumption in writing of its obligation to
perform this Agreement by any successor to all or substantially all of the
assets of the Corporation within 15 days after the effective date of a merger,
consolidation, sale or similar transaction, unless you consent to the
Corporation's not obtaining such assumption. Notwithstanding the foregoing,
if there is a reduction in your duties or authority, a change in your
reporting structure and/or you have been removed as Chairman and/or Chief
Executive Officer as a result of becoming disabled under this Section
11(c)(ii)(z) before February 1, 2005, but you do not qualify for long-term
disability benefits under the Supplemental LTD Policy after the six-month
period required in the Policy, then you shall be entitled to terminate your
employment for "good reason" provided that you make yourself available to
return to work promptly after the determination is made that you are not
"disabled" and further provided that upon your return to work, the Corporation
does not restore the duties, authority, and/or reporting structure that were
in place before you became disabled under this Section 11(c)(ii)(z), except as
otherwise provided under this Agreement, and does not restore your position as
Chairman, and Chief Executive Officer, or, if you make yourself available to
return to work after January 31, 2005, does not restore your position as
Chairman.
(d) The amounts payable to you under Section 11(b)(1) following your
termination of employment will be reduced by the amount of cash compensation,
if any, earned by you for services rendered to any other entity as an
employee, independent contractor, consultant, officer, director, or in any
other capacity, provided however, that (i) no such reduction will be applied
during the two-year period following your termination of employment, and (ii)
compensation earned by you for service as a director of any corporation will
not cause such a reduction to the extent such compensation is based on the
same fee structure as is received by all other directors thereof for Board
service. You will promptly advise the Senior Vice President - Worldwide Human
Resources of the Corporation of any facts that could cause such a reduction in
the amounts payable to you under Section 11(b)(1). Upon written notice from
the Corporation, you will promptly reimburse to the Corporation any
overpayments made to you as a result of your receipt of the cash compensation
described in the first sentence of this Section 11(d), provided that the
amount you are required to reimburse shall be on an after-tax basis (that is
the amount determined, after taking into account any taxes incurred by you on
such overpayment less the tax benefit, if any, you may derive from repayment
to the Corporation). Notwithstanding anything herein to the contrary, you
shall have no obligation to seek other employment.
(e) Payments or benefits under this Agreement are not intended to duplicate
payments or benefits under any other Unisys agreement or severance program,
including, without limitation, your Executive Employment Agreement. To the
extent that you may be entitled to receive duplicate payments or benefits
under this and any other Unisys agreement or program, the provisions of that
agreement or program which is most favorable to you or provides you with the
greater payment or benefit shall be effective. Solely for the avoidance of
doubt, the reference to the term "SERP" in Section 6(a)(i)(C) of your
Executive Employment Agreement includes, but is not limited to, the Unisys
Supplemental Executive Retirement Income Plan and the EOPP, as modified by
Section 6 of this Agreement.
12. CERTAIN ADDITIONAL PAYMENTS BY THE CORPORATION. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Corporation to or for your benefit
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 12) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by you with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then you shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by you of all federal, state and local taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, you retain
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments, including the Gross-up Payment.
(b) Subject to the provisions of Section 12(c), all determinations required
to be made under this Section 12, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
a nationally recognized accounting firm mutually agreed to by the parties (the
"Accounting Firm") which shall provide detailed supporting calculations both
to the Corporation and you within 15 business days of the receipt of notice
from you that there has been a Payment, or such earlier time as is requested
by the Corporation. All fees and expenses of the Accounting Firm shall be
borne solely by the Corporation. Any Gross-Up Payment, net of any taxes
(including income and excise taxes) required to be withheld, as determined
pursuant to this Section 12, shall be paid by the Corporation to you within
five days of the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by you, it shall
furnish you with a written opinion that failure to report the Excise Tax on
your applicable federal income tax return would not result in the imposition
of a negligence or similar penalty. Any determination by the Accounting Firm
shall be binding upon the Corporation and you. As a result of the uncertainty
in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Corporation should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Corporation exhausts its remedies pursuant
to Section 12(c) and you thereafter are required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Corporation to or for your benefit.
(c) You shall notify the Corporation in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Corporation of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after you are informed in
writing of such claim and shall apprise the Corporation of the nature of such
claim and the date on which such claim is requested to be paid. You shall not
pay such claim prior to the expiration of the 30-day period following the date
on which the IRS gives such notice to the Corporation (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due). If the Corporation notifies you in writing prior to the expiration of
such period that it desires to contest such claim, you shall:
(i) give the Corporation any information reasonably requested by the
Corporation relating to such claim,
(ii) take such action in connection with contesting such claim as the
Corporation shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Corporation,
(iii) cooperate with the Corporation in good faith in order effectively to
contest such claim, and
(iv) permit the Corporation to participate in any proceedings relating to
such claim;
provided, however, that the Corporation shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold you harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses including without limitation, reasonable legal
fees. Without limitation on the foregoing provisions of this Section 12(c),
the Corporation shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
you to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and you agree to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Corporation shall determine; provided,
however, that if the Corporation directs you to pay such claim and sue for a
refund, the Corporation shall advance the amount of such payment to you, on an
interest-free basis and shall indemnify and hold you harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for your
taxable year with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the Corporation's
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and you shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by you of an amount advanced by the Corporation
pursuant to Section 12(c), you become entitled to receive any refund with
respect to such claim, you shall (subject to the Corporation's complying with
the requirements of Section 12(c)) promptly pay to the Corporation the amount
of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by you of an amount advanced
by the Corporation pursuant to Section 12(c), a determination is made that you
shall not be entitled to any refund with respect to such claim and the
Corporation does not notify you in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
13. CONDUCT AFTER TERMINATION. From and after the termination of your
employment for any reason:
(a) For a period of 24 months from the date of termination of your
employment, you shall not engage in or become employed as a business owner,
employee, agent, representative or consultant in any activity which is in
competition with any line of business of Unisys (or its subsidiaries or
affiliates) existing as of your termination date, except with the express
prior written consent of the Committee, provided, however, you shall be deemed
not to be in competition for purposes of Section 13 of this Agreement (1) if
you serve on boards of directors of other companies, (2) if you are an
employee of or a consultant to an entity a unit of which is in competition
with Unisys, provided that it can be demonstrated to the reasonable
satisfaction of the Committee that procedures are in place to assure that any
unit that is in competition with Unisys and any director, officer, employee,
consultant or other representative of such unit cannot directly or indirectly
avail itself or themselves of your services, (3) if you are an employee of or
a consultant to an entity that provides consulting services to other entities,
one or more of which are in competition with Unisys, provided that it can be
demonstrated to the reasonable satisfaction of the Committee that procedures
are in place to assure that no entity that is in competition with Unisys nor
any director, officer, employee, consultant or other representative of such
unit can directly or indirectly avail itself or themselves of your services,
(4) if you invest in securities which are listed for trading on a national
exchange or NASDAQ and your investment does not exceed 1% of the issued and
outstanding shares of stock or (5) if you acquire an ownership interest in a
non-public company, provided that such ownership represents a passive
investment. If you intend to acquire an ownership interest in, or become
employed as a business owner, employee, agent, representative or consultant
with, a non-public company that is owned 100% by members of your family, you
will not be deemed to be in competition for purposes of this Section 13 if you
receive the express prior written consent of the Board of Directors, which
consent will not be unreasonably withheld;
(b) For a period of 24 months from the date of termination of your
employment, you shall not negatively comment publicly or privately about
Unisys (or its subsidiaries or affiliates), any of its products, services or
other businesses, its present or past Board of Directors, its officers, or
employees, nor shall you in any way discuss the circumstances of your
termination of employment, except that (1) you may give truthful testimony
before a court or governmental agency, (2) you may make comments about the
circumstances of your termination with the prior written approval of the
Corporation, (3) you may respond publicly to any untrue public comment made by
the Corporation, (4) you may discuss the circumstances of your termination
with your attorneys, your financial and tax advisers, members of your family
and any prospective employer, provided that you take all necessary steps to
assure that each such person does not, as a result of your discussions with
them, make any such negative comment prohibited under this Section 13(b) and
(5) you may make comments to an arbitrator or court for the purpose of
determining or enforcing your rights under this Agreement or any entitlement
under any agreement, plan, award, policy or program with or sponsored by
Unisys (or any of its subsidiaries or affiliates);
(c) For a period of eighteen months from the date of the termination of
your employment, you shall not induce or attempt to induce any employee of
Unisys (or any of its subsidiaries or affiliates) to render services for any
other person, firm or business entity, except that you will be permitted to
give recommendations, if requested, for employees seeking employment outside
of Unisys;
(d) (1) You shall not use, furnish or divulge to any other person, firm or
business entity any confidential information relating to Unisys business (or
that of any of its subsidiaries or affiliates), or any trade secrets,
processes, contracts or arrangements involved in any such business, except (A)
when required to do so by a court of law, by any governmental agency having
supervisory authority over the business of Unisys or by any administrative or
legislative body (including a committee thereof) with apparent jurisdiction to
order you to divulge, disclose or make accessible such information, (B) to an
attorney as necessary to enforce your rights under this Agreement, or any
other agreement, plan, policy, award or program with or sponsored by Unisys or
(C) after such information becomes known to the public or within the relevant
industry to which such confidential information pertains.
(2) For a period of 24 months following the date of termination of your
employment, Unisys (and its subsidiaries and affiliates) agrees not to
negatively comment publicly or privately about you or the circumstances of
your termination of employment, except (A) Unisys may give truthful testimony
before a court or governmental agency, (B) Unisys may make comments about the
circumstances of your termination with your prior written approval, (C) Unisys
may respond publicly to any untrue public comment made by you, (D) Unisys may
discuss the circumstances of your termination with its attorneys and its
financial and tax advisers, provided that it takes reasonable steps to
assure that each such person does not, as a result of Unisys discussions with
them, make any such negative comment prohibited under this Section 13(d) and
(E) Unisys may make comments to an arbitrator or court for the purpose of
determining its rights under this Agreement or any agreement, plan, award,
policy or program with or sponsored by Unisys (or any of its subsidiaries or
affiliates).
(3) You and Unisys mutually agree that the obligations contained in this
Section 13 are reasonable and necessary for each party's mutual protection and
that one party cannot be reasonably or adequately compensated in damages in an
action at law in the event that the other party breaches such obligations. You
and Unisys expressly agree that, in addition to any other rights or remedies
which each may possess, each shall be entitled to injunctive and other
equitable relief to prevent a breach of this Section 13 by the other party,
including a temporary restraining order or temporary injunction from any court
of competent jurisdiction restraining any threatened or actual violation, and
you and Unisys each consents to the entry of such an order and injunctive
relief and waives the making of a bond as a condition for obtaining such
relief. Such right shall be cumulative in addition to any other legal or
equitable rights and remedies the parties may have. In addition, in the event
that you should materially breach your obligations under Section 13(b) or you
should breach any other obligation described in this Section 13, Unisys shall
have the right to terminate any remaining payments due under Section 11(b)(1)
and (4).
(e) (1) With respect to the last paragraph of Section 6(e)(3) of the 1990
Long-Term Incentive Plan, if applicable, the Corporation agrees that (A) the
term "cause" shall be construed as defined in this Agreement, (B) in the event
that any action is contemplated under such Section, you shall be provided with
a written notice stating (i) with specificity, the nature of the alleged
conduct that is deemed to be "materially adverse or detrimental to the
interests of the Company" and, if such alleged conduct is curable, (ii) the
steps, if any, you should reasonably take to cure such alleged conduct and
(iii) the period of time by which such alleged violation must be cured (which
time period shall not be less than 30 days after receipt of such written
notice). No action shall be taken by the Senior Vice-President, Worldwide
Human Resources or any other person pursuant to such Section 6.3(e)(3) after
the expiration of such time period unless you have been given the opportunity
to be heard by the Committee and there is a vote of two-thirds of all non-
employee members of the Committee, determining that the alleged conduct is
materially adverse or materially detrimental to the interests of the
Corporation and instructing the Senior Vice President, Worldwide Human
Resources or such other person to take such action.
(2) The restrictive covenants contained in this Section 13 will
supersede and replace any similar covenants or provisions relating to the
revocation, suspension or restriction of benefits or entitlements for conduct
deemed adverse or detrimental to the interests of the Corporation in any plan,
program, policy or arrangement sponsored by the Corporation or any of its
subsidiaries or affiliates. Other than as expressly set forth in this
Agreement, there shall be no restrictions on your activities following
termination of your employment, except restrictions imposed by law.
14. PLAN DOCUMENTS; CODE OF ETHICAL CONDUCT. Each of the above-described
benefits which are more fully described in an applicable Unisys plan document
(including, without limitation EVC, stock option and restricted share award
documents) are subject to the terms of such plan or award document (as may be
amended by Unisys from time to time) and, except as expressly provided in this
Agreement, each such plan document or award document will govern the benefit
payable hereunder and thereunder. In addition, you agree that the Unisys
policies and procedures applicable to all Unisys employees, including, without
limitation, the Unisys Code of Ethical Conduct, shall be applicable to you as
in effect as of the date of this Agreement.
15. SUCCESSORS. This agreement shall be binding upon Unisys and its
successors and assigns.
16. INDEMNIFICATION. You will be entitled to the indemnification rights
contained in the Restated Certificate of Incorporation of Unisys Corporation,
dated September 27, 1999, the By-Laws of Unisys Corporation, dated July 19,
2001 and the Indemnification Agreement between you and the Corporation dated
as of September 23, 1997 as any of them may be amended from time to time.
Unisys agrees to maintain directors and officers liability insurance covering
you to the extent that Unisys provides such coverage for its other directors
and officers.
17. MISCELLANEOUS. Except as expressly set forth herein, this Agreement
constitutes the entire agreement between the parties concerning the subject
matter hereof and supersedes all prior agreements including, without
limitation, the employment agreements dated September 23, 1997 and April 25,
2002. For the avoidance of doubt, your Indemnification Agreement dated as of
September 23, 1997 and your Executive Employment Agreement dated as of
September 23, 1997 continue in full force and effect. Any reference to your
employment agreement dated September 23, 1997 or April 25, 2002 in the
Executive Employment Agreement shall be deemed to refer to this Agreement. No
provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by you
and the Chairman of the Committee or his designee. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the Commonwealth of Pennsylvania without giving effect
to the provisions thereof relating to conflicts of laws.
18. NO MITIGATION; NO OFFSET. In the event of any termination of your
employment hereunder, you shall be under no obligation to seek other
employment or otherwise mitigate the obligations of the Corporation under this
Agreement, and, except as provided in Section 11(d) above, there shall be no
offset against amounts or benefits due to you under this Agreement or
otherwise on account of (a) any claim that the Corporation may have against
you or (b) any remuneration or other benefit earned or received by you after
such termination, except as otherwise provided under the applicable terms of
any agreement, plan, award, policy or program with or sponsored by Unisys (or
any of its subsidiaries or affiliates), subject to the terms of this
Agreement, including, but not limited to, Sections 6(d) and 13.
19. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
20. ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in
Philadelphia, Pennsylvania in accordance with the rules of the American
Arbitration Association. Any arbitration award will be final and conclusive
upon the parties, and a judgment enforcing such award may be entered in any
court of competent jurisdiction. Costs of arbitration shall be borne by
Unisys. Unless the arbitrator determines that you did not have a reasonable
basis for asserting your position with respect to the dispute in question,
Unisys shall also reimburse you for your reasonable attorneys' fees incurred
with respect to any arbitration.
21. CORPORATE AUTHORITY. Unisys represents and warrants that it is fully
authorized and empowered to enter into this Agreement. This Agreement and any
necessary determination under or modification of, any plan, program or
arrangement of the Corporation required by this Agreement, have been
authorized by the Board and approved by the Committee.
If the foregoing sets forth our agreement with you, please sign and return to
us the enclosed copy of this Agreement.
Very truly yours,
UNISYS CORPORATION The foregoing is accepted:
By: /s/ Henry C. Duques /s/ Lawrence A. Weinbach
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Henry C. Duques; Chairman Lawrence A. Weinbach
Compensation Committee
Board of Directors