UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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Message from our Chair and
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Table of Contents
Table of Contents
About Unisys
Challenging the status
quo, every day.
Unisys is a global technology solutions company dedicated to driving breakthroughs for our clients.
We push the boundaries of what’s possible, powering the performance and profitability of organizations around the world.
Digital workplace solutions that bolster employee experienceresonate with clients, and empower workforces. Cloud, applications and infrastructure solutions that modernize apps while boosting security. Enterprise computing solutions that embrace innovation. And business process solutions that optimize processes to fuel productivity. Across our solutions, clients view us as a trusted partner to help lead their organizations into the future.
we have momentum for 2024.”
Table of Contents
Fiscal year 2023 Proxy Statement | 1 |
Letter to Stockholders
March 24, 2023
Dear Fellow Stockholder:
It is my pleasure to invite you to the Unisys 2023 Annual Meeting of Stockholders. This year’s meeting will be held on Friday, May 5, 2023, and will begin at 8:00 a.m., Eastern time. To allow all of our stockholders, regardless of their physical location, to participate more easily in the meeting, the annual meeting once again will be held entirely online. You will be able to attend and participate in the annual meeting online by visiting www.virtualshareholdermeeting.com/UIS2023, where you will be able to listen to the meeting live, submit questions, and vote.
2022 was a year of macroeconomicgrowth and geopolitical uncertainty that posed unexpected challengesopportunity, strengthened by New Business — which we define as new logo, new scope, and expansion — and the quality of our pipeline. We exceeded our upwardly revised revenue and profitability guidance and delivered strong growth in contract signings. And, we are encouraged by client engagement with our Next-Gen Solutions, and the size of our backlog and qualified pipeline in 2024.
Unisys is driven by innovation, enhanced value for existing and new clients and our stockholders and the creation of a great experience for our employees.
Our accomplishments in fiscal year 2023 speak volumes about our team and our ability to
our company and to our market. We held our revenue flat on a constant currency basis and made progress on many strategic fronts, building a foundationpower breakthroughs for the
future. We grew our higher growthworld’s leading organizations with services and
margin Next-Gen Solutions. We reinvigorated our sales organization with a new leadership structuresolutions in cloud, data and
the expansion of our Unisys alliance partners network. Finally, we successfully completed our most significant brand transformation since 1986 with the launch of the new Unisys brand.artificial intelligence, digital workplace, logistics and enterprise computing. With a focus on progress, our new
Unisys brand embodies our entrepreneurial spirit and the aspirations we know Unisys can achieve for our company, our clients and
for you, our stockholders.
Unisys’ strong culture, focus on innovation and technology and commitment to stockholders provide a solid foundation to grow our business. We ended 2023 as a stronger company, and with a dynamic pipeline and solutions that resonate with clients, we have momentum for 2024. As we look ahead, our management team continues to focus on the future of our business and ensuring we deliver long-term value to our stockholders.
Please join us at our 2024 Annual Meeting of Stockholders on Wednesday, May 1, 2024, at 8:00 a.m., Eastern Time, via Webcast at www.virtualshareholdermeeting.com/UIS2024.
We are continuing our practice of making proxy materials available to our stockholders online. We believe that doing so allows us to provide you with the information you need, while reducing our printing and mailing costs and helping to conserve natural resources. Stockholders who continue to receive paper copies of proxy materials may help us to reduce costs further by opting to receive future proxy materials by email. You may register for electronic delivery of future proxy materials by following the instructions on either the enclosed proxy/voting instruction card or the Notice of Internet Availability of Proxy Materials that you received in the mail.
Your vote is important. Whether or not you
plan to attend the
annual meeting,2024 Annual Meeting, I
urgeencourage you to
take a momentvote via the internet, telephone or mail to
vote on the items in this year’s proxy statement. Voting takes only a few minutes, and it will ensure
that your shares are
represented at the meeting.
properly represented.
Peter
A. Altabef
Chair and Chief
Notice of Annual Meeting
of Stockholders
 | | | | May 5, 2023 (Friday)1, 2024 (Wednesday)8:00 AM (Eastern Time) |  | | | | | Virtual Meeting You will be able to attend and participate in the annual meeting online by visiting
Online, via Webcast at www.virtualshareholdermeeting.com/UIS2023
UIS2024 |  | | | | | Record holders of Unisys common stock at the close of business on March 6, 20234, 2024 | |
Unisys Corporation (“Unisys” or the “Company”) will hold its 20232024 Annual Meeting of Stockholders (the “Annual Meeting”) to:
| Proposals | | | | | | Board Recommendation | | | For Further Details | |
Proposal 1 | | | Elect eleven directors identified in the attached Proxy Statement | | | “FOR”each director nominee |  | | | |
Proposal 2 | | | Approve a non-binding advisory resolution approving the compensation of the Company’s named executive officers | | | “FOR” | | | | |
| | | | | | |
Proposal 2
| | Hold an advisory vote to approve executive compensation | | “FOR” | | Page 30 |
| | | | | | |
| | | | | | |
| Proposal 3 | | Hold an advisory vote on the frequency of holding an advisory vote on executive compensation | | Every “ONE YEAR” | | Page 64 |
| | | | | | |
| | | | | | |
Proposal 4 | | Ratify the selection of the Company’s independent registered public accounting firm for 20232024 | | | “FOR” | | | | |
Proposal 4 | | | | | | |
| | | | | | |
Proposal 5 | | Approve the Unisys Corporation 20232024 Long-Term Incentive and Equity Compensation Plan | | | “FOR” | | | | |
Stockholders
willmay also transact any other business properly brought before the
meeting.Annual Meeting.
Holders of record of Unisys common stock at the close of business on March 4, 2024, are entitled to vote at the Annual Meeting and any adjournment or postponement thereof.
On or about March 22, 2024, we will mail our stockholders a notice (the “Notice”) that explains (i) how to access our 2024 Proxy Statement (the “Proxy Statement”) and Annual Report on Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 26, 2024 (the “Annual Report”), (ii) how to vote, and (iii) how to attend the Annual Meeting. The Notice will also provide instructions on how to request a paper copy of these documents.
To allow all of our stockholders, regardless of their physical location, to participate more easily in the meeting, the annual meetingAnnual Meeting once again will be held entirely online. If you plan to attend the annual meetingAnnual Meeting online, you will need the 16-digit control number included in your Notice, on your proxy card, or on the instructions that accompany your proxy materials. We believe the virtual meeting format affords our stockholders an opportunity for meaningful participation. You will be able to attend and participate in the annual meetingAnnual Meeting online by visiting www.virtualshareholdermeeting.com/UIS2023,UIS2024, where you will be able to listen to the meeting live, submit questions, and vote. Only record holders
In accordance with SEC rules, we are furnishing proxy materials to our stockholders via the internet. You may read, print or download our 2024 Proxy Statement and Annual Report, including the financial statements for 2023, at www.proxyvote.com.
We hope you will attend our virtual Annual Meeting. Regardless of Unisyswhether you plan to attend, it is important that your shares are represented and voted at the Annual Meeting. If you received a paper copy of the proxy card or voting instruction form by mail, you can vote by signing, dating and returning that document. You can revoke your proxy at any time before it is exercised in the manner set forth in “Annual Meeting Information,” which begins on page 79 of this Proxy Statement.
Registered stockholders and participants in plans holding shares of our common stock
atmay vote by telephone, by internet, or by mail. To use these convenient services, follow the
closesteps detailed in the voting instructions that are attached to the proxy card. Beneficial owners of
businessshares of our common stock held in street name through a bank or brokerage account should follow the voting instructions they receive from the institution that holds such shares. Brokers may not vote your shares on
March 6, 2023, willthe election of directors, the non-binding proposal regarding the compensation of our named executive officers or the approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan without specific instructions as to how to vote. Please return your proxy card so your vote can be
entitled to vote at the annual meeting.counted as promptly as possible.
By Order of the Board of Directors,
Claudius Sokenu
Kristen Prohl
Senior Vice President, General Counsel,
Corporate
Secretary and Chief AdministrativeAdministration Officer
Blue Bell, Pennsylvania
How to Vote
 | |  | |  | | | | |
Internet
www.proxyvote.com
| Internet
www.proxyvote.com or scan the Quick Response “QR” Barcode on your proxy card | Telephone
1-800-690-6903
| | Telephone
1-800-690-6903
as noted on your proxy card | | | Mail
Mark, sign, date and promptly mail the enclosedyour proxy card in the provided postage-paid envelope | |
| | | | |
Your vote is important. Whether or not you plan to attend the annual meeting,Annual Meeting, please promptly submit your proxy or voting instructions by Internet, telephone, or mail. For specific instructions on how to vote your shares, please refer to the instructions found on the Notice of Internet Availability of Proxy Materials you received in the mail or, if you received a paper copy of the proxy materials, the enclosed proxy/voting instruction card. | | | | Important Notice Regarding the Availability of Proxy Materials for the StockholderAnnual Meeting of Stockholders to be Held on May 5, 2023: 1, 2024:The Company’s proxy statementProxy Statement and annual reportAnnual Report are available at www.proxyvote.comwww.proxyvote.com. | |
Forward-Looking Statements
These proxy materials contain information that may constitute “forward-looking” statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events and include any statement that does not directly relate to any historical or current fact. Words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “projects” and similar expressions may identify such forward-looking statements. All forward-looking statements rely on assumptions and are subject to risks, uncertainties and other factors that could cause the Company’s actual results to differ materially from expectations. Factors that could affect future results include, but are not limited to, those discussed under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Any forward-looking statement speaks only as of the date on which that statement is made. The Company assumes no obligation to update any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made.
4 |  | | | 1 | |
This summary highlights selected information contained elsewhere in this Proxy Statement.relevant for voting at the Annual Meeting. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this proxy statement.Proxy Statement.
About Unisys
2023 Overview — Where We Are Today
We are a global technology solutions company that powers breakthroughs for the world’s leading organizations. Our clients rely on us to help solve many of their toughest business and technology challenges in highly complex and regulated environments. We partner with clients to transform the mission-critical systems that support their daily operations in a rapidly evolving digital age. We believe that agile technology can inspire breakthroughs that propel organizations into the future every day. No matter the industry, we work together with clients around the world to drive innovation through digital workplace, cloud, enterprise computing and business process solutions. From our origins dating back to 1873 through the formation of Unisys in 1986, we have built a legacy of innovation and reputation of trust.
In 2023, we increased revenue during a year of geopolitical and macroeconomic uncertainty. We are advancing Artificial Intelligence (“AI”) adoption for clients across various industries and infusing generative AI into our solutions. We help clients leverage AI to optimize their business outcomes and measure their return on investment. One of the our innovative products, currently being piloted, is Unisys Logistics Optimization™, which leverages AI and quantum annealing to boost the effectiveness and profitability of cargo transportation. We are constantly innovating and establishing trust with investors, clients and industry analysts. We are demonstrating that our strategy is solid, and we are on track to achieve success in growing the pipeline, closing deals, managing costs and pushing the boundaries to continue our progress in 2024.
Our new Unisys brand is all about progress. It’s about Unisys being the catalyst that pushes people and organizations to break through to the next big innovation. The brand launch aims to increase awareness and transform perception of Unisys and our innovative solutions with our clients, prospects, industry analysts, and third-party advisors. We believe our new brand campaign will influence key sales metrics, such as leads, pipeline, wins and revenue growth over time.
How Did We Perform in 2023?
In 2023, we exceeded our upwardly revised full-year guidance ranges. During the year, we grew our backlog, signed 18% more New Business total contract value (“TCV”) than the prior year, and expanded our New Business pipeline. We progressed towards our long-term financial goals and are particularly pleased with our full-year free cash flow performance, which improved by nearly $70 million year-over-year.
During 2023, our revenue increased 1.8% year-over-year on a reported basis, an increase of 1.6% in constant currency. Operating profit margin and non-GAAP operating profit margin were 3.8% and 7.0%, respectively. Net loss as a percentage of revenue and adjusted EBITDA as a percentage of revenue were (21.4)% and 14.2% respectively. For a reconciliation of our GAAP measures to non-GAAP measures, please see Appendix A to this Proxy Statement and the earnings release attached as Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on February 21, 2024 (but such report shall not be deemed to be incorporated by reference to this Proxy Statement).
| | | | | Revenue | | | Operating Profit
Margin | | | Non-GAAP
Operating
Profit Margin | | | Net Loss as a
Percentage of
Revenue | | | Adjusted EBITDA as
a Percentage of
Revenue | |
| | 2023 Actual | | | $2,015.4M | | | 3.8% | | | 7.0% | | | (21.4)% | | | 14.2% | |
The global GAAP pension deficit increased during 2023 by approximately $160 million to approximately $700 million. Approximately, $70 million of this increase was due to the purchase of insurance contracts in our overfunded UK plans, using plan assets, as the first step towards an anticipated full-risk transfer of those plans. The remainder of the deficit increase was due primarily to lower discount rates. During the year, we executed our pension management strategy with two annuity purchases that transferred an aggregate of approximately $500 million in pension liabilities to a third-party insurer. These transactions were funded with plan assets.
In 2023, we had operating cash flow of $74.2 million, ($4.5) million of free cash flow and $43.5 million of pre-pension free cash flow. We had approximately $387.7 million in cash and cash equivalents on the balance sheet as of December 31, 2023.
| | Proposal 1 | | | | | | | | |
| | | |
| Election of Directors | | |
 | | | | The Board recommends a vote FOReach director nominee. |  | | ![[MISSING IMAGE: ic_forarrow-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-037875/ic_forarrow-pn.jpg) See page 10 |
| 9 | | | | |
Ensuring that the Board has the optimal balance of skills, viewpoints, perspectives and experience is a top priority of the Board and the Nominating and Corporate Governance Committee. The nominees for whom you are being asked to vote are a diverse group of highly qualified leaders with a broad range of skills and business and industry experience. Our Board nominees also reflect our commitment to diversity. For additional information about the diversity, experience, skills and qualifications of each individual nominee, please see the charts on pages 9 and 10 and biographical data beginning on page 12.
The following provides summary information about each director nominee.
| | | | Director | Committee Membership |
| Name and Primary Occupation | Age | Since | AFC | CHRC | NCGC | SRC |
 | Peter A. Altabef, CHAIR OF THE BOARD Chief Executive Officer, Unisys Corporation | 63 | 2015 | | | | |
 | Nathaniel A. Davis, LEAD INDEPENDENT DIRECTOR IND Former Chairman of the Board and Chief Executive Officer, Stride, Inc. | 69 | 2011 | | | | |
 | Matthew J. Desch IND Chief Executive Officer, Iridium Communications Inc. | 65 | 2019 | | M | | |
 | Philippe Germond IND Partner, Barber Hauler Capital Advisers | 66 | 2016 | | | C | |
 | Deborah Lee James IND Former U.S. Secretary of the Air Force | 64 | 2017 | | M | M | |
 | John A. Kritzmacher IND Former Executive Vice President and Chief Financial Officer, John Wiley & Sons, Inc. | 62 | 2022 | M | | | M |
 | Paul E. Martin IND Former Senior Vice President and Chief Information Officer, Baxter International, Inc. | 65 | 2017 | M | | | C |
 | Regina Paolillo IND Former Global Chief Operating Officer, TTEC Holdings, Inc. | 64 | 2018 | M | | | M |
 | Troy K. Richardson IND Former President of the Digital Thread group, PTC Inc. | 60 | 2021 | M | | | M |
 | Lee D. Roberts IND Chief Executive Officer and President, BlueWater Consulting, LLC | 70 | 2011 | | C | M | |
 | Roxanne Taylor IND Former Senior Vice President and Chief Marketing and Communications Officer, Memorial Sloan-Kettering Cancer Center | 66 | 2021 | | M | M | |
| | Name and Primary Occupation | | | Age | | | Director
Since | | | Committee Membership | | | Gender | | | Race | |
| | AFC | | | CHRC | | | NCGC | | | SRC | |
| | | | | Peter Altabef, CHAIR OF THE BOARD
Chief Executive Officer, Unisys Corporation | | | 64 | | | 2015 | | | | | | | | | | | | | | | MA | | | WH | |
| | | | | Nathaniel A. Davis, LEAD INDEPENDENT DIRECTOR IND
Retired Chairman of the Board and Chief Executive Officer,
Stride, Inc. | | | 70 | | | 2011 | | | | | | | | | | | | | | | MA | | | AA | |
| | | | | Matthew J. Desch IND
Chief Executive Officer, Iridium Communications Inc. | | | 66 | | | 2019 | | | | | | M | | | | | | | | | MA | | | WH | |
| | | | | Philippe Germond IND
Partner, Barber Hauler Capital Advisers | | | 67 | | | 2016 | | | M | | | | | | C | | | | | | MA | | | WH | |
| | | | | Deborah Lee James IND
Retired U.S. Secretary of the Air Force | | | 65 | | | 2017 | | | | | | M | | | M | | | | | | FE | | | WH | |
| | | | | John A. Kritzmacher IND
Retired Executive Vice President and Chief Financial Officer,
John Wiley & Sons, Inc. | | | 63 | | | 2022 | | | M | | | | | | | | | M | | | MA | | | WH | |
| | | | | Paul E. Martin IND
Retired Senior Vice President and Chief Information Officer,
Baxter International, Inc. | | | 66 | | | 2017 | | | M | | | | | | | | | C | | | MA | | | AA | |
| | | | | Regina Paolillo IND
Retired Global Chief Operating Officer, TTEC Holdings, Inc. | | | 65 | | | 2018 | | | C | | | | | | | | | M | | | FE | | | WH | |
| | | | | Troy K. Richardson IND
Retired President of the Digital Thread group of PTC Inc. | | | 61 | | | 2021 | | | | | | M | | | | | | M | | | MA | | | AA | |
| | | | | Lee D. Roberts IND
Chief Executive Officer and President, BlueWater Consulting,
LLC | | | 71 | | | 2011 | | | | | | C | | | M | | | | | | MA | | | WH | |
| | | | | Roxanne Taylor IND
Retired Senior Vice President and Chief Marketing and
Communications Officer, Memorial Sloan-Kettering
Cancer Center | | | 67 | | | 2021 | | | | | | M | | | M | | | | | | FE | | | WH | |
| | AFC | | |
AFC | Audit and Finance Committee | M | | M | | | Member | | | FE | | | Female | |
CHRC | CHRC | | | Compensation and Human Resources Committee | C | | C | | | Chair | | | MA | | | Male | |
NCGC | NCGC | | | Nominating and Corporate Governance Committee | IND | | IND | | | Independent | | | AA | | | African American | |
SRC | SRC | | | Security and Risk Committee | | | | | | | | | WH | | | White | |
2023 | 2024 Proxy Statement | 5 | | 3 | |
The following charts highlight the balance in age and the diversity in tenure, gender and ethnicity of our director nominees. Also highlighted are the variety of background and experience of the director nominees.
Independence | Diversity | | | | |
 |  |
| |
Table of Contents
6 | | | Proxy Summary |
Corporate Governance Highlights
Unisys is committed to strong corporate governance aligned with stockholder interests. The Board, through its Nominating and Corporate Governance Committee, regularly monitors leading practices in governance and adopts measures that it determines are in the best interests of Unisys and its stockholders. The following highlights our corporate governance principles and practices. See the sections entitled “Corporate Governance” beginning on page 24 and “Compensation Discussion & Analysis” beginning on page 35, respectively, for more information.
| | Board Independence
and Composition | | | | Board Performance | | | | Shareholder Rights | |
| | • | | | | | |
●
Highly diverse and qualified board Director skill set aligned with corporate strategy Effective lead independent director 91% of directors standing for reelectionre-election are independent Regular board refreshment and a mix of tenure Limit on outside directorships •
Mandatory retirement age of 74
| | |
| | Board Performance | | |
| | ●• Regular shareholder engagement
● Committed
Commitment to social responsibilityoverseeing our approach to Environmental, Social and sustainabilityGovernance (“ESG”) Annual boardBoard and committee self-evaluations Regular executive sessions at Board and committee meetings Strong alignment between company performance and executive compensation Director onboarding and continuing education
programs
| | |
| | Stockholder Rights | | | | | |
| | ●•
Annual election of all directors No stockholder rights plan Majority voting for uncontested director elections Supermajority voting provisions to protect certain stockholder rights No super voting or low voting stock Majority voting for directors in uncontested elections
| | |
Sustainability Highlights
As a global technology solutions company, we understand we have the unique opportunity to lead, impact and support positive sustainability changes. Our strategy adopts an approach, primarily focused on environmental sustainability of our own operations and those of our suppliers. We are committed to sustainability efforts that will further our mission, including initiatives to promote sustainable operations, act as responsible environmental stewards and further decarbonize our operations. Our annual Sustainability Report can be found on our Company website, but such report shall not be deemed to be incorporated by reference into this Proxy Statement or any of our future filings with the SEC.
| | 2024 Proxy Statement | | | 5 | |
| | Proposal 2 | | | | | | | | |
| | | |
| Non-Binding Advisory Vote to Approve Executive Compensation | | |
| | | | The Board recommends a vote FORthis proposal. | | | See page 30 |
| 34 | | | | |
Our Principles-Based Philosophy
Table of Contents
Executive Compensation Overview
The Unisys executive compensation program includes base salary, short-term incentives and long-term incentives,
each of which isas described below for our
CEOChief Executive Officer (“CEO”) and our
other Named Executive Officers (“NEOs”) each of whose compensation is discussed in more detail in
the section entitled “Compensation Discussion and
Analysis.Analysis beginning on page 35 of this Proxy Statement.”
| | | | | | | | Target Mix | | | | | | | |
| | Element | CEO | | NEOsElement | Description | | CEO | | | Other NEOs | | | Description | | | Why is it provided | |
 | Fixed | | | Base Salary |  | |  | | | | | | Paid in cash | | | ● •
Provides a competitive fixed rate of pay relative to similar positions in the market Enables the Company to attract and retain critical executive talent | |
 | Variable, At-risk | | | Short-Term Incentives
(“STI”) |  | |  | | | | | | Paid annually in cash under the Executive Variable Compensation (“EVC”) Plan | | | ● •
Focuses NEOs on achieving rigorous and challenging annual performance goals aligned with the Company’s annual operating plan to drive long-term shareholderstockholder value creation | |
| | Long-Term Incentives
(“LTI”) |  | |  | | | | | | Paid under the LTI Plan using a combination of equity and cash | | | ● •
2/3 dependent on performance metrics and 1/3 time-based Focuses NEOs on longer-term goals strongly aligned to drive shareholderstockholder value creation, as well as support the Company’s leadership retention strategy | |
The charts below show the total target compensation mix of our CEO and our other NEOs.
The mix reflects STI, such as cash, and LTI, such as restricted stock units (“RSUs”) that are time-based and performance-based, including based on relative total stockholder return (“TSR-based”). These charts illustrate that a significant majority of our NEOs’ total target compensation is
“at risk” (87%“at-risk” (84% for our CEO and an average of
72%76% for our other NEOs).
Stockholder Outreach
We make comprehensive efforts to proactively engage our stockholders to obtain important feedback, including discussing how our executive compensation program supports our strategy. In the past, senior executives and directors of the Company, including the Chair of the Compensation and Human Resources Committee and Lead Independent Director, have participated in these investor meetings.
We received significant support for our say-on-pay proposal at the Company’s 2022 and 2023 annual stockholders’ meetings with more than 97% of the shares voted in favor in 2022 and 84.5% in 2023. We remain engaged with stockholders and will continue to address stockholder feedback and considerations through changes to the executive compensation plans if the Compensation and Human Resources Committee believes that such changes are consistent with its pay philosophy and the Company’s overall business strategy.
| | CEO2022 Say-On-Pay Support | | Other NEOs | 2023 Say-On-Pay Support | | | Five-Year Average Say-On-Pay Support | |
| | | | | |
| |  | |  | |
| | | | |
|  | |
8 | | | Proxy Summary | | 7 | |
2022
2023 Compensation Highlights
| | Pay Component | | | Details of Changes for 20222023 | |
| | Base Salary | | | ●•
Mr. Thomson received an 18.7% increase in base salary based on change in role to Chief Operating Officer, performance and market considerations.● Ms. Ebrahimi received a 3.8%5.5% increase in base salary based on performance and market considerations.
●•
Ms. PoggenpohlMcCann received a 3.3%7.0% increase in base salary based on performance and market considerations. •
Mr. Sokenu received a 5.0% increase in base salary based on performance and market considerations. | |
| | | |
| Short-Term Incentives (“STI”) | | | ●• Mr. Thomson’s
No NEOs received STI target percentage increased from 95%increases in 2023. •
We removed the Free Cash Flow metric to 110% upon transitionplace greater weighting on both Revenue and Non-GAAP Operating Profit. •
Non-Linear performance ranges implemented to his new role as Chief Operating Officer.flatten the curve and ensure stability around target performance results. ●• We incorporated a new
Modified the Non-Financial Diversity, Equity & Inclusion (“DEI”) non-financial metric to reflect 100% female representation, at senior manager and above levels. •
CEO target bonus reduced from 140% to 120% of base salary to reflect his commitment to Company financials and bottom-line performance. •
Final 2023 plan funding for STI resulted in above target performance. | |
| | Long-Term Incentives (“LTI”) | | | •
Strategically redesigned the annual STI program.● 2022 DEI goals include improving the representationmix of (a) women globallyperformance measures between shares and (b) associates from Underrepresented Ethnic Groups (“UREG”) within the U.S.
cash to carefully manage share usage, minimize dilution and conserve our equity reserves. ●• We narrowed the payout range (expressed as a percentage of target opportunity) for
2023 LTI award values based on performance-based TSR RSUs, performance-based TSR Cash, performance-based Non-GAAP Operating Profit Cash, performance-based stock price appreciation RSUs and Free Cash Flow to better align with market practice.time-based RSUs. ●• Financial goals were aligned with the Company’s operating plan and financial expectations. All targets for 2022 were higher than actual and target 2021 performance levels. |
| | |
Long-Term Incentives (“LTI”) | | ●
1/3 of total 2022 LTI delivered in performance-based cash measured on Non-GAAP Operating Profit, which was the measure in 2020, prior to the one year change in 2021 to relative Total Shareholder Return (“rTSR”) due to COVID-19.● 1/3 of total 20222023 LTI was delivered in time-based shares.
● 1/3 of total 2022 LTI was delivered in rTSRrelative TSR performance-based shares.
•
CEO LTI target reduced by $1.25 million to reflect his commitment to the Company financials and bottom-line performance. •
Final 2023 results for performance-based LTI resulted in above target performance. | |
Compensation Best Practices
The Compensation and Human Resources Committee continually evaluates the Company’s compensation and human capital management (“HCM”) policies and practices to ensure they are consistent with exceptionalleading governance principles. Below are highlights of our governance practices:
 | ![[MISSING IMAGE: ic_roundtick-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-037875/ic_roundtick-pn.gif) What We Do | | | |  What We Don’t Do | |
| | | | |
 Provide the majority of compensation in performance-based pay
Maintain stock ownership guidelines for officers and directors (excludes stock options)
Cap incentive plan at 2x target; no payouts below threshold
Maintain a clawback policy
Reflect multi-dimensional performance using earnings, revenue, cash and market performance with a mix of relative and absolute goals; also assess performance over multiple time periods with 1-year performance in the STI and 1-year, 2-year and 3-year performance periods in the performance-based component of the LTI Require one-year minimum vesting for all LTI awards
Have change in control agreements with double-trigger severance provisions
Conduct annual compensation program risk assessment
Adhere to an insider trading policy
Use an independent compensation consultant engaged by and reporting directly to the Compensation and Human Resources Committee
| | |
| | | | | |
| | ![[MISSING IMAGE: ic_roundcross-bw.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-037875/ic_roundcross-bw.gif) What We Don’t Do | | | | | |
| | 
Excise tax gross-ups on a change in control ×
Excessive severance in a change in control or termination
×
Excessive perquisites × Hedging
Allow employees, including our executive officers, and also non-employee directors to engage in hedging transactions, speculation, short sales, margin accounts or pledgingpledge Unisys securities ×
Automatic vesting of equity upon a change in control ×
Stock option repricing, reloads, or cash buyouts ×
Discounted stock options or SARs ×
Liberal change in control definition | | |
2023 | 8 | | | | | | | | | | Proxy StatementSummary | 9 |
| | Proposal 3 | | | | | |
| | | | |
Advisory Vote on the Frequency of an Advisory Vote on Executive Compensation | | |
| The Board recommends a vote for the option of every ONE YEAR. | | See page 59 |
| | | | |
Proposal 4 | | | |
| | |
| Ratification of the Selection of Independent Registered Public Accounting Firm | | |
| | | | The Board recommends a vote FORthis proposal. | | | See page 6066 | | |
| | The Audit and Finance Committee is directly responsible for the appointment, compensation, retention and oversight of the Company’s independent registered public accounting firm. The Audit and Finance Committee has selected, and the Board has ratified the selection of, Grant Thornton LLP (“Grant Thornton”) to serve as our independent registered public accounting firm for 2024. Grant Thornton has served as the Company’s independent registered public accounting firm since March 17, 2023. The Audit and Finance Committee and the Board believe the continued retention of Grant Thornton as the Company’s independent registered public accounting firm is in the best interest of the Company and our stockholders, and we are asking our stockholders to ratify the selection of Grant Thornton as our independent registered public accounting firm for 2024. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the selection of Grant Thornton to our stockholders for ratification because we value our stockholders’ views on the Company’s independent registered public accounting firm and as a matter of good corporate practice. | | |
Proposal 5 | | | |
| | | |
Approval of Unisys Corporation 20232024 Long-Term Incentive and Equity Compensation Plan | | |
| | | | The Board recommends a vote FORthis proposal. | | | See page 62 |
| 69 | | | | |
The Unisys Corporation 20232024 Long-Term Incentive and Equity Compensation Plan (the “2023“2024 Equity Plan”), attached to this Proxy Statement as Appendix B, is intended to reinforce the alignment between employees’ and non-employee directors’ interests and stockholders’ interests, and purposefully excludes features that could misalign those interests. Accordingly, the 2024 Equity Plan:
•
Includes a default double trigger change in control provision and does not provide for automatic vesting upon a change in control
•
Prohibits the payment of dividends or dividend equivalent rights on unvested equity awards
•
Prohibits repricing of stock options and stock appreciation rights without stockholder approval, other than in connection with a capitalization event adjustment or change in control
•
Does not have evergreen share pool provisions
•
Does not have a replacement option or stock appreciation right feature
•
Does not provide tax gross-ups to officers, non-employee directors or other plan participants
•
Authorizes the recoupment of awards under our recoupment policies and/or any recoupment requirements imposed under applicable laws
We currently maintain the 2023 Long-Term Incentive and Equity Compensation Plan (the “2023 Equity Plan”), which was approved by our stockholders at the 2023 annual meeting. Upon stockholder approval, the 2024 Equity Plan will replace the 2023 Equity Plan:Plan and no further awards will be granted under the 2023 Equity Plan.
In addition to the shares that remain available for issuance under the 2023 Equity Plan, we are requesting an additional 6,340,000 shares for issuance under the 2024 Equity Plan. This number was determined based on an analysis of various factors, including historical burn rate, potential dilution, industry plan cost standards, and anticipated equity compensation needs.
Based on these factors and our current grant practices, the shares requested for issuance under the 2024 Equity Plan are expected to meet our equity grant needs for approximately 2 years. The shares reserved may, however, last for a greater or fewer number of years depending on currently unknown factors, such as the number of grant recipients, future grant practices, and our stock price.
● | Includes a default double trigger change in control provision and does not provide for automatic vesting upon a change in control2024 Proxy Statement | | | 9 | |
| | Proposal 1 | |
● | Includes a one-year minimum vesting requirement |
● | Prohibits the payment of dividends or dividend equivalent rights on unvested equity awards |
● | Limits grants to any individual employee in a calendar year |
● | Limits non-employee directors’ aggregate cash and equity compensation in a calendar year |
● | Prohibits repricing of stock options and stock appreciation rights without stockholder approval, other than in connection with a capitalization event adjustment or change in control |
● | Does not have evergreen share pool provisions |
● | Does not have a replacement option or stock appreciation right feature |
● | Does not provide tax gross-ups to officers, non-employee directors or other plan participants |
● | Authorizes the recoupment of awards under our recoupment policies and/or any recoupment requirements imposed under applicable laws |
Table of Contents
10 | |
| | | | |
Proposal 1
| |
The Board currently consists of eleven members, each of whose term expires at
the Annual Meeting. Each of the eleven directors has been nominated for re-election for a term expiring at the 2025 annual meeting of stockholders (the
“2025 annual meeting”). Each of the nominees has agreed to serve as a director, if elected, and the Company 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.
| |  |
| | | |
The Board currently consists of twelve members, each of whose term expires at the annual meeting. Denise K. Fletcher will retire from the Board at the annual meeting. Each of the remaining eleven directors has been nominated for reelection for a term expiring at the 2024 annual meeting. Each of the nominees has agreed to serve as a director if elected, and the Company 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. |
|
 | The Board of Directors recommends a vote “FORFOR”” all nominees. |
| | | |
The following charts highlight the balance in age and the diversity in tenure, gender and ethnicity of our director nominees. Also highlighted are the variety of background and experience of the director nominees. The Board believes that this balance and mix of diversity, background and experience will help bring broad and valuable perspectives to the Board that will lead to a well-functioning board of directors.
Independence | Diversity | | | | |
 |  | |
| | 10 | | | | | | | | | | Election of Directors | |
Board Tenure
The Board strives to maintain an appropriate balance of tenure and refreshment among its directors. The Board believes there are significant benefits from the valuable experience and familiarity with the Company brought by longer-tenured directors, as well as significant benefits from the fresh perspectives brought by newer-tenured directors. The average tenure of our director nominees is approximately six years.
Background and Experience
Our director nominees possess relevant experience, skills and qualifications which contribute to a well-functioning board. All of our director nominees bring to the Board senior leadership experience, industry sector and technology experience derived from their diverse professional backgrounds and areas of expertise that are relevant to Unisys. As a group, they have international experience, financial experience and experience serving as a chief executive officer of other public companies and as a director on other public company boards. We believe our director nominees appropriately reflect a diversity of experience, skills and professional backgrounds.
| | | | | | | | Altabef | | | | Davis | | | | Desch | | | | Germond | | | | James | | | | Kritzmacher | | | | Martin | | | | Paolillo | | | | Richardson | | | | Roberts | | | | Taylor | |
Tenure | Age |
 |  |
Table of Contents
| | 2018 + Regina Paolillo | | 2019 +Matthew J. Desch + Lisa A. Hook | | 2020 | | 2021 + Troy K. Richardson + Roxanne Taylor | | 2022 + John A. Kritzmacher | | 2023 | Director
additions |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Director
exits | 2018 - Alison Davis - Paul E.
Weaver | | 2019 | | 2020 | | 2021 - Lisa A. Hook | | 2022 - Jared L.
Cohon | | 2023 - Denise K. Fletcher | |
Mr. Weaver and Mr. Cohon retired, and Ms. Fletcher will be retiring, from the Board in compliance with the Company’s mandatory retirement age for directors as set forth in the Company’s Bylaws.
Background & Experience
12 | 2024 Proxy Statement | | | 11 | |
Director Independence
A majority of the Board is required to qualify as independent under the listing standards of the New York Stock Exchange (“NYSE”). Members of the Audit and Finance, Compensation and Human Resources, and Nominating and Corporate Governance Committees must also meet the NYSE independence criteria, as well as any applicable independence criteria prescribed by the SEC.
The Nominating and Corporate Governance 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 NYSE and who the Board affirmatively determines have no material relationship with the Company will be considered independent.
The Company’s directors and nominees other than Mr. Altabef, our CEO, meet the independence requirements prescribed by the NYSE and, in the case of members of the Audit and Finance Committee, also meet the audit committee independence requirements prescribed by the SEC. In assessing whether a director or director nominee has a material relationship with Unisys (either directly or as a partner, stockholder or officer of an organization that has a relationship with Unisys), the Board uses the criteria outlined in the paragraph above. In 2023, the Board determined that none of its non-employee directors has a material relationship with Unisys.
| | 12 | | | | | | | | | | Election of Directors | |
Board Diversity
| Board Diversity Matrix (as of March 24, 2023) |
| Total Number of Directors: | | 12 |
| | | Female | | Male | | Non-Binary | | Did Not Disclose
Gender |
| Part I: Gender Identity | | | | | | | | |
| Directors | | 4 | | 8 | | - | | - |
| Part II: Demographic Background: | | | | | | | | |
| African American or Black | | - | | 3 | | - | | - |
| Alaskan Native or Native American | | - | | - | | - | | - |
| Asian | | - | | - | | - | | - |
| Hispanic or Latinx | | - | | - | | - | | - |
| Native Hawaiian or Pacific Islander | | - | | - | | - | | - |
| White | | 4 | | 5 | | - | | - |
| Two or more races or ethnicities | | - | | - | | - | | - |
| | | | | | | | | |
| LGBTQ+ | | - |
| Did Not Disclose Demographic Background: | | - |
Table of Contents
Information Regarding Nominees
The names and ages of the nominees, their principal occupations and employment during the past five years, and other information regarding them follows below.
| Other Current Directorships: ● •
● •
● •
Perot Systems Corporation ● •
Belo Corporation •
MICROS Systems, Inc. | | | | Peter A. Altabef | |
| | Chief Executive Officer | |
| | Professional Experience Chair of the Board of Directors since 2018 and Chief Executive Officer of Unisys since 2015 ● •
President of the CompanyUnisys from December 2021 to May 2022, after having previously served in this role from 2015 to 2020 ● •
President and Chief Executive Officer, and a member of the Boardboard of Directors,directors, of MICROS Systems, Inc. from 2013 until 2014, when MICROS Systems, Inc. was acquired by Oracle Corporation ● •
President of Dell Services (a unit of Dell Inc.) from 2009 to 2011 ● •
President and Chief Executive Officer, and a member of the Boardboard of Directors,directors, of Perot Systems Corporation from 2004 until 2009, when Perot Systems Corporation was acquired by Dell, Inc. ● •
Serves as a member of the board of directors of NiSource (NYSE: NI) and Petrus Trust Company, LTA •
Serves on the board of advisors of Merit Energy Company, LLC, and also a member of the President’s National Security Telecommunications Advisory Committee, where he has served as co-chair of its Cybersecurity Moonshot subcommittee ● •
Serves as a trustee of the Committee for Economic Development (“CED”) of The Conference Board, where he serves as co-chair of the CED’s Technology and Innovation Committee ● •
Served as Senior Advisor to 2M Companies, Inc. in 2012 •
Served as member of the board of directors of Belo Corporation from 2011 to 2013 | |
| | Attributes, Skills and Qualifications: Mr. Altabef has more than 25 years of senior leadership experience in the information technology industry and, having led both Perot Systems Corporation and MICROS Systems, Inc., has a proven ability to drive revenue growth and achieve strong financial performance. As a result, the Board believes Mr. Altabef has the leadership skills and experience to serve as a director and as the Chair and Chief Executive OfficerCEO of the Company. | |
14 | | Election of Directors |
| 2024 Proxy Statement | | | 13 | |
| Lead Independent Director Other Current Directorships: ● •
RLJ Lodging Trust
(NYSE: RLJ)
● •
● •
● •
XO Communications Services, LLC ● •
Charter Communications, Inc. (Nasdaq: CHTR) ● •
EarthLink, Inc. | | | | Nathaniel A. Davis Former Chairman of the Board and Chief Executive Officer, Stride, Inc.
Professional Experience
Former
| |
| | Retired Chairman of the Board and Chief Executive Officer of Stride, Inc. | |
| | Professional Experience •
Retired Chairman of the Board and Chief Executive Officer of Stride, Inc. (NYSE: LRN) (formerly K12 Inc.), a provider of tech-enabled education solutions, curriculum and programs directly to students, schools, the military, and enterprises in primary, second, and post-secondary settings ● •
Served as Stride’sStride, Inc.’s Chief Executive Officer from 2018 to 2021, a position he previously held from 2014 to 2016 ● •
Served as a member of the Boardboard of Directorsdirectors of Stride, Inc. from 2009 to 2022, and as its Chairman of the Board from 2012 to 2022 and Executive Chairman from 2013 to 2022 ● •
Managing Director of the RANND Advisory Group, a business consulting group that advises software, technology, media and venture capital firms, before assuming the role of Executive Chairman of Stride in 2013
President and Chief Executive Officer of XM Satellite Radio Inc., a provider of direct satellite radio broadcasts in the U.S., from 2007 to 2008, and President and Chief Operating Officer from 2006 to 2007 ● •
Served as a member of the XM Satellite Radio BoardInc. board of Directorsdirectors from 1999 until 2008 ● •
President and Chief Operating Officer and a member of the Boardboard of Directorsdirectors of XO Communications Services, LLC (formerly Nextlink Communications)Communications Inc.) from 2000 to 2003 ● •
Held senior management roles at Nextel Communications Inc. and MCI Communications Corp ● •
Serves as trustee of RLJ Lodging Trust (NYSE: RLJ) •
Served as a member of the board of directors of Charter Communications, Inc. (Nasdaq: CHTR) from 2005-2008 •
Served as a member of the board of directors of Earthlink, Inc. in 2011 •
Began his career at AT&T Inc. | |
| | Attributes, Skills and Qualifications: Mr. Davis brings managerial and operational expertise to ourthe Board. This expertise, as well as his extensive experience in the communications industry, brings a valuable perspective to ourthe Board as Unisys continues its work to strengthen its competitive and financial profile in a changing IT industry. | |
2023 Proxy Statement | 15 |
| 14 | | | | | | | | | | Election of Directors | |
| ● •
Compensation and Human Resources Other Current Directorships: ● •
Iridium Communications, Inc. (Nasdaq: IRDM) | | | | Matthew J. Desch | |
| | Chief Executive Officer, Iridium Communications Inc. | |
| | Professional Experience Chief Executive Officer and a director of Iridium Communications Inc. (Nasdaq: IRDM), a global mobile, voice and data satellite communications company, since 2009 ● •
Chief Executive Officer of Iridium’sIridium Communications Inc.’s predecessor, Iridium Holdings LLC, beginning in 2006 ● •
Chief Executive Officer of Telcordia Technologies, Inc., a telecommunications software services provider that is now part of Ericsson, prior to joining Iridium ● •
Spent 13 years at Nortel Networks Corporation, including as president of the company’s global wireless networks business, and as President of Global Carriers ● •
Serves on the President’s National Security Telecommunications Advisory Committee | |
| | Attributes, Skills and Qualifications: Mr. Desch’s deep understanding of critical infrastructure from his 35 years in the telecommunications industry brings Unisys a unique and valuable perspective regarding the security challenges faced around the globe. In addition, Mr. Desch is able to draw upon his extensive expertise in cybersecurity, finance, M&A and human capital management, together with over twenty years of experience as a public company chief executive officer, to provide important strategic and operational advice as the Company faces the challenges of the highly competitive IT services marketplace. | |
| 2024 Proxy Statement | | | 15 | |
| | ● •
Audit and Finance •
Nominating and Corporate Governance (Chair) Other Current Directorships: ● •
•
France Galop ● •
Atos Origin S.A.
(Euronext NV: ATO) ● •
● •
● •
Alcatel | | | | Philippe Germond | |
| | Partner, Barber Hauler Capital Advisers | |
| | Professional Experience Partner at Barber Hauler Capital Advisers since 2019 after having joined the firm as a Senior Advisor in 2017 ● •
Chairman of the Management Board (the equivalent of Chief Executive Officer) of Europcar GroupeMobility Group S.A. (Euronext NV: EURCAR), a publicly traded European car rental operator with a presence in more than 140 countries and the leading operator in Europe, from 2014 to 2016 ● •
Chairman and Chief Executive Officer of Paris Mutuel Urbain from 2009 to 2014 ● •
Chairman and Chief Executive Officer of Atos Origin S.A. (Euronext NV: ATO) from 2007 to 2008, and a member of the Management Board of Atos Worldline from 2006 to 20082007 ● •
President and Chief Operating Officer of Alcatel from 2003 to 2005 ● •
Chairman and Chief Executive Officer of SFR S.A. (Societe Francaise du Radiotelephone — Cegetel) from 1995 to 2002 ● •
Began his career at Hewlett-Packard Enterprise Company, where he served for 15 years in various marketing and sales roles of increasing responsibility, ultimately serving in Europe as the Managing Director of the Microcomputer Group and a member of the Management Board ● •
Serves as a member of the board of directors of Comet France S.A.S. •
Serves as a member of the board of directors of France Galop since 2023 •
Served as the Chairman of the Supervisory Board of Qosmos, a French software company, until its acquisition in 2016 | |
| | Attributes, Skills and Qualifications: As a successful leader in sales, operations and governance, Mr. Germond brings broad executive experience in a number of industries. His experience implementing transformation projects and making companies more digital and customer-oriented is helpful to Unisys as we continue our transformation and bring enhanced value to our clients. In addition, Mr. Germond’s vast global experience is particularly useful for Unisys, a company withwhich derives more than half of its revenue from internationalnon-U.S. operations and over 25% of its revenue from Europe. Mr. Germond’s extensive strategy and mergers and acquisitions expertise is also beneficial to Unisys as the Company implements its strategic imperatives. | |
16 | 16 | | | | | | | | | | Election of Directors |
| |
| ● •
Compensation and Human Resources ● •
Nominating and Corporate Governance Other Current Directorships: ● •
Prior Directorships ● •
Aerojet Rocketdyne Holdings, Inc. | | | | Deborah Lee James Former
| |
| | Retired U.S. Secretary of the Air Force | |
| | Professional Experience U.S. Secretary of the Air Force from 2013 to 2017 where she was responsible for the affairs of the Department of the Air Force ● •
Held a variety of increasingly senior positions at Science Applications International Corporation (“SAIC”) from 2002 to 2013 including President of SAIC’s Technical and Engineering Sector ● •
Executive Vice President and Chief Operating Officer at Business Executives for National Security from 2000 to 2001 ● •
Vice President of International Operations and Marketing at United Technologies Corporation from 1998 to 2000 ● •
Served as the Assistant Secretary of Defense for Reserve Affairs, Assistant to the Secretary for Legislative Affairs and as a professional staff member on the House Armed Services Committee •
Serves as a member of the board of directors of Textron Inc. (NYSE: TXT) •
Served as a member of the board of directors of Aerojet Rocketdyne Holdings, Inc. from 2022 to 2023 | |
| | Attributes, Skills and Qualifications: Ms. James brings more than 30 years of senior homeland and national security experience in the federal government and the private sector to Unisys. Her experience leading the U.S. Air Force gives her a valuable perspective regarding cyber, logistics and border security. In addition, Ms. James’ experience in the private sector with the transformative nature of digital products and solutions is an important asset to the Board as Unisys launches its next generation of offerings. | |
| 2024 Proxy Statement | | | 17 | |
| | ● •
● •
Other Current Directorships: ● •
InterDigital, IncInc.
(Nasdaq: IDCC) Prior Directorships ● •
QualTek Services Inc. | | | | John A. Kritzmacher Former
| |
| | Retired Executive Vice President and Chief Financial Officer of John Wiley & Sons, Inc. | |
| | Professional Experience Executive Vice President and Chief Financial Officer of John Wiley & Sons, Inc., a global leader in research and education, from 2013 until 2021 ● •
Senior Vice President, Business Operations and Organizational Planning, at WebMD Health Corp., a leading provider of health information services from 2012 to 2013 ● •
Executive Vice President and Chief Financial Officer of Global Crossing Limited, a global provider of IP-based telecommunications solutions, from 2008 to 2011 ● •
Held a number of roles of increasing responsibility at Alcatel-Lucent and its predecessor companies, Lucent Technologies Inc., AT&T Inc. and Bell Laboratories, Inc., from 1982 to 2008, culminating in serving as Chief Financial Officer at Lucent Technologies Inc. in 2006 and as Chief Operating Officer of the Services Business Group at Alcatel-Lucent Enterprise from 2007 to 2008 •
Serves as a member of the board of directors of InterDigital, Inc. (Nasdaq: IDCC) since 2009 •
Served as a member of the board of directors of QualTek Services, Inc. from 2022 to 2023 | |
| | Attributes, Skills and Qualifications: Mr. Kritzmacher’s distinguished career serving as a financial and operational leader for more than 40 years at several leading global technology and telecommunications companies has equipped him to provide the Board with valuable perspectives important to the Company’s strategic imperatives. In addition, Mr. Kritzmacher’s understanding of the financial and operational aspects of doing business globally will greatly benefitbenefits Unisys, which receives more than half of its revenue from international operations. | |
2023 Proxy Statement | 17 |
| 18 | | | | | | | | | | Election of Directors | |
| ● •
● •
Security and Risk (Chair) Other Current Directorships: ● •
● •
● •
Ping Identity Corp. | | | | Paul E. Martin Former
| |
| | Retired Senior Vice President and Chief Information Officer of Baxter International, Inc. | |
| | Professional Experience Senior Vice President and Chief Information Officer of Baxter International, Inc. from 2011 to 2020 ● •
Global Chief Information Officer at Rexam Plc from 2004 to 2011, and as Division CIO from 1999 to 2004 ● •
Held management roles at CIT Group Capital Financing, Burlington Northern Santa Fe Corporation, and Frito-Lay, Inc. •
Serves as a member of the board of directors and audit committee of Owens Corning (NYSE: OC), a global building and industrial materials manufacturer •
Serves as a member of the board of directors, compensation committee and audit committee of STERIS plc, a medical equipment company specializing in sterilization and surgical products •
Served as a member of the board of directors of Ping Identity Corp., a security software company | |
| | Attributes, Skills and Qualifications: With extensive executive management experience across the IT industry, Mr. Martin understands the cybersecurity and IT challenges that our clients face. In addition, the Board will greatly benefit fromvalues Mr. Martin’s international experience and his deep life sciences and healthcare expertise, a core industry area of focus for the Company. | |
| 2024 Proxy Statement | | | 19 | |
| | ● •
Audit and Finance (Chair) ● •
Other Current Directorships: ● •
Alight, Inc. (NYSE: ALIT) •
UST Inc. ● •
Welltok, Inc. | | | | Regina Paolillo Former Global Chief Operating Officer, TTEC Holdings, Inc.
Professional Experience
President and
| |
| | Retired Global Chief Operating Officer of TTEC Holdings, Inc. | |
| | Professional Experience •
Global Chief Operating Officer at TTEC Holdings, Inc. (Nasdaq: TTEC) (formerly TeleTech Holdings, Inc.), a global customer experience company that designs, builds and operates omnichannel customer experiences on behalf of leading brands across the world, frombetween 2021 to 2022 after previously having served as •
Executive Vice President, Chief Financial & Administrative Officer of TTEC sinceHoldings, Inc., between 2011 to 2021 ● •
Chief Financial Officer and Executive Vice President for Enterprise Services at TriZetto Group, Inc. between 2009 and 2011 ● •
Supported the investment teams and portfolio companies at General Atlantic L.P. from 2007 to 2008 in the areas of financial, operations and human capital ● •
Executive Vice President of the Revenue Cycle and Mortgage Services Division at Genpact Limited, following its acquisition of Creditek Inc. ● •
Chief Financial Officer and Chief Operating Officer of Creditek Inc. before becoming the Chief Executive Officer from 2003 to 2005 ● •
Held finance, operations and executive leadership positions at Gartner, Inc., Productivity, Inc., Citibank N.A. and Bristol-Myers Squibb Company ● •
Began her career as an auditor at Price WaterhousePricewaterhouseCoopers LLP •
Serves as a member of the board of directors, head of the audit committee and member of nominating and governance committee of Alight, Inc. (NYSE: ALIT), a cloud-based provider of integrated digital human capital and business solutions •
Serves as a member of the board of directors and audit committee of UST Inc., a provider of digital technology and transformation, information technology and services •
Served as a member of the board of directors and head of the audit committee of Welltok, Inc., an enterprise software as a service company in the consumer health market, until its acquisition by Virgin Pulse in 2021 | |
| | Attributes, Skills and Qualifications: As a certified public accountant and experienced financial and operational leader with a variety of technology and services companies, Ms. Paolillo brings a broad understanding of the strategic and operational priorities of technology and services organizations, coupled with deep knowledge of financial and accounting matters and financial reporting as well as experience in investments and acquisitions. | |
18 | 20 | | | | | | | | | | Election of Directors |
| |
| ● •Audit
Compensation and FinanceHuman Resources ● •
Security and Risk | | | | Troy K. Richardson Former
| |
| | Retired President of the Digital Thread group, PTC Inc. | |
| | Professional Experience President of the Digital Thread group of PTC Inc. (Nasdaq: PTC), a global software and services company, from 2021 to 2022 after having served as Executive Vice President and Chief Operating Officer from 2020 to 2021 ● •
Held several senior management positions at DXC Technology Company and its predecessor, Computer Sciences Corporation, from 2015 to 2020, including roles as Senior Vice President and Head, Global Sales, and Senior Vice President and General Manager, Enterprise and Cloud Applications ● •
Senior Vice President, Global Alliance Sales, at Oracle Corporation from 2014 to 2015 ● •
Senior Vice President, Global Cloud Sales, Ecosystem and Channels, at SAP SEEuropean Company from 2012 to 2014.2014 ● •
Held management positions at Hewlett-Packard Company, Xiocom Wireless, Inc., Novell, Inc., NCR Corporation and IBMInternational Business Machines Corporation | |
| | Attributes, Skills and Qualifications: Mr. Richardson’s expertise in global sales, commercial marketing and client service and his success in the IT industry enables him to provide the Board with insight into the constantly changing trends facing the Company. His experience as a go-to-market leader will provideprovides the Board with additional perspective as the CompanyUnisys implements its strategy of enhancing and expanding its solution portfolio, particularly in Digital Workplace Solutions and Cloud, Applications & Infrastructure Solutions. | |
| 2024 Proxy Statement | | | 21 | |
| | ● •
Compensation and Human Resources (Chair) ● •
Nominating and Corporate Governance ● •
● •
● •
QAD Inc. | | | | Lee D. Roberts Chief Executive Officer and President, BlueWater Consulting, LLC
Professional Experience
| |
| | Chief Executive Officer and President of BlueWater Consulting, LLC.LLC | |
| | ● •
Chief Executive Officer and President of BlueWater Consulting, LLC •
Served as General Manager and Vice President for Document, Content and Business Process Management at IBMInternational Business Machines Corporation ● •
Chairman and Chief Executive Officer at FileNET Corporation from 2000 until its acquisition by IBM in 2006 ● •
President and Chief Executive Officer at FileNET from 1998 to 2000, and President and Chief Operating Officer from 1997 to 1998 ● •
Spent twenty years at IBM, where he held numerous senior management, sales and marketing roles.roles •
Served as a member of the board of directors of Inovalon, Inc. and QAD, Inc. until each was sold in 2021 | |
| | Attributes, Skills and Qualifications: Mr. Roberts brings a deep understanding of the IT industry, technology trends and customer requirements to the Board. In addition, his extensive executive experience in our industry enables him to provide important strategic counsel to the Board. | |
2023 Proxy Statement | 19 |
| 22 | | | | | | | | | | Election of Directors | |
| ● •
Compensation and Human Resources ● •
Nominating and Corporate Governance Other Current Directorships: ● •
Pure Storage, Inc.
(NYSE: PSTG)
● •
Thoughtworks Holding, Inc. (Nasdaq: TWKS) | | | | Roxanne Taylor Former
| |
| | Retired Senior Vice President and& Chief Marketing and Communications Officer of Memorial Sloan-Kettering Cancer Center | |
| | Professional Experience Senior Vice President and& Chief Marketing and Communications Officer atof Memorial Sloan-Kettering Cancer Center, a cancer treatment and research institution,academic medical center, from 2020 to 2022 ● •
Held several positions at Accenture plc (formerly Andersen Consulting) from 1995 to 2018, including Chief Marketing and Communications Officer from 2007 to 2018 ● •
Held business, investor relations and marketing roles for Reuters, Citicorp and Credit Suisse Group AG •
Serves as a member of the board of directors, member of the Nominating and Governance Committee and Compensation and Talent Committee of Pure Storage, Inc. (NYSE: PSTG), a company that develops data storage hardware and software products •
Serves as a member of the board of directors and member of the Audit Committee, Compensation Committee and Talent Committee of Thoughtworks Holding, Inc. (Nasdaq: TWKS), a global technology consultancy that integrates strategy, design and software engineering to enable enterprises and technology disruptors across the globe to thrive as modern digital businesses | |
| | Attributes, Skills and Qualifications: Ms. Taylor brings a deep expertise in global marketing and branding, with a proven track record of driving innovation by developing successful digital platforms while at Accenture. The Board will benefitbenefits from this experience as the CompanyUnisys continues to implement its strategy of using its Next-Gen Solutions to enhance its go-to-market approach focused on solving business problems for clients. While at Accenture, Ms. Taylor was part of the team that prepared the company’s earnings announcements and SEC filings. She also served as a key member of Accenture’s disclosure committee and has extensive experience in corporate communications, including issues management and crisescrisis communications. | |
Director Independence
A majority of the Board of Directors is required to qualify as independent under the listing standards of the New York Stock Exchange (the “NYSE”). Members of the Audit and Finance, Compensation and Human Resources, and Nominating and Corporate Governance Committees must also meet the NYSE independence criteria, as well as any applicable independence criteria prescribed by the U.S. Securities and Exchange Commission (the “SEC”).
The Nominating and Corporate Governance 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 NYSE and who the Board affirmatively determines have no material relationship with the Company will be considered independent. The Board has determined that 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 contributions to that organization are less than one percent of its annual charitable receipts.
All of the Company’s directors and nominees for director other than Mr. Altabef meet the independence requirements prescribed by the NYSE and, in the case of members of the Audit and Finance Committee, also meet the audit committee independence requirements prescribed by the SEC. In assessing whether a director or nominee has a material relationship with Unisys (either directly or as a partner, stockholder or officer of an organization that has a relationship with Unisys), the Board uses the criteria outlined in the paragraph above. In 2022, the Board determined that none of its non-employee directors has a material relationship with Unisys.
20 | | Election of Directors2024 Proxy Statement | | | 23 | |
Director Nomination Process
As part of the nomination process, the Nominating and Corporate Governance Committee is responsible for determining the appropriate skills and characteristics required of
new Board members in the context of the current make-up of the Board and for identifying qualified candidates for Board membership. In so doing, the Nominating and Corporate Governance Committee considers, with input from the Board, those factors it deems appropriate, such as independence, experience, expertise, strength of character, mature judgment, leadership ability, technical skills, diversity, age and the extent to which the individual would fill a present need on the Board. The aim is to assemble a Board that is strong in its collective knowledge and that consists of individuals who bring a variety of complementary attributes and who, taken together, have the appropriate skills and experience to oversee the Company’s business.
As set forth above, the Nominating and Corporate Governance Committee considers diversity as one of a number of factors in identifying nominees for director. The committeeNominating and Corporate Governance Committee views diversity broadly to include diversity of experience, skills and viewpoint as well as traditional diversity concepts such as race and gender.
1
| Identification1 | | | Identification | | | ● •
The Nominating and Corporate Governance Committee receives suggestions for new directors from a number of sources, including Board members. It also may, in its discretion, employ a third-party search firm to assist in identifying candidates for director.director candidates. The committee willNominating and Corporate Governance Committee also considerconsiders recommendations for Board membership received from stockholders and other qualified sources. | | |
2
| Review2 | | | Review | | | ● •
With respect to existing directors, prior to making its recommendation to the full Board, the Nominating and Corporate Governance Committee, in consultation with the Chair of the Board and Chief Executive OfficerCEO and lead independent director, reviews each director’s continuation on the Board as a regular part of the annual nominating process. | | |
3
| 3 | | | Recommendation and Approval | | | ● •
After the Nominating and Corporate Governance Committee makes its recommendations, the full Board is responsible for final approval of new director candidates, as well as the nomination of existing directors for reelection.re-election. | | |
Recommendations on director candidates must be in writing and addressed to the Chair of the Nominating and Corporate Governance Committee, c/o
Corporate Secretary
at our principal executive office, located at Unisys Corporation, 801 Lakeview Drive, Suite 100, Blue Bell, Pennsylvania 19422.
Stockholder Nominations of Director Candidates
Any stockholder who intends to make a nomination for the Board
of Directors at the
annual meetingAnnual Meeting must deliver to the Company not less than 90 days prior to the date of the annual meeting (a) a notice 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 statementProxy Statement soliciting proxies for the election of the nominee and (b) the directors’ questionnaire, representation and agreement required by Article I, Section 8 of the Company’s Bylaws.
In addition to satisfying the requirements under the Company’s Bylaws, if a stockholder intends to comply with the SEC’s universal proxy rules and to solicit proxies in support of director nominees other than the Company’s nominees, the stockholder must provide notice that sets forth the information required by Rule 14a-19 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which notice must be postmarked or transmitted electronically to us at the address stated above for recommendations on director candidates no later than 60 calendar days prior to the one-year anniversary date of the Annual Meeting (for the 20242025 annual meeting, of stockholders, no later than March 6, 2024)3, 2025). If the date of the 20242025 annual meeting of stockholders is changed by more than 30 calendar days from such anniversary date, however, then the stockholder must provide notice by the later of 60 calendar days prior to the date of the 20242025 annual meeting of stockholders and the 10th10th calendar day following the date on which public announcement of the date of the 20242025 annual meeting of stockholders is first made by the Company.
2023 Proxy Statement | 2124 | | | | | | | | | | |
Corporate Governance Principles
Our Board of Directors highly values strong corporate governance principles and firmly believes that such principles create long-term value for our stockholders. Tenets of the strong corporate governance practices adopted by the Company include:
| | Board Independence
and Composition | | | Board Performance | | | Shareholder Rights | |
| | • | | | |
●
Highly diverse and qualified board Director skill set aligned with corporate strategy ● •
Effective lead independent director 91% of directors standing for reelectionre-election are independent Regular board refreshment and a mix of tenure •
Limit on outside directorships •
Mandatory retirement age of 74
| | |
| | Board Performance | | |
| | ● •Regular shareholder engagement● Committed
Commitment to social responsibility and sustainabilityoverseeing our approach to ESG Annual board and committee self-evaluations Regular executive sessions at Board and committee meetings ● •
Strong alignment between companyCompany performance and executive compensation •
Director onboarding and continuing education programs
| | |
| | Stockholder Rights | | | | | |
| | ● •
Annual election of all directors No stockholder rights plan Majority voting for uncontested director elections ● •
Supermajority voting provisions to protect certain stockholder rights No super voting or low voting stock Majority voting for directors in uncontested elections | | |
Board and Committee Structure
Board Leadership Structure
The Board believes that it should have the flexibility to make the selection of Chair of the Board and
Chief Executive OfficerCEO in the way that it believes best to provide appropriate leadership for the Company at any given point in time. Therefore, the Board does not have a policy on whether the same person should serve as both the CEO and Chair of the Board or, if the roles are separate, whether the Chair should be selected from the non-employee directors or should be an employee. Our corporate governance guidelines require the Board to elect a lead director from its independent directors whenever the Chair is an employee of the Company.
Each year, the Nominating and Corporate Governance Committee makes a recommendation regarding who should serve as Chair of the Board and, if the recommended Chair is not independent, who should serve as lead independent director. When making its recommendation regarding who should serve as Chair, the Nominating and Corporate Governance Committee assesses the skill set and qualifications that it believes are important for the Chair to possess and discusses who would most effectively lead the Board. The Board considers this recommendation when electing a Chair and, if necessary, a lead independent director. As a result of this process, the Board has determined that combining the positions of Chair and CEO and electing Mr. Altabef to serve as the Chair and Mr. Davis to serve as lead independent director best positions the Board and management to implement our strategy and deliver value to our stockholders. The Board believes that adopting this leadership structure provides independent board leadership and oversight while benefiting the Company by having Mr. Altabef, who has demonstrated the strong leadership and vision necessary to drive our strategies and achieve our objectives, also serve as Chair.
22 | | Corporate Governance2024 Proxy Statement | | | 25 | |
The Board
of Directors has four standing committees: (1) Audit and Finance, (2) Compensation and Human Resources, (3) Nominating and Corporate Governance, and (4) Security and Risk. The specific functions and responsibilities of each committee are set forth in its charter, which is available on the Company’s website at www.unisys.com/governance and is also available in print to any stockholder who requests it.
The current composition of each standing committee is set forth below:
Director | Director | | | Audit and
Finance
Committee | | | Compensation
and Human
Resources
Committee | | | Nominating and
Corporate
Governance
Committee | | | Security and
Risk Committee | |
| | Peter A. Altabef | | | | | | | | | | | | | |
| | Nathaniel A. Davis | | | | | | | | | | | | | |
| | Matthew J. Desch | | | |  | | | | | | | | | |
Denise K. Fletcher | Philippe Germond |  | | | | | | | | | | | | |
Philippe Germond | | | | | | | | |
| Deborah Lee James | | | | | | | | | | | | | |
| | John A. Kritzmacher | | | | | | | | | | | | | |
| | Paul E. Martin | | | | | | | | | | | | | |
| | Regina Paolillo | | | | | | | | | | | | | |
| | Troy K. Richardson | | | | | | | | | | | | | |
| | Lee D. Roberts | | | | | | | | | | | | | |
| | Roxanne Taylor | | | | | | | | | | | | | |
![[MISSING IMAGE: ic_roundbull-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-037875/ic_roundbull-pn.jpg)
Chair ![[MISSING IMAGE: ic_member-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-037875/ic_member-pn.jpg)
Member Chair Member | | | | | | | | |
| Audit and Finance Committee | | | | | |
| |
Members: Denise K. Fletcher
Regina Paolillo (Chair)
John A. Kritzmacher
Paul E. Martin
Regina PaolilloPhilippe Germond
| | | Purpose: •
Troy K. Richardson The Audit and Finance Committee assists the Board in its oversight of: the integrity of our financial statements and its financial reporting and disclosure practices; (2)
the adequacy and effectiveness of its systems of internal controls regarding financial reporting and accounting compliance; (3)
the qualifications, performance, independence, scope of responsibility and compensation of our independent registered public accounting firm; (4)
the performance, scope of responsibility and compensation of our internal audit function; and (5)
our compliance with legal and regulatory requirements and the adequacy and effectiveness of our ethical and environmental compliance programs. •
The Audit and Finance Committee is also responsible for (i) the Company’s cybersecurity and other information technology controls and procedures, in conjunction with the Security and Risk Committee, (ii) pension oversight, and (iii) preparing the report required by the SEC to be included in the Company’s annual Proxy Statement. •
The Audit and Finance Committee’s authority and responsibilities are specified in its charter, which may be accessed at our Investor Relations website at www.unisys.com/governance. | | |
| | Independence and Qualifications:
The Board has determined that each member of Ms. Fletcher, Mr. Kritzmacher, Mr. Martin, Ms. Paolillothe Audit and Mr. RichardsonFinance Committee qualifies as independent under the listing standards of the NYSE and is financially literate and that Ms. Fletcher,Paolillo and Mr. Kritzmacher and Ms. Paolillo are each an “audit committee financial expert” as defined by the SEC.
| |
| | Number of Meetings:11 | 13 | Purpose:
● The Audit and Finance Committee assists the Board in its oversight of:
(1) the integrity of our financial statements and its financial reporting and disclosure practices;
(2) the adequacy and effectiveness of its systems of internal controls regarding financial reporting and accounting compliance;
(3) the independence and qualifications of our independent registered public accounting firm;
(4) the performance of our internal audit function and our independent registered public accounting firm;
(5) our compliance with legal and regulatory requirements and the adequacy and effectiveness of its ethical and environmental compliance programs;
(6) our financial affairs, including its capital structure, financial arrangements, capital spending and acquisition and disposition plans; and
(7) the named plan fiduciaries responsible for the administration and the management and investment of plan assets in the pension, savings and welfare benefit plans sponsored by the Company.
● The Audit and Finance Committee is also responsible for preparing the report required by the SEC to be included in the Company’s annual proxy statement.
● Details of the Committee’s authority and responsibilities are specified in the Committee’s charter, which may be accessed at our Investor Relations website at www.unisys.com/governance.
| |
| | | | |
2023 Proxy Statement | 2326 | | | | | | | | | | Corporate Governance | |
| | Compensation and Human Resources Committee | | | | | |
| |
Lee D. Roberts (Chair) Matthew J. Desch Deborah Lee James Troy Richardson
Roxanne Taylor Independenceand Qualifications:
The Board has determined that each of Mr. Desch, Ms. James, Mr. Roberts and Ms. Taylor qualifies as independent under the listing standards of the NYSE.
Number of Meetings: 5
| | | Purpose: The Compensation and Human Resources Committee: oversees and recommends to the Board compensation changes for the CEO; (1) (2)
oversees the compensation of our other executive officers; oversees the compensation-related policies and programs involving our executive officers and the level of benefits of officers and key employees; reviews and recommends to the Board compensation of our directors; reviews the senior executive succession plan and the senior executive leadership development process as presented by the Chief Executive Officer;CEO; and reviews our human capital and people strategy as presented by the Chief Human Resources Officer.Officer (“CHRO”). The committeeCompensation and Human Resources Committee regularly reviews and approves our executive compensation strategy and principles to ensure they are aligned with our business strategy and objectives and with stockholder interests. Under its charter, the Compensation and Human Resources Committee annually reviews and approves goals and objectives relevant to the compensation of the Chief Executive Officer,CEO, evaluates the performance of the Chief Executive OfficerCEO in light of those goals and objectives and makes recommendations to the independent members of the Board concerning the compensation of the Chief Executive Officer.CEO. The committee alsoCompensation and Human Resources Committee annually reviews and approves compensation levels of the other executive officers. To do so, the committeeCompensation and Human Resources Committee solicits input from our Chief Executive OfficerCEO regarding the compensation of our other executive officers. The Compensation and Human Resources Committee also reviews and recommends to the Board the adoption of director compensation programs. The Company’s guidelines regarding the compensation of directors are described more fully under “Compensation of Directors” below. Under its charter, the Compensation and Human Resources Committee also annually reviews management’s assessment of risk as it relates to our compensation arrangements, practices, policies and programs for executive officers and other employees to determine whether such arrangements, practices, policies and programs encourage unnecessary or excessexcessive risk taking and whether any risks arising from such arrangements, practices, policies and programs are reasonably likely to have a material adverse effect on the Company. • The Compensation and Human Resources Committee regularly receives reports and recommendations from management and from its outside compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), to assist it in carrying out its responsibilities. During 2023, Meridian and its affiliates did not provide any additional services to the Company or its affiliates, and the work of Meridian has not raised any conflict of interest. The Compensation and Human Resources Committee also periodically reviews our human capital and people strategy, including regarding our culture, associate engagement and talent management, to assess alignment with achieving our long-term performance and growth objectives, including periodically reviewing our employee diversity, equity and inclusion policies, programs and initiatives and other recruitment, retention, development and internal human capital programs. Details of the Compensation and Human Resources Committee has engaged Meridian Compensation Partners, LLC (“Meridian”) as its outside compensation consultant. During 2022, Meridian and its affiliates did not provide any additional services to the Company or its affiliates, and the work of Meridian has not raised any conflict of interest.● Under its charter, the committee also may consult with legal, accounting or other advisors, as appropriate, and may form and delegate authority to subcommittees when appropriate.
● Details of the Committee’s authority and responsibilities are specified in the Committee’s charter, which may be accessed at our Investor Relations website at www.unisys.com/governance.
| | |
| | Independence and Qualifications: The Board has determined that each member of the Compensation and Human Resources Committee qualifies as independent under the listing standards of the NYSE. | |
| | Number of Meetings: 5 | | | |
24 | | Corporate Governance2024 Proxy Statement | | | 27 | |
| | Nominating and Corporate Governance Committee | | | | | |
| |
Philippe Germond (Chair) Deborah Lee James Lee D. Roberts Roxanne Taylor Independenceand Qualifications:
The Board has determined that each of Mr. Germond, Ms. James, Mr. Roberts and Ms. Taylor qualifies as independent under the listing standards of the NYSE.
Number of Meetings: 4
| | | Purpose: The Nominating and Corporate Governance Committee Committee: (1)
identifies and reviews candidates and recommends to the Board of Directors nominees for membership on the Board of Directors.Board. The director nomination process and the factors considered by the committee when reviewing candidates are described in “Director Nomination Process.”Process”; oversees the Company’s corporate governance, including developing and recommending to the Board the corporate governance guidelines adopted by the Board each year.year; and (3)● The Nominating and Corporate Governance Committee
oversees the evaluation of the Board of Directors, including reviewing annually with the Board the independence of outside directors and annually facilitating the Board’s self-assessment of its performance. The Nominating and Corporate Governance Committee also reviews management’s report on our posture with respect to environmental, social and governance (“ESG”)ESG and corporate social responsibility (“CSR”) matters. Details of the Nominating and Corporate Governance Committee’s authority and responsibilities are specified in the Committee’s charter, which may be accessed at our Investor Relations website at www.unisys.com/governance. | | |
| | | | |
Security and Risk Committee | |
|
Members:
Paul E. Martin (Chair)
Denise K. Fletcher
John A. Kritzmacher
Regina Paolillo
Troy K. Richardson
Independence and Qualifications:
The Board has determined that each member of Ms. Fletcher, Mr. Kritzmacher, Mr. Martin, Ms. Paolillothe of Nominating and Mr. RichardsonCorporate Governance Committee qualifies as independent under the listing standards of the NYSE.
| |
| | Number of Meetings:4 | 4 | |
| | Security and Risk Committee | | | | | |
| | Members: Paul E. Martin (Chair)
John A. Kritzmacher
Regina Paolillo
Troy K. Richardson | | | Purpose: The Security and Risk Committee assists the Board of Directors in its oversight responsibilities with regard to the Company’s organization-wide security and enterprise risk management practices, including: overseeing the practices, procedures and controls that management uses to identify, manage and mitigate risks related to cybersecurity, privacy and disaster recovery and respond to incidents with respect thereto; and overseeing the practices, procedures and controls that management uses to identify, manage and mitigate other key enterprise risks that the Company faces such as strategic, commercial, physical security, property, workplace safety, legal, regulatory, and reputational risks. Details of the Security and Risk Committee’s authority and responsibilities are specified in the Committee’s charter, which may be accessed at our Investor Relations website at www.unisys.com/governance. | | |
| | Independence and Qualifications: The Board has determined that each member of Security and Risk Committee qualifies as independent under the listing standards of the NYSE. | |
| | Number of Meetings: 5 | | | |
2023 Proxy Statement | 2528 | | | | | | | | | | Corporate Governance | |
Board Meetings and Attendance; Executive Sessions
The Board
of Directors held
fiveseven meetings in
2022.2023. During
2022,2023, all directors attended at least 75% of the total number of meetings of the Board and standing committees on which they served (held during the period when the director served)
, other than Lee Roberts, who attended all of the meetings of the Board and standing committees on which he served other than four meetings held in February 2022, which he missed for medical reasons..
It is our policy that all directors should attend the annual meeting of stockholders. All of our current directors who were directors at the time of the
20222023 annual meeting
of stockholders (the “2023 annual meeting”) attended that meeting.
The
In general, the non-employee directors meet in executive session at all regularly scheduled Board
and committee meetings. They may also meet in executive session at any time upon request. If the Chair of the Board is an employee of the Company, the lead independent director presides at executive sessions. If the Chair is not an employee, the Chair presides at executive sessions.
Annual Board and Committee Self-Evaluations
The Board conducts an annual self-evaluation to determine whether it and its committees are functioning effectively. In addition, each committee conducts an annual self-evaluation of its performance and reports on its findings annually to the Board.
Evaluation | | | Feedback Analysis | | | Presentation Of
Findings & Follow-Up | |
| | | | |
The Chair of the Nominating and Corporate Governance Committee oversees the process. Each director completes a detailed questionnaire assessing the functioning and effectiveness of the full Board as well as each Committee on which they serve. Individual interviews are also conducted with each director by the Chair of the Nominating and Corporate Governance Committee. |  | The results of the assessment of the Board are shared with the Chair of the Board, the Lead Independent Director and the results of the assessment of each Committee are shared with the chairs of the committees. The aggregated responses to the questionnaires are also shared with the members of the Board and each Committee. | | The Board, led by the Chair of the Nominating and Corporate Governance Committee, and each Committee, led by its Chair, review and discuss the results of assessment to identify areas requiring performance enhancement, process improvement or the development or acquisition of further Board skills. |
![[MISSING IMAGE: tb_annualboard-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-037875/tb_annualboard-pn.jpg)
Board’s Role in Corporate Oversight
In its oversight role, the Board of Directors annually reviews our strategic and operating plans. Each year, the Board meets with our leadership team during a meeting dedicated to discussing our strategy for the coming year in light of our longer-term strategic goals. During these sessions, the leaders of our businesses provide the Board with their view of the key risks and opportunities facing each business unit and the Board provides guidance and advice to the leadership teammanagement regarding the formulation and implementation of our strategic goals. Once the business strategy has been determined, it is the responsibility of our leadership teammanagement to execute the strategy in alignment with our operating plan. The Board monitors the leadership team’smanagement’s performance against our strategic goals by receiving regular updates from the leadership team,management, actively engaging in dialogue with our senior leaders, and reviewing our performance against our operating plan.
Board and Committee Oversight of Enterprise Risk
Enterprise risk management (“ERM”) is an integral part of our business processes. The leadership team is primarily responsible for establishing policies and procedures designed to identify, assess and manage the Company’s material short-, intermediate-, and long-term risks. Management has an ERM committee, comprised of the members of our leadership team and supported by other executives with subject-matter expertise, that provides oversight of enterprise risks and our processes to identify, measure, monitor, manage and mitigate these risks. We regularly engage outside advisors, as appropriate, to assist in the identification and evaluation of risks. Our risk oversight processes and disclosure
26 | | Corporate Governance2024 Proxy Statement | | | 29 | |
controls and procedures are designed to appropriately escalate key risks for the Security and Risk
OversightCommittee and the Board as well as to analyze potential risks for disclosure.
The Security and Risk Committee oversees the ERM process, including reviews of the most significant risks the Company faces and the manner in which our management manages these risks, and regularly reports and escalates key risks to the Board. In accordance with NYSE Corporate Governance Standards, the Audit and Finance Committee charter assigns to the Audit and Finance Committee the responsibility to discuss with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures. The Security and Risk Committee charter separately assigns to the Security and Risk Committee the responsibility to review our policies and procedures with respect to risk assessment and risk management. Annually, we conduct a formal risk assessment of our business, which includes input from key business unit and functional leaders as well as our directors that provides the basis for the Audit and Finance Committee’s, the Security and Risk Committee’s and Board’s risk review and oversight process. Our Board and its committees routinely receive reports from significant business units and functions, and these presentations include a discussion of the business, regulatory, compliance, operational, and other risks associated with planned strategies and tactics. The Board adopted a framework pursuant to which it delegated oversight for certain categories of Directors annually reviewsenterprise risks to each of its standing committees, as discussed above and shown below. Each committee provides periodic reports to the risksBoard regarding its oversight of these enterprise risks. This structure enables the Board and opportunities facingits committees to coordinate the Company.risk oversight role.
| | BOARD OF DIRECTORS | | |
| ● •
Annually reviews our strategic and operation plans, which address, among other things, the risks and opportunities facing the Company. Has delegated certain risk management oversight responsibility to the Board committees. Each committee regularly reports to the full Board. Has overall responsibility for executive officer succession planning and reviews succession plans each year. | | |
| | | |
 |
| Audit and Finance Committee | | | | Security and Risk Committee | |
| ● •
Receives quarterly reports from the Chief Financial Officer, Corporate Controller, General Counsel, Chief Compliance Officer, on our complianceinternal audit function and ethics program.our independent registered public accounting firm. Regularly reviews with management the leadership teamCompany’s liquidity and capital structure. •
Oversees, in conjunction with the Security and Risk Committee, our financial arrangements, capital structurecybersecurity and our ability to access the capital markets.other information technology controls and procedures. Oversees named plan fiduciaries responsible for the administration and the management and investment of our pension assets as well as the performance of pension plan investments. | | | | ● •
Has oversight responsibilities with regard to our organization-wide security and enterprise risk management practices.ERM practices, including cybersecurity, privacy and disaster recovery. Responsible for discussing with the leadership team our major financial risk exposures (other than with respect to financial reporting and executive compensation) and the steps management has taken to monitoridentify, manage and controlmitigate those exposures, including our risk assessment and risk management policies. | |
| | Nominating and Corporate Governance Committee | | | | Compensation and Human Resources Committee | |
| | ● •
Annually reviews our corporate governance guidelines and their implementation. •
Regularly reviews and monitors other matters relating to the corporate governance of the Company. | | | | ● •
Annually reviews the leadership team’s assessment of risk as it relates to the Company’s compensation arrangements. | |
| | MANAGEMENT | | |
| | |
MANAGEMENT |
●
Our ChiefInternal Audit Executive prepares annually a corporateFunction is responsible for evaluating and improving the effectiveness of the organization’s risk assessment reportmanagement, control, and governance processes. It provides that reportobjective assurance and advisory services designed to add value to the Board of Directors. This report identifies the material business risks (including strategic, operational, financial reporting and compliance risks) for the Company and identifies the controls and management initiatives that respond to and mitigate those risks.organization. Our leadership team regularly evaluates these controls, and the ChiefInternal Audit Executive periodicallyFunction reports quarterly to the SecurityAudit and RiskFinance Committee regarding their design and effectiveness.
| | |
| | 30 | | | | | | | | | | Corporate Governance | |
| | Cybersecurity Oversight | | | | | | | | |
| | |
The Security and Risk Committee’s responsibilities include reviewing the leadership team’s implementationcrisis preparedness and incident response plans, monitoring our enterprise risk profile and its ongoing and potential exposure to risks of cybersecurity programs, privacy programs and risk policies and procedures and the leadership team’s actions to (1) safeguard the effectiveness of such programs and policies and the integrity of our electronic systems and facilities and (2) prevent, detect and respond to cyber-attacks or information or data breaches involving our electronic information, intellectual property and data. In addition, the Security and Risk Committee receives information from the Chief Information Officer regarding matters related to the management of cybersecurity risk and information from the Chief Privacy Officer regarding matters related to the management of privacy risks. The Security and Risk Committee also receives and reviewsvarious types, reviewing summaries of any incidents or activities, reviewing reports or presentations from management or advisors, including third-party experts, regarding the management of enterprise risk programs, periodically meeting with the Chief Information Security Officer (“CISO”) and Chief Privacy Officer (“CPO”) and periodically briefing the full Board on cybersecurity matters. Additionally, the Audit and Finance Committee has general oversight over our cybersecurity as it relates to responsibility for our internal audit function, including cybersecurity practices, compliance with legal and regulatory requirements and internal control over financing reporting. In November 2023, the Audit and Finance Committee charter was amended to ensure that it, in conjunction with the Security and Risk Committee, reviews our cybersecurity and other information technology controls and procedures no less than annually. Management’s Disclosure Committee assists in fulfilling our obligations to maintain disclosure controls and procedures and coordinates and oversees the process of preparing our periodic securities filings with the SEC. Cybersecurity incidents, based on their severity, are requiredescalated to the Disclosure Committee by our Security Incident Response Team. The Disclosure Committee is comprised of the CEO, Chief Operating Officer (“COO”), Chief Financial Officer (“CFO”), General Counsel, Chief Compliance Officer and Chief Accounting Officer (“CAO”). The COO represents our business units and the CISO reports to the COO. The Disclosure Committee meets on a quarterly basis and more often, if necessary, and invites subject matter experts to meetings, as appropriate. We have policies and procedures in place designed to provide appropriate information of any matters to our Disclosure Committee that should be reportedconsidered in advance of applicable public filings, including cybersecurity matters, and to address the proper handling and escalation of information to management and the Board or a committee of the committee pursuant to any escalation policies applicableBoard, including the Security and Risk Committee and the Audit and Finance Committee. In addition to the Company’s Corporate Security & Infrastructure Office.oversight of the Board, members of our management, including our CISO, CPO and Chief Information Officer, are responsible for assessing and managing material cybersecurity risks. | | | | | |
| | | | |
Table of Contents
ESG and HCM Oversight
At Unisys, we understand our responsibility to the world around us as well as to our people. We demonstrate the importance of this responsibility by ensuring that our Board, either directly or through its committees, has oversight of ESG and HCM matters. Under its charter, the Nominating and Corporate Governance Committee is responsible for reviewing our report regarding ESG and CSR matters. Among its other responsibilities, the Compensation and Human Resources Committee periodically reviews our human capital and people strategy for achieving our long-term performance and growth objectives, including our employee diversity and inclusion policies, programs, initiatives and other recruitment, retention, development and internal communications programs.
Communications with our Directors
Stockholders and other interested parties may send communications to the Board of Directors or to the non-employee directors as a group by writing to them c/o Corporate Secretary, Unisys Corporation, 801 Lakeview Drive, Suite 100, Blue Bell, Pennsylvania 19422. All communications directed to Board members will be delivered to them.
| | 2024 Proxy Statement | | | 31 | |
Other Governance Policies and Procedures
Corporate Governance Guidelines
The Board
of Directors has adopted Guidelines on Significant Corporate Governance Issues. The full text of these guidelines is available on the Company’s website at www.unisys.com/governance and is also available in print to any stockholder who requests it.
Code of Ethics and Business Conduct
The Unisys Code of Ethics and Business Conduct applies to all employees, officers (including the
Chief Executive Officer, Chief Financial OfficerCEO, CFO and
Chief Accounting Officer orCAO and controller) and directors. The code is posted on the Company’s website at www.unisys.com/ethics and is also available in print to any stockholder who requests it. The Company intends to post amendments to or waivers from the code (to the extent applicable to the Company’s
Chief Executive Officer, Chief Financial OfficerCEO, CFO or
Chief Accounting OfficerCAO or controller) at this location on its website.
Related Party Transactions
The Company is required to disclose any transactions since the beginning of
20222023 (or any currently proposed transaction) in which the Company was a participant, the amount involved exceeds $120,000 and a director or executive officer, any immediate family member of a director or executive officer or any person or group beneficially owning more than 5% of the Company’s common stock had a direct or indirect material interest. We do not have any such transactions to report.
Currently we have not adopted a policy specifically directed at the review, approval or ratification of related party transactions required to be disclosed. However, under the Unisys Code of Ethics and Business Conduct, all employees, officers and directors are required to avoid conflicts of interest. Employees (including officers) must review with, and obtain the approval of, their immediate supervisor and the Company’s Chief Compliance Officer or their delegate, any situation (without regard to dollar amount) that may involve a conflict of interest. Directors should raise possible conflicts of interest with the Chief Executive OfficerCEO or the general counsel. The code of ethics defines a conflict of interest as any relationship, arrangement, investment or situation in which loyalties are divided between Unisys interests and personal interests and specifically notes involvement (either personally or through a family member) in a business that is a competitor, supplier or client of the Company as a particularly sensitive area that requires careful review.
Compensation Committee Interlocks and Insider Participation
In 2023, the members of our Compensation and Human Resources Committee were Matthew J. Desch, Deborah Lee James, Troy Richardson, Roxanne Taylor and Lee D. Roberts, our chair of the Compensation and Human Resources Committee. None of the members of our Compensation and Human Resources Committee in 2023 was at any time during 2023 or at any other time an officer or employee of the Company or any of its subsidiaries, and none had or have any relationships with the Company that are required to be disclosed under Item 404 of Regulation S-K under the Exchange Act. None of our executive officers has served as a member of the Board, or as a member of the compensation or similar committee, of any entity that has one or more executive officers who served on our Board or our Compensation and Human Resources Committee.
28 | | | | | | | | | | | Corporate Governance | |
Compensation of Directors
| Annual Retainers | | | | | | | | |
| Cash | | | | | | $ | 85,000 | |
| Restricted Stock Units | Restricted Stock Units having a value of $200,000 | |
| Additional Cash Retainer | | | Chair | | | Member | |
| Lead Independent Director | | | | | | $ | 50,000 | |
| Committees | | | | | | | | |
| Audit and Finance | | $ | 30,000 | | | $ | 12,000 | |
| Compensation and Human Resources | | $ | 20,000 | | | $ | 10,000 | |
| Nominating and Corporate Governance | | $ | 16,250 | | | $ | 7,500 | |
| Security and Risk | | $ | 16,500 | | | $ | 7,500 | |
Our current compensation program for non-employee members of the Board is summarized below:
| | Annual Retainers | | | | | | | | | | | | | |
| | Cash | | | | | | | | | | $ | 85,000 | | |
| | Equity | | | having a value of $200,000 | |
| | Additional Cash Retainer | | | | | Chair | | | | | | Member | | |
| | Lead Independent Director | | | | | | | | | | $ | 50,000 | | |
| | Committees | | | | | | | | | | | | | |
| | Audit and Finance | | | | $ | 30,000 | | | | | $ | 12,000 | | |
| | Compensation and Human Resources | | | | $ | 20,000 | | | | | $ | 10,000 | | |
| | Nominating and Corporate Governance | | | | $ | 16,250 | | | | | $ | 7,500 | | |
| | Security and Risk | | | | $ | 16,500 | | | | | $ | 7,500 | | |
Under our Guidelines on Significant Corporate Governance Issues, our leadership team reports to the Compensation and Human Resources Committee annually on the status of Board compensation in relation to our peer group of companies. Changes in Board compensation, if any, originate with the Compensation and Human Resources Committee, but are approved by the full Board following discussion. Particular attention is paid to structuring Board compensation in a manner aligned with stockholder interests. In this regard, a meaningful portion of a director’s compensation is provided in
stock unit awards.the form of equity. It is expected that directors will not, except in rare circumstances approved by the Board, draw any consulting, legal or other fees from the
Company.Company, other than directors’ fees. In no event shall any member of the Audit and Finance Committee receive any compensation from the Company other than directors’ fees.
At a meeting of the Board of Directors on February 4, 2022,8, 2023, the Board approved a annual equity grant to each non-employee director, to be effective on February 25, 202228, 2023. For each non-employee director other than Mr. Kritzmacher, the grant was for a number of restrictedshares of Unisys common stock units that resultsdetermined by dividing $200,000 by the fair market value of a share of Unisys common stock on the effective date of the grant and rounding up to the nearest whole share. As a result, on February 25, 2022,28, 2023, each non-employee director as of that date other than Mr. Kritzmacher received an annual grant of 9,187 restricted stock units having a value of $200,001 based on the fair market value of Unisys common stock on that date that vested immediately. 40,161 shares.
Non-employee directors who first join the Board after the annual grant date receive pro-rated grants based on the date on which their service begins. Mr. Kritzmacher joined the Board during 2022, but after 2022 annual director grants were made. Accordingly, Mr. Kritzmacher’s 2023 annual equity grant was enlarged by an amount equal to a pro-rata portion of the 2022 grant. As a result, he received a number of shares of Unisys common stock determined by dividing $233,333.33 by the fair market value of a share of Unisys common stock on the grant date and rounding up to the nearest whole share, resulting in an annual grant to him of 46,854 shares.
Directors may defer receipt of
these restricted stock unitsthe shares underlying their shares until termination of service, or until a specified date, under our deferred compensation plan for directors.
The annual cash retainers described above are paid in monthly installments in cash.installments. Directors may defer until termination of service, or until a specified date, all or a portion of their cash fees under our deferred compensation plan for directors. Under this plan, any deferred cash amounts, and earnings or losses thereon (calculated by reference to investment options available under the Unisys Savings Plan and selected by the director), are recorded in a memorandum account maintained for each director. Formerly, directors may choose, on an annual basis, to receive their fees in the form of common stock equivalent units under the Unisys Corporation Director Stock Unit Plan. 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 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 a date specified by the director, at the director’s choice. Directors do not have the right to vote with respect to any deferred stock units. This plan was terminated in 2004 and no shares (other than shares subject to outstanding awards previously received) are available for future issuance under this plan. 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, stock options or restricted stock unitsadditional compensation for their services as directors. The following table provides a summary of the compensation of current non-employee directors serving during 2022 (Mr. Kritzmacher, who was elected2023:
| | 2024 Proxy Statement | | | 33 | |
| | Name | | | Fees
Earned
or Paid
in Cash(1)
($) | | | Stock
Awards(2)
($) | | | Option
Awards
($) | | | Non-Equity
Incentive Plan
Compensation
($) | | | Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings | | | All Other
Compensation
($) | | | Total
($) | |
| | Nathaniel A. Davis
Lead Independent Director | | | | | 135,000 | | | | | | 200,002 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 335,002 | | |
| | Matthew J. Desch | | | | | 95,000 | | | | | | 200,002 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 295,002 | | |
| | Denise K. Fletcher
Former Chair, Audit and Finance Committee | | | | | 51,042 | | | | | | 200,002 | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 251,044 | | |
| | Philippe Germond
Chair, Nominating and Corporate Governance Committee | | | | | 103,605 | | | | | | 200,002 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 303,607 | | |
| | Deborah Lee James | | | | | 102,500 | | | | | | 200,002 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 302,502 | | |
| | John A. Kritzmacher | | | | | 104,320 | | | | | | 233,333 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 337,653 | | |
| | Paul E. Martin
Chair, Security and Risk Committee | | | | | 113,320 | | | | | | 200,002 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 313,322 | | |
| | Regina Paolillo
Chair, Audit and Finance Committee | | | | | 115,000 | | | | | | 200,002 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 315,002 | | |
| | Troy K. Richardson | | | | | 103,153 | | | | | | 200,002 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 303,155 | | |
| | Lee D. Roberts
Chair, Compensation and Human Resources Committee | | | | | 112,320 | | | | | | 200,002 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 312,322 | | |
| | Roxanne Taylor | | | | | 102,500 | | | | | | 200,002 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 302,502 | | |
(1)
Amounts shown are the annual board retainer and annual retainer fees for chairs of committees, committee membership and lead independent director. Includes amounts that have been deferred under the deferred compensation plan for directors.
(2)
Amounts shown are the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions made in such valuation, see note 19 to the Board on December 13, 2022, is notour 2023 financial statements included in the following table as he did not receive anyAnnual Report. Includes awards that have been deferred under the deferred compensation during 2022):plan for directors.
Table of Contents
| Name | | | Fees
Earned
or Paid
in Cash(1)
($) | | | | Stock
Awards(2) (3)
($) | | | | Option
Awards(4)
($) | | | | Non-Equity
Incentive Plan
Compensation
($) | | | | Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings | | | | All Other
Compensation
($) | | | | Total
($) | |
Nathaniel A. Davis
Lead Independent Director | | | 135,000 | | | | 200,001 | | | | — | | | | — | | | | — | | | | — | | | | 335,001 | |
| Matthew J. Desch | | | 95,000 | | | | 200,001 | | | | — | | | | — | | | | — | | | | — | | | | 295,001 | |
Denise K. Fletcher
Chair, Audit and Finance Committee | | | 122,500 | | | | 200,001 | | | | — | | | | — | | | | — | | | | — | | | | 322,501 | |
Philippe Germond
Chair, Nominating and Corporate Governance Committee | | | 101,250 | | | | 200,001 | | | | — | | | | — | | | | — | | | | — | | | | 301,251 | |
| Deborah Lee James | | | 102,500 | | | | 200,001 | | | | — | | | | — | | | | — | | | | — | | | | 302,501 | |
Paul E. Martin
Chair, Security and Risk Committee | | | 113,500 | | | | 200,001 | | | | — | | | | — | | | | — | | | | — | | | | 313,501 | |
| Regina Paolillo | | | 104,500 | | | | 200,001 | | | | — | | | | — | | | | — | | | | — | | | | 304,501 | |
| Troy K. Richardson | | | 104,500 | | | | 200,001 | | | | — | | | | — | | | | — | | | | — | | | | 304,501 | |
Lee D. Roberts
Chair, Compensation and Human Resources Committee | | | 112,500 | | | | 200,001 | | | | — | | | | — | | | | — | | | | — | | | | 312,501 | |
| Roxanne Taylor | | | 99,583 | | | | 200,001 | | | | — | | | | — | | | | — | | | | — | | | | 299,584 | |
(1) | Amounts shown are the annual board retainer and annual retainer fees for chairs of committees, committee membership and lead independent director. Includes amounts that have been deferred under the deferred compensation plan for directors. |
(2) | Amounts shown are the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions made in such valuation, see note 18 to our 2022 financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2022. Amounts shown are in respect of the 9,187 restricted stock units granted to non-employee directors. Includes awards that have been deferred under the deferred compensation plan for directors. |
(3) | At December 31, 2022, Ms. Fletcher had outstanding 1,314.8 stock units in respect of directors’ fees and no other director had any such stock units. |
(4) | At December 31, 2022, none of the directors had outstanding stock options. |
Stock Ownership Guidelines
Under our stock ownership guidelines, directors are expected to own Unisys stock or stock units having a value equal to five times their annual retainer within five years after the director’s date of election to the Board. As a result of the increase in the expected ownership level resulting from the increase in the annual retainer paid toDecember 31, 2023, all directors in 2019, directors serving as of January 1, 2019 will have until January 1, 2024 to beare compliant with the new expected ownership level.exception of those with a grace period based on less than five years of their date of election. The number of shares owned by each director is set forth in the stock ownership table on page 71.77.
5x | | | | | | | | | | | | | | | | | |
| | 5x | | | | | | | | | | What Counts | | | | | | | | | | What Does Not Count | | | | | |
| | | | | |
| Cash component of annual retainer for directors | | | | | | | ● •
Shares owned directly or beneficially in the director’s name Stock units deferred under a Unisys deferred compensation plan Shares owned by the director’s spouse | | | | | | | ● •
Unvested performance-based stock unit awards ● Unvested stock options
● Vested stock options that are not “in-the-money”
| | |
| | | | | | | | | | | | | | | | | | |
30 | 34 | | | | | | | | | | |
| Proposal 2
| |
| | Advisory Vote to Approve
Executive Compensation | |
In accordance with Section 14A of the
Securities Exchange Act,
of 1934, as amended (the “Exchange Act”), which was added under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company is asking stockholders to approve an advisory resolution
onapproving the compensation of its named executive officers, as described below in this
proxy statementProxy Statement in “Executive Compensation”, “Summary Compensation Table” and the related compensation tables and narrative.
As described in detail in “Compensation Discussion and Analysis” beginning on page
31,35, our executive compensation program is designed to attract, motivate and retain executives who lead our business, to reward them for achieving financial and strategic company goals and to align their interests with the interests of stockholders. We believe that the compensation of our named executive officers is reasonable, competitive and strongly focused on pay-for-performance principles, with a significant portion of target compensation at risk and performance-based. We emphasize compensation opportunities that appropriately reward executives for delivering financial results that meet or exceed pre-established goals, and executive compensation varies depending upon the achievement of those goals. Through stock ownership requirements and equity incentives, we also align the interests of our executive officers with those of stockholders and the long-term interests of the Company. We believe that the policies and procedures articulated in “Compensation Discussion and Analysis” are effective in achieving our goals and that the executive compensation reported in this
proxy statementProxy Statement was appropriate and aligned with
20222023 results. Please read “Compensation Discussion and Analysis” below, as well as the compensation tables and narrative that follow it, for additional details about our executive compensation programs and compensation of our named executive officers in
2022.2023.
For the reasons set forth above, the Company is asking stockholders to approve the following advisory resolution at the
annual meeting:Annual Meeting:
RESOLVED, that the stockholders of Unisys Corporation approve, on an advisory basis, the compensation of the Company’s named executive officers set forth in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narrative in the Proxy Statement for the Company’s
20232024 Annual Meeting of Stockholders.
This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Company’s Board of Directors. However, the Board and the Compensation and Human Resources Committee will review and consider the vote when making future executive compensation decisions.
 | | | | The Board of Directors recommends a vote “FOR”the non-binding advisory resolution approving the compensation of the Company’s named executive officers as described in this proxy statement.Proxy Statement. | |  |
2023 | 2024 Proxy Statement | 31 | | 35 | |
Compensation Discussion & Analysis
This section details the objectives and elements of the Unisys executive compensation program, describes the related processes of our Compensation and Human Resources Committee
(referred to in this Compensation Discussion and Analysis section as “CHRC” or the “Committee”), and discusses the compensation earned by our Named Executive Officers (“NEOs”). For
2022,2023, our NEOs were:
 • | Peter A. Altabef
Chair and Chief Executive Officer
| |  | Katherine Ebrahimi
Senior Vice President and Chief Human
Resources Officer
|
| | | | |
 | Debra McCann(1)
Executive Vice President and Chief
Financial Officer
| |  | Teresa Poggenpohl
Senior Vice President and Chief
Marketing Officer
|
| | | | |
 | Michael M. Thomson
President and Chief Operating Officer
and Former Executive Vice President
and Chief Financial Officer
| |  | Gerald P. Kenney(3)
Former Senior Vice President, General
Counsel and Corporate Secretary
|
| | | | |
 | Claudius Sokenu(2)
Senior Vice President, General
Counsel, Corporate Secretary and Chief
Administrative Officer
| | | |
(1) | Ms. McCann is a new hire as of May 2, 2022. |
(2) | Mr. Sokenu is a new hire as of May 2, 2022. In addition to his role as General Counsel and Corporate Secretary, Mr. Sokenu was named Chief Administrative Officer in October 2022. |
(3) | Mr. Kenney’s employment with the Company terminated effective April 30, 2022. Severance payable to Mr. Kenney is described under the “Transition Agreement with Mr. Kenney” section. |
Peter Altabef
Table of Contents
32 | | Advisory Vote to Approve Executive Compensation |
•
Debra McCann — Executive Vice President and Chief Financial Officer
•
Teresa Poggenpohl — Senior Vice President and Chief Marketing Officer
•
Michael M. Thomson — President and Chief Operating Officer
•
Katherine Ebrahimi — Senior Vice President and Chief Human Resources Officer(1)
•
Claudius Sokenu — Former Senior Vice President, General Counsel, Secretary and Chief Administrative Officer(2)
(1)
Ms. Ebrahimi will step down from her role as Senior Vice President, Chief Human Resources Officer and separate from Unisys on March 31, 2024. Severance payable to Ms. Ebrahimi is described under the “Transition Agreement with Ms. Ebrahimi” section.
(2)
Mr. Sokenu ceased to serve as Senior Vice President, General Counsel, Secretary and Chief Administrative Officer on June 30, 2023.
Stockholder Outreach2022 Overview — Where
We
Are TodayUnisys is a global technology solutions company that powers breakthroughs for the world’s leading organizations. Our agile technology solutions drive transformation across digital workplace; cloud, applications and infrastructure; enterprise computing; and business process solutions. From our origins dating back to 1873 through the formation of Unisys in 1986, we have built a legacy of innovation and reputation of trust. Across industries, we partner with clients on the mission-critical systems that support their daily operations, solving many of their toughest technology challenges across complex and highly regulated environments.
In 2022, the Company held revenue flat during a year of geopolitical and macroeconomic uncertainty. We expanded our Next-Gen Solutions, including Modern Workplace, Digital Platforms and Applications (DP&A), Specialized Services and Next-Gen Compute (SS&C), and micro-market solutions. These are our higher growth and margin solutions aligned with areas of the market where we see strong client demand. We see an opportunity to generate sustainable growth and margin expansion as these Next-Gen Solutions become a larger mix of the business and focus of our global sales efforts.
In November 2022, we launched the most significant brand transformation for Unisys since 1986. We now have a new brand identity for a new era of our company. Our future-focused brand story centers on progress and positions Unisys as the catalyst pushing people and organizations to break through to their next big innovation. The accompanying new brand campaign aims to increase awareness and transform perceptions of Unisys and our advanced solutions with key target audiences: clients, prospects, industry analysts, third-party advisors, and recruits. We anticipate the differentiated, relevant new Unisys brand and campaign will drive deeper client engagement and tangible value for the business, notably across key sales metrics such as leads, pipeline, wins, and revenue growth over time.
Shareholder Outreach
Each year, we make comprehensive efforts to proactively engage our shareholdersstockholders to obtain important feedback, including discussing how our executive compensation program supports our strategy. SeniorIn the past, senior executives and directors of the Company, including the Chair of the Compensation and Human Resources Committee and Lead Independent Director, have participated in these investor meetings.
We received significant support for our say-on-pay proposal at the Company’s 20212022 and 20222023 annual stockholdersstockholders’ meetings with more than 97.7%97% of the shares voted in favor in 20212022 and 97.6%84.5% in 2022.2023. We remain engaged with shareholdersstockholders and will continue to address shareholderstockholder feedback and considerations through changes to the executive compensation plans if the Compensation and Human Resources Committee believes that such changes are consistent with its pay philosophy and the Company’s overall business strategy.
The table below illustrates a three-year lookback and progression of Unisys Revenue Growthrevenue growth, operating profit margin and Non-GAAP Operating Profit Margin. Revenue declined 3.6%non-GAAP operating profit margin. For the year ended 2023, revenue increased 1.8%, while Operating Profitoperating profit was 8.0%3.8% and non-GAAP operating profit was 7.0%.
(1)
For a discussion and reconciliation of our GAAP measures to non-GAAP measures, please see Appendix A to this Proxy Statement and the earnings release attached as Exhibit 99.1 to our Current Report on Form 8-K furnished with the SEC on February 21, 2024 (but such report shall not be deemed to be incorporated by reference to this Proxy Statement).
| | Revenue Growth2024 Proxy Statement | | Non-GAAP Operating
Profit Margin | |
| 37 |  | |  | |
How Did We Perform in
2022?2023?
In 2022,2023, we made measurable progress onexceeded our key operational and financial objectives and exitedupwardly revised full-year guidance ranges. During the year, with strong momentum inwe grew our leading indicators. More specifically, we achieved double digitbacklog, signed 18% more New Business total contract value (“TCV”) than the prior year, over year growth in Annual Contract Value, Total Contract Value and Pipeline and expanded our Book-to-Bill ratio to 1.1x, up from 0.8x in 2021.New Business pipeline. We continuedprogressed towards our progress in shiftinglong-term financial goals and are particularly pleased with our full-year free cash flow performance, which improved by nearly $70 million year-over-year.
During 2023, our revenue
to our higher value Next-Gen Solutions. We are excited for the future with a new brand identity and marketing campaign designed to build awareness for Unisys and its key solutions.During 2022, our revenue declined 3.6% year over yearincreased 1.8% year-over-year on a reported basis, an increase of 0.1%1.6% in constant currency. Non-GAAPOperating profit margin and non-GAAP operating profit margin were 3.8% and 7.0%, respectively. Net loss as a percentage of revenue and adjusted EBITDA marginsas a percentage of revenue were 8%(21.4)% and 16.5%14.2% respectively. For a reconciliation of our GAAP measures to non-GAAP measures, please see Appendix A to this Proxy Statement and the earnings release attached as Exhibit 9999.1 to our Current Report on Form 8-K filed with the SEC on February 22, 2023.21, 2024 (but such report shall not be deemed to be incorporated by reference to this Proxy Statement).
| Revenue | | Non-GAAP Operating
Profit Margin | | Adjusted EBITDA Margin | |
| 2022 Actual: $1,980M or
-3.6% Year-Over-Year | | 2022 Actual: 8.0% | | 2022 Actual: 16.5% | |
| | | | | Revenue | | | Operating Profit
Margin | | | Non-GAAP
Operating
Profit Margin | | | Net Loss as a
Percentage of
Revenue | | | Adjusted EBITDA as
a Percentage of
Revenue | |
| | 2023 Actual | | | $2,015.4M | | | 3.8% | | | 7.0% | | | (21.4)% | | | 14.2% | |
The global GAAP pension deficit improvementincreased during 20222023 by approximately $160 million to approximately $700 million. Approximately, $70 million of this increase was due to the purchase of insurance contracts in our overfunded UK plans, using plan assets, as the first step towards an anticipated full-risk transfer of those plans. The remainder of the deficit increase was due primarily to lower discount rates. During the year, we executed our pension management strategy with two annuity purchases that transferred an aggregate of approximately $210 million. Based on calculations$500 million in pension liabilities to a third-party insurer. These transactions were funded with plan assets.
In 2023, we had operating cash flow of $74.2 million, ($4.5) million of free cash flow and actuarial assumptions as$43.5 million of December 31, 2022, which are likely to change in the future, we do not expect to make mandatorypre-pension free cash contributions to our U.S. qualified defined benefit pension plans until 2025.flow. We had approximately $392$387.7 million in cash and cash equivalents on the balance sheet as of December 31, 2022.
34 | | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
2022
2023 Compensation Highlights
| Pay Component | | What We Did | | | | | | Why We Did It |
| Base Salary | | In 2022, Mr. Thomson received an 18.7% increase in base salary based on change in role to Chief Operating Officer and market considerations and Ms. Ebrahimi and Ms. Poggenpohl received a 3.8% and 3.3% increase respectively in base salary based on market considerations. No other NEOs received increases in 2022. |  | The increase in Mr. Thomson’s base salary is based on change in role to Chief Operating Officer, performance, and market considerations, while the increase in Ms. Ebrahimi’s and Ms. Poggenpohl’s base salaries was based on performance and market considerations. |
Short-Term
Incentives (“STI”) | | Mr. Thomson’s STI target percentage increased from 95% to 110%. No other NEOs received STI target percentage increases in 2022. | | The increase in Mr. Thomson’s STI target is due to his transition to his new role as Chief Operating Officer. |
| | | In 2022, we incorporated a new Diversity, Equity & Inclusion (“DEI”) non-financial metric to the annual STI program, in addition to the already existing Non-GAAP Operating Profit Margin, Revenue and Free Cash Flow financial metrics. This new DEI metric is weighted 15% for executive officers, including the NEOs, with Revenue weighted at 40%, Non-GAAP Operating Profit at 35% and Free Cash Flow at 10%. The 2022 DEI goals include improving the representation of (a) women globally and (b) associates from Underrepresented Ethnic Groups (“UREG”) within the U.S. We tightened the payout range (which is expressed as a percentage of target opportunity) for Non-GAAP Operating Profit and Free Cash Flow as shown in the table below. Maximum overall STI funding remains at 200% of targets based on achievement of incentive goals. | | We believe the success of this critical human capital measure supports our strategy in creating an equitable workforce that improves our organization, local communities and society. At Unisys, our commitment to our greatest strength, our people, will never change. We understand that our growth, success and competitiveness as a company depend on our ability to foster an inclusive culture, ensure diverse perspectives, and cultivate a strong sense of belonging. |
| | | | | | | | | |
| | | Measure | | 2021 | | 2022 | | We tightened the payout range to better align with market practice, our business financial goals and our annual Operating Plan. |
| | | | |
| Non-GAAP Operating Profit | | 60%-135% | | 65%-130% |
| Achievement against objective of profitability | | | | |
| Revenue | | 90%-110% | | 90%-110% |
| Achievement on growth objectives | | | | |
| Free Cash Flow | | 50%-150% | | 60%-135% |
| Ability to generate cash | | | | |
| DEI | | — | | -1% to +2% |
| Achievement on improving diversity representation | | | | (of target) |
| | | | | | | | |
| | | | | | | | |
Long-Term
Incentives (“LTI”) | | Beginning in 2022, 1/3 of total LTI delivered in performance-based cash was based on Non-GAAP Operating Profit, which was the measure in 2020, prior to the one-year change in 2021 to rTSR due to COVID-19. Vesting remains at 1/3 each year with three tranches based on 1-, 2-, and 3-year cumulative performance periods. In addition to the performance-based cash, 1/3 of total 2022 LTI grant value was time-based shares and 1/3 was rTSR performance-based shares. | | We reverted to Non-GAAP Operating Profit in 2022 which had been the metric in the performance-based cash LTI prior to the temporary change due to COVID-19. |
| | | | | | | | | |
Table of Contents
| | Pay Component | | | What We Did | | | | | | Why We Did It | |
| | Base Salary | | | In 2023, Mr. Thomson, Ms. McCann and Mr. Sokenu received 5.5%, 7.0% and 5.0% increases respectively in base salary based on market considerations. No other NEOs received base salary increases in 2023. | | | | | | The increases in Mr. Thomson, Ms. McCann and Mr. Sokenu’s base salaries are based on performance and market considerations. | |
| | Short-Term
Incentives (“STI”) | | | No NEOs received STI target percentage increases in 2023. | | | | | | | |
| | Removal of Free Cash Flow (FCF) Metric | | | | | | | |
| | In 2023, we removed the Free Cash Flow metric from the STI program while placing greater weighting on both Revenue and Non-GAAP Operating Profit. Free Cash Flow remains a highly important focus for the Company. | | | | | | | |
| | Non-Financial DEI Metric | | | | | | | |
| | For 2023, the Company modified the DEI Metric component of the STI that was first introduced in 2022 to reflect 100% female representation, at senior manager and above levels, for global consistency. Previously, the metric was weighted on 50% female and 50% Underrepresented Ethnic Groups (UREG) for the US and 100% female representation for the rest of the world. The UREG metric remains an important tracked Company metric, reflecting its strategic importance and the Company’s commitment to fostering a diverse and inclusive workplace, but it is no longer directly tied to the STI program in 2023. Non-Linear Performance Ranges In 2023, the Company implemented non-linear performance ranges to flatten the curve and ensure stability around target performance results. | | | | | | We believe the success of this critical human capital measure continues to support our strategy in creating an equitable workforce that improves our organization, local communities and society. At Unisys, our commitment to our greatest strength, our people, will never change. We understand that our growth, success and competitiveness as a company depend on our ability to foster an inclusive culture, ensure diverse perspectives, and cultivate a strong sense of belonging. | |
| | CEO Target Bonus Reduction | | | | | | | |
| | Beginning in 2023, the CEO target bonus was reduced from 140% to 120% of base salary to reflect his commitment to Company financials and bottom-line performance. | | | | | | | |
| | The maximum payout design for all NEOs remains at 200% of each NEOs annual target based on achievement of both individual and performance metrics. | | | | | | | |
| | Long-Term
Incentives (“LTI”) | | | In 2023, we realigned the mix of performance measures between shares and cash for our LTI awards to carefully manage share usage, to minimize dilution and conserve our equity reserves. | | | | | | This structure ensures that our executives are incentivized for their ongoing contributions and their role in driving sustainable long-term growth. | |
| | 2023 LTI awards were based on time-based Restricted Stock Units (RSUs), performance-based TSR RSUs, performance-based TSR Cash, performance-based Non-GAAP Operating Profit Cash, and performance-based stock price appreciation RSUs to further incent behaviors in driving stock price appreciation and stockholder value. | | | | | | We remain optimistic about our future and are confident that these measures will lead to enhanced stockholder value. | |
| | After conducting a comprehensive review of their market positioning, select NEOs and executive officers received increased LTI award values in 2023. | | | | | | | |
| | CEO LTI Target Reduction | | | | | | | |
| | Beginning in 2023, the CEO LTI target was reduced by $1.25 million to reflect his commitment to the Company financials and bottom-line performance. | | | | | | | |
| | 2024 Proxy Statement | 35 | | 39 | |
Our Principles-Based Philosophy
Our executive compensation program is designed to align the interests of our executives with shareholdersthose of our stockholders and drive long-term profitable and sustainable growth, as well as to maintain leadership stability and incentivize successful execution of our strategy and operating plan. We believe this objective isthese objectives are achieved based onthrough application of the following criteria:principles:
| | Alignment with Long-Term Shareholders’Stockholders’ Interests | | | Our NEOs’ interests should beare directly aligned with our shareholders’stockholders’ interests through compensation programs which emphasize an appropriate balance of short- andshort-and long-term financial performance and deliver a meaningful percentage of compensation in the form of equity awards. Our LTI program should further supportsupports our continued focus on driving shareholderstockholder value creation. | | |
Competitiveness | Competitiveness | | | Total compensation should beis competitive in order to attract qualified individuals, motivate performance and retain executives with the abilities and skills needed to foster long-term shareholderstockholder value creation. | | |
| | Motivating Achievement of Financial Goals and Strategic Objectives | | | A significant portion of overall compensation should beis dependent on the achievement of our short and long-term financial goals and strategic objectives to create value in the long-term, which is a key pillar of our Pay for Performance philosophy. | | |
| | Rewarding Superior Performance | | | Although total compensation should beis competitive at the target performance level, performance that exceeds target should beis appropriately rewarded. We also believe there should be aThis is balanced with downside risk of below-target payouts if we do not achieve our financial goals and strategic objectives. | | |
| | Responding to Change | | | As our industry evolves and our opportunities for competitive business advantages change over time, we must likewise evolve to continue to create value. Our compensation programs should beare tailored to our strategic priorities (which may require changing the performance measures in our incentive plans) and our current outlook (which may impact how we calibrate incentive plan payouts to various levels of performance). along with stockholder feedback and macroeconomic factors. | | |
36 | | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
Compensation Components Overview
The Unisys executive compensation program includes base salary, short-term incentives and long-term incentives, each of which is described below.
| | Element | | | Target Mix | | | Description | |
| | Element | | CEO | | NEOs | | Description | | Why is it provided | |
| CEO | | | Other NEOs | |
| | Fixed | | | Base Salary | |  | |  | | | | | Paid in cash | | | ●•
Provides a competitive fixed rate of pay relative to similar positions in the market Enables the Company to attract and retain critical executive talent | |
| Short-Term Incentives (“STI”)Variable, At-risk | |  | STI |  | | | | | | | | Paid annually in cash under the Executive Variable Compensation (“EVC”) Plan | | | ●•
Focuses NEOs on achieving rigorous and challenging annual performance goals aligned with the Company’s annual operating plan to drive long-term shareholderstockholder value creation | |
Long-Term Incentives (“LTI”) | LTI |  | |  | | | | | | Paid under the LTI Plan using a combination of equity and cash | | | ●• 2/3 dependent
Primarily focused on performance metrics, and 1/3while maintaining a time-based focusesaward to focus NEOs on longer-termlong-term goals strongly aligned to drive shareholderstockholder value creation, as well as support the Company’s leadership retention strategy | |
The charts below show the total target compensation mix of our CEO and our other NEOs. These charts illustrate that a significant majority of our NEOs’ total target compensation is
“at risk” (87%“at-risk” (84% for our CEO and an average of
72%76% for our other NEOs).
CEO | 2024 Proxy Statement | Other NEOs |
 | 41 | |
Table of Contents
Mix of Performance Measures
The performance measures included in the
20222023 EVC and LTI plans are summarized below. These measures are aligned with our strategy, tracked regularly and used to manage and measure financial
and non-financial performance across our business. They are commonly used among the companies in our peer group and reflect the investor preferences we have heard during our
shareholderstockholder engagement efforts:
2022
2023 Performance Measures
| Metric | | Details | | % of STI | | % of LTI* |
| Relative Total Shareholder Return (“rTSR”) | | Unisys’ Relative TSR positioning among the constituent companies of the Russell 2000 Index over multiple performance periods. | | N/A | | 33.3% |
| Non-GAAP Operating Profit** | | Non-GAAP Operating Profit excludes pre-tax post retirement expense and pre-tax charges in connection with cost-reduction activities, debt exchange/extinguishment and other expenses. Non-GAAP Operating Profit is subject to adjustment by the CEO and the Compensation and Human Resources Committee of the Board of Directors when there are special items related to discontinued operations, reorganizations, restructurings or significant non-operational items. | | 35% | | 33.3% |
| Revenue | | This metric reflects Unisys’ total revenue results. | | 40% | | N/A |
| Free Cash Flow | | Reflects cash flows from operating activities net of capital expenditures that allow us to make strategic investments, pay debts, return capital to shareholders. | | 10% | | N/A |
| DEI | | Metric added in 2022 with weightings of 7.5% gender diversity and 7.5% UREG | | 15% | | N/A |
* | Remaining 33.3%Metric | | | | Details | | | | % of LTI is delivered in Time-Based RSUs which are directly linked to share price.STI | | | | % of
LTI* | |
** | Relative Total
Stockholder
Return (“rTSR”) | | | | Unisys’ TSR positioning among the constituent companies of the Russell 2000 Index over multiple performance periods. | | | | N/A | | | | 8%-17% | |
| | Non-GAAP
Operating
Profit | | | | This measure excludes pretax postretirement expense and pretax charges in connection with certain legal matters related to professional services and legal fees, including legal defense costs, associated with certain legal proceedings, and cost-reduction activities and other expenses. Non-GAAP Operating profitProfit is subject to adjustment by the CEO and the Compensation and Human Resources Committee of the Board of Directors when there are special items related to discontinued operations, reorganizations, restructurings or significant non-operational items. For a discussion and reconciliation of our GAAP measures to non-GAAP measures, please see Appendix A to this Proxy Statement and the earnings release attached as Exhibit 99.1 to our Current Report on Form 8-K furnished with the SEC on February 21, 2024 (but such report shall not be deemed to be incorporated by reference to this Proxy Statement). | | | | 40% | | | | 8%-17% | |
| | Stock Price Performance | | | | Based upon the achievement of stock price hurdles (“Price Targets”) measured over a three-year period. The price targets are achieved if the 20 consecutive 20-trading day averages within the Performance Period equals or surpasses a price target. Metric was added back to further incent behaviors in driving stock price appreciation and stockholder value. | | | | N/A | | | | 0%-27% | |
| | Revenue | | | | This metric reflects Unisys’ total revenue. Revenue is subject to adjustment by the LTI mix at 33.3%Compensation and Human Resources Committee of the Board of Directors when there are special items related to discontinued operations or significant non-operational items. | | | | 45% | | | | N/A | |
| | DEI | | | | Metric added in 2022 with weighting modified to 15% gender diversity in 2022.2023 | | | | 15% | | | | N/A | |
*
The percentage of LTI for each metric will vary by NEO due to the difference in the stock price performance awards.
How Performance Targets are Established
The figure below depicts the process and factors that we use to set the performance targets for our
short-STI and
long-term incentiveLTI plans. We use our long-term planning process to estimate multi-year performance goals, which inform our LTI plan metrics. Annually, we establish our operating plan based on internal and external factors, the outputs of which are used in establishing our STI goals.
38 | | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
Governance Best
Practice Governance Practices
The Compensation and Human Resources CommitteeCHRC continually evaluates the Company’s compensation policies and practices to ensure they are consistent with best practice principles. Below are highlights of our governance practices:
 | What We Do | | | |  What We Don’t Do | |
| | | | |
 Provide the majority of compensation in performance-based pay
Maintain stock ownership guidelines for officers and directors (excludes stock options)
Cap incentive plan at 2x target; no payouts below threshold
Maintain a clawback policy
Reflect multi-dimensional performance using earnings, revenue, cash and market performance with a mix of relative and absolute goals; also assess performance over multiple time periods with 1-year performance in the STI and 1 year, 2-year and 3-year performance periods in the performance-based component of the LTI Require one-year minimum vesting for all LTI awards
Have change in control agreements with double-trigger severance provisions
Conduct annual compensation program risk assessment
Adhere to an insider trading policy
Use an independent compensation consultant engaged by and reporting directly to the Compensation and Human Resources CommitteeCHRC
| | |
| |  What We Don’t Do
| | | | | |
| | Excise tax gross-ups on a change in control ×
Excessive severance in a change in control or termination
×
Excessive perquisites × Hedging
Allow hedging transactions, speculation, short sales, margin accounts or pledging Unisys securities ×
Automatic vesting of equity upon a change in control ×
Stock option repricing, reloads, or cash buyouts ×
Discounted stock options or SARs ×
Liberal change in control definition | | |
| | 2024 Proxy Statement | | | 43 | |
The Decision-Making Process
Table of Contents
Roles and Responsibilities
| | Compensation and Human Resources Committee | | | | | |
| |
The Compensation Committee was renamed the CompensationCHRC is accountable for review and Human Resources Committee shortly priorapproval of overall compensation actions and strategic initiatives along with oversight to 2022 (referred to in this section as the “Committee”) to reflect the broader human capital responsibilities of the Committee.responsibilities. The Committee is comprised of independent, non-employee members of the Board. The Committee is appointed by the Board to: | | |
| | oversee and recommend to the Board of Directors compensation changes for the CEO; | | |
| | oversee compensation of our executive officers; | | |
| | oversee compensation-related policies and programs involving our executive officers and the level of benefits of officers and key employees; | | |
| | review and recommend to the Board compensation of the Company’s Directors;directors; | | |
| | review the senior executive succession plan and the senior executive leadership development process as presented by the CEO; and | | |
| | review our human capital and people strategy as presented by the Chief Human Resources Officer,CHRO, including Diversity, Equity and InclusionDEI initiatives.
| | |
| | The Committee oversees the executive compensation program for our NEOs and works very closely with its independent compensation consultant and the leadership team to examine the effectiveness of our executive compensation program throughout the year. Details of the Committee’s authority and responsibilities are specified in the Committee’scommittee’s charter, which may be accessed at our Investor Relations website: www.unisys.com/governance.
| | |
| | As part of the responsibilities described in its charter, the Committeecommittee sets objective business performance targets and the amounts payable at different levels of performance under the EVC and LTI plans. Goal setting is part of the Company’s overall business planning process. As part of this process, a range of performance scenarios is developed. Goals are then set at the threshold, target and maximum performance levels — driven by the strategic and operational plans approved by the Board. The Committeecommittee also considers the probability of achievement of different levels of performance when setting goals. | | |
Leadership | Leadership | | | | | |
| |
The Committee receives reports and recommendations from management during the year on multiple compensation, human capital and performance-related topics. Throughout 2022,2023, the Committeecommittee solicited input from Mr. Altabef regarding the compensation and performance of executive officers. In addition, Mr. Altabef provided recommendations, based on our operating and strategic plans, to the Committee related to the performance measures used in the Company’s short- andshort-and long-term incentive plans, as well as the recommended threshold, target and maximum performance levels. | | |
| | 44 | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
| | Independent Compensation Consultant | | | | | |
| |
The Committee retains and regularly consults with an independent compensation consultant, Meridian Compensation Partners LLC (“Meridian”).Meridian. To ensure the Committee receives independent and unbiased advice and analysis, the consultant is prohibited from providing any services to Company leadership. Under its charter, the Committee has sole authority to retain and terminate outside compensation consultants, including the authority to approve the consultant’s fees and other retention terms. The consultant maintains active engagement with the Committee chair and reports to the Committee.committee. The Committee annually reviews the independence of the consultant’s work under rules adopted by the SEC and NYSE and has found no conflicts.
| | |
| | In 2022,2023, Meridian performed duties requested by the Committee including: | | |
| | conducting a risk assessment | | |
| | (1) (2)
providing recommendations on the composition of the peer group; | | |
| | analyzing executive and Directordirector compensation in comparison to market references; | | |
| | updating the Committee on executive compensation and governance market trends; | | |
| | advising the Committeecommittee on STI and LTI plan designs; | | |
| | reviewing disclosures related to executive and Directordirector compensation; | | |
| | providing data, analysis and advice for review of Mr. Altabef’s compensation, which is then recommended to and approved by the independent members of the Board of Directors;Board; | | |
| | regularly attending meetings and joining from time to time in executive sessions with the Committee without the presence of management; and | | |
| | supporting requests from the Committee. | | |
Timeline
40 | | Advisory Vote to Approve Executive Compensation2024 Proxy Statement | | | 45 | |
Timeline
| | | | | | |
Review | | Engage | | Evaluate | | Approve |
| | | | | | |
● Evaluate Peer group
● Conduct competitive market review
| | ● Consider compensation program changes
● Review trends and developments related to compensation governance
| | ● Determine compensation program design changes
● Establish performance measures and targets and individual performance objectives
| | ● Review CEO performance
● Set target compensation for CEO and executive officers
● Approve annual STI payouts and long-term incentive grants
|
| | | | | | |
The executive compensation program considers market compensation practices of companies with which the Company competes or could compete for executive talent (the “peer group”) and/ or business. As part of its process, the Committee compares the Company’s overall compensation structure (mix of pay) and levels for the NEOs (total annual compensation, as well as each component of
their total compensation) to
be within a reasonable range of the peer group
market ranges from the 25th to 75th percentiles.median. The Committee’s selection of peer group companies
wasis based on input from the Committee’s compensation consultant, business
judgementjudgment and the following selection criteria:
Peer Group Screening Area
| | Comparable Size | | | | Comparable Industry and Peers | |
| | ● •
Revenue ($500M -– $8B), market capitalization (<$40B), number of employees, EBITDA margin, enterprise value | | | | ● •
Industry Group as defined by GICS classification,the Global Industry Classification Standard, reviewing peer groups provided by third parties, other competitors and proxy advisory firms | |
| | Publicly-Traded US Based Companies | | | | Other Consideration | |
| | ● •
Traded on North American Stock Exchanges, filings, financials, compensation data available | | | | ● •
Business fit, Non-USnon-US Sales, cybersecurity, software, services, technology offerings and end markets | |
The Committee regularly reviews the composition of the peer group and its selection criteria to ensure that they remain appropriate in light of the evolving competitive landscape, including consideration of merger and acquisition activity. In July 20212022 as part of the annual review, the Committee’s compensation consultant recommended, and the Committee approved, the following peer group of companies for setting 20222023 executive compensation:
2022 | 2023 Compensation Peer Group | | | | | |
| | | | | |
Booz Allen Hamilton Holding Corporation
CACI International Inc.
EPAM Systems, Inc.
Fortinet Inc.
ICF International Inc.
ManTech International Corporation
MAXIMUS, Inc.
NetScout Systems, Inc.
| |
| Palo Alto Networks, Inc.
Science Applications International Corporation Sykes Enterprises Incorporated
Sabre Corporation Teradata Corporation
Tyler Technologies, Inc. TTEC Holding, Inc. Vectrus,
V2X, Inc.
Verint System, Inc. | | + | New for 2022
Sabre Corporation
Tyler Technologies, Inc.
|
| | | | | | | | |
The 2022 peer group does not include the following companies which were included in the 2021 peer group for the reasons stated: Virtusa (acquired in February 2021 and no longer publicly traded), GTT Communications (delisted) and NCR (acquired Cardtronics for pushing above the comparable revenue scope for Unisys).
The 2022 peer group includes two new companies: Tyler Technologies Inc. and Sabre Corporation – both are comparable to Unisys from a business perspective and meet the quantitative screening criteria.
Unisys vs. Peer Groups
Revenue ($M)46 | | Market Cap ($M) | | |
| | | | | | |
 | |  | |  |
EBITDA Margin | | Enterprise Value | | Number of Employees |
| | | | |
 | |  | |  |
When determining 2022 compensation for the executive officers, the Committee also considered information compiled by its independent compensation consultant from various market survey sources. These surveys show compensation levels across a broad spectrum of technology companies and were used to inform the Committee regarding market executive compensation levels.
Table of Contents
42 | | Advisory Vote to Approve Executive Compensation | |
2022
2023 Executive Compensation Program
Base salary represents annual fixed compensation and is a standard element of compensation necessary to attract and retain executive leadership talent. When reviewing base salary decisions for NEOs other than the CEO, the Committee considers the CEO’s recommendations, as well as each NEO’s position and level of responsibility within the Company. The Committee also takes into account factors such as relevant market data, overall Company performance, individual performance and contributions, and internal equity within the Company. For
2022, aligning2023, Mr. Thomson, Ms. McCann, and Mr. Sokenu received base salary increases of 5.5%, 7%, and 5%, respectively, based on their performance and in alignment with the
market, Mr. Thomson received an 18.7% increase in his base salary based on past performance and as a result of the change in his role Chief Operating Officer and Ms. Ebrahimi and Ms. Poggenpohl received a 3.8% and 3.3% increase, respectively, in base salary based on performance and market conditions.market. No other NEOs received increases in their base salaries during
2022.2023.NEO | Base Salary |
Peter A. Altabef | $991,000 |
Debra McCann | $500,000 |
Michael M. Thomson | $635,000 |
Claudius Sokenu | $500,000 |
Katherine Ebrahimi | $415,000 |
Teresa Poggenpohl | $465,000 |
Gerald P. Kenney | $500,000 |
| | NEO | | | Base Salary | |
| | Peter Altabef | | | | $ | 991,000 | | |
| | Debra McCann | | | | $ | 535,000 | | |
| | Michael M. Thomson | | | | $ | 670,000 | | |
| | Teresa Poggenpohl | | | | $ | 465,000 | | |
| | Katherine Ebrahimi | | | | $ | 415,000 | | |
| | Claudius Sokenu | | | | $ | 525,000 | | |
Short-Term Incentive Compensation
The NEOs are eligible to receive an annual cash incentive payment through the EVC plan, which is designed to incentivize executives to attain short-term performance goals aligned with the Company’s annual operating plan as a part of our Pay for Performance philosophy. The Committee has the discretion to determine the criteria applicable to incentive payments and the amounts of such payouts. For
2022,2023, the awards paid to NEOs under the EVC plan depended upon (a) the NEO’s target incentive opportunity and (b) the degree to which the Company performance goals were met.
For 2022,
In 2023, target award opportunities for NEOs
which arewere based on market considerations and stated as a percentage of actual earned base
salary, were as follows:salary. The following table summarizes the target award opportunities for NEOs in 2023:| NEO | | 2022 Target Award Opportunity
(as % of actual earned base salary) | | | 2022 Target Award Opportunity
($) |
| Peter A. Altabef | | | 140% | | | $ | 1,387,400 |
| Debra McCann | | | 95% | | | $ | 315,347 |
| Michael M. Thomson | | | 110% | | | $ | 698,500 |
| Claudius Sokenu | | | 95% | | | $ | 315,347 |
| Katherine Ebrahimi | | | 95% | | | $ | 394,250 |
| Teresa Poggenpohl | | | 95% | | | $ | 441,750 |
| | | | | | | | |
| | NEO | | | 2023 Target Award Opportunity
(as % of actual earned base salary) | | | 2023 Target Award Opportunity
($) | |
| | Peter Altabef* | | | 120% | | | | $ | 1,189,200 | | |
| | Debra McCann | | | 95% | | | | $ | 508,250 | | |
| | Michael M. Thomson | | | 110% | | | | $ | 737,000 | | |
| | Teresa Poggenpohl | | | 95% | | | | $ | 441,750 | | |
| | Katherine Ebrahimi | | | 95% | | | | $ | 394,250 | | |
| | Claudius Sokenu** | | | 95% | | | | $ | 498,750 | | |
*
In 2023, Mr. Altabef’s target bonus was reduced from 140% to 120% to reflect his commitment to the Company financials and bottom-line performance.
**
Mr. Sokenu voluntarily exited the Company on June 30, 2023 and therefore did not receive a 2023 STI award.
2023 | 2024 Proxy Statement | 43 | | 47 | |
The Committee reviews the performance measures under the EVC plan on an annual basis to ensure they support our operating plan and keep our NEOs focused on attaining rigorous short-term goals.
Corporate Non-GAAP Operating Profit minimum performance achievement of 50% of target
funding gate is required for the
total EVC plan to fund for the performance year. For
2022,2023, we exceeded the minimum performance requirement.
Below are the 20222023 performance measures and their respective 20222023 payout curves. We believe these measures are the most effective in assessing the success of our business strategy.
The Committee set threshold, target, and maximum payout opportunities in 20222023 for each measure as shown below:
| | Performance Level | | | Revenue, Non-GAAP
Operating Profit Revenue
Free Cash Flow, and DEI
Payout (as % of Target) | |
| | Below Threshold | | | 0% | |
Threshold | Threshold | | | 50% | |
Target | Target | | | 100% | |
Maximum | 200% |
| Maximum | | | 200% | |
44 | 48 | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
| | Measure
(Unisys
Corporate) | | | Metric(1) | | | Weight | | | Adjusted Results(2) | |
| | Threshold | | | Target | | | Maximum | | | Results | | | Funding
by
Metric | | | Weighted
by
Metric | |
| | Revenue
($M) | | | | | | | | | 100% | | | 101.7% | | | 45.8% | |
| | Non-GAAP
Operating Profit
($M) | | | | | | | | | 116% | | | 137.1% | | | 54.9% | |
| | Non-
Financial
(DEI)
Women
Globally | | | | | | | | | 102% | | | 120.0% | | | 18.0% | |
| | | | | | | | | | | | | | | | | | | | | | | 118.6% | |
(1)(1) | Payout ratios at performance levels between Threshold-Target and Target-Maximum are interpolated on a straight-line basis. |
Payout ratios for Revenue and Non-GAAP Operating Profit are based on non-linear performance curves providing for softening of the curve above or below target performance achievement and then interpolated as shown in the table below. Payout ratios for DEI at performance levels between Threshold-Target and Target-Maximum are interpolated on a straight-line basis. For a discussion and reconciliation of our GAAP measures to non-GAAP measures, please see Appendix A to this Proxy Statement and the earnings release attached as Exhibit 99.1 to our Current Report on Form 8-K furnished with the SEC on February 21, 2024 (but such report shall not be deemed to be incorporated by reference to this Proxy Statement).
(2)
2023 EVC funding for Revenue and Non-GAAP Operating Profit results have been adjusted downward to reflect certain items that were not originally included in the target at the discretion of the Committee. In the absence of these adjustments, the 2023 EVC would have been funded at 140.7%.
The following table shows the
20222023 EVC targets and the actual awards paid to the NEOs under the EVC plan.
| NEO | | 2022 EVC
Target | | | Total Amount
Paid | | | Total Paid
as % of Target |
| Peter A. Altabef | | $ | 1,387,400 | | | $ | 807,467 | | | | 58.2% |
| Debra McCann | | $ | 315,347 | | | $ | 183,532 | | | | 58.2% |
| Michael M. Thomson | | $ | 698,500 | | | $ | 406,527 | | | | 58.2% |
| Claudius Sokenu | | $ | 315,347 | | | $ | 183,532 | | | | 58.2% |
| Katherine Ebrahimi | | $ | 394,250 | | | $ | 229,454 | | | | 58.2% |
| Teresa Poggenpohl | | $ | 441,750 | | | $ | 257,099 | | | | 58.2% |
| | | | | | | | | | | | |
| | NEO | | | 2023 EVC
Target | | | Total Amount
Paid | | | Total Amount Paid
as % of 2023 EVC Target | |
| | Peter Altabef | | | $1,189,200 | | | $1,410,391 | | | 118.6% | |
| | Debra McCann | | | $508,250 | | | $602,785 | | | 118.6% | |
| | Michael M. Thomson | | | $737,000 | | | $874,082 | | | 118.6% | |
| | Teresa Poggenpohl | | | $441,750 | | | $523,916 | | | 118.6% | |
| | Katherine Ebrahimi | | | $394,250 | | | $467,581 | | | 118.6% | |
| | Claudius Sokenu* | | | $498,750 | | | $0 | | | — | |
Table of Contents
*
Mr. Sokenu voluntarily exited the company on June 30, 2023 and therefore did not receive a 2023 STI award.
Long-Term Incentive Compensation
The LTI plan is designed to provide executives with a continuing stake in our long-term success and to align their interests with those of our
shareholders.stockholders. The LTI plan provides
cashequity and
equity-basedcash-based awards.
For 2022,2023, the Committee used a combination of long-term incentive vehicles, including 1/3 TSR Based-RSUs, 1/3Time-Based RSUs, rTSR-Based RSUs, rTSR-Based Cash, Non-GAAP Operating Profit-Based Cash, and 1/3 Time-BasedStock Price Performance RSUs. These vehicles focus NEOs on driving long-term shareholderstockholder value creation, as well as fostering leadership stability. LTI targets for NEOs remained unchanged from prior year with exception of Mr. Thomson due to the transition to his new role as Chief Operating Officer and Ms. Poggenpohl based on market competitive benchmarking performed by the Committee’s independent compensation consultant.
| | 2024 Proxy Statement | | | 49 | |
| | Element of LTI | | | Overview of Design | | | | |
TSR-Based
RSUs | Time-Based RSUs | | | Vest 1/3 per year on the anniversary of the grant | |
| | rTSR-Based RSUs & rTSR-Based Cash | | | ●•
Grant is tied to the achievement of TSRrTSR as follows: -1/
- 1/3 of target one-year performance (2022)-1/(2023)
- 1/3 of target two-year performance (2022-2023)-1/(2023-2024)
- 1/3 of target three-year performance (2022-2024)(2023-2025) The awards measure rTSR from a percentile positioning perspective amongour TSR relative to the TSR of other constituent companies of the Russell 2000 Index. | |
| | | | | | | |
| | | | Relative TSR Positioning | |
| | | | | | | | Below Threshold | Threshold | Target | | Threshold | | | | Target | | | | Maximum | |
| | | Ranking | | Ranking | | | Below 25thPercentile | 25th Percentile | 55th Percentile | | 25th Percentile | | | | 55th Percentile | | | | 80thPercentile | |
| | | | | LTI Achievement | | | 0% of target | | | | 50% of target | | | | 100% of target | | | | 200% of target | |
| | | | | ●•
Results are interpolated between Threshold and Target, and between Target and Maximum. The overall TSRrTSR calculation is based on the average price of the 30-day trading days preceding both the start and end dates of the respective performance periods. | |
| | Non-GAAP
| | | ●•
Grant is tied to the achievement of Non-GAAP Operating Profit as follows: -1/
- 1/3 of target one-year performance (2022)-1/(2023)
- 1/3 of target two-year performance (2022-2023)-1/(2023-2024)
- 1/3 of target three-year performance (2022-2024)(2023-2025) •
Payouts of 0% to 200% of target based on performance | |
Time-Based
RSUs | Stock Price Performance RSUs for Select NEOs | | | ●• Vest 1/3 per year on
Performance-based RSUs shall become eligible to vest when the 20-trading day trailing average of the closing stock price is at least $8 for 20 consecutive trading days at any time during the period from date of grant through the 3-year anniversary of the grant date and regardless of stock price achievement throughout the vesting period, the 20-trading day trailing average of the closing stock price must be at least $8 for 20 consecutive trading days leading up to and including the 3-year vesting date; however, the actual number of units vesting are based on the stock price hurdle attainment requirements. •
Results will be interpolated between price points once the minimum $8 is achieved, rounded up to the next RSU; no more than 100% of the target number of units shall be eligible to become vested if the stock price hurdle attainment is greater than $14. | |
| | Stock Price Performance
Attainment | | | | % of Target Number of
Units Vesting | | | |
| | <$8 | | | | 0% of Target Number of Units | | | |
| | $8 | | | | 25% of Target Number of Units | | | |
| | $10 | | | | 50% of Target Number of Units | | | |
| | $12 | | | | 75% of Target Number of Units | | | |
| | $14 | | | | 100% of Target Number of Units | | | |
The performance-based elements of the LTI plan — TSR-Based RSUsTime-based and
Non-GAAP Operating Profit-Based Cash — feature concurrent one-year, two-year cumulative and three-year cumulative performance periods. The actual number of TSR-Based RSUs and Non-GAAP Operating Profit-Based Cash vested and settled depend on the achievement of results. TSR-BasedrTSR-Based RSU awards are settled in stock,
while rTSR-Based and Non-GAAP Operating Profit-Based cash awards are paid in cash,
in each case upon vesting and the certification of
performance results by the
Committee. The performance result used to determineCommittee for the
actual award earned is calculated at the end of each performance period.performance-based awards.| Vesting year | | 2022 | | 2023 | | 2024 | | 2025 |
1st Tranche
(1/3 of opportunity) | | 2022
Target
Awards
Granted
to NEOs | | Actual awards vest in 2023
(for 2022 performance) | | | | |
| | | | | | | | |
2nd Tranche
(1/3 of opportunity) | | | Actual awards vest in 2024
(for 2022-2023 performance) | | |
| | | | | | | | |
3rd Tranche
(1/3 of opportunity) | | | Actual awards vest in 2025
(for 2022-2024 performance) |
| | | | | |
| | | | | |
Performance Periods for all rTSR-Based and Non-GAAP Operating Profit-Based Awards:
| | Vesting | | | 2023 | | | 2024 | | | 2025 | | | 2026 | |
| | 1st Tranche (1/3 of opportunity) | | | 2023
Target
Awards
Granted
to NEOs | | | Awards vest in 2024
(for 2023 performance) | | | | | | | |
| | | |
| | 2nd Tranche
(1/3 of opportunity) | | | Awards vest in 2025
(for 2023-2024 performance) | | | | |
| | | |
| | 3rd Tranche (1/3 of opportunity) | | | Awards vest in 2026
(for 2023-2025 performance) | |
| | | |
46 | 50 | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
Performance Period for Stock Price Performance RSUs for Select NEOs2022
| | Vesting | | | 2023 | | | 2024 | | | 2025 | | | 2026 | |
| | 100% in 2026 | | | | | | Awards vest in 2026
(for stock price performance) | |
| | | |
2023 Target LTI Plan Award Grants
The table below shows the target value of the long-term incentive awards granted in
20222023, based on market considerations, performance history, and industry benchmarks, as of the grant date for each of the NEOs.
| NEO | | TSR-Based RSUs | | Performance-Based
Cash | | Time-Based
RSUs | | Total Value |
| Peter A. Altabef | | $ | 1,707,200 | | $ | 1,707,200 | | $ | 1,707,200 | | $ | 5,121,600 |
| Debra McCann | | $ | 333,300 | | $ | 333,400 | | $ | 333,300 | | $ | 1,000,000 |
| Michael M. Thomson | | $ | 550,000 | | $ | 550,000 | | $ | 550,000 | | $ | 1,650,000 |
| Claudius Sokenu | | $ | 183,300 | | $ | 183,400 | | $ | 183,300 | | $ | 550,000 |
| Katherine Ebrahimi | | $ | 166,650 | | $ | 166,700 | | $ | 166,650 | | $ | 500,000 |
| Teresa Poggenpohl | | $ | 150,000 | | $ | 150,000 | | $ | 150,000 | | $ | 450,000 |
| | NEO | | | Time-
Based
RSUs | | | rTSR-
Based
RSUs | | | rTSR-
Based
Cash | | | PB-Cash:
Non-GAAP
Operating
Profit | | | Stock Price
Performance
RSUs | | | Total Value | |
| | Peter Altabef* | | | | $ | 1,040,533 | | | | | $ | 312,161 | | | | | $ | 728,373 | | | | | $ | 1,040,533 | | | | | $ | 750,000 | | | | | $ | 3,871,600* | | |
| | Debra McCann | | | | $ | 416,667 | | | | | $ | 125,000 | | | | | $ | 291,666 | | | | | $ | 416,667 | | | | | $ | 500,000 | | | | | $ | 1,750,000 | | |
| | Michael M. Thomson | | | | $ | 700,000 | | | | | $ | 210,000 | | | | | $ | 490,000 | | | | | $ | 700,000 | | | | | $ | 750,000 | | | | | $ | 2,850,000 | | |
| | Teresa Poggenpohl | | | | $ | 150,000 | | | | | $ | 45,000 | | | | | $ | 105,000 | | | | | $ | 150,000 | | | | | $ | 500,000 | | | | | $ | 950,000 | | |
| | Katherine Ebrahimi | | | | $ | 166,666 | | | | | $ | 50,000 | | | | | $ | 116,667 | | | | | $ | 166,667 | | | | | $ | 0 | | | | | $ | 500,000 | | |
| | Claudius Sokenu** | | | | $ | 183,333 | | | | | $ | 55,000 | | | | | $ | 128,334 | | | | | $ | 183,333 | | | | | $ | 500,000 | | | | | $ | 1,050,000 | | |
*
Mr. Altabef’s 2023 LTI Award was reduced by $1.25 million (inclusive of stock price performance award) when compared to 2022
Performance Retention Equity AwardsIn 2022, newly hired executive officers Debra McCannto reflect his commitment to the Company financials and Claudiusbottom-line performance.
**
Mr. Sokenu
received a one-time Special Performance Retention Equity Award issuedvoluntarily exited the Company on June
1, 2022.These30, 2023 and therefore these awards are primarily performance-oriented, are focused on our most critical talent (including the NEOs) and provide additional performance-based compensation only if share price hurdles are met for 20 consecutive trading days, thereby requiring sustainable performance directly aligned with stock price appreciation.were forfeited.
These awards will vest three years after the grant date and include a component that is dependent on the sustained increase in the Company’s stock price relative to the average closing stock price for the 20 trading days immediately preceding the grant date (weighted at 2/3) and a component that consists of time-based RSUs (weighted at 1/3) intended to incentivize retention. The size of each award varies based on the business impact of each recipient’s role.
| NEO | | Stock-Price
Appreciation | | Time-Based
RSUs | | Total Target
Value |
| Debra McCann | | $ | 500,000 | | $ | 250,000 | | $ | 750,000 |
| Claudius Sokenu | | $ | 223,333 | | $ | 111,667 | | $ | 335,000 |
The measurement price (starting price) used in determining achievement of the performance-based portion of the Special Performance Retention Equity Award is $11.92, which is the average closing stock price for the 20 trading days immediately preceding the grant date (May 4, 2022 – June 1, 2022).
| Performance-Based Attainment | | <10% | | +10% | | +15% | | +20% |
| Unisys Stock Price Requirement | | | <$11.92 | | | $13.11 | | | $13.71 | | | $14.30 |
| % of Target Shares Vesting | | | 0% | | | 50% | | | 75% | | | 100% |
More information about the long-term incentive awards granted to each NEO in 2022 is set forth under “Grants of Plan-Based Awards”.
2020, 2021 and 2022
LTI Results
TSR-RSUs vested
Vested amounts for each tranche of the LTI grants from 2020, 2021 and 2022, TSR-Cash vested for each tranche of the LTI grant from 2021rTSR-Based RSUs, rTSR-Based Cash and Profit-Based Cash vested for each tranche of LTI grants from 2020 and 2022vesting based on the performance period ending in 2023 are shown in the tables below. Vesting for rTSR-RSUs and rTSR-Cash is based on comparing Unisys’ TSR during the relevant period to the TSR of the other members of the Russell 2000 Index, while vesting amounts for Profit-Based Cash are determined based on actual profit versus pre-established threshold, target and maximum goals, while vesting amounts for TSR-RSUsgoals.
2022 and
TSR-Cash are based on comparing Unisys rTSR during the relevant period to the Russell 2000 Index.
Table of Contents
2020 and 2022 Profit-Based Cash
Results are based on Non-GAAP Operating Profit.
Targets for open performance periods of Profit-Based Cash awards for the 2020 award were adjusted in February 2020 to reflect the sale of the U.S. Federal business.| Grant Year | | Vesting
Period | | Performance Period | | Threshold ($M) | Target ($M) | Maximum ($M) | | Payout |
| 2020 | | Tranche 3 | | 1/1/2020-12/31/2022 | |  | | 88.90% |
| 2022 | | Tranche 1 | | 1/1/2022-12/31/2022 | |  | | 73.15% |
2020,
| | Grant Year | | | Vesting
Period | | | Performance Period | | | Threshold ($M) | | | Target ($M) | | | Maximum ($M) | | | Payout | |
| | 2022 | | | Tranche 2 | | | 1/1/2022-12/31/2023 | | | | | | 63.58% | |
| | 2023 | | | Tranche 1 | | | 1/1/2023-12/31/2023 | | | | | | 200% | |
| | 2024 Proxy Statement | | | 51 | |
2021,
2022 and
20222023 TSR-Based RSUs and 2021
and 2023 TSR-Based Cash
Results are based on UnisysUnisys’ TSR as compared to the TSR of the other members of the Russell 2000 Index, as shown below.
| | Grant Year | | | Vesting Period | | | Performance Period | | | Vested Percentage | |
2020(1) | 2021(1) | | | Tranche 3 | | | 1/1/2020-12/2021-12/31/20222023 | | 37.28% | 0% | |
2021(2) | 2022(2) | | | Tranche 2 | | | 1/1/2021-12/2022-12/31/20222023 | | | 0% | |
| | 20232022(3) | | | Tranche 1 | | | 1/1/2022-12/2023-12/31/20222023 | | 0% | 166.18% | |
(1)(1) | For the 2020 grant, three-year Unisys rTSR was -26.60% as compared to the Russell 2000 index rTSR of 4.76%. As a result, the NEOs earned 37.28% of the third tranche of the 2020 rTSR-Based RSU grant. |
(2) | For the 2021 grant, we measured rTSR among the constituent companies of the Russell 2000 Index from January 1, 2021 through December 31, 2022. The results of the 2022For the 2021 awards, we measured rTSR among the constituent companies of the Russel 2000 index from January 1, 2021 through December 31, 2023. The results of the 2023 rTSR positioning of the peer companies in the index were Threshold -48.12%, Target 6.76% and Maximum 46.30%. For this grant, two-year Unisys rTSR was -73.02%. This results in a ranking of 1,572 out of 1,819, for a 14th percentile ranking and 0% vesting. |
(3) | For the 2022 grant, we measured rTSR among the constituent companies of the Russell 2000 Index from January 1, 2022 through December 31, 2022. The results of the 2022 rTSR positioning of the peer companies in the index were Threshold -54.04%, Target -18.24% and Maximum 7.46%. For this grant, one-year Unisys rTSR was -76.78%. This results in a ranking of 1,745 out of 1,922, for a 9th percentile ranking and 0% vesting. |
-52.09%, Target 7.43%, and Maximum 57.51%. For this grant, the three-year Unisys rTSR was -68.36%. This results, in a ranking of 1,409 of 1,712 for a 18th percentile ranking and 0% vesting.
(2)
For the 2022 awards, we measured rTSR among the constituent companies of the Russell 2000 Index from January 1, 2022 through December 31, 2023. The results of the 2023 rTSR positioning of the peer companies in the index were Threshold -60.56%, Target -17.93%, and Maximum 15.67%. For this grant, two-year Unisys rTSR was -72.77%. This results in a ranking of 1,480 out of 1,809, for a 18th percentile ranking and 0% vesting.
(3)
For the 2023 awards, we measured rTSR among the constituent companies of the Russell 2000 Index from January 1, 2023 through December 31, 2023. The results of the 2023 rTSR positioning of the peer companies in the index were Threshold -26.13%, Target -0.35% and Maximum 30.86%. For this grant, one-year Unisys rTSR was 17.25%. This results in a ranking of 520 out of 1,825, for a 72nd percentile ranking and 166.18% vesting.
Long-Term Incentive Granting Practices
Most awards are granted in the first quarter of the year, although awards may be granted
as part of the hiring process or in connection with aat hire, promotion or significant change in responsibility. Annual grants are approved at a
specified, regularly scheduledregular meeting of the Committee with a grant date that is
threefour days after the Company’s earnings release. The Committee approves the type and number of awards to be granted and the performance criteria for awards.
For all grants, the grant date is no earlier than the date of the meeting at which such grant is approved. The dates of regularly scheduled Board and
Committeecommittee meetings are generally determined many months in advance as part of
the normalannual Board
scheduling process.scheduling. Timing of grants is not
coordinated withaltered based on the expected impact of the release of material nonpublic information and
that the
Committeecommittee does not consider material nonpublic information when determining whether and in what amount to make equity awards.
LTI awards granted during the year outside of the annual award have a grant date no earlier than the date of approval. Grants that require the approval of the Committee are typically reviewed and approved at a regularly scheduled Compensation and Human Resources Committee meeting or by written consent in advance of the individual’s employment commencement or promotion date. For those awards requiring Committee approval, the grant date is the first trading day of the month following confirmation of both Committee approval and the individual’s hire or date of promotion, unless otherwise approved by the Committee.
Table of Contents
48 | | Advisory Vote to Approve Executive Compensation |
Other Executive Compensation Practices and Policies
Share Ownership Guidelines
All executive officers, including NEOs, are expected to own Unisys stock or stock units (including unvested Time-Based RSUs and earned TSR-BasedrTSR-Based RSUs that have not yet vested) having a value equal to or greater than a multiple of their annual base salary, as shown in the table below. Outstanding stock options and RSUs that have not yet met the performance criteria do not count toward fulfillment of the ownership guidelines. In addition, any “in the money” portion of vested stock options do not count toward stock ownership achievement. Executive officers are expected to meet the ownership guidelines within five years of appointment. The Compensation and Human Resources Committee reviews the adequacy of and compliance with the guidelines on an annual basis. The number of shares owned by each NEO is set forth in the section entitled, “Security Ownership by Certain Beneficial Owners and Management.”
Role | Role | | | Ownership Requirement | |
CEO | CEO | | | 3.0x base salary | |
| | CFO & COO | | | 1.5x base salary | |
Corporate SVP | SVP | | | 1.0x base salary | |
Currently based on the recent reduction in the Unisys stock price, along with recent new hires, severalAll NEOs and
Executive Officers fall belowexecutive officers have either achieved the ownership requirement
level. Weor are
closely monitoring ason track to achieve within the
stock price fluctuates and additional grants are issued.five-year requirement (in the case of more recently appointed officers).
| | 52 | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
Clawback Policy
We maintain
In 2023 we implemented a
new clawback policy
that applies to
all NEOscomply with the latest SEC and
otherNYSE mandates regarding the recovery from executive officers of
the Company. Under the clawback policy, we will seek to recovererroneously awarded incentive-based compensation (including cash and equity) if
our financial statementswe are required to
be restated as a result of the Company’srestate our financial results due to material
non-compliancenoncompliance with
the financial reporting requirements under
U.S. federalthe securities laws,
including the corrections of errors. The policy covers both current and
former executive officers, even if
the executive officer engagednot directly involved in
fraud or intentional misconductactivity that caused or
otherwise contributed to the
need for the restatement.We will further comply with any recoupment requirements imposed by applicable laws, rules or regulations, including in connection with the final rule issued by the SEC implementing the provisions of the Dodd-Frank Wall Street Reformmisstatement, and Consumer Protection Act relating to the recoupment of incentive-based compensation. We will monitor the listing standards adopted by the NYSE and amend our clawback policy during the required timeframe in compliance with those standards.includes a three-year lookback requirement.
Insider Trading, Anti-Hedging, and Anti-Pledging Policy
We maintain an insider trading policy, which applies to all employees, officers and directors of the Company and its subsidiaries. The policy prohibits trading in securities of the Company while aware of material non-public information. Individuals whose roles are likely to provide them with access to material non-public information, including the NEOs and members of the Board,
of Directors, are subject to further restrictions, which, among other things, limits them to trading during quarterly trading windows with pre-clearance and prohibits derivatives trading, short sales, margin transactions, pledges and hedging transactions relating to Unisys securities at any time.
Risk Assessment and Mitigation of Compensation Policies and Practices
The Committee has reviewed the Company’s
incentive compensation programs, discussed the concept of risk as it relates to the Company’s compensation
program,programs, considered various mitigating factors and reviewed these items with
Meridian, the Committee’s independent compensation consultant.Meridian. In addition, the Committee has asked Meridian to conduct an independent risk assessment of the Company’s
executive compensation
program.programs. Based on these reviews and discussions, the Committee does not believe the Company’s compensation
program createsprograms create risks that are reasonably likely to have a material adverse effect on the Company’s business.
The Company has a strong bias toward incentives based on pre-established goals and limits use of discretionary bonuses. In limited cases, we have provided modest sign-on bonuses to executives in order to recognize value forgone at a prior employer or to attract a new executive to join the Company. Sign-on bonuses are often paid in installments to mitigate risk if the executive leaves the Company. Generally, executives are required to repay any sign-on bonuses if they leave prior to completing one year of service.
Table of Contents
Other Benefits
Executive officers participate in the retirement programs discussed below under “Defined Contribution Plans” and “Non-Qualified Deferred Compensation”. In addition, subject to underwriting approvals and applicable corporate governance requirements, executive officers appointed prior to February 2015 are eligible for supplemental death benefits under the Unisys Corporation Executive Death Benefit Only Program, which provides a death benefit equal to four times an executive officer’s base salary plus target bonus (if death occurs during active employment) or two and one-half times an executive officer’s final base salary (for retired officers who remain eligible for the benefit). The Company increases the benefit payable to the executive officer’s beneficiary to cover any income and employment taxes due. This benefit is no longer available to newly appointed executive officers. Of the active NEOs, Mr. Altabef is the only participant in this legacy program.
Perquisites available to executive officers are limited to financial counseling/tax preparation services, an annual physical examination and spousal travel with a bona fide business need. These benefits are designed to promote executive wellness and financial security. See the
Summary“Summary Compensation
TableTable” for additional detail.
In order to
To attract and retain key executives, the Company enters into severance and change-in-control agreements with its executive officers, including the NEOs. The severance agreements are intended to align with market practice. The change in control agreements are intended to provide retention and management continuity in the event of an actual or threatened change in control. More detail is provided under “Termination Arrangements.“Executive Officer Severance Agreements” and “Change-In-Control Agreements.”
| | 2024 Proxy Statement | | | 53 | |
Compensation and Human Resources Committee Report
Unisys’ Compensation and Human Resources Committee is responsible for the overall design and governance of the Company’s executive compensation program, senior executive succession leadership development process and succession planning human capital and people strategy. The Compensation and Human Resources Committee’s objective is to establish a competitive executive compensation program that links executive compensation to business performance and stockholder return. In performing its governance function, with regard to the Compensation Discussion and Analysis, the Compensation and Human Resources Committee relied on statements and information prepared by the Company’s management. It also relied on information provided by Meridian.
Recommendation Regarding Compensation Discussion and Analysis
The
Compensation and Human Resources Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with management. Based on such review and discussion, the
Compensation and Human Resources Committee recommended to the Board
of Directors that the Compensation Discussion and Analysis be included in this
proxy statement.Proxy Statement.This report is furnished by the members of the Compensation and Human Capital Committee.
Compensation and Human Resources Committee
Lee D. Roberts (Chair)
Matthew J. Desch
Deborah Lee James
Lee D. Roberts (Chair)Troy RichardsonRoxanne Taylor
Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act that might incorporate this proxy statementProxy Statement or future filings with the SEC, in whole or in part, the above report shall not be deemed to be “soliciting material” or “filed” with the SEC and shall not be deemed to be incorporated by reference into any such filing.
50 | | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
Executive Compensation Tables
Summary Compensation Table
The following table sets forth
information concerning the compensation of the NEOs for services rendered in all capacities to Unisys.
Name and
Principal Position | | Year | | Salary
($) | | Bonus(1)
($) | | Stock
Awards(2)(3)
($) | | Option
Awards
($) | | Non-
Equity
Incentive
Plan
Compen-
sation(4)
($) | | Change
in
Pension
Value
and Non-
qualified
Deferred
Compen-
sation
Earnings
($) | | All Other
Compen-
sation(5)
($) | | Total
($) |
Peter A. Altabef
Chair and Chief Executive Officer | | 2022 | | 991,000 | | — | | 4,384,201 | | — | | 1,700,836 | | — | | 16,700 | | 7,092,737 |
| | 2021 | | 991,000 | | — | | 4,234,347 | | — | | 2,814,432 | | — | | 19,756 | | 8,059,535 |
| | 2020 | | 861,408 | | — | | 3,592,245 | | — | | 2,761,869 | | — | | 18,671 | | 7,234,194 |
Debra McCann
Executive Vice President and Chief Financial Officer | | 2022 | | 327,000 | | — | | 1,999,069 | | — | | 264,826 | | — | | 8,573 | | 2,599,468 |
Michael M. Thomson
President and Chief Operating Officer and Former Executive Vice President and Chief Financial Officer | | 2022 | | 623,500 | | — | | 1,412,482 | | — | | 639,435 | | — | | 8,998 | | 2,684,415 |
| | 2021 | | 535,000 | | — | | 2,682,393 | | — | | 742,064 | | — | | 8,515 | | 3,967,972 |
| | 2020 | | 499,750 | | 225,000 | | 743,684 | | — | | 655,750 | | — | | 8,550 | | 2,132,735 |
Claudius Sokenu
Senior Vice President, General Counsel, Corporate Secretary and Chief Administrative Officer | | 2022 | | 327,000 | | 200,000 | | 1,028,157 | | — | | 228,251 | | — | | 5,616 | | 1,789,025 |
Katherine Ebrahimi
Senior Vice President, Chief Human Resources Officer | | 2022 | | 413,300 | | — | | 428,021 | | — | | 319,501 | | — | | 14,150 | | 1,174,972 |
| | 2021 | | 400,000 | | — | | 742,080 | | — | | 507,985 | | — | | 13,700 | | 1,663,765 |
Teresa Poggenpohl
Senior Vice President and Chief Marketing Officer | | 2022 | | 463,270 | | — | | 385,253 | | — | | 293,674 | | — | | 16,736 | | 1,158,932 |
Gerald P. Kenney
Former Senior Vice President, General Counsel and Corporate Secretary | | 2022 | | 173,100 | | — | | — | | — | | 54,349 | | — | | 997,262 | | 1,224,711 |
| | 2021 | | 500,000 | | — | | 785,856 | | — | | 603,654 | | — | | 13,596 | | 1,903,106 |
| | 2020 | | 467,131 | | — | | 408,980 | | — | | 613,570 | | — | | 13,550 | | 1,503,232 |
| | Name and
Principal Position | | | Year | | | Salary
($) | | | Bonus(1)
($) | | | Stock
Awards(2)(3)
($) | | | Non-
Equity
Incentive
Plan
Compen-
sation(4)
($) | | | All Other
Compen-
sation(5)
($) | | | Total
($) | |
| | Peter Altabef
Chair and CEO | | | 2023 | | | 991,000 | | | — | | | 2,249,583 | | | 2,869,362 | | | 23,463 | | | 6,133,408 | |
| | 2022 | | | 991,000 | | | — | | | 4,384,201 | | | 1,700,836 | | | 16,700 | | | 7,092,737 | |
| | 2021 | | | 991,000 | | | — | | | 4,234,347 | | | 2,814,432 | | | 19,756 | | | 8,059,535 | |
| | Debra McCann
Executive Vice President and CFO | | | 2023 | | | 534,327 | | | — | | | 1,100,483 | | | 1,112,785 | | | 9,900 | | | 2,757,495 | |
| | 2022 | | | 327,000 | | | — | | | 1,999,069 | | | 264,826 | | | 8,573 | | | 2,599,468 | |
| | Michael M. Thomson
President and Chief Operating Officer | | | 2023 | | | 669,327 | | | — | | | 1,758,820 | | | 1,728,738 | | | 11,407 | | | 4,168,292 | |
| | 2022 | | | 623,500 | | | — | | | 1,412,482 | | | 639,435 | | | 8,998 | | | 2,684,415 | |
| | 2021 | | | 535,000 | | | — | | | 2,682,393 | | | 742,064 | | | 8,515 | | | 3,967,972 | |
| | Teresa Poggenpohl
Senior Vice President and Chief Marketing Officer | | | 2023 | | | 465,000 | | | — | | | 716,172 | | | 713,869 | | | 14,900 | | | 1,909,942 | |
| | 2022 | | | 463,270 | | | — | | | 385,253 | | | 293,674 | | | 16,736 | | | 1,158,932 | |
| | Katherine Ebrahimi
Senior Vice President, CHRO | | | 2023 | | | 415,000 | | | — | | | 240,192 | | | 678,646 | | | 14,900 | | | 1,348,738 | |
| | 2022 | | | 413,300 | | | — | | | 428,021 | | | 319,501 | | | 14,150 | | | 1,174,972 | |
| | 2021 | | | 400,000 | | | — | | | 742,080 | | | 507,985 | | | 13,700 | | | 1,663,765 | |
| | Claudius Sokenu
Former Senior Vice President, General Counsel, Secretary and Chief Administrative Officer | | | 2023 | | | 272,596 | | | 400,000 | | | 764,214 | | | — | | | 1,380 | | | 1,438,189 | |
| | 2022 | | | 327,000 | | | 200,000 | | | 1,028,157 | | | 228,251 | | | 5,616 | | | 1,789,025 | |
(1)
Amounts shown for 2022 and 2023 include sign-on bonus for Mr. Sokenu. Mr. Sokenu voluntarily exited the Company on June 30, 2023.
(2)
Amounts shown are the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions made in such valuation, see note 19 to the Company’s 2023 financial statements included in the Annual Report. For more details on grants in 2023, see “Grants of Plan-Based Awards” below.
(3)
Amounts shown for 2023 represent Time-Based RSUs, the aggregate grant date Monte Carlo simulation of the rTSR-Based RSUs, assuming that target performance levels are met, and Performance Retention Equity Awards, assuming stock hurdle and time requirements are met. Assuming that maximum performance levels are achieved for the rTSR-Based RSUs and Share Hurdle target is achieved, the value of the awards at date of grant would be as follows: Mr. Altabef — $918,097, Ms. McCann — $367,631, Mr. Thomson — $617,635, Ms. Poggenpohl — $132,347, Ms. Ebrahimi-$147,053 and Mr. Sokenu $161,758.
(4)
Amounts include short-term incentives paid under the 2023 EVC Plan and 2023 payouts of Target Long-Term Performance-Based Cash incentives under the 2023 Long-Term Incentive Plan.
(5)
For 2023, amounts consist of the following: Mr. Altabef — 401(k) matching contributions of $8,963 and perquisites of $14,500, which includes executive physical and financial planning; Ms. McCann — 401(k) matching contributions of $9,900, Mr. Thomson — 401(k) matching contributions of $9,714 and perquisites of $1,092, which includes spousal travel and financial planning, Ms. Poggenpohl — 401(k) matching contributions of $9,900 and perquisites of $5,000 for financial planning, Ms. Ebrahimi — 401(k) matching contributions of $9,900 and perquisites of $5,000 for financial planning and Mr. Sokenu — 401(k) matching contributions of $1,380.
(1) | Amounts shown for 2022 include sign-on bonus for Mr. Sokenu at time of hire. |
(2)2024 Proxy Statement | Amounts shown are the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions made in such valuation, see note 18 to the Company’s 2022 financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2022. For more details on grants in 2022, see “Grants of Plan-Based Awards” below. |
(3) | Amounts shown for 2022 represent the aggregate grant date Monte Carlo simulation of the TSR-Based RSUs, assuming that target performance levels are met, Time-Based RSUs, and Performance Retention Equity Awards, assuming stock hurdle and time requirements are met. Only Ms. McCann and Mr. Sokenu received a Performance Retention Equity Award in 2022. Assuming that maximum performance levels are achieved for the TSR-Based RSUs and Share Hurdle target is achieved, the value of the awards at date of grant would be as follows: Mr. Altabef — $5,353,995, Ms. McCann - $2,391,563, Mr. Thomson — $1,724,926, Mr. Sokenu - $1,269,845, Ms. Ebrahimi - $522,701, Ms. Poggenpohl - $470,472 and Mr. Kenney $0. |
(4) | Amounts include short-term incentives paid under the 2022 EVC Plan and 2022 payouts of Target Long-Term Performance-Based Cash incentives under the 2019 Long-Term Incentive Plan. |
(5)55 | For 2022, amounts consist of the following: Mr. Altabef — 401(k) matching contributions of $9,200 and perquisites of $7,500, for financial planning; Ms. McCann – 401(k) matching contributions of $8,573; Mr. Thomson — 401(k) matching contributions of $8,998; Mr. Sokenu –perquisites of $5,616, which include financial planning and physical; Ms. Ebrahimi – 401(k) matching contribution of $9,150 and perquisites of $5,000 for financial planning, Ms. Poggenpohl – 401(k) matching contribution of $11,736 and perquisites of $5,000 for financial planning and Mr. Kenney — 401(k) matching contributions of $9,200 and perquisites of $3,095 for financial planning, COBRA reimbursement of $9,967 and cash severance of $975,000. |
| |
Table of Contents
Grants of Plan-Based Awards
The following table sets forth information on grants of plan-based awards during
20222023 to the NEOs.
| | | | | | | Estimated Future Payouts Under
Non-Equity Incentive
Plan Awards | | Estimated Future Payouts
Under Equity Incentive
Plan Awards | | | | | | | | |
| Name | | Award
Type | | Grant
Date in
2022 | | Threshold
($)(1) | | Target
($)(2) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) | | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) | | Exercise or
Base Price
of Option
Awards
($/sh) | | Grant Date
Fair Value
of Stock
and Option
Awards
($)(3)(4) |
| Peter A. Altabef | | EVC Plan(1) | | | | 693,700 | | 1,387,400 | | 2,774,800 | | | | | | | | | | | | | | |
| | Time-Based RSU | | 2/25 | | | | | | | | | | | | | | 78,420 | | | | | | 1,707,203 |
| | | TSR-Based RSU | | 2/25 | | | | | | | | 39,210 | | 78,420 | | 156,840 | | | | | | | | 2,676,997 |
| | | Performance-Based Cash LTI | | 2/25 | | 853,600 | | 1,707,200 | | 3,414,400 | | | | | | | | | | | | | | |
| Debra McCann | | EVC Plan(1) | | | | 237,500 | | 475,000 | | 950,000 | | | | | | | | | | | | | | |
| | Time-Based RSU | | 6/1 | | | | | | | | | | | | | | 28,585 | | | | | | 333,301 |
| | | TSR-Based RSU | | 6/1 | | | | | | | | 14,293 | | 28,585 | | 57,170 | | | | | | | | 975,797 |
| | | Performance-Based Cash LTI | | 6/1 | | 166,700 | | 333,400 | | 666,800 | | | | | | | | | | | | | | |
| | | Time-Based Retention Award(5) | | 6/1 | | | | | | | | | | | | | | 21,441 | | | | | | 250,002 |
| | | Performance-Based Retention Award(5) | | 6/1 | | | | | | | | | | 42,882 | | | | | | | | | | 439,969 |
| Michael M. Thomson | | EVC Plan(1) | | | | 349,250 | | 698,500 | | 1,397,000 | | | | | | | | | | | | | | |
| | Time-Based RSU | | 2/25 | | | | | | | | | | | | | | 25,265 | | | | | | 550,019 |
| | | TSR-Based RSU | | 2/25 | | | | | | | | 12,633 | | 25,265 | | 50,530 | | | | | | | | 862,463 |
| | | Performance-Based Cash LTI | | 2/25 | | 275,000 | | 550,000 | | 1,100,000 | | | | | | | | | | | | | | |
| Claudius Sokenu | | EVC Plan(1) | | | | 237,500 | | 475,000 | | 950,000 | | | | | | | | | | | | | | |
| | Time-Based RSU | | 6/1 | | | | | | | | | | | | | | 15,721 | | | | | | 183,307 |
| | | TSR-Based RSU | | 6/1 | | | | | | | | 7,861 | | 15,721 | | 31,442 | | | | | | | | 536,663 |
| | | Performance-Based Cash LTI | | 6/1 | | 91,700 | | 183,400 | | 366,800 | | | | | | | | | | | | | | |
| | | Time-Based Retention Award(5) | | 6/1 | | | | | | | | | | | | | | 9,577 | | | | | | 111,668 |
| | | Performance-Based Retention Award(5) | | 6/1 | | | | | | | | | | 19,154 | | | | | | | | | | 196,520 |
| Katherine Ebrahimi | | EVC Plan(1) | | | | 197,125 | | 394,250 | | 788,500 | | | | | | | | | | | | | | |
| | Time-Based RSU | | 2/25 | | | | | | | | | | | | | | 7,656 | | | | | | 166,671 |
| | | TSR-Based RSU | | 2/25 | | | | | | | | 3,828 | | 7,656 | | 15,312 | | | | | | | | 261,350 |
| | | Performance-Based Cash LTI | | 2/25 | | 83,350 | | 166,700 | | 333,400 | | | | | | | | | | | | | | |
| Teresa Poggenpohl | | EVC Plan(1) | | | | 220,875 | | 441,750 | | 883,500 | | | | | | | | | | | | | | |
| | Time-Based RSU | | 2/25 | | | | | | | | | | | | | | 6,891 | | | | | | 150,017 |
| | | TSR-Based RSU | | 2/25 | | | | | | | | 3,446 | | 6,891 | | 13,782 | | | | | | | | 235,236 |
| | | Performance-Based Cash LTI | | 2/25 | | 75,000 | | 150,000 | | 300,000 | | | | | | | | | | | | | | |
| | | | | | | | | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards | | | Estimated Future Payouts
Under Equity Incentive
Plan Awards | | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) | | | Grant Date
Fair Value
of Stock
and Option
Awards
($)(3)(4) | |
| | Name | | | Award
Type | | | Grant
Date in
2023 | | | Threshold
($)(1) | | | Target
($)(2) | | | Maximum
($) | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | |
| | Peter Altabef | | | EVC Plan(1) | | | | | | 594,600 | | | 1,189,200 | | | 2,378,400 | | | | | | | | | | | | | | | | |
| | Time-Based RSU | | | 2/28 | | | | | | | | | | | | | | | | | | | | | 208,942 | | | 1,040,531 | |
| | rTSR-Based RSU | | | 2/28 | | | | | | | | | | | | 31,342 | | | 62,683 | | | 125,366 | | | | | | 459,049 | |
| | PB Cash NON GAAP Profit | | | 2/28 | | | 520,267 | | | 1,040,533 | | | 2,081,066 | | | | | | | | | | | | | | | | |
| | rTSR-Based Cash | | | 2/28 | | | 364,187 | | | 728,373 | | | 1,456,746 | | | | | | | | | | | | | | | | |
| | Stock Price Performance RSU(5) | | | 5/8 | | | | | | | | | | | | | | | 192,803 | | | | | | | | | 750,004 | |
| | Debra McCann | | | EVC Plan(1) | | | | | | 254,125 | | | 508,250 | | | 1,016,500 | | | | | | | | | | | | | | | | |
| | Time-Based RSU | | | 2/28 | | | | | | | | | | | | | | | | | | | | | 83,668 | | | 416,667 | |
| | rTSR-Based RSU | | | 2/28 | | | | | | | | | | | | 12,550 | | | 25,100 | | | 50,200 | | | | | | 183,816 | |
| | PB Cash NON GAAP Profit | | | 2/28 | | | 208,334 | | | 416,667 | | | 833,334 | | | | | | | | | | | | | | | | |
| | rTSR-Based Cash | | | 2/28 | | | 145,834 | | | 291,667 | | | 583,334 | | | | | | | | | | | | | | | | |
| | Stock Price Performance RSUU(5) | | | 5/8 | | | | | | | | | | | | | | | 128,535 | | | | | | | | | 500,001 | |
| | Michael M. Thomson | | | EVC Plan(1) | | | | | | 368,500 | | | 737,000 | | | 1,474,000 | | | | | | | | | | | | | | | | |
| | Time-Based RSU | | | 2/28 | | | | | | | | | | | | | | | | | | | | | 140,562 | | | 699,999 | |
| | rTSR-Based RSU | | | 2/28 | | | | | | | | | | | | 21,085 | | | 42,169 | | | 84,338 | | | | | | 308,818 | |
| | PB Cash NON GAAP Profit | | | 2/28 | | | 350,000 | | | 700,000 | | | 1,400,000 | | | | | | | | | | | | | | | | |
| | rTSR-Based Cash | | | 2/28 | | | 245,000 | | | 490,000 | | | 980,000 | | | | | | | | | | | | | | | | |
| | Stock Price Performance RSU(5) | | | | | | | | | | | | | | | | | | 192,803 | | | | | | | | | 750,004 | |
| | Teresa Poggenpohl | | | EVC Plan(1) | | | | | | 220,875 | | | 441,750 | | | 883,500 | | | | | | | | | | | | | | | | |
| | Time-Based RSU | | | 2/28 | | | | | | | | | | | | | | | | | | | | | 30,120 | | | 149,998 | |
| | rTSR-Based RSU | | | 2/28 | | | | | | | | | | | | 4,518 | | | 9,036 | | | 18,072 | | | | | | 66,174 | |
| | PB Cash NON GAAP Profit | | | 2/28 | | | 75,000 | | | 150,000 | | | 300,000 | | | | | | | | | | | | | | | | |
| | rTSR Based Cash | | | 2/28 | | | 52,500 | | | 105,000 | | | 210,000 | | | | | | | | | | | | | | | | |
| | Stock Price Performance RSU(5) | | | 5/8 | | | | | | | | | | | | | | | 128,535 | | | | | | | | | 500,001 | |
| | Katherine Ebrahimi | | | EVC Plan(1) | | | | | | 197,125 | | | 394,250 | | | 788,500 | | | | | | | | | | | | | | | | |
| | Time-Based RSU | | | 2/28 | | | | | | | | | | | | | | | | | | | | | 33,467 | | | 166,666 | |
| | rTSR-Based RSU | | | 2/28 | | | | | | | | | | | | 5,020 | | | 10,040 | | | 20,080 | | | | | | 73,526 | |
| | PB Cash NON GAAP Profit | | | 2/28 | | | 83,334 | | | 166,667 | | | 333,334 | | | | | | | | | | | | | | | | |
| | rTSR-Based Cash | | | 2/28 | | | 58,334 | | | 116,667 | | | 233,334 | | | | | | | | | | | | | | | | |
| | Claudius Sokenu | | | EVC Plan(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Time-Based RSU | | | 2/28 | | | | | | | | | | | | | | | | | | | | | 36,814 | | | 183,334 | |
| | rTSR-Based RSU | | | 2/28 | | | | | | | | | | | | 5,522 | | | 11,044 | | | 22,088 | | | | | | 80,879 | |
| | PB Cash NON GAAP Profit | | | 2/28 | | | 91,667 | | | 183,333 | | | 366,666 | | | | | | | | | | | | | | | | |
| | rTSR Based Cash | | | 2/28 | | | 64,167 | | | 128,333 | | | 256,666 | | | | | | | | | | | | | | | | |
| | Stock Price Performance RSU(5) | | | 5/8 | | | | | | | | | | | | | | | 128,535 | | | | | | | | | 500,001 | |
(1)
Threshold funding for Non-GAAP Operating Profit is 65% and Revenue is 90%.
(2)
Target amounts represent annualized base salary at year-end multiplied by target bonus percent.
(3)
Time-Based RSU value is determined using the Unisys closing price on grant date: $4.98 on February 28, 2023.
(4)
rTSR-Based RSU value are determined based on Monte-Carlo simulation using the following assumptions based on the vesting tranches: (a) Tranche 1/1/2023 to 12/31/2023: $6.83; (b) Tranche 1/1/2023 to 12/31/2024: $7.37; and (c) Tranche 1/1/2023 to 12/31/2025 $7.77.
(5)
Mr. Altabef, Ms. McCann, Mr. Thomson, Ms. Poggenpohl and Mr. Sokenu received Stock Price Performance LTI awards as part of their 2023 total LTI package on May 8, 2023 with a closing price of $3.89. Mr. Sokenu voluntarily exited the company on June 30, 2023, therefore, this award was cancelled upon termination.
(1) | Threshold funding for Non-GAAP Operating Profit is 65%, Revenue is 90% and Free Cash Flow is 60%. |
(2)56 | Target amounts represent annualized base salary at year-end multiplied by target bonus percent. |
(3) | The Time-Based RSU value is determined using the Unisys closing price on grant date: $21.77 on 2/25/2022 and $11.66 on 6/1/2022. |
(4) | TSR-Based RSU value are determined based on Monte-Carlo simulation using the following assumptions based on the vesting tranches: (a) Tranche 1/1/2022 to 12/31/2022: $33.26; (b) Tranche 1/1/2022 to 12/31/2023: $34.06; and (c) Tranche 1/1/2022 to 12/31/2024 $35.09. |
(5) | Ms. McCann and Mr. Sokenu received Performance-based Equity Retention Awards on June 1, 2022, closing price of $11.66. |
| | |
Table of Contents
52 | | | | Advisory Vote to Approve Executive Compensation | |
Awards shown under “Estimated Future Payouts Under Non-Equity Incentive Plan Awards”
above on page 55 are annual bonuses in the form of cash incentive compensation through the EVC Plan and performance-based cash awards. As discussed more fully in “Compensation Discussion and Analysis” above, the amount of incentive compensation paid to the NEOs under the EVC Plan generally depends upon (a) the officer’s target annual bonus amount and (b) the degree to which the Company’s performance goals were met.
rTSR RSUs, rTSR-Based
RSUs are earned one-third annually over a three-year periodCash and
PB Cash Non-GAAP Operating Profit
Based Cash LTI are earned one-third annually over a three-year period. Such earned awards vest on the first, second and third anniversary of grant, respectively, if the NEO is then employed by the Company.
Performance BasedThe 2023 tranche of PB Cash
Non-GAAP Operating Profit LTI paid out at
73.15%63.58% of target on the vesting date of February 25,
2023.2024. The 2023 tranche of both rTSR RSUs and rTSR-Based Cash paid out at 166.18% of target and the 2023 tranche of Non-GAAP Operating Profit Based Cash paid out at 200% of target on the vesting date of February 28, 2024.
Awards shown under “All Other Stock Awards” are Time-Based RSUs granted under the
20192023 Plan. These RSUs will vest one-third per year beginning on the first anniversary of the date of grant if the individual is then employed by the Company.
Outstanding Equity Awards at Fiscal Year-End
The following table shows equity awards to the NEOs that were outstanding as of December 31,
2022.| Name | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(2) | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1) | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)(2) | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(1) |
| Peter A. Altabef | | — | | — | | — | | — | | — | | 152,207 | | 777,778 | | 152,207 | | 777,778 |
| Debra McCann | | — | | — | | — | | — | | — | | 50,026 | | 255,633 | | 71,467 | | 365,196 |
| Michael M.Thomson | | — | | — | | — | | — | | — | | 66,567 | | 340,157 | | 90,328 | | 461,576 |
| Claudius Sokenu | | — | | — | | — | | — | | — | | 25,298 | | 129,273 | | 34,875 | | 178,211 |
| Katherine Ebrahimi | | — | | — | | — | | — | | — | | 19,844 | | 101,403 | | 24,393 | | 124,648 |
| Teresa Poggenpohl | | — | | — | | — | | — | | — | | 14,933 | | 76,308 | | 19,410 | | 99,185 |
| Gerald P. Kenney | | — | | — | | — | | — | | — | | 1,769 | | 9,040 | | 11,939 | | 61,008 |
| | Name | | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(2) | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1) | | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#)(2) | | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)(1) | |
| | Peter Altabef | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 283,083 | | | | | | 1,590,926 | | | | | | 329,627 | | | | | | 1,852,504 | | |
| | Debra McCann | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 124,166 | | | | | | 697,813 | | | | | | 215,574 | | | | | | 1,211,526 | | |
| | Michael M. Thomson | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 186,826 | | | | | | 1,049,962 | | | | | | 304,997 | | | | | | 1,714,083 | | |
| | Teresa Poggenpohl | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 40,974 | | | | | | 230,274 | | | | | | 152,902 | | | | | | 859,309 | | |
| | Katherine Ebrahimi | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 45,383 | | | | | | 255,052 | | | | | | 26,505 | | | | | | 148,958 | | |
| | Claudius Sokenu(3) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
(1)
Market value reflects $5.62 closing price of Unisys common stock on December 29, 2023.
(2)
The awards below are scheduled to vest as described in the table below if the individual is then employed by the Company (subject to the achievement of the relevant performance goals, in the case of Equity Incentive Plan awards).
(3)
Mr. Sokenu voluntarily exited the company on June 30, 2023.
(1) | Market value reflects $5.11 closing price of Unisys common stock on December 31, 2022. |
(2)2024 Proxy Statement | The awards below are scheduled to vest as follows if the individual is then employed by the Company: |
| | | 57 | |
| | Name | | | Vesting Date | | | Number of Shares or
Units of Stock
That Have Not Vested
(Time-Based RSUs) | | | Equity Incentive Plan Awards:
Number of Unearned Shares,
Units or Other Rights
That Have Not Vested
(Performance-Based RSUs at Target) | |
| | Peter Altabef | | | 2/25/2024 | | | 26,140 | | | 26,140 | |
| | 2/26/2024 | | | 21,861 | | | 21,861 | |
| | 2/28/2024 | | | 69,647 | | | 20,894 | |
| | 2/25/2025 | | | 26,140 | | | 26,140 | |
| | 2/28/2025 | | | 69,647 | | | 20,894 | |
| | 2/28/2026 | | | 69,648 | | | 20,895 | |
| | 5/8/2026 | | | — | | | 192,803 | |
| | Debra McCann | | | 2/28/2024 | | | 27,889 | | | 8,366 | |
| | 6/1/2024 | | | 9,528 | | | 9,528 | |
| | 2/28/2025 | | | 27,889 | | | 8,367 | |
| | 6/1/2025 | | | 30,970 | | | 52,411 | |
| | 2/28/2026 | | | 27,890 | | | 8,367 | |
| | 5/8/2026 | | | — | | | 128,535 | |
| | Michael M. Thomson | | | 2/25/2024 | | | 8,422 | | | 8,422 | |
| | 2/26/2024 | | | 29,420 | | | 53,181 | |
| | 2/28/2024 | | | 46,854 | | | 14,056 | |
| | 2/25/2025 | | | 8,422 | | | 8,422 | |
| | 2/28/2025 | | | 46,854 | | | 14,056 | |
| | 2/28/2026 | | | 46,854 | | | 14,057 | |
| | 5/8/2026 | | | — | | | 192,803 | |
| | Teresa Poggenpohl | | | 2/25/2024 | | | 2,297 | | | 2,297 | |
| | 2/28/2024 | | | 10,040 | | | 3,012 | |
| | 5/3/2024 | | | 6,260 | | | 10,737 | |
| | 2/25/2025 | | | 2,297 | | | 2,297 | |
| | 2/28/2025 | | | 10,040 | | | 3,012 | |
| | 2/28/2026 | | | 10,040 | | | 3,012 | |
| | 5/8/2026 | | | — | | | 128,535 | |
| | Katherine Ebrahimi | | | 2/25/2024 | | | 2,552 | | | 2,552 | |
| | 2/26/2024 | | | 6,812 | | | 11,361 | |
| | 2/28/2024 | | | 11,155 | | | 3,346 | |
| | 2/25/2025 | | | 2,552 | | | 2,552 | |
| | 2/28/2025 | | | 11,156 | | | 3,347 | |
| | 2/28/2026 | | | 11,156 | | | 3,347 | |
| | Claudius Sokenu* | | | — | | | — | | | — | |
*
Mr. Sokenu voluntarily exited the company on June 30, 2023.
| Name | | Vesting Date | | Number of Shares or
Units of Stock
That Have Not Vested
(Time-Based RSUs) | | Equity Incentive Plan Awards:
Number of Unearned Shares,
Units or Other Rights
That Have Not Vested
(TSR-Based RSUs at Target) |
| Peter A. Altabef | | 2/25/2023 | | 26,140 | | 26,140 |
| | | 2/26/2023 | | 21,860 | | 21,860 |
| | | 2/28/2023 | | 30,066 | | 30,066 |
| | | 2/25/2024 | | 26,140 | | 26,140 |
| | | 2/26/2024 | | 21,861 | | 21,861 |
| | | 2/25/2025 | | 26,140 | | 26,140 |
| Debra McCann | | 6/1/2023 | | 9,528 | | 9,528 |
| | | 6/1/2024 | | 9,528 | | 9,528 |
| | | 6/1/2025 | | 9,529 | | 9,529 |
| | | 6/1/2025 | | 21,441 | | 42,882 |
| Michael M. Thomson | | 2/25/2023 | | 8,421 | | 8,421 |
| | | 2/26/2023 | | 5,657 | | 5,657 |
| | | 2/28/2023 | | 6,225 | | 6,225 |
| | | 2/25/2024 | | 8,422 | | 8,422 |
| | | 2/26/2024 | | 5,658 | | 5,658 |
| | | 2/26/2024 | | 23,762 | | 47,523 |
| | | 2/25/2025 | | 8,422 | | 8,422 |
| Claudius Sokenu | | 6/1/2023 | | 5,240 | | 5,240 |
| | | 6/1/2024 | | 5,240 | | 5,240 |
| | | 6/1/2025 | | 5,241 | | 5,241 |
| | | 6/1/2025 | | 9,577 | | 19,154 |
| Katherine Ebrahimi | | 2/25/2023 | | 2,552 | | 2,552 |
| | | 2/26/2023 | | 2,263 | | 2,263 |
| | | 2/28/2023 | | 3,113 | | 3,113 |
| | | 2/25/2024 | | 2,552 | | 2,552 |
| | | 2/26/2024 | | 2,263 | | 2,263 |
| | | 2/26/2024 | | 4,549 | | 9,098 |
| | | 2/25/2025 | | 2,552 | | 2,552 |
| Teresa Poggenpohl | | 2/25/2023 | | 2,297 | | 2,297 |
| | | 2/25/2024 | | 2,297 | | 2,297 |
| | | 2/25/2025 | | 2,297 | | 2,297 |
| | | 5/3/2023 | | 1,782 | | 1,782 |
| | | 5/3/2024 | | 1,782 | | 1,782 |
| | | 5/3/2024 | | 4,478 | | 8,955 |
| | | | | | | |
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5458 | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
Option Exercises and Stock Vested
The following table provides information on stock option exercises and the vesting of stock awards during
20222023 for each of the NEOs.
| | | Option Awards | | Stock Awards |
| Name | | Number of Shares
Acquired on
Exercise
(#) | | Value Realized
on Exercise
($) | | Number of Shares
Acquired on Vesting
(#) | | Value Realized on
Vesting
($) |
| Peter A. Altabef | | — | | — | | 185,293 | | 3,803,964 |
| Debra McCann | | — | | — | | — | | — |
| Michael M. Thomson | | — | | — | | 30,774 | | 638,715 |
| Claudius Sokenu | | — | | — | | — | | — |
| Katherine Ebrahimi | | — | | — | | 18,786 | | 386,227 |
| Teresa Poggenpohl | | — | | — | | 3,384 | | 45,819 |
| Gerald P. Kenney | | — | | — | | 27,923 | | 522,391 |
| | | | | Option Awards | | | Stock Awards | |
| | Name | | | Number of Shares
Acquired on
Exercise
(#) | | | Value Realized
on Exercise
($) | | | Number of Shares
Acquired on Vesting
(#) | | | Value Realized on
Vesting
($) | |
| | Peter Altabef | | | | | — | | | | | | — | | | | | | 89,275 | | | | | | 455,150 | | |
| | Debra McCann | | | | | — | | | | | | — | | | | | | 9,528 | | | | | | 36,588 | | |
| | Michael M. Thomson | | | | | — | | | | | | — | | | | | | 22,624 | | | | | | 115,765 | | |
| | Teresa Poggenpohl | | | | | — | | | | | | — | | | | | | 4,079 | | | | | | 19,518 | | |
| | Katherine Ebrahimi | | | | | — | | | | | | — | | | | | | 9,089 | | | | | | 46,323 | | |
| | Claudius Sokenu | | | | | — | | | | | | — | | | | | | 5,240 | | | | | | 20,122 | | |
Defined Contribution Plans
The NEOs based in the U.S. are eligible to participate in the Unisys Savings Plan, which is a tax-qualified defined contribution plan with a matching contributions feature. In
2022,2023, the Company made matching contributions under the plan of 50% of each 1% of eligible pay contributed by a participant on a before-tax basis, up to the first 6% of eligible pay contributed.
Non-Qualified Deferred Compensation
The table below shows compensation of the NEOs that has been deferred under a plan that is not tax-qualified. Under the Company’s non-qualified deferred compensation
plans,plan, eligible employees may defer until a future date payment of all or any portion of their annual salary or bonus, as well as any vested share unit award under one of the Company’s long-term incentive plans. Amounts deferred are recorded in a memorandum account for each participant and are credited or debited with earnings or losses as if such amounts had been invested in one or more of the professionally managed investment options available under the Unisys Savings Plan, as selected by the participant. Participants may change their investment options at any time. Account balances will be paid either in a single lump sum or in annual installments, as elected by the participant. The memorandum accounts are not funded, and the right to receive future payments of amounts recorded in these accounts is an unsecured claim against the Company’s general assets.
| Name | | Executive
Contributions
in 2022
($) | | Company
Contributions
in 2022
($) | | Aggregate
Earnings in
2022
($)(1) | | Aggregate
Withdrawals/
Distributions
in 2022
($) | | Aggregate
Balance at
December 31,
2022
($)(1) |
| Michael M. Thomson | | — | | — | | (5,252) | | — | | 20,973 |
| | Name | | | Executive
Contributions
in 2023
($) | | | Company
Contributions
in 2023
($) | | | Aggregate
Earnings in
2023
($)(1) | | | Aggregate
Withdrawals/
Distributions
in 2023
($) | | | Aggregate
Balance at
December 31,
2023
($)(1) | |
| | Michael M. Thomson | | | | | — | | | | | | — | | | | | | 2,324 | | | | | | — | | | | | | 23,916 | | |
(1)(1) | No amounts shown in this column are reported in the Summary Compensation Table. |
Potential Payments upon Termination or Change in Control
Mr. Altabef’s Letter Agreement
Under the letter agreement covering the terms and conditions of Mr. Altabef’s employment as Chief Executive Officer,CEO, if Mr. Altabef’s employment is terminated by the Company without causeCause (as defined in the letter agreement) or by Mr. Altabef for good reason (defined generally as a reduction in aggregate compensation target, a material reduction in duties or authority or removal as Chief Executive Officer)CEO) prior to a change of control of the Company, Mr. Altabef will be entitled to receive an amount equal
| | 2024 Proxy Statement | | | 59 | |
to two times the sum of (1) his base salary (at its then current rate) plus (2) his target bonus amount (as in effect on the date of termination), and monthly payments for up to 24 months equal to the difference between the monthly COBRA rate and the monthly active employee contribution rate applicable to Mr. Altabef. Receipt of benefits under
these agreementsthe letter agreement requires the execution of a release of claims in favor of the Company. The letter agreement includes non-compete, non-solicitation and non-disparagement provisions effective for 12 months from the date of termination of employment for any reason. If Mr. Altabef materially breaches any of these provisions, the Company has the right to terminate any payments described above that have not yet been made and to seek the recoupment of any such payments that were previously made.
Beginning in 2022, the LTI agreements governing grants of time-based RSUs,
TSR-basedrTSR-based RSUs and performance-based cash awards
shall stipulate that if, prior to a Change In Control (as defined in the
20192023 Plan), Mr. Altabef’s employment by the Corporation is terminated after Mr. Altabef has reached age 65, and the termination is either by the Corporation other than for Cause (as defined in the
20192023 Plan) or by Mr. Altabef with Good Reason (as defined in the
20192023 Plan) and at the time of termination the Corporation has reached a written agreement with a successor to Mr. Altabef to serve as
Chief Executive OfficerCEO of the Company, then, subject to Mr. Altabef having executed and not revoked a general release of claims in favor of the Corporation, any time-based RSUs granted under such agreements that remain unvested as of the date of Mr. Altabef’s termination shall become vested on the date of his termination and any
TSR-basedrTSR-based RSUs and performance-based cash awards granted under such agreements that remain outstanding and unvested as of the date of Mr. Altabef’s termination shall remain outstanding and continue to be eligible to vest as if Mr. Altabef remained employed through the applicable vesting date, with the portion of any such award, if any, that becomes vested based on the level of achievement of the performance goals over the relevant measurement period as set forth in the relevant grant agreement. It is the Board’s intention that these terms shall be included in any subsequent grants of long-term incentive awards to Mr. Altabef going forward.
Executive Officer Severance Agreements
The Company has entered into letter agreements with certain of its executive officers, including the NEOs other than Mr. Altabef, providing that if any such executive officer’s employment is terminated by the Company without cause or by such executive officer for good reason (defined generally as a reduction in duties or authority, a reduction in annual base salary or a requirement that an executive relocate from their principal residence or perform their principal duties in a new location), that executive officer will be entitled to receive an amount equal to the sum of his or her annual base salary plus his or her annual target bonus, payable in substantially equal installments during the twelve month period following the date of termination. Each executive officer will also be entitled to continued medical, dental and vision coverage for up to one year at the same costs applicable to active employees. In addition, if such executive officer is a participant under the Unisys Corporation Executive Death Benefit Only Program at the time of termination, the executive officer will be deemed to have met the age and service requirements for retirement as set forth in the program and, upon the executive officer’s death, his or her beneficiary shall be entitled to the post-retirement death benefits provided under the program.
Receipt of benefits under these agreements requires execution of a release of claims in favor of the Company. NEOs would be entitled to the payments below if their employment had been terminated as described above on the last business day of
2022.| Name | | Aggregate Termination
Payments
($) | | Aggregate Medical, Dental
and Vision Payments
($) |
| Peter A. Altabef(1) | | 4,756,800 | | 10,780 |
| Debra McCann | | 975,000 | | 0 |
| Michael M. Thomson | | 1,333,500 | | 15,405 |
| Claudius Sokenu | | 975,000 | | 5,514 |
| Katherine Ebrahimi | | 809,250 | | 20,392 |
| Teresa Poggenpohl | | 906,750 | | 9,529 |
| | Name | | | Aggregate
Termination
Payments
($) | | | Value of LTI RSU
Accelerated
Vesting
($)(1)(2) | | | Value of LTI
Profit-Based Cash
Accelerated
Vesting(2) | | | Aggregate Medical,
Dentaland
Vision Payments
($) | |
| | Peter Altabef | | | | | 4,360,400 | | | | | | 3,443,430 | | | | | | 3,443,707 | | | | | | 12,105 | | |
| | Debra McCann | | | | | 1,043,250 | | | | | | | | | | | | | | | | | | — | | |
| | Michael M. Thomson | | | | | 1,407,000 | | | | | | | | | | | | | | | | | | 18,999 | | |
| | Teresa Poggenpohl | | | | | 906,750 | | | | | | | | | | | | | | | | | | — | | |
| | Katherine Ebrahimi | | | | | 809,250 | | | | | | | | | | | | | | | | | | 11,280 | | |
(1)(1) | Mr. Altabef participates in the Unisys Corporation Executive Death Benefit Only Program. |
| |
TableMarket value reflects $5.62 closing price of Contents
56 | | Advisory Vote to Approve Executive Compensation |
Unisys common stock on December 29, 2023.
(2)
The award value shown reflects all unvested stock and cash that would vest upon termination at target as set forth in the grant documents.
The NEOs are also each party to a change in control agreement with the Company, as described below. They are not entitled to receive duplicate payments under their change in control agreement and the above-described agreements. In the event of a conflict, they will be entitled to the benefits under their change in control agreement.
| | 60 | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
Transition Agreement with
Mr. KenneyMs. EbrahimiEffective December
6, 2021,12, 2023, the Company entered into a Transition Agreement and General Release with
Mr. Kenney,Ms. Ebrahimi, pursuant to which
Mr. Kenney’sMs. Ebrahimi’s employment
with the Company terminatedwill terminate without cause on
April 30, 2022.March 31, 2024. Under the terms of this Transition Agreement, in addition to any benefits to which
he wasshe is entitled under the
broad-based Company’s
benefit plans in accordance with their terms,
Mr. Kenney receivedMs. Ebrahimi will receive the benefits applicable upon a termination other than for cause
as he was entitled to receive upon such a termination pursuant to
his December 4, 2014her April 2, 2018 letter agreement with the Company,
including thewhich are payment of an amount equal to
hisher annual base salary ($
500,000)415,000) and
hisher target annual bonus ($
475,000)394,250), in each case paid out in bi-weekly installments over the one-year period immediately following
hisher termination.
In addition, Mr. Kenney received any The Transition Agreement also includes customary release and cooperation provisions and reaffirms her pre-existing restrictive covenant obligations to the Company, which prohibit Ms. Ebrahimi from soliciting its employees for a period of twelve (12) months following her termination.
All outstanding
awards previously granted to him under the Company’s long-term incentive plans (other than the 2021non-vested Time-Based RSUs, rTSR-Based RSUs, and Performance
Growth Restricted Stock UnitCash awards granted to
him on February 26, 2021, whichMs. Ebrahimi will
vest in accordance with their terms based on the actual date of the termination of Mr. Kenney’s employment) that are scheduled to vest on or before February 26, 2024 as if he remained employed by the Company through February 26, 2024, except that all such time-based awards that would have vested between the date of the termination of Mr. Kenney’s employment and February 26, 2024 were paid within sixty days of such termination date. All other awards previously granted to Mr. Kenney werebe forfeited
immediately upon
hisher termination.
Change-in-Control Agreements
The Company has entered into change-in-control employment agreements with its executive officers, including the NEOs. 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. Mr. Altabef’s change-in-control employment agreement is substantially similar to the other executive officers’ change-in-control employment agreements except that the lump sum payment relating to annual salary and bonus will be equal to two and a half times the sum of his annual base salary plus the higher of his target bonus prior to the change in control, the highest annual bonus paid in the three years prior to the change in control or the annual bonus paid after the change in control. The material terms of each of the change-in-control employment agreements with the NEOs are summarized below.
A change in control is generally defined as (1) the acquisition of 20% or more of Unisys common stock, (2) 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 (3) 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 and provides 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. For purposes of determining compensation levels, base salary must be at least equal to the highest salary paid or payable to the executive during the 12 months preceding the change in control, and bonus must be at least equal to the highest bonus paid or payable to the executive under the EVC Plan (or any comparable bonus or retention amount under any predecessor or successor plan or retention agreement) for the three fiscal years preceding the change in control (the “Recent Annual Bonus”).
If, following a change in control, the Company terminates the executive without
causeCause (as defined in the change-in-control employment agreements) or the executive terminates employment for good reason (generally defined as a reduction in the executive’s compensation or responsibilities or a change in the executive’s job location), the terminated executive will be entitled to receive special termination benefits. These benefits are as follows: (1) a pro-rated bonus for the year in which the termination occurs (based on the higher of (a) the Recent Annual Bonus and (b) the annual bonus paid or payable for the most recent fiscal year during the term of the agreement (such higher amount, the “Highest Annual Bonus”)), (2) a lump sum payment equal to two years of salary and bonus (based on the highest salary paid or payable during the term of the agreement and the Highest Annual Bonus) (or, in the case of Mr. Altabef, as described above), (3) a lump sum payment equal to the amount of premiums the Company would have paid to continue the executive in the Company’s welfare (other than health) plans for the two-year period, (4) for two years following the termination of employment, continued eligibility for coverage under the Company’s health plans at the same premium rates applicable to active employees and (5) outplacement services. To receive health coverage, the executive will be required to pay the full premium charged for the coverage. The Company will then reimburse the executive the amount of the premium that exceeds the amount the executive
Table of Contents
would have paid as an employee. Except as described below, 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 payment or distribution will be reduced to avoid the imposition of the excise tax if doing so would result in greater after-tax benefits to the executive. The executive is under no obligation to mitigate amounts payable under these agreements.
| | 2024 Proxy Statement | | | 61 | |
Change-In-Control Termination Benefits
If the NEOs
(other than Mr. Sokenu who voluntarily exited the Company on June 30, 2023) had become entitled to the special termination benefits described above on the last business day of
2022,2023, they would have received the following:
| Name | | Pro-Rata
Bonus
($) | | Lump Sum
Payment for
Salary and
Bonus
($) | | Value of
Outplacement
Services
($)(1) | | Welfare Benefit
Plan Premiums
($) | | Health
Coverage
Payments
($) | | Total
($)(2) |
| Peter A. Altabef | | 1,387,400 | | 5,946,000 | | 50,000 | | 20,207 | | 22,306 | | 7,425,913 |
| Debra McCann | | 475,000 | | 1,950,000 | | 50,000 | | 10,240 | | — | | 2,485,240 |
| Michael M. Thomson | | 698,500 | | 2,667,000 | | 50,000 | | 14,690 | | 31,875 | | 3,462,065 |
| Claudius Sokenu | | 475,000 | | 1,950,000 | | 50,000 | | 10,240 | | 11,411 | | 2,496,651 |
| Katherine Ebrahimi | | 394,250 | | 1,618,500 | | 50,000 | | 9,821 | | 42,197 | | 2,114,768 |
| Teresa Poggenpohl | | 441,750 | | 1,813,500 | | 50,000 | | 9,529 | | — | | 2,314,779 |
| | Name | | | Pro-Rata
Bonus
($) | | | Lump Sum
Payment for
Salary and
Bonus
($) | | | Value of
Outplacement
Services
($)(1) | | | Welfare Benefit
Plan Premiums
($) | | | Health
Coverage
Payments
($) | | | Total
($)(2) | |
| | Peter Altabef | | | | | 1,189,200 | | | | | | 5,696,268 | | | | | | 10,000 | | | | | | 20,207 | | | | | | 25,053 | | | | | | 6,940,728 | | |
| | Debra McCann | | | | | 508,250 | | | | | | 2,128,176 | | | | | | 10,000 | | | | | | 10,240 | | | | | | — | | | | | | 2,656,666 | | |
| | Michael M. Thomson | | | | | 737,000 | | | | | | 2,874,434 | | | | | | 10,000 | | | | | | 14,690 | | | | | | 39,321 | | | | | | 3,675,445 | | |
| | Teresa Poggenpohl | | | | | 441,750 | | | | | | 1,849,724 | | | | | | 10,000 | | | | | | 9,529 | | | | | | — | | | | | | 2,311,003 | | |
| | Katherine Ebrahimi | | | | | 394,250 | | | | | | 1,650,282 | | | | | | 10,000 | | | | | | 9,697 | | | | | | 23,342 | | | | | | 2,088,117 | | |
(1)(1) | The change-in-control agreements provide for reasonable outplacement services directly related to the termination of the executive’s employment. The executive may select the provider of outplacement services, and therefore, the costs actually incurred will vary by individual. The Company believes that the amounts shown in this column are a reasonable estimate of the potential costs of outplacement services. |
(2) | Amounts shown in this column do not include the value of the vested awards shown in the tables below “Long-Term Incentive Plans”. |
(2)
Amounts shown in this column do not include the value of the vested awards shown in the tables below “Long-Term Incentive Plans”.
Long-Term Incentive Plans
Under the Company’s long-term incentive plans, if a change in control occurs and a participant’s employment terminates for “good reason” or other than for
causeCause within 24 months of the change in control, all Time-Based RSUs will become fully vested
and the target amount of
TSR-BasedrTSR-Based RSUs,
TSR-BasedrTSR-Based Cash, Profit-Based Cash and
Profit-Based Cash granted under the Unisys Corporation 2019 Long-Term Incentive and Equity Compensation PlanStock Price Performance RSUs will vest. If a change in control and a termination of employment had occurred on the last business day of
2022,2023, the NEOs would have become vested in the following number of RSUs, having the following values, and would have become entitled to receive the following amount of long-term Performance-Based Cash:
| Name | | Vested Restricted
Stock Units
(#) | | Value of Vested
Restricted Stock
Units
($)(1) | | Value of Vested
Long-Term Profit-
Based Cash
($) |
| Peter A. Altabef | | 304,414 | | 1,555,556 | | 3,317,201 |
| Debra McCann | | 121,493 | | 620,829 | | 333,400 |
| Michael M. Thomson | | 156,895 | | 801,733 | | 938,934 |
| Claudius Sokenu | | 60,173 | | 307,484 | | 183,400 |
| Katherine Ebrahimi | | 44,237 | | 226,051 | | 331,401 |
| Teresa Poggenpohl | | 34,343 | | 175,493 | | 238,934 |
| | Name | | | Vested Restricted
Stock Units
(#) | | | Value of Vested
Restricted Stock
Units
($)(1) | | | Value of Vested
Long-Term Profit-
Based Cash
($) | |
| | Peter Altabef | | | | | 612,710 | | | | | | 3,443,430 | | | | | | 3,443,707 | | |
| | Debra McCann | | | | | 339,740 | | | | | | 1,909,339 | | | | | | 930,601 | | |
| | Michael M. Thomson | | | | | 491,823 | | | | | | 2,764,045 | | | | | | 1,695,567 | | |
| | Teresa Poggenpohl | | | | | 193,876 | | | | | | 1,089,583 | | | | | | 399,467 | | |
| | Katherine Ebrahimi | | | | | 71,888 | | | | | | 404,011 | | | | | | 450,035 | | |
(1)
Based on the $5.62 closing price of Unisys common stock on December 29, 2023.
(1) | Based on the $5.11 closing price of Unisys common stock on December 31, 2022. |
| 62 | |
Table of Contents
58 | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
Pursuant to Item 402(u) of Regulation S-K, the Company is required to provide the following information with respect to the year ended December 31,
2022:2023:● | The total annual compensation of the median compensated employee (other than Mr. Altabef, the Company’s Chief Executive Officer) was approximately $21,370. |
| |
● | As reported in the Summary Compensation Table, the total annual compensation of Mr. Altabef, the Company’s Chief Executive Officer, was $7,092,737. |
| |
● | Based on this information, the ratio of the total annual compensation of the Company’s Chief Executive Officer to the total annual compensation of the median compensated employee is 332 to 1. |
•
The total annual compensation of the median compensated employee (other than Mr. Altabef, the Company’s CEO) was approximately $22,898.
•
As reported in the Summary Compensation Table, the total annual compensation of Mr. Altabef, the Company’s CEO, was $6,133,408.
•
Based on this information, the ratio of the total annual compensation of the Company’s CEO to the total annual compensation of the median compensated employee is 267 to 1.
As of December 31,
2022,2023, our total employee population consisted of
15,529 individuals, including both full-time and part-time employees,
of which 2,591 were aligned to offices in the United States and
12,938 to offices in non-U.S. jurisdictions. We compared the compensation of our total employee population, as reflected in our human resources system as of December 31,
2022.2023. To identify the median compensated employee, we calculated total target annual compensation for each of our worldwide employees as of December 31,
2022.2023. For this purpose, total target annual compensation was calculated as the sum of each employee’s salary or hourly wages in
2022,2023, plus the employee’s
target variable compensation for
2022.2023. For non-US employees, we applied currency exchange rates as in effect on December 31, 2023. We then ranked the total target annual compensation of all our employees
applying currency exchange rates established monthly by us (except for the
Chief Executive Officer)CEO) from lowest to highest, and identified the employee who was in the middle of the list. That employee was identified as the median compensated employee for purposes of determining the CEO pay ratio as of December 31,
2022.2023. The total annual compensation for this employee for the year ended December 31,
20222023, was then calculated in accordance with Item 402(c)(2)(x) and is shown above.
The Pay Ratio is an estimate calculated in accordance with Item 402(u). SEC rules for identifying the “median employee” and calculating the Pay Ratio allow companies to apply various methodologies and assumptions. As a result, the annual total compensation of our median employee and the Pay Ratio reported by us may not be comparable to the median employee compensation and pay ratios reported by other companies.
In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation paid tofor our principal executive officer (“PEO”) and Non-PEO NEOs and Company financial performance for each of the fiscal years ended December 31,listed below.
| | Year | | | Summary
Compensation
Table Total for
Peter Altabef(1)
($) | | | Compensation
Actually Paid to
Peter Altabef(1)(2)(3)
($) | | | Average
Summary
Compensation
Table Total for
Non-PEO
NEOs(1)
($) | | | Average
Compensation
Actually Paid to
Non-PEO
NEOs(1)(2)(3)
($) | | | Value of Initial Fixed $100
Investment |based on:(4) | | | Net
Income
($ Millions) | | | Non-GAAP
Operating
Profit
($ Millions)(⁵) | |
| | TSR
($) | | | Peer Group
TSR
($) | |
| | (a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | |
| | 2023 | | | 6,133,408 | | | 6,129,859 | | | 2,333,051 | | | 1,774,167 | | | 47.39 | | | 140.50 | | | (427.1) | | | 141 | |
| | 2022 | | | 7,092,737 | | | (28,601) | | | 1,772,221 | | | 524,628 | | | 43.09 | | | 104.76 | | | (104.9) | | | 159 | |
| | 2021 | | | 8,059,535 | | | 8,248,348 | | | 2,877,154 | | | 2,618,113 | | | 173.44 | | | 128.59 | | | (449.8) | | | 193 | |
| | 2020 | | | 7,234,193 | | | 11,800,164 | | | 2,186,982 | | | 2,649,415 | | | 165.94 | | | 122.62 | | | (317.2) | | | 153 | |
(1)
Peter Altabef was our PEO for each year presented. The individuals comprising the Non-PEO named executive officers for 2023 were Debra McCann, Michael Thomson, Teresa Poggenpohl, Katherine Ebrahimi and Claudius Sokenu. For 2022,
the individuals comprising the Non-PEO named executive officers were Debra McCann, Michael Thomson, Teresa Poggenpohl, Katherine Ebrahimi, Claudius Sokenu and Gerald P. Kenney. For 2021,
the individuals comprising the Non-PEO named executive officers were Michael Thomson, Katherine Ebrahimi, Gerald P. Kenney, Shalabh Gupta and
2020.Eric Hutto. For 2020, the individuals comprising the Non-PEO named executive officers were Michael Thomson, Eric Hutto, Visal Gupta, Gerald P. Kenney, Venkatapathi Puvvada and. Jeffrey E. Renzi.| | | | | | | Average
Summary | | Average | | Value of Initial Fixed $100
Investment Based On:(4) | | | | |
| Year | | Summary
Compensation
Table Total for
PEO(1)
($) | | Compensation
Actually Paid to
PEO(1)(2)(3)
($) | | Compensation
Table Total
for Non-PEO
NEOs(1)
($) | | Compensation
Actually Paid
to Non-PEO
NEOs(1)(2)(3)
($) | | Total
Shareholder
Return
($) | | Peer Group
Total
Shareholder
Return
($) | | Net
Income
($ Millions) | | Non-GAAP
Operating
Profit
($ Millions)(5) |
| (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) |
| 2022 | | 7,092,737 | | (28,601) | | 1,771,921 | | 524,328 | | 43.09 | | 104.76 | | (104.9) | | 159 |
| 2021 | | 8,059,535 | | 8,248,348 | | 2,877,154 | | 2,618,113 | | 173.44 | | 128.59 | | (449.8) | | 193 |
| 2020 | | 7,234,194 | | 11,800,166 | | 2,186,982 | | 2,649,415 | | 165.94 | | 122.62 | | (317.2) | | 153 |
(2)
The amounts shown for “Compensation Actually Paid” have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the amount shown in the “Total” column set forth in the Summary Compensation Table with certain adjustments as described in footnote 3 below.
(3)
“Compensation Actually Paid” reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the “Exclusion of Stock Awards” column are the totals from the “Stock Awards” columns set forth in the Summary Compensation Table. Amounts in the “Exclusion of Change in Pension Value” column reflect the amounts
(1) | Peter Altabef was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented are listed below. |
| 2024 Proxy Statement | | | 63 | |
Tableattributable to the “Change in Pension Value” reported in the Summary Compensation Table. Amounts in the “Inclusion of
Contents
| 2020 | | 2021 | | 2022 |
| Michael M. Thomson | | Michael M. Thomson | | Debra McCann |
| Eric Hutto | | Gerald P. Kenney | | Michael M. Thomson |
| Vishal Gupta | | Katherine Ebrahimi | | Claudius Sokenu |
| Gerald P. Kenney | | Shalabh Gupta | | Katherine Ebrahimi |
| Venkatapathi Puvvada | | Eric Hutto | | Teresa Poggenpohl |
| Jeffrey E. Renzi | | — | | Gerald P. Kenney |
(2) | The amounts shown for “Compensation Actually Paid” have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the amount shown in the “Total” column set forth in the Summary Compensation Table with certain adjustments as described in footnote 3 below. |
(3) | “Compensation Actually Paid” reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the “Exclusion of Stock Awards” column are the totals from the “Stock Awards” columns set forth in the Summary Compensation Table. Amounts in the “Exclusion of Change in Pension Value” column reflect the amounts attributable to the “Change in Pension Value” reported in the Summary Compensation Table. Amounts in the “Inclusion of Pension Service Cost” are based on the service cost for services rendered during the listedPension Service Cost” are based on the service cost for services rendered during the applicable year. |
| Year | | Summary
Compensation
Table Total for
PEO
($) | | Exclusion in Pension
Value for PEO
($) | | Exclusion of
Stock Awards for
PEO
($) | | Inclusion of
Pension Service
Cost for PEO
($) | | Inclusion of
Equity Values
for PEO
($) | | Compensation
Actually Paid to
PEO
($) |
| 2022 | | 7,092,737 | | 0 | | (4,384,201) | | 0 | | (2,737,137) | | (28,601) |
| 2021 | | 8,059,535 | | 0 | | (4,234,347) | | 0 | | 4,423,160 | | 8,248,348 |
| 2020 | | 7,234,194 | | 0 | | (3,592,245) | | 0 | | 8,158,216 | | 11,800,166 |
| Year | | Average
Summary
Compensation
Table Total for
Non-PEO NEOs
($) | | Average Exclusion of
Change in Pension
Value for Non-PEO
NEOs
($) | | Average
Exclusion of
Stock Awards for
Non-PEO NEOs
($) | | Average Inclusion
of Pension Service
Cost for Non-PEO
NEOs
($) | | Average
Inclusion of
Equity Values
for Non-PEO
NEOs
($) | | Average
Compensation
Actually Paid to
Non-PEO NEOs
($) |
| 2022 | | 1,771,921 | | 0 | | (875,497) | | 0 | | (372,096) | | 524,328 |
| 2021 | | 2,877,154 | | 0 | | (1,674,572) | | 0 | | 1,415,531 | | 2,618,113 |
| 2020 | | 2,186,982 | | (7,621) | | (480,026) | | 0 | | 950,080 | | 2,649,415 |
| | Year | | | Summary
Compensation
Table Total for
Peter Altabef
($) | | | Exclusion in Pension
Value for
Peter Altabef ($) | | | Exclusion of
Stock Awards for
Peter Altabef
($) | | | Inclusion of
Pension Service
Cost for
Peter Altabef ($) | | | Inclusion of
Equity Values for
Peter Altabef
($) | | | Compensation
Actually Paid to
Peter Altabef
($) | |
| | 2023 | | | 6,133,408 | | | 0 | | | (2,249,583) | | | 0 | | | 2,246,034 | | | 6,129,859 | |
| | Year | | | Average
Summary
Compensation
Table Total for
Non-PEO NEOs
($) | | | Average Exclusion of
Change in Pension
Value for Non-PEO
NEOs
($) | | | Average
Exclusion of
Stock Awards for
Non-PEO NEOs
($) | | | Average Inclusion
of Pension Service
Cost for Non-PEO
NEOs
($) | | | Average
Inclusion of
Equity Values
for Non-PEO
NEOs
($) | | | Average
Compensation
Actually Paid to
Non-PEO NEOs
($) | |
| | 2023 | | | 2,333,051 | | | 0 | | | (915,976) | | | 0 | | | 357,092 | | | 1,774,167 | |
The amounts in the “Inclusion of Equity Values” columns in the tables above are derived from the amounts set forth in the following tables:
| Year | | Year-End Fair Value
of Equity Awards
Granted During
Year That Remained
Unvested as of Last
Day of Year for PEO
($) | | Change in Fair Value
from Last Day of Prior
Year to Last Day of Year
of Unvested Equity
Awards for PEO
($) | | Change in Fair Value
from Last Day of
Prior Year to Vesting
Date of Unvested
Equity Awards
that Vested During
Year for PEO
($) | | Fair Value at Last Day
of Prior Year of
Equity Awards
Forfeited During
Year for PEO
($) | | Total - Inclusion of
Equity Values for PEO
($) |
| 2022 | | 549,615 | | (3,279,239) | | (7,513) | | 0 | | (2,737,137) |
| 2021 | | 3,050,308 | | (295,991) | | 1,668,843 | | 0 | | 4,423,160 |
| 2020 | | 4,554,481 | | 2,359,775 | | 1,243,960 | | 0 | | 8,158,216 |
| | | | | | | | | | | |
| | Year | | | Year-End Fair Value
of Equity Awards
Granted During
Year That Remained
Unvested as of Last
Day of Year for
Peter Altabef
($) | | | Change in Fair Value
from Last Day of Prior
Year to Last Day of Year
of Unvested Equity
Awards for Peter Altabef ($) | | | Change in Fair Value
from Last Day of
Prior Year to Vesting
Date of Unvested
Equity Awards
that Vested During
Year for Peter Altabef
($) | | | Fair Value at Last Day
of Prior Year of
Equity Awards
Forfeited During
Year for Peter Altabef
($) | | | Total-Inclusion of
Equity Values for
Peter Altabef
($) | |
| | 2023 | | | 2,350,835 | | | (103,756) | | | (1,045) | | | 0 | | | 2,246,034 | |
| | Year | | | Average Year-End
Fair Value of Equity
Awards Granted
During Year That
Remained Unvested
as of Last Day of
Year for Non-PEO NEOs
($) | | | Average Change in Fair
Value from Last Day of
Prior Year to Last Day of
Year of Unvested Equity
Awards for Non-PEO
NEOs
($) | | | Average Change in
Fair Value from Last
Day of Prior Year
to Vesting Date of
Unvested Equity
Awards that Vested
During Year for Non-PEO
NEOs
($) | | | Average Fair Value at
Last Day of Prior Year
of Equity Awards
Forfeited During Year
for Non-PEO NEOs
($) | | | Total-Average
Inclusion of
Equity Values for
Non-PEO NEOs
($) | |
| | 2023 | | | 408,605 | | | (11,324) | | | (4,009) | | | (36,180) | | | 357,092 | |
(4)
The Peer Group TSR set forth in this table utilizes the Standard & Poor’s 500 Information Technology Services Index (“S&P 500 IT Services Index”), which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the S&P 500 IT Services Index, respectively.
(5)
We determined Non-GAAP Operating Profit to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2023. Non-GAAP Operating Profit is defined as GAAP Operating Income excluding pretax post-retirement expense, pretax charges in connection with cost-reduction activities, non-operational legal reserves, loss on debt exchange transactions and other non-operational income/expense. Non-GAAP Operating Profit is subject to adjustment by the CEO and the CHRC of the Board for special items related to discontinued operations, reorganizations, restructurings or significant non-operational items. For a discussion and reconciliation of our GAAP measures to non-GAAP measures, please see Appendix A to this Proxy Statement and the earnings release attached as Exhibit 99.1 to our Current Report on Form 8-K furnished with the SEC on February 21, 2024 (but such report shall not be deemed to be incorporated by reference to this Proxy Statement).
60 | | | | | | | | | | | Advisory Vote to Approve Executive Compensation | |
| Year | | Average Year-End
Fair Value of Equity
Awards Granted
During Year That
Remained Unvested
as of Last Day of
Year for Non-PEO
NEOs
($) | | Average Change in Fair
Value from Last Day of
Prior Year to Last Day of
Year of Unvested Equity
Awards for Non-PEO
NEOs
($) | | Average Change in
Fair Value from Last
Day of Prior Year
to Vesting Date of
Unvested Equity
Awards that Vested
During Year for Non-
PEO NEOs
($) | | Average Fair Value at
Last Day of Prior Year
of Equity Awards
Forfeited During Year
for Non-PEO NEOs
($) | | Total - Average
Inclusion of
Equity Values for Non-
PEO NEOs
($) |
| 2022 | | 150,886 | | (501,674) | | 2,569 | | (23,877) | | (372,096) |
| 2021 | | 1,253,003 | | (36,802) | | 199,330 | | 0 | | 1,415,531 |
| 2020 | | 620,744 | | 235,162 | | 116,267 | | (22,093) | | 950,080 |
(4) | The Peer Group TSR set forth in this table utilizes the Standard & Poor’s 500 Information Technology Services Index (“S&P 500 IT Services Index”), which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2022. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in the Company and in the S&P 500 IT Services Index, respectively. |
(5) | We determined Non-GAAP Operating Profit to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2022. Non-GAAP Operating Profit is defined as GAAP Operating Income excluding pretax post-retirement expense, pretax charges in connection with cost-reduction activities, non-operational legal reserves, loss on debt exchange transactions and other non-operational income/expense. Non-GAAP Operating Profit is subject to adjustment by the Chief Executive Officer and the Compensation Committee of the Board for special items related to discontinued operations, reorganizations, restructurings or significant non-operational items. |
Pay Versus Performance Comparative Disclosure
In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between the information presented in the table above.
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Company Total
ShareholderStockholder Return (“TSR”)
The following
graphchart sets forth the relationship between “Compensation Actually Paid” to our PEO, the average of “Compensation Actually Paid” to our other NEOs, and the Company’s cumulative TSR over the three most recently completed fiscal years.
PEO and Average Non-PEO NEO Compensation Actually Paid
Versus Unisys Corporation TSR |
|
 |
|
Table of Contents
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Net Income
(Loss)
The following graphchart sets forth the relationship between “Compensation Actually Paid” to our PEO, the average of “Compensation Actually Paid” to our other NEOs, and our net income (loss) before non-controlling interest during the three most recently completed fiscal years.
PEO and Average Non-PEO NEO Compensation Actually Paid
Versus Unisys Corporation Net Income |
| 2024 Proxy Statement |
 |
| | 65 | |
Table of Contents
62 | | Advisory Vote to Approve Executive Compensation |
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Non-GAAP Operating Profit
The following
graphchart sets forth the relationship between “Compensation Actually Paid” to our PEO, the average of “Compensation Actually Paid” to our other NEOs, and our non-GAAP operating profit during the three most recently completed fiscal years. Non-GAAP operating profit is defined in footnote 5 to the Pay Versus Performance Table, above.
PEO and Average Non-PEO NEO Compensation Actually Paid
Versus Unisys Corporation Non-GAAP Operating Profit |
|
 |
|
Table of Contents
Description of Relationship Between Company TSRMost Important Financial and
Peer Group TSRNon-Financial Performance Measures
The following
graph compares our cumulative TSR overlist presents the three most
important performance measures, as determined by the Company, that link compensation actually paid to our NEOs to the Company’s performance for the most recently completed
fiscal years to that of the S&P 500 IT Services Index over the same period.Comparison of Cumulative TSR of Unisys Corporation and S&P 500 IT
Services Index |
|
 |
Tabular List of the Most Important Financial Measures
The following table presents the three financial performance measures that the Company considers to have beenyear. Non-GAAP Operating Profit is the most important in linking Compensation Actually Paidfinancial measure used to our PEOs and other NEOs for fiscal year 2022link compensation actually paid to Company performance. TheExcept for non-GAAP operating profit, the other performance measures included in this tableset forth below are not ranked by relative importance.
•
Non-GAAP Operating Profit
•
Relative Total Stockholder Return, and
•
Revenue
Most Important Financial Performance Measures |
Relative Total Shareholder Return |
Revenue |
Free Cash Flow |
|
Table of Contents
64 | | Advisory Vote to Approve Executive Compensation66 |
Proposal 3 |
Advisory Vote on the Frequency of an Advisory Vote on Executive Compensation |
In accordance with Section 14A of the Exchange Act, the Company is asking stockholders to vote on whether they would prefer future advisory votes on executive compensation to occur every year, every two years or every three years. After careful consideration of the frequency alternatives, the Board of Directors believes that conducting an advisory vote on executive compensation every year is appropriate for the Company and its stockholders at this time. The Company has conducted an advisory vote on executive compensation on an annual basis since 2011.
You may cast your vote on your preferred voting frequency by choosing one of the following options -- one year, two years, three years or abstain -- on the proxy card when you vote in response to the resolution set forth below:
| | | | | | | |
RESOLVED, that the option of once every one year, two years, or three years that receives the highest number of votes cast on this resolution will be determined to be the preferred frequency with which the Company is to hold a stockholder vote to approve, on an advisory basis, the compensation of the Company’s named executive officers set forth in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narrative in the Proxy Statement for the Company’s 2023 Annual Meeting of Stockholders.
Stockholders are not voting to approve or disapprove the Board’s recommendation.
The Board and the Compensation and Human Resources Committee will review and consider the vote when making future determinations as to the frequency of the advisory “say-on-pay” vote. However, because this advisory vote on frequency is non-binding, the Company may decide that it is in its and its stockholders’ best interests to hold an advisory vote on executive compensation more or less frequently than the option selected by stockholders.
 | The Board of Directors recommends that you vote for the option of every “ONE YEAR” as to the frequency of the advisory vote on the compensation of the Company’s named executive officers.Proposal 3 | |
| | |
Table of Contents
Proposal 4 |
Ratification of the SelectionAppointment of Independent Registered Public Accounting Firm |
The Audit and Finance Committee conducted a competitive process to determine the Company’s independent registered public accounting firm for the year ended December 31, 2023. The committee invited several independent registered public accounting firms to participate in this process, including PricewaterhouseCoopersLLP (“PwC”), which firm has audited the Company’s consolidated financial statements since 2020. After reviewing proposals from the independent registered public accounting firms that participated in the process, the committee made the decision to change the Company’s independent registered public accounting firm and engaged the firm of Grant Thornton LLP (“Grant Thornton”) as the independent registered public accounting firm to audit the Company’s financial statements for the year ending December 31, 2023. The Company expects that representatives of Grant Thornton 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 Grant Thornton to be well qualified to serve as the independent registered public accounting firm for Unisys and recommends a vote for the proposal to ratify their selection.
|
The Audit and Finance Committee has selected, and the Board has ratified the selection of, Grant Thornton to serve as our independent registered public accounting firm for 2024. Grant Thornton is a registered public accounting firm regulated by the Public Company Accounting Oversight Board (the “PCAOB”). Grant Thornton has served as the Company’s independent registered public accounting firm since March 17, 2023. PricewaterhouseCoopers LLP (“PwC”), also a registered public accounting firm regulated by the PCAOB, served as the Company’s independent registered public accounting firm for the years ended December 31, 2022 and 2021, and the subsequent interim period from December 31, 2022 through March 17, 2023.
During the fiscal years ended December 31, 2022 orand 2021, and from January 1, 2023 through Grant Thornton’s appointment on March 17, 2023, neither the Company, nor anyone on its behalf, consulted Grant Thornton regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to the consolidated financial statements of the Company, and no written report or oral advice was provided to the Company by Grant Thornton that Grant Thornton concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a “disagreement” (as(as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as(as that term is defined in Item 304(a)(1)(v) of Regulation S-K).
Representatives of Grant Thornton attended all regularly scheduled meetings of the Audit and Finance Committee held at or after March 17, 2023, and representatives of PwC attended all regularly scheduled meetings of the Audit and Finance Committee held from January 1, 2023 to March 17, 2023.
Prior to selecting Grant Thornton to serve as the Company’s independent registered public accounting firm for 2024, the Audit and Finance Committee discussed with Grant Thornton all communications required by auditing standards of the PCAOB. In addition, the Audit and Finance Committee discussed with Grant Thornton its independence from the Company and the critical audit matters addressed during the audit. The Audit and Finance Committee annually reviews and considers Grant Thornton’s performance of the Company’s audit during the prior year, the terms and conditions of Grant Thornton’s engagement letter and the fees and services to be provided for 2024.
The Audit and Finance Committee and full Board believe the continued retention of Grant Thornton as the Company’s independent registered public accounting firm is in the best interest of the Company and our stockholders, and we are asking stockholders to ratify the selection of Grant Thornton as our independent registered public accounting firm for 2024. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the selection of Grant Thornton to our stockholders for ratification because we value our stockholders’ views on the Company’s independent registered public accounting firm and as a matter of good corporate practice. The Board has not determined what action it would take if the stockholders do not approve the selection of Grant Thorton. If, however, our stockholders fail to ratify our selection of Grant Thornton, it will be considered a recommendation to the Board and the Audit and Finance Committee to consider the selection of a different firm to serve as the Company’s independent registered public accounting firm. In addition, even if stockholders ratify the selection of Grant Thornton, the Audit and Finance Committee may in its discretion select a different independent registered public accounting firm at any time during the year if it determines such a change would be in the best interest of the Company and our stockholders.
The Company expects that representatives of Grant Thornton will be present at the Annual Meeting to have the opportunity to make a statement if they desire to do so and to respond to appropriate questions asked by stockholders. The Board considers Grant Thornton to be well qualified to serve as the independent registered public accounting firm for Unisys and recommends a vote for the proposal to ratify their selection.
| | 2024 Proxy Statement | | | 67 | |
Change in Our Independent Registered Accounting Firm
After the conclusion of a competitive auditor selection process, on March 17, 2023, the Audit and Finance Committee dismissed PwC as its independent registered public accounting firm and approved the engagement of Grant Thornton to serve as the Company’s independent registered public accounting firm beginning with the fiscal year ending December 31, 2023, and notified PwC of its dismissal. The dismissal of PwC as the Company’s independent registered public accounting firm did not result from any dissatisfaction with the quality of professional services rendered by PwC.
The reports of PwC on the Company’s consolidated financial statements as of and for the years ended December 31, 2022 and 2021 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During the
Company’s two most recentfiscal years ended December 31, 2022 and 2021, and the subsequent interim period through March 17, 2023, there
have been nowere no: (1) “disagreements”
(as defined(as that term is described in Item 304(a)(1)(iv) of Regulation S-K and
the related instructions)
between the Company andwith PwC on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or
procedure,procedures, which disagreements if not resolved to
thePwC’s satisfaction
of PwC, would have caused PwC to make reference
thereto in
its reportsconnection with their opinion to the subject matter of the disagreement, or (2) “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act), except for the material weaknesses in the Company’s internal control over financial reporting disclosed in the Company’s Annual Report on
Form 10-K for the
consolidated financial statements for such years. During the yearsyear ended December 31, 2022 and
2021, and the subsequent interim period through March 17, 2023, there have been no “reportable events” (as defined in Regulation S-K Item 304(a)(1)(v)) other than as described immediately below.During the auditAnnual Report on Form 10-K for the yearsyear ended December 31, 2022 and 2021, material weaknesses in internal control over financial reporting were identifiedeach case related to the design and maintenance of effective formal policies and procedures to ensure appropriate information is communicated from the IT function and the legal and compliance function to the accounting function and those responsible for governance on a timely basis. These material weaknesses were disclosed in Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and in Item 9A of the Company’s Amended Annual Report on Form 10-K/A for the year ended December 31, 2021.
| The Board of Directors recommends a vote “FOR” the proposal to ratify the selection of as the Company’s independent registered public accounting firm for 2023. |
| |
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66 | | Advisory Vote to Approve Executive Compensation |
Independent Registered Public Accounting Firm Fees & Services
PwC was
The following table sets forth the
Company’s independent registered public accounting firm for the years ended December 31, 2022 and December 31, 2021. PwC has billed the Company the followingaggregate fees for professional services rendered
by Grant Thornton and PwC in
respectconnection with the audits of
our annual financial statements for the fiscal years ended December 31, 2023 and 2022 and
2021 (in millions of dollars):for other services rendered by Grant Thornton and PwC during those periods. All fees described below were approved by the Audit and Finance Committee.| | | 2022 | | 2021 |
| Audit Fees | | $5.8 | | $5.8 |
| Audit-Related Fees | | 3.5 | | 1.0 |
| Tax Fees | | 0.3 | | 0.7 |
| All Other Fees | | 0.1 | | 0.0 |
| | (in millions) | | | 2023
($) | | | 2022
($) | |
| | Audit Fees | | | | | 5.2 | | | | | | 5.8 | | |
| | Audit-Related Fees | | | | | 2.0 | | | | | | 3.5 | | |
| | Tax Fees | | | | | 0.3 | | | | | | 0.3 | | |
| | All Other Fees | | | | | 0.5 | | | | | | 0.1 | | |
| | Total Fees | | | | | 8.0 | | | | | | 9.7 | | |
Audit fees consist of fees for the audit and review of the Company’s financial statements, statutory audits, assistance with and review of documents filed with the SEC and Section 404 attestation procedures. Audit-related fees consist of fees for SSAE No. 16 engagements, employee benefit plan audits, comfort letters, consents, accounting consultations in connection with transactions, merger and acquisition due diligence, internal investigations and various attestation engagements.
Audit-related fees were higher in 2022 than in 2021 primarily as a result of costs associated with internal investigations conducted during 2022. Tax fees principally represent fees for tax compliance and advisory services. All other fees consist of fees for professional services including permissible consulting services and fees for software licenses.
Pre-Approval Policies and Procedures
The Audit and Finance Committee annually reviews and pre-approves the services that may be provided by the independent registered public accounting firm. The committeeAudit and Finance Committee has adopted an Audit and Non-Audit Services Pre-Approval Policy that contains a list of pre-approved services, which the committeeAudit and Finance Committee may revise from time to time. In addition, the Audit and Finance Committee has delegated pre-approval authority to the chair of the committee.Audit and Finance Committee. The chair of the committeeAudit and Finance Committee reports any such pre-approval decision to the Audit and Finance Committee at its next scheduled meeting.
| | | | | The Board recommends a vote “FOR” the proposal to ratify the appointment of as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024. | |
Audit and Finance Committee Report
The Audit and Finance Committee of the Board provides oversight on matters related to the Company’s financial reporting and ensures the Company develops and maintains adequate financial controls and procedures, and monitors compliance with those controls and procedures. In addition, the Audit and Finance Committee has oversight responsibility for the Company’s internal auditor. The Audit and Finance Committee discussed with the Company’s internal auditors and Grant Thornton, the independent registered public accounting firm that audited the Company’s 2023 financial statements, the plans for their respective audits. The Audit and Finance Committee met with the internal auditors and Grant Thornton, with and without management present, and discussed the results of their examinations, their evaluation of the Company’s internal controls and the Company’s financial reporting.
The Company’s management has primary responsibility for preparing the Company’s financial statements and implementing internal controls over financial reporting, and Grant Thornton, as the independent registered public accounting firm, is responsible for auditing those financial statements and the effectiveness of the internal controls over financial reporting. The Audit and Finance Committee may investigate any matter brought to its attention and, in such regard, has full access to the Company’s books, records, facilities and employees, and may also retain outside legal, accounting or other advisors. Any individual may also bring matters to the attention of the Audit and Finance Committee by following the procedures set forth in this Proxy Statement under the heading “Communications with Our Directors.”
Audit and Finance Committee Charter
The Board has adopted a written charter for the Audit and Finance Committee, which the Audit and Finance Committee reviews at least annually. The charter sets out the purpose, membership and responsibilities of the Audit and Finance Committee, among other information related to the committee.
Regular Review of Financial Statements
The Audit and Finance Committee reviewed and discussed the Company’s unaudited financial statements with management and Grant Thornton before the release of each quarter’s earnings report and filing on Form 10-Q, and the Company’s audited financial statements before the earnings release discussing full year results and filing of the Company’s Annual Report.
Communications with Grant Thornton
In performing its oversight responsibilities, as defined in its charter, the Audit and Finance Committee has reviewed and discussed the audited financial statements and reporting process for 2022,2023, including internal controls over financial reporting, with management and with PwC, the independent registered public accounting firm that audited the Company’s 2022 financial statements.Grant Thornton. The committeeAudit and Finance Committee has also discussed with PwCGrant Thornton the matters required to be discussed by the Public Company Accounting Oversight Board (the “PCAOB”)PCAOB Auditing Standard No. 1301, Communications with Audit Committees. In addition,The Audit and Finance Committee met privately with Grant Thornton four times during 2023.
Independence of Grant Thornton
Grant Thornton is directly accountable to the
committeeAudit and Finance Committee and the Board. The Audit and Finance Committee has received from
PwCGrant Thornton the written disclosures and the letter required by applicable requirements of the PCAOB regarding
PwC’sGrant Thornton’s communications with the
committeeAudit and Finance Committee concerning independence and has discussed with
PwCGrant Thornton its
independence from management and the Company, and disclosed relationships and the impact of those relationships on Grant Thornton’s independence. The
committeeAudit and Finance Committee has also considered the compatibility of audit-related services, tax services and other non-audit services with
PwC’sGrant Thornton’s independence.
Recommendation Regarding Annual Report
In performing its oversight function with regard to the 2023 financial statements, the Audit and Finance Committee relied on financial statements and information prepared by the Company’s management. It also relied on information provided by the internal audit staff as well as Grant Thornton. The Audit and Finance Committee reviewed and discussed with management the Company’s audited financial statements as of and for the year ended December 31, 2023. Based on
these discussions, and the
reviewsinformation received and
discussions referred to above,reviewed, the
committeeAudit and Finance Committee recommended to the Board
of Directors that the audited financial statements be included in the
Company’s Annual Report
on Form 10-K for the year ended December 31, 2022 for filing with the SEC.
This report is furnished by the members of the Audit and Finance Committee.
Audit and Finance Committee
Denise K. Fletcher
Regina Paolillo (Chair)
John A. Kritzmacher
Paul E. Martin
Regina Paolillo
Troy K. Richardson
2023 | 2024 Proxy Statement | 67 | | 69 | |
| Proposal 54 | |
| | Approval of the Unisys
Corporation 2023 2024
Long-Term Incentive
and Equity Compensation
Plan |  |
GeneralGeneralOn February 8, 2023, the
The Board
of Directorshas unanimously adopted, subject to stockholders’ approval at the
annual meeting,Annual Meeting, the Unisys Corporation
20232024 Long-Term Incentive and Equity Compensation Plan (the
“2023“2024 Equity Plan”). The
20232024 Equity Plan will become effective on the date it is approved by stockholders (the “Plan Effective Date”). A copy of the
20232024 Equity Plan is attached to this
proxy statementProxy Statement as Appendix
A.B.
We currently maintain the
2023 Equity Plan, which was approved by our stockholders at the 2023 annual meeting. The 2023 Equity Plan replaced our 2019 Long-Term Incentive and Equity Compensation Plan (the “2019 Equity
Plan”), which was approved by our stockholders at the 2019 Annual Meeting of Stockholders.Plan).” As of the record date
67,975,03669,012,293 shares of our common stock were
outstanding andoutstanding. Similarly, as of the record date, the shares remaining available for issuance under the
20192023 Equity Plan that are not subject to currently outstanding awards, and
the shares subject to currently outstanding awards (including shares reserved for above target performance) were as follows (shares in thousands rounded to the nearest thousand):
| | Total |
Shares Available | | 2,245 |
Full Value Shares Outstanding (including shares reserved for above target performance) | | 4,909 |
Options/SARs outstanding | | — |
Total | | 7,154 |
* | Unisys Corporation Director Stock Unit Plan |
| | | | | 2019
Plan | | | 2023
Plan | | | Total | |
| | Shares Available | | | | | 0 | | | | | | 1,739 | | | | | | 1,739 | | |
| | Full Value Shares Outstanding (including shares reserved for above target performance) | | | | | 2,478 | | | | | | 5,255 | | | | | | 7,733 | | |
| | Total | | | | | 2,478 | | | | | | 6,994 | | | | | | 9,472 | | |
Upon stockholder approval, the
20232024 Equity Plan will replace the
20192023 Equity Plan and no further awards will be granted under the
20192023 Equity Plan. If the
20232024 Equity Plan is not approved by stockholders, then the
20232024 Equity Plan will not become effective and the
20192023 Equity Plan will continue in full force and effect.
If the 20232024 Equity Plan is approved by stockholders, then (i) shares with respect to grants outstanding under the 2023 Equity Plan and the 2019 Equity Plan (collectively, the “Prior Plans”) immediately prior to the Plan Effective Date that, on or after such date, terminate, expire, or are canceled,cancelled, forfeited, exchanged, or surrendered without having been exercised, vested or paid under the 2019 Equity PlanPrior Plans may be issued or transferred under the 20232024 Equity Plan and (ii) shares remaining available for issuance under the 20192023 Equity Plan immediately prior to the Plan Effective Date that are not subject to outstanding awards under the 20192023 Equity Plan may also be issued or transferred under the 20232024 Equity Plan. The terms and conditions of outstanding awards under the 2019 Equity PlanPrior Plans will not be affected by the approval of the 20232024 Equity Plan, and the 2019 Equity PlanPrior Plans will remain in effect with respect to such awards.
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68 | | Approval of the Unisys Corporation 2023 Long-Term Incentive and Equity Compensation Plan |
In addition to the shares that remain available for issuance under the 20192023 Equity Plan and shares subject to Prior Plan awards that again become available for grant in the event that such Prior Plan awards terminate, expire, or are cancelled, forfeited, exchanged, or surrendered without having been exercised, vested or paid, we are requesting an additional 3,625,0006,340,000 shares for issuance under the 20232024 Equity Plan. This number was determined based on an analysis of various factors, including historical burn rate, potential dilution, industry plan cost standards, and anticipated equity compensation needs. In 2022, the 2019 Equity Plan’s2023, our average burn rate was 6.44%5.65%. We have estimated that the potential dilution to current stockholders that could result from the future issuance of shares available under the 20232024 Equity Plan, in addition to shares subject to awards outstanding under the 20192023 Equity Plan, would be approximately 13.7%18.9%, calculated as follows:
New Shares Requested + Shares Available + Shares Subject to Outstanding Awards
New Shares Requested + Shares Available + Shares Subject to Outstanding Awards
+ Total Common Stock Outstanding
| | New Shares Requested + Shares Available + Shares Subject to Outstanding Awards | |
| | Requested + Shares Available + Shares Subject to Outstanding Awards
+ Total Common Stock Outstanding | |
| | 70 | | | | | | | | | | Approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan | |
Based on these factors and our current grant practices, the shares requested for use under the
20232024 Equity Plan are expected to meet our equity grant needs for approximately 2 years. The shares reserved may, however, last for a greater or fewer number of years depending on currently unknown factors, such as the number of grant recipients, future grant practices, and our stock price.
Why Stockholders Should Approve The
20232024 Equity Plan
Additional shares are needed.If stockholders do not approve the
20232024 Equity Plan, the Company expects that the current equity program will have an insufficient
amountnumber of shares to grant prior to the
2024 Annual Meeting.2025 annual meeting. If we cannot grant equity awards, the Company will be placed at a competitive disadvantage, making it difficult to attract, retain, and develop the talent of our employees, officers and non-employee directors.
Equity awards are an important component of the Company’s compensation program.The
20232024 Equity Plan will enable us to attract, retain and develop the talent of employees, officers, and non-employee directors.
Equity incentives align the interests of our executives with those of our stockholders.Our philosophy is to provide a significant portion of executive compensation in the form of equity awards that are at-risk and performance-based. Equity awards are designed to provide key leaders with a stake in the long-term success of the Company as well as align executive and stockholder interests.
The 20232024 Equity Plan provides flexibility.We will be able to continue to adapt the compensation of key individuals to accommodate changes in best practices, law, accounting principles, and corporate objectives if the
20232024 Equity Plan is approved.
The 20232024 Equity Plan is intended to reinforce the alignment between employees’ and non-employee directors’ interests and stockholders’ interests, and purposefully excludes features that could misalign those interests. Accordingly, the 20232024 Equity Plan:
•
Includes a default double trigger change in control provision and does not provide for automatic vesting upon a change in control
•
Prohibits the payment of dividends or dividend equivalent rights on unvested equity awards
•
Limits non-employee directors’ aggregate cash and equity compensation in a calendar year
•
Prohibits repricing of stock options and stock appreciation rights without stockholder approval, other than in connection with a capitalization event adjustment or change in control
•
Does not have evergreen share pool provisions
•
Does not have an option or stock appreciation right reload feature
•
Does not provide tax gross-ups to officers, non-employee directors or other plan participants
•
Authorizes the recoupment of awards under our recoupment policies and/or any recoupment requirements imposed under applicable laws
● | Includes a default double trigger change in control provision and does not provide for automatic vesting upon a change in control |
| 2024 Proxy Statement | |
● | Includes a one-year minimum vesting requirement |
| | |
●71 | Prohibits the payment of dividends or dividend equivalent rights on unvested equity awards |
| |
● | Limits grants to any individual employee in a calendar year |
| |
● | Limits non-employee directors’ aggregate cash and equity compensation in a calendar year |
| |
● | Prohibits repricing of stock options and stock appreciation rights without stockholder approval, other than in connection with a capitalization event adjustment or change in control |
| |
● | Does not have evergreen share pool provisions |
| |
● | Does not have a replacement option or stock appreciation right feature |
| |
● | Does not provide tax gross-ups to officers, non-employee directors or other plan participants |
| |
● | Authorizes the recoupment of awards under our recoupment policies and/or any recoupment requirements imposed under applicable laws |
| |
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This summary of the
20232024 Equity Plan’s principal features is qualified in its entirety by reference to the
20232024 Equity Plan, which is attached to this
proxy statementProxy Statement as Appendix
A.B.The purpose of the
20232024 Equity Plan is to provide designated employees and non-employee members of the Board
of Directors with the opportunity to receive grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, other equity-based awards and incentive awards (collectively
as used in this proposal, the “awards”). We believe that the
20232024 Equity Plan will support our ongoing efforts to attract, retain and develop exceptional talent and enable us to provide incentives directly linked to our short and long-term objectives and increases in stockholder value.
If the
20232024 Equity Plan is approved by stockholders, the maximum number of shares available to be granted under the
20232024 Equity Plan will be the sum of the following: (i)
3,625,0006,340,000 shares, plus (ii) shares subject to outstanding awards under the
2019 Equity PlanPrior Plans immediately prior to the Plan Effective Date, to the extent that such awards subsequently terminate, expire, or are cancelled, forfeited, exchanged, or surrendered without having been exercised, vested or paid under the
2019 Equity Plan,Prior Plans, plus (iii) the aggregate number of shares remaining available for issuance under the
20192023 Equity Plan immediately prior to the Plan Effective Date that are not subject to outstanding awards under the
20192023 Equity Plan. In no event will the aggregate number of shares of common stock issuable under the
20232024 Equity Plan exceed
5,869,83710,000,000 shares. The aggregate number of shares that may be issued under the
20232024 Equity Plan as incentive stock options is 2,500,000 shares. The number of shares available under the
20232024 Equity Plan (including for incentive stock options) is subject to adjustment in the event of certain capitalization events. The issuance of any shares under the
20232024 Equity Plan will result in a reduction of the number of shares available for awards under the
20232024 Equity Plan on a one-for-one basis.
Shares subject to awards granted under the
20232024 Equity Plan will go back into the share pool and be available for future grants if the awards terminate, expire or are
canceled,cancelled, forfeited, exchanged or surrendered without having been exercised, or are otherwise forfeited or not paid in full in shares of common stock. Awards that are designated at grant as cash-settled awards will not be counted against the limit on the shares available under the
20232024 Equity Plan.
Shares surrendered to pay the exercise price of an option or withheld to pay the taxes on any award and shares repurchased by the Company with the proceeds of an option exercise are not added to the share pool and will not be available for future grants. Additionally, the full number of shares subject to stock appreciation rights exercised and settled in shares will be counted against the limit on the shares available under the
20232024 Equity Plan.
The common stock covered by the
20232024 Equity Plan may be either authorized but unissued shares or reacquired shares, including shares of common stock purchased by us on the open market. On March
6, 2023,4, 2024, the closing price of a share of our common stock on the
New York Stock ExchangeNYSE was
$4.19.$5.29.Award Limits
Subject to adjustment in the event of certain capitalization events, no employee is eligible to receive awards covering more than 1,000,000 shares in any calendar year. Further, no person may be granted dividend equivalents or incentive awards payable in cash measured with respect to a performance period of one year or less in excess of $5,000,000 or with respect to a performance period of more than one year in excess of $10,000,000.
Non-Employee Director Limits
Notwithstanding any provision to the contrary in the
20232024 Equity Plan or in any policy of the Company regarding compensation payable to a non-employee director, the sum of the grant date fair value (determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of all awards payable in shares and the maximum amount that may become payable pursuant to all
cash- settledcash-settled awards that may be granted under the
20232024 Equity Plan as compensation for services as a non-employee director, together with cash compensation paid to the non-employee director in the form of
a Board
of Director and committee retainer, meeting or similar fees, during any calendar year may not exceed $600,000.
AdministrationAdministration
The
20232024 Equity Plan will be administered by a committee comprised of no fewer than two members of the Board
of Directors who are appointed by the Board
of Directors to administer the
20232024 Equity Plan. To the extent deemed necessary by the Board,
of Directors, each committee member will satisfy the requirements for (i) an “independent director” under rules adopted by the
New York Stock ExchangeNYSE or other stock exchange on which the shares are at the time primarily traded and (ii) a “nonemployee director” for purposes of such Rule 16b-3 under the
United States Securities Exchange Act of 1934, as amended. The Board
of Directors has delegated authority to
our Compensation and Human Resources Committee (the “Committee”)the CHRC to administer the
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70 | | Approval of the Unisys Corporation 2023 Long-Term Incentive and Equity Compensation Plan |
2023 2024 Equity Plan. Subject to requirements of the New York Stock ExchangeNYSE and applicable law, the CommitteeCHRC may delegate certain of its authority under the 20232024 Equity Plan to a subcommittee or to officers of the Company.
| | 72 | | | | | | | | | | Approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan | |
The
Committee’sCHRC’s authority includes but is not limited to the power to: (i) construe and interpret the
20232024 Equity Plan, and any agreement executed pursuant to the
20232024 Equity Plan, (ii) determine who will be granted awards from the eligible population, (iii) determine the type, size and terms and conditions of the awards, (iv) determine the time when the awards will be made and the duration of any applicable exercise, vesting or restriction period, including the criteria for exercisability, vesting, and the restriction period and the acceleration of exercisability, vesting, and the lapse of a restriction period, (v) determine whether the grant, vesting, exercise, issuance, retention and/or payment of an award will be subject to the attainment of one or more performance goals, (vi) amend the terms and conditions of any previously issued award, (vii) determine any restrictions on resale applicable to the shares to be issued or transferred pursuant to the award, (viii) determine whether, and to what extent, and pursuant to what circumstances an award may be settled in, or the exercise price may be paid in, cash, shares, or other awards or property, or an award may be cancelled, forfeited or surrendered, (ix) determine the number of shares or other consideration subject to awards, (x) determine whether awards will be granted singly, in combination with, in tandem with, in replacement of or as alternatives to, other awards under the
20232024 Equity Plan or any other incentive or compensation plan, (xi) establish, adopt or revise any rules and regulations, including adopting sub-plans to facilitate compliance with applicable laws, ease administration and/or take advantage of tax-favorable treatment for awards, (xii) determine whether any award will be subject to any non-competition, non-solicitation, confidentiality, clawback or other covenants, (xiii) determine whether an incentive award
or performance-based award has been earned, and (xiv) make all other determinations necessary or advisable for the administration of the
20232024 Equity Plan. The
CommitteeCHRC may accelerate the vesting of any awards at any time for any reason and may provide for complete or partial exceptions to any service or performance requirement as it deems appropriate.
The
20232024 Equity Plan provides for equitable adjustment by the
CommitteeCHRC to the number and kind of shares reserved under the
20232024 Equity Plan, the number and kind of shares covered by, or issuable pursuant to, each outstanding award, the exercise or base price relating to an award
the individual share-based award limits under the 2023 Equity Plan and any other terms of affected awards in the event of certain capitalization events. Such events include a change in the number or kind of shares of common stock outstanding due to an event such as a stock dividend, spinoff, recapitalization, stock split or combination or exchange of shares, merger, reorganization, consolidation, reclassification or change in par value, or similar extraordinary or unusual event affecting the shares without the Company’s receipt of consideration, or if the value of the shares is substantially reduced due to a spinoff or the Company’s payment of an extraordinary dividend.
The recipients of awards under the 2024 Equity Plan will be selected by the CHRC in its discretion. Incentive stock options may be granted only to employees of the Company and its subsidiary corporations. All other awards may be granted to employees and non-employee directors of the Company and its subsidiaries. As of the record date,
nine executive officersthe Company has ten non-employee directors and
eleven non-employee directorsthe Company and its subsidiaries have approximately 16,500 employees, each of whom would be eligible to receive awards under the
20232024 Equity Plan, if it were in
effect.effect however, approximately 200 employees receive awards annually. In
2023,2024, awards under the
20192023 Plan have been made to nine of our executive officers, eleven non-employee directors, and approximately 200 non-executive officer employees of the Company and its subsidiaries.
The
20232024 Equity Plan was adopted by the Board
of Directors and will become effective upon its approval by the Company’s stockholders. If approved by the stockholders, the
20232024 Equity Plan will continue in effect until the tenth anniversary of
its adoption by the
Plan Effective Date,Board, unless terminated earlier by the
Board of Directors (except with respect to incentive stock options which may not be granted after the tenth anniversary of Board adoption of the 2023 Equity Plan).Board.
No Repricing
The 2023 Equity Plan prohibits repricing of stock options or stock appreciation rights other than in connection with an adjustment upon a capitalization event. Specifically, without
Without prior approval of stockholders, the Committee may not lower the exercise price of an outstanding stock option or stock appreciation right, nor provide cash or any other award or security in replacement of a
canceledcancelled underwater stock option or stock appreciation right other than upon a change in
control.control or an adjustment related to a capitalization event. Options granted under the
20232024 Equity Plan may be either incentive stock options or nonqualified stock options. The
exercise periodterm of options is determined by the
CommitteeCHRC but, in no event, may options be exercisable more than ten years from the date they are granted, or five years for incentive stock options granted to employees who own stock possessing more than 10% of the voting power of all classes of stock of the Company or any subsidiary (“10% stockholders”). The exercise price for each option must be no less than 100% of the fair market value of a share at the time the option is granted, or 110% for incentive stock options granted to 10% stockholders. The
CommitteeCHRC will determine when options will become exercisable and the effect of
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termination of service, but options may not vest prior to the first anniversary of the date of grant.service. The exercise price must be paid in full by the participant upon exercise
| | 2024 Proxy Statement | | | 73 | |
of the option, by certified or bank check or other instrument permitted by the
Committee,CHRC, by delivering shares having a fair market value equal to the exercise price, through a broker-assisted sale or by a combination of the foregoing or such other consideration permitted by the
Committee.CHRC.
Stock Appreciation Rights
The
CommitteeCHRC may determine the terms and conditions of a stock appreciation right. However, no stock appreciation right will be exercisable after the expiration of ten years
from the date of grant, the stock appreciation right may not vest prior to the one-year anniversary from the date of grant and the base price for a stock appreciation right must be no less than 100% of the fair market value of a share at the time the stock appreciation right is granted. Upon exercise of a stock appreciation right, the participant receives shares and/or cash equal to the value of the stock appreciation since the grant date for the number of rights exercised.
The
CommitteeCHRC may grant shares of common stock under a restricted stock award for consideration or for no consideration and subject to such restrictions as determined by the
Committee; provided that restricted stock awards shall be subject to time-based vesting over a period of note less than one year and/or performance-based vesting over a performance period of not less than one year.CHRC. The
CommitteeCHRC will determine to what extent, and under what conditions, the participant will have
the right to vote shares of restricted stock awards and to accrue the right to any dividends or other distributions paid on such shares during any restriction period; provided, however, that no dividends will be
payabledistributed until the underlying restricted stock award vests.
Restricted stock units are unfunded, unsecured rights to receive shares of common stock, cash
based on the value of shares of common stock, or a combination of cash and shares upon the satisfaction of certain time-based or performance-based vesting
criteria; provided that restricted stock units shall be subject to time-based vesting over a period of note less than one year and/or performance-based vesting over a performance period of not less than one year. Restricted stock units are generally granted for no consideration, however the purchase price, if any for the restricted stock units will be determined by the Committee at the time of grant.criteria. Each restricted stock unit represents one share of common stock. Participants have no rights to the shares underlying the restricted stock units unless and until the vesting criteria for the restricted stock units has been met and the award has been settled. The
CommitteeCHRC may grant dividend equivalent rights in connection with restricted stock units, under such terms and conditions as the
CommitteeCHRC deems appropriate, provided that no dividend equivalent rights will be payable until the underlying restricted stock units vest.
The
CommitteeCHRC may grant incentive awards, which are performance-based awards that are expressed in U.S. currency and may be settled in cash, shares or a combination of both in accordance with the terms set by the
Committee.CHRC. Incentive awards may be either annual incentive awards
with a performance cycle of one year or long-term incentive
awards with a performance cycle of more than one year.awards.Performance Awards
The Committee may determine that awards granted under the 2023 Equity Plan are performance-based awards based on performance goals or other performance-based conditions as the Committee may determine.
Performance goals under the 2023 Equity Plan include levels of achievement relating to one or more of the following measures or such other measures selected by the Committee in its discretion, which may, without limitation, apply to the Company as a whole, or to any business unit, region, sector or industry group, subsidiary, product or service line, on a U.S. GAAP or non-GAAP basis, and which may be measured on an absolute or relative basis or in such other manner as deemed appropriate by the Committee: basic or diluted earnings per share; total shareholder return; operating income; net income; cash flow (including but not limited to, operating cash flow, free cash flow, and cash flow return on capital); return on equity, capital, assets, or sales; revenue or revenue growth; earnings before interest, taxes, depreciation and amortization (“EBITDA”) or EBITDA growth; stock price; debt-to-capital ratio; stockholders’ equity per share; operating income as a percent of revenue; gross profit as a percent of revenue; selling, general and administrative expenses as a percent of revenue; pre-tax profit; orders; improvements in capital structure; budget and expense management; productivity ratios; economic value added or other value added measurements; operating efficiency; working capital targets; enterprise value; customer value; customer satisfaction; completion of acquisition or business expansion. The Committee may provide for such adjustments to the Performance Goals as it deems appropriate, including but not limited to adjustments designed to reflect changes during the performance period in generally accepted accounting principles or in tax rates, currency fluctuations, the effects of acquisitions or dispositions of a business or investments in whole or in part, debt reduction charges, extraordinary or nonrecurring items, the gain or loss from claims or litigation and related insurance recoveries, the effects of impairment of tangible or intangible assets, or the effects of restructuring or reductions in force or other business
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72 | | Approval of the Unisys Corporation 2023 Long-Term Incentive and Equity Compensation Plan |
recharacterization activities, income or expense related to defined benefit or defined contribution pension plans, uninsured losses from natural catastrophes or political and legal developments affecting the Company’s business (including losses as a result of war, terrorism, confiscation, expropriation, seizure, new regulatory requirements, business interruption or similar events).
The 2023 Equity Plan provides for specified procedures for awards designated as performance-based awards, including that (i) within the first 25% of the applicable performance period or service period, the Committee will establish in writing the performance goals that must be met over the applicable performance period, the maximum amount payable if the goals are met and other material terms; (ii) after the performance period, the Committee will certify whether the goals were met and may adjust or eliminate the amount payable to a participant; and (iii) unless otherwise provided in an award agreement, a performance-based award may be paid only if the goals are met. Although the Committee intends to grant performance-based awards subject to the conditions and procedures outlined above, the Committee may in its discretion grant awards that do not meet such conditions and procedures.
Other Equity Awards
The
CommitteeCHRC may grant other share-based awards subject to such terms and conditions as the
CommitteeCHRC determines are
appropriate; provided that other equity awards shall be subject to time-based vesting over a period of not less than one year and/ or performance-based vesting over a performance period of not less than one year.appropriate.
Dividends and Dividend Equivalents
In no event may any award under the
20232024 Equity Plan provide for the participant’s receipt of dividends or dividend equivalents in any form prior to the vesting of such award or an applicable portion of such award.
Subject to applicable laws, the
CommitteeCHRC may permit or require a participant to defer receipt of the payment of cash or the delivery of shares that would otherwise be due to the participant in connection with any award.
Foreign Awards and Rights
The Company may grant awards to such employees of the Company and its subsidiaries who reside in foreign jurisdictions, subject to such terms and conditions as the
CommitteeCHRC determines are appropriate. The
CommitteeCHRC may generally amend or vary the terms of the
20232024 Equity Plan in order to conform such terms with the requirements of each jurisdiction where a subsidiary is located as it considers necessary or desirable to take into account or to mitigate the burden of taxation and social security contributions for participants and/or establish one or more sub-plans for these purposes.
Upon a change in control (as defined in the 20232024 Equity Plan) where the Company is not the surviving corporation (or survives only as a subsidiary of another corporation), unless the CommitteeCHRC determines otherwise, any outstanding options and stock appreciation rights that are not exercised or paid at the time of the change in control will be assumed by, or replaced with comparable options or rights by, the surviving corporation (or a parent or subsidiary of the surviving corporation), and other outstanding awards will be converted to similar grants of the surviving corporation (or a parent or subsidiary of the surviving corporation). Notwithstanding the immediately preceding sentence, if, in connection with such change in control, any outstanding options and stock appreciation rights are not assumed by, or replaced with comparable options or rights by, the surviving corporation (or a parent or subsidiary of the surviving corporation), and any other outstanding awards are not converted to similar grants of the surviving corporation (or a parent or subsidiary
| | 74 | | | | | | | | | | Approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan | |
of the surviving corporation), then upon such change in control the
CommitteeCHRC may provide that: (i) all such outstanding options and stock appreciation rights that are not assumed or replaced shall accelerate and become fully exercisable, (ii) the restrictions and conditions on all such outstanding restricted stock awards that are not converted to similar grants shall fully lapse, (iii) all such outstanding restricted stock units, dividend equivalents, other equity awards and incentive awards that are not converted to similar grants shall be fully vested
(with performance criteria deemed satisfied at the target level), (iv) the
CommitteeCHRC may require that the participant surrender their outstanding options and stock appreciation rights in exchange for a payment by the Company, in cash or common stock as determined by the
Committee,CHRC, in an amount equal to the amount, if any, by which the then fair market value of the shares of common stock subject to the participant’s unexercised options and stock appreciation rights exceeds the exercise price of the options or the base amount of the stock appreciation rights, as applicable; (v) after giving participants an opportunity to exercise their outstanding options and stock appreciation rights, terminate any or all unexercised options and stock appreciation rights at such time as the
CommitteeCHRC deems appropriate;
and/or (vi) determine that participants shall receive a payment in settlement of outstanding restricted stock awards, restricted stock units, dividend equivalents, incentive Awards or other equity awards, if permitted under section 409A of the Code.
Further, unless the award agreement provides otherwise, if a participant’s employment is terminated for good reason or without cause within 24 months following a change in control and the participant signs a release of claims (if required by the CHRC), all outstanding awards will vest and become exercisable and all restrictions and conditions on any awards will lapse and if such award is a performance- basedperformance-based award, the award will become vested at the target level of performance.
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Tax Withholding
The
CommitteeCHRC may permit or require a participant to remit to the Company or any subsidiary, an amount sufficient to satisfy any U.S. federal, state, and or local taxes and any taxes imposed by a jurisdiction outside the U.S. by (i) withholding from wages or other cash compensation; (ii) withholding from the sale of shares of underlying an award either through a voluntary or mandatory sale arranged by the Company on the participant’s behalf; or (iii) if the
CommitteeCHRC so permits, by withholding in shares otherwise deliverable under an award.
Company Policies
The Committee may determine that an award
Awards will be subject to any applicable clawback or recoupment policies, share trading policies and any other policies implemented by the Board
of Directors or the
Committee,CHRC, as well as any clawback or recoupment requirements required under applicable laws, rules, regulations or stock exchange listing standards.
NontransferabilityNontransferability
Generally, only the participant may exercise rights under an award during the participant’s lifetime. A participant may not transfer those rights except by will or the laws of descent and distribution. However, if permitted by the
Committee,CHRC, a participant may transfer an award other than an incentive stock option pursuant to a domestic relations order or as otherwise permitted by the
Committee.CHRC.
Amendment and Termination
The
20232024 Equity Plan may be amended or terminated by the
Board of Directors;Board; provided, however, the
20232024 Equity Plan may not be amended in the absence of stockholder approval if such approval is required under applicable laws or stock exchange requirements. In addition, without the written consent of the participant, no amendment or termination of the
20232024 Equity Plan may materially and adversely modify the participant’s rights under the terms and conditions of an outstanding award, except as reserved under the
20232024 Equity Plan.
The amountrecipients amounts and timing of awards under the 20232024 Equity Plan are determined in the sole discretion of the Compensation Committee,CHRC, as administrator, or the Board, of Directors, and cannot be determined in advance. Future awards under the 20232024 Equity Plan to non-employee directors, officers and other employees are discretionary, and therefore not determinable at this time.
| | 2024 Proxy Statement | | | 75 | |
U.S. Federal Income Tax Consequences
The following discussion is a brief summary of the principal United States federal income tax consequences of participation in the
20232024 Equity Plan for a participant who is a U.S. tax resident under the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), as currently in effect. The Code and its regulations are subject to change. This summary is not intended to be exhaustive and does not describe, among other things, state, local or foreign income and other tax consequences. The specific tax consequences to a participant will depend upon that participant’s individual circumstances.
Options and Stock Appreciation Rights
Under existing law and regulations, the grant of nonqualified stock options and stock appreciation rights will not result in income taxable to the employee or non-employee director. However, the exercise of a nonqualified stock option or stock appreciation right results in taxable income to the holder. At the time of the exercise of a nonqualified stock option, the participant will be taxed at ordinary income tax rates on the excess of the fair market value of the shares purchased over the option’s exercise price. At the time of the exercise of a stock appreciation right, the participant will be taxed at ordinary income tax rates on the amount of the cash, or the fair market value of the shares, received by the employee upon exercise.
The grant of an incentive stock option will not result in income taxable to the employee. The holder will not recognize income when the incentive stock option is exercised but the holder must treat the excess of the fair market value of the underlying shares on the date of exercise over the exercise price as an item of adjustment for purposes of the alternative minimum tax. If the holder disposes of the underlying shares after he or she has held the shares for at least two years after the incentive stock option was granted and one year after the incentive stock option was exercised, the amount the holder receives upon the disposition over the exercise price is treated as long-term capital gain for the holder. If the holder makes a “disqualifying disposition” of the underlying shares by disposing of the shares before they have been held for at least two years after the date the incentive stock option was granted and one year after the date the incentive stock option was exercised, the holder will recognize compensation income equal to the excess of (i) the fair market value of the underlying shares on the date the incentive stock option was exercised or, if less, the amount received on the disposition over (ii) the exercise price.
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74 | | Approval of the Unisys Corporation 2023 Long-Term Incentive and Equity Compensation Plan |
Restricted Stock Awards
A participant in the
20232024 Equity Plan who is granted a restricted stock award will not be taxed upon the acquisition of such shares so long as the interest in such shares is subject to a “substantial risk of forfeiture” within the meaning of Code Section 83. Upon lapse or release of the restrictions, the recipient will be taxed at ordinary income tax rates on an amount equal to the then current fair market value of the shares. Any such awards that are not subject to a substantial risk of forfeiture will be taxed at the time of grant. The basis of restricted shares held after lapse or termination of restrictions will be equal to their fair market value on the date of lapse or termination of restrictions, and upon subsequent disposition any further gain or loss will be a long-term or short-term capital gain or loss, depending upon the length of time the shares are held. A recipient of a restricted stock award may elect to be taxed at ordinary income tax rates on the full fair market value of the restricted shares at the time of grant. If this election is made, the basis of the shares acquired will be equal to the fair market value at the time of grant, no tax will be payable upon the subsequent lapse or release of the restrictions, and any gain or loss upon disposition will be a capital gain or loss.
A participant who is granted a restricted stock unit will not be taxed upon the grant of the award. Upon receipt of payment of cash or common stock pursuant to a restricted stock unit, the participant will realize ordinary income in an amount equal to any cash received and the fair market value of any shares received.
Performance Awards and
A recipient of
a performancean incentive award will generally realize ordinary income at the time shares are transferred or cash is paid to the participant with respect to such award.
A recipient of dividend equivalents generally will realize ordinary income at the time the dividend equivalent is paid.
DeductibilityDeductibility
The Company is generally entitled to a deduction equal to the compensation realized by the holders of the nonqualified stock options, incentive stock options with a disqualifying disposition, stock appreciation rights, restricted stock, restricted stock units, performance awards/incentive awards and dividend equivalents. However, under the Tax Cuts and Jobs
| | 76 | | | | | | | | | | Approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan | |
Act of 2017, the Company’s deduction will be limited by Section 162(m) of the Code for certain covered executive officers to the extent that their total compensation
for any of them in any one year exceeds $1 million.
Section 409A of the Code imposes certain requirements on nonqualified deferred compensation arrangements. These include requirements on an individual’s election to defer compensation and the individual’s selection of the timing and form of distribution of the deferred compensation. Section 409A also generally provides that distributions must be made on or following the occurrence of certain events (such as the individual’s separation from service, a predetermined date, or the individual’s death). Section 409A imposes restrictions on an individual’s ability to change his or her distribution timing or form after the compensation has been deferred. For certain individuals who are
officers,key employees, Section 409A requires that
suchany distribution payable on account of the individual’s
distributionseparation from service commence no earlier than six months after such
officer’s separation from service.separation. Certain awards under the
20232024 Equity Plan may be designed to be subject to the requirements of Section 409A in form and in operation. For example, restricted stock units that provide for a settlement date following the vesting date may be subject to Section 409A. If an award under the
20232024 Equity Plan is subject to and fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A fails to comply with the requirements of Section 409A, Section 409A imposes an additional 20% federal penalty tax on compensation recognized as ordinary income, as well as interest on such deferred compensation.
If this proposal is approved by our stockholders, the Board of Directors intends to cause the shares of common stock that will become available for issuance under the 20232024 Equity Plan to be registered on a Form S-8 Registration Statement to be filed with the SEC at the Company’s expense prior to the issuance of any such shares.
 | | | | The Board of Directors recommends a vote “FOR”the approval of the 20232024 Equity Plan. | |
| | 2024 Proxy Statement | | | 77 | |
Security Ownership of Certain Beneficial Owners and Management
Shown below is information with respect to persons or groups whom the Company knows to beneficially own more than 5% of the outstanding shares of Unisys common stock as of March 4, 2024 based on the information filed by such persons or groups with the SEC on Schedules 13G.
| | Name and Address of Beneficial Owner | | | Number of
Shares of
Common Stock | | | Percent of
Class | |
| | BlackRock, lnc. 55 East 52nd Street
New York, NY 10055 | | | 6,197,495(1) | | | 8.98 | |
| | Neuberger Berman Group LLC Neuberger Berman Investment Advisers LLC
1290 Avenue of the Americas
New York, NY 10104 | | | 5,263,503(2) | | | 7.63 | |
| | The Vanguard Group 100 Vanguard Blvd.
Malvern, PA 19355 | | | 6,231,910(3) | | | 9.03 | |
(1)
Ownership information is based solely on a Schedule 13G-A filed by stockholder with the SEC on January 24, 2024. Sole dispositive power has been reported for all shares, and shared dispositive power has been reported for no shares. Shared voting power has been reported for no shares.
(2)
Ownership information is based solely on a Schedule 13G filed by the stockholder with the SEC on February 12, 2024. Shared dispositive power has been reported for all shares. Shared voting power has been reported for 4,287,551 shares.
(3)
Ownership information is based solely on a Schedule 13G-A filed by stockholder with the SEC on February 13, 2024. Sole dispositive power has been reported for 6,175,653 shares, and shared dispositive power has been reported for 56,257 shares. Shared voting power has been reported for 30,388 shares.
Shown below are the number of shares of Unisys common stock (or time-based restricted stock units) beneficially owned as of February 28, 2024, by all directors, each of the executive officers named on page 35, and all directors and current executive officers of Unisys as a group.
| | Beneficial Owner | | | Number of
Shares of
Common Stock
Beneficially
Owned(1)(2) | | | Percent of
Class | |
| | Peter Altabef | | | 1,429,899 | | | 2.07% | |
| | Nathaniel A. Davis | | | 139,697 | | | * | |
| | Matthew J. Desch | | | 161,675 | | | * | |
| | Katherine Ebrahimi | | | 109,036 | | | * | |
| | Philippe Germond | | | 145,585 | | | * | |
| | Deborah Lee James | | | 133,831 | | | * | |
| | John A. Kritzmacher | | | 82,891 | | | * | |
| | Paul E. Martin | | | 137,904 | | | * | |
| | Debra McCann | | | 231,240 | | | * | |
| | Regina Paolillo | | | 123,992 | | | * | |
| | Teresa Poggenpohl | | | 83,376 | | | * | |
| | Troy K. Richardson | | | 89,503 | | | * | |
| | Lee D. Roberts | | | 208,784 | | | * | |
| | Claudius Sokenu(3) | | | 3,346 | | | * | |
| | Roxanne Taylor | | | 86,877 | | | * | |
| | Michael M. Thomson | | | 364,146 | | | * | |
| | All directors and current officers as a group (19 persons) | | | 3,796,972 | | | 5.50% | |
2023 Proxy Statement | 7578 | | | | | | | | | | Security Ownership of Certain Beneficial Owners and Management | |
*
Less than 1%
(1)
Includes shares reported by directors and executive officers as held directly or indirectly in the names of spouses, children or trusts as to which beneficial ownership may have been disclaimed.
(2)
Includes:
(a)
Time based restricted stock units issued to directors and officers, a portion of which remains unvested, as reported on Form 4 for each director and officer.
(b)
Stock units deferred under the 2005 Deferred Compensation Plan for directors that have elected to defer distribution. Deferred stock units are distributed in shares of common stock upon a change in control of the Company; or upon the earlier of termination of service or on any date at least two years after the stock units are awarded, as previously elected by the director. They may not be voted.
(3)
Mr. Sokenu voluntarily exited the Company on June 30, 2023. Share ownership for Mr. Sokenu is based on his last Form 4 dated June 5, 2023, and corporate records of shares that have vested in connection with his departure from the Company on June 30, 2023.
Section 16(a) Beneficial Ownership Reporting Compliance
The Company’s directors and executive officers, as well as any persons who hold more than 10% of our outstanding common stock, are subject to the reporting requirements of Section 16(a) of the Exchange Act, which requires them to file reports with the SEC concerning their ownership of Unisys equity securities. Based on our records and other information, we believe that all filing requirements for the year ended December 31, 2023 were satisfied in a timely manner.
Equity Compensation Plan Information
The following table sets forth information as of December 31,
20222023, with respect to compensation plans under which Unisys common stock is authorized for issuance.
| Plan category | | Number of
securities
to be issued
upon exercise of
outstanding
options, warrants
and rights
(a) | | Weighted-
average
exercise price
of outstanding
option,
warrants and
rights
(b) | | | Number of
securities remaining
available for
future issuance
under equity
compensation plans
(excluding securities
reflected in column
(a)(c) |
| Equity compensation plans approved | | | 0(1) | | $ | 0 | | | | |
| by security holders | | | 1,384,453(2) | | $ | 0 | | | | 2,244,837(3) |
| Equity compensation plans not approved by security holders(4) | | | 1,315(5) | | $ | 0 | | | | 0 |
| Total | | | 1,385,768 | | | | | | | 2,244,837 |
| | Plan category | | | Number of
securities
to be issued
upon exercise of
outstanding
options, warrants
and rights
(a) | | | Weighted-
average
exercise price
of outstanding
option,
warrants and
rights
(b) | | | Number of
securities remaining
available for
future issuance
under equity
compensation plans
(excluding securities
reflected in column
(a)(c) | |
| | Equity compensation plans approved by security holders | | | 4,470,869(1) | | | $0 | | | 4,425,559(2) | |
| | Equity compensation plans not approved by security holders | | | — | | | — | | | — | |
| | Total | | | 4,470,869 | | | | | | 4,425,559 | |
(1)
Represents restricted stock units. Assumes that unearned performance-based restricted stock units will vest at target.
(2)
Represents shares available for issuance under the 2023 Equity Plan. Assumes that outstanding unearned performance-based restricted stock units will vest at the maximum amount.
(1) | Represents stock options. No options remain outstanding. |
(2)2024 Proxy Statement | Represents restricted stock units. Assumes that unearned performance-based restricted stock units will vest at target. |
(3) | Shares issuable under the Unisys Corporation 2019 Long-Term Incentive and Equity Compensation Plan (the “2019 Plan”). Assumes that outstanding unearned performance-based restricted stock units will vest at the maximum amount. |
(4) | Represents the Unisys Corporation Director Stock Unit Plan (the “Stock Unit Plan”). Under the Stock Unit Plan, directors received a portion of their annual retainers and attendance fees in common stock equivalent units. The Stock Unit Plan was terminated in 2004, and stock units are now granted to directors under the 2019 Plan, which was approved by stockholders. No shares (other than shares subject to outstanding awards previously made) are available for future issuance under the Stock Unit Plan. |
(5)79 | Represents stock units granted under the Stock Unit Plan. |
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76 | | Security Ownership of Certain Beneficial Owners and Management |
Security Ownership of Certain Beneficial Owners and Management
Shown below is information with respect to persons or groups that beneficially owned more than 5% of Unisys common stock as of March 6, 2023. This information is derived from Schedules 13G filed by such persons or groups.
Name and Address of Beneficial Owner | | Number of
Shares of
Common Stock | | Percent of
Class |
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055 | | 11,652,675(1) | | 17.2 |
FMR LLC
Abigail P. Johnson
245 Summer Street
Boston, MA 02210 | | 10,168,132(2) | | 14.999 |
Neuberger Berman Group LLC
Neuberger Berman Investment Advisers LLC
1290 Avenue of the Americas
New York, NY 10104 | | 4,999,250(3) | | 7.37 |
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355 | | 8,111,780(4) | | 11.97 |
(1) | Ownership information is based solely on a Schedule 13G filed by stockholder with the SEC on January 23, 2023. Sole dispositive power has been reported for all shares. Sole voting power has been reported for 11,556,876 shares. |
(2) | Ownership information is based solely on a Schedule 13G-A filed by stockholder with the SEC on February 9, 2023. Sole dispositive power has been reported for all shares. Sole voting power has been reported for 10,168,067 shares. |
(3) | Ownership information is based solely on a Schedule 13G filed by stockholder with the SEC on February 10, 2023. Shared dispositive power has been reported for all shares. Shared voting power has been reported for 4,037,195 shares. |
(4) | Ownership information is based solely on a Schedule 13G-A filed by stockholder with the SEC on February 9, 2023. Sole dispositive power has been reported for 7,864,127 shares, and shared dispositive power has been reported for 247,653 shares. Shared voting power has been reported for 191,954 shares. |
Shown below are the number of shares of Unisys common stock (or stock units) beneficially owned as of March 6, 2023 by all directors, each of the executive officers named on page 31, and all directors and current executive officers of Unisys as a group.
| Beneficial Owner | | Number of
Shares of
Common
Stock(1)(2) | | Additional
Shares of
Common Stock
Deemed
Beneficially
Owned(1) |
| Percent of
Class |
| Peter A. Altabef | | 936,299 | | — | | 1.4% |
| Nathaniel A. Davis | | 103,660 | | — | | * |
| Matthew J. Desch | | 75,638 | | — | | * |
| Katherine Ebrahimi | | 60,866 | | — | | * |
| Denise K. Fletcher | | 141,874 | | — | | * |
| Philippe Germond | | 109,653 | | — | | * |
| Deborah Lee James | | 97,794 | | — | | * |
| Gerald P. Kenney | | 66,704 | | — | | * |
| John A. Kritzmacher | | 46,854 | | — | | * |
| Paul E. Martin | | 101,867 | | — | | * |
| Debra McCann | | 0 | | — | | * |
| Regina Paolillo | | 87,955 | | — | | * |
| Teresa Poggenpohl | | 3,897 | | — | | * |
| | | | | | | |
Table of Contents
| Beneficial Owner | | Number of
Shares of
Common
Stock(1)(2) | | Additional
Shares of
Common Stock
Deemed
Beneficially
Owned(1) | | Percent of
Class |
| Troy K. Richardson | | 53,466 | | — | | * |
| Lee D. Roberts | | 172,747 | | — | | * |
| Claudius Sokenu | | 0 | | — | | * |
| Roxanne Taylor | | 50,840 | | — | | * |
| Michael M. Thomson | | 69,654 | | — | | * |
| All directors and current officers as a group | | 2,227,875 | | — | | 2.7% |
* | Less than 1% |
(1) | Includes shares reported by directors and executive officers as held directly or in the names of spouses, children or trusts as to which beneficial ownership may have been disclaimed. Amounts shown for Mr. Kenney are as of April 30, 2022, the last day on which he served as an executive officer of the Company. |
(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, for current officers as a group, 7,483.06. With respect to such shares, plan participants have authority to direct voting. |
| (b) | Stock units, as described on page 28, for directors as follows: Ms. Fletcher, 1,314.8. They may not be voted. |
| (c) | Stock units deferred under the 2005 Deferred Compensation Plan for Directors as follows: Mr. Desch, 75,638; Ms. Fletcher, 100,397; Mr. Germond, 23,701; Ms. James, 72,289; Mr. Martin, 48,565; Ms. Paolillo, 86,955, and Ms. Taylor, 8,009. Deferred stock units are distributed in shares of common stock upon a change in control of the Company; or upon the earlier of termination of service or on any date at least two years after the stock units are awarded, as previously elected by the director. They may not be voted. |
Delinquent Section 16(a) Reports
The Company’s directors and executive officers are required to file reports with the SEC concerning their ownership of Unisys equity securities. During 2022, no directors or executive officers had any late filings.
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78 | | Annual Meeting Information |
Annual Meeting Information
The Board
of Directors solicits your proxy for use at the
2023 Annual Meeting
of Stockholders to be held on May
5, 20231, 2024 and at any adjournments or postponements thereof. At the
annual meeting,Annual Meeting, stockholders will be asked to (1) elect directors, (2) approve
on ana non-binding advisory
basis,resolution approving the compensation of the Company’s named executive officers, (3)
vote, on an advisory basis, on the frequency with which the Company should hold an advisory vote on executive compensation, (4) ratify the selection of the Company’s independent registered public accounting firm,
(5)(4) approve the Unisys Corporation
20232024 Long-Term Incentive and Equity Compensation Plan, and
(6)(5) transact any other business properly brought before the meeting.
The record date for the
annual meetingAnnual Meeting is March
6, 2023.4, 2024. 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,
67,975,03669,012,293 shares of common stock were outstanding. The presence, in person via webcast or by proxy, of a majority of those shares will constitute a quorum at the
meeting.Annual Meeting.
This proxy statement,Proxy Statement, the proxy/voting instruction card and the annual report of Unisys,Annual Report, including the financial statements for 2022,2023, are being made available to stockholders on or about March 22, 2024.
Information About the Meeting and Voting
How Can I Participate in the Annual Meeting?
You can access the Annual Meeting at the meeting time by visiting www.virtualshareholdermeeting.com/UIS2024. In order to allow all of our stockholders, regardless of their physical location, to participate more easily in the Annual Meeting, the Annual Meeting will once again be held entirely online. The virtual Annual Meeting has been designed to provide the same rights to participate as you would have at an in-person meeting.
If you plan to attend the Annual Meeting online, you will need the 16-digit control number included in the Notice, on your proxy card or on the instructions that accompany your proxy materials. The Annual Meeting will begin promptly at 8:00 a.m. (Eastern Time). Online check-in will begin at 7:30 a.m. (Eastern Time), and you should allow ample time for the online check-in procedures.
What am I Voting On?
Our Board is soliciting your vote for:
•
The election of 11 persons to the Board identified in this Proxy Statement, each to serve for a term expiring at the 2025 annual meeting and until his or her successor is duly elected and qualified. Each of the 11 individuals nominated for election is currently serving on the Board.
•
The approval of a non-binding advisory resolution approving the compensation of the Company’s named executive officers.
•
The ratification of the selection of Grant Thornton as the Company’s independent registered public accounting firm for 2024.
•
The approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan.
What are the Board’s Recommendations?
The Board recommends that you vote “FOR” the election of the 11 nominees identified in this Proxy Statement, with each to serve as a director for a term expiring at the 2025 annual meeting and until his or her successor is duly elected and qualified.
The Board recommends that you vote “FOR” the non-binding advisory resolution approving the compensation of the Company’s named executive officers.
The Board recommends that you vote “FOR” the ratification of the selection of Grant Thornton as the Company’s independent registered public accounting firm for 2024.
The Board recommends that you vote “FOR” the approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan.
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Who is Entitled to Vote?
Only holders of record of outstanding shares of the Company’s common stock as of the close of business on March 4, 2024, which we refer to as the Record Date, are entitled to notice of, and to vote at, the Annual Meeting. Shares of common stock may be voted only if the stockholder is present in person or is represented by proxy at the Annual Meeting. As of the record date, there were 69,012,293 shares of common stock outstanding. Each share of common stock is entitled to one vote for each director nominee and one vote with respect to each other matter to be voted on at the Annual Meeting. Stockholders do not have cumulative voting rights.
What Constitutes a Quorum?
Holders of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting as of the Record Date must be present in person or by proxy at the Annual Meeting. This is referred to as a quorum. Unless a quorum is present at the Annual Meeting, no action may be taken at the Annual Meeting except the adjournment thereof to a later time. Abstentions, withheld votes, and shares of record held by a broker or its nominee (“broker shares”) that are voted on any matter are included in determining the existence of a quorum. Broker shares that are not voted on any matter will not be included in determining whether a quorum is present. All valid proxies returned will be included in the determination of whether a quorum is present at the Annual Meeting. The shares of common stock of a stockholder whose ballot on any or all proposals is marked as “abstain” will be treated as present for quorum purposes. “Broker non-votes,” as discussed below, will also be treated as present for quorum purposes.
What is a Broker Non-Vote?
A “broker non-vote” occurs when a broker or other nominee holding shares of common stock for a beneficial owner returns a properly executed proxy but does not cast a vote on a particular proposal because the broker or nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner. Brokers that are member firms of the NYSE and who hold common shares in street name for customers generally may vote their customers’ shares on proposals considered to be “routine” matters under the NYSE rules and may not vote their customers’ shares on proposals that are not considered to be “routine” matters under the NYSE rules if the customers have not furnished voting instructions within a specified period of time prior to the Annual Meeting. Proposal One, the election of directors, is not considered to be a “routine” matter under the NYSE rules. Proposal Two, ratification of the appointment of our independent registered public accounting firm, is considered a “routine” matter under the NYSE rules. Proposal Three, approval of a non-binding advisory resolution approving the compensation of the Company’s named executive officers, is not considered to be a “routine” matter under the NYSE rules. Proposal Four, approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan, is not considered to be a “routine” matter under the NYSE rules.
What Vote is Required to Approve Each Proposal?
Election of Directors. Directors will be elected by the vote of a majority of the votes cast at the Annual Meeting. This means that a nominee will be elected if the number of votes cast “FOR” his or her election exceeds 50% of the total number of votes cast with respect to that nominee’s election. Abstentions and broker non-votes will not be included in the vote totals and therefore will have no effect on the vote for the proposal to elect directors. There is no cumulative voting.
Advisory Vote to Approve Executive Compensation. Approval of a non-binding advisory resolution approving the compensation of the Company’s named executive officers requires the affirmative vote of a majority of shares present, in person or by proxy, and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” the proposal. Broker non-votes will not be included in the vote totals and therefore will have no effect on the vote to approve the non-binding advisory resolution approving the compensation of the Company’s named executive officers. The advisory vote to approve executive compensation is not binding on the Company. However, the Company will review and consider the results of this advisory vote when making future executive compensation decisions.
Ratification of Appointment of Independent Registered Public Accounting Firm. Ratification of the selection of the Company’s independent registered public accounting firm requires the affirmative vote of a majority of shares present, in person or by proxy, and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” the proposal. There will be no broker non-votes for the proposal to ratify the selection of the Company’s independent registered public accounting firm since brokers will be entitled to vote on this “routine” proposal.
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Approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan. Approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan requires the affirmative vote of a majority of shares present, in person or by proxy, and entitled to vote on the proposal. Abstentions will have the same effect as a vote “AGAINST” the proposal. Broker non-votes will not be included in the vote totals and therefore will have no effect on the vote for the proposal to approve the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan.
How Do I Vote?
If you are a stockholder of record, there are several ways for you to vote your shares of common stock at the Annual Meeting:
•
Voting by Internet. You may vote your shares through the Internet by signing on to the website identified on the proxy card and following the procedures described on the website. Internet voting is available 24 2023.hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on the proxy card. The procedures allow you to authorize a proxy to vote your shares of common stock and to confirm that your instructions have been properly recorded. If you vote through the Internet, you should not return your proxy card.
•
Voting by Mail. If you choose to vote by mail, simply complete the enclosed proxy card, date and sign it, and return it in the postage-paid envelope provided. If you sign your proxy card and return it without marking any voting instructions, your shares will be voted: (1) FOR the election of the directors identified in this Proxy Statement, (2) FOR the approval of the non-binding advisory resolution approving the compensation of the Company’s named executive officers, (3) FOR the ratification of the selection of Grant Thornton as the Company’s independent registered public accounting firm for 2024, (4) FOR the approval of the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan and (5) in their discretion on any other matters that properly come before the Annual Meeting.
•
Beneficial Owners. If you are a stockholder whose shares of common stock are held in “street name” (i.e., in the name of a bank, broker or other holder of record), you may vote the shares of common stock in person at the Annual Meeting only if you obtain a valid proxy from the bank, broker or other holder of record giving you the right to vote the shares of common stock. Alternatively, you may have your shares of common stock voted at the Annual Meeting by following the voting instructions provided to you by your bank, broker or other holder of record. If you do not provide voting instructions to the organization that holds your shares, the organization will be prohibited under the current rules of the NYSE from voting your shares of common stock on “non-routine” matters. This is commonly referred to as a “broker non-vote”. The ratification of the selection of the Company’s independent registered public accounting firm is considered “routine” and therefore may be voted on by your broker or custodian.
How Can I Access the Proxy Materials Electronically?
This Proxy Statement and the Annual Report are available at the following website: www.proxyvote.com.
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 via webcast or represented by proxy. You can vote by proxy over the Internet by following the instructions provided in the Notice, or, if you request printed copies of the proxy materials by mail, you can also vote by submitting a proxy by mail or by telephone by following the instructions provided on the proxy/voting instruction card. If you have previously elected to receive proxy materials over the Internet, you should have already received email instructions on how to vote electronically.
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 via webcast at the Annual Meeting.
The method by which you vote will in no way limit your right to vote at the Annual Meeting if you later decide to attend in person via webcast. If you are the beneficial owner of shares held in “street name” by a bank, broker or other holder of record, you may gain access to the Annual Meeting by following the instructions in the voting instruction card provided by your bank, broker or other nominee. You may not vote your shares electronically at the Annual Meeting unless you receive a valid proxy from your bank, brokerage firm, broker dealer or other nominee holder.
If you are a stockholder of record and you properly complete, sign and return your proxy, and do not revoke it, the proxy holders will vote your shares in accordance with your instructions. If your signed and returned proxy gives no instructions, the proxy holders will vote your shares (1) FOR the election of the directors identified in this Proxy Statement, (2) FOR the approval of a non-binding advisory resolution approving the compensation of the Company’s named executive officers, (3) FOR the ratification of the selection of independent registered public accounting firm, (4) FOR the approval of
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the Unisys Corporation 2024 Long-Term Incentive and Equity Compensation Plan and (5) in their discretion on any other matters that properly come before the Annual Meeting.
If you are a beneficial owner of shares held in street name and you do not provide specific voting instructions to the organization that holds your shares, the organization will be prohibited under the current rules of the NYSE from voting your shares on “non-routine” matters. This is commonly referred to as a “broker non-vote”. The election of directors, the approval of the non-binding advisory resolution regarding the compensation of the Company’s named executive officers and the approval of the 2024 Equity Plan are considered “non-routine” matters and therefore may not be voted on by your bank or broker absent specific instructions from you. The ratification of the selection of independent registered public accounting firm is considered “routine” and therefore may be voted on by your bank or broker without instructions from you. Please instruct your bank or broker so your vote can be counted.
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 shares of Unisys common stock credited to your account as of March 4, 2024. The trustee will vote those shares in accordance with your instructions if it receives your completed proxy by May 1, 2024. 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 timely instructions from other participants.
Internet Availability of Proxy Materials; Multiple Sets of Proxy Materials
Pursuant to the “notice and access” rules adopted by the SEC, the Company has elected to provide stockholders access to its proxy materials over the Internet. Accordingly, the Company sent a Notice of Internet Availability of Proxy Materials (the “Notice”) to most stockholders (other than those who previously requested electronic or paper delivery of proxy materials). The Notice includes instructions on how to access the proxy materials over the Internet, how to vote online and how to request a printed copy of these materials. In addition, by following the instructions in the Notice, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis.
Choosing to receive your future proxy materials by email will save the Company the cost of printing and mailing documents to you and will reduce the impact of the Company’s annual meetings on the environment. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it.
If you hold shares of Unisys common stock in more than one account, you may receive more than one Notice or more than one set of proxy materials. Please be sure to vote all the shares that you own.
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 via webcast or represented by proxy. You can vote by proxy over the Internet by following the instructions provided in the Notice, or, if you request printed copies of the proxy materials by mail, you can also vote by submitting a proxy by mail or by telephone by following the instructions provided on the proxy/voting instruction card. If you have previously elected to receive proxy materials over the Internet, you should have already received email instructions on how to vote electronically.
You may revoke your proxy at any time before it is exercised by writing to the Corporate Secretary of Unisys, by timely delivery of a properly executed later-dated proxy (including an Internet or telephone vote) or by voting in person via webcast 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 via webcast. If you are the beneficial owner of shares held in “street name” by a bank, broker or other holder of record, you may gain access to the meeting by following the instructions in the voting instruction card provided by your bank, broker or other nominee. You may not vote your shares electronically at the annual meeting unless you receive a valid proxy from your bank, brokerage firm, broker dealer or other nominee holder.
Table of Contents
If you are a stockholder of record and you properly complete, sign and return your proxy, and do not revoke it, the proxy holders will vote your shares in accordance with your instructions. If your signed and returned proxy gives no instructions, the proxy holders will vote your shares (1) FOR the election of directors, (2) FOR the approval, on an advisory basis, of the compensation of the Company’s named executive officers, (3) FOR the approval, on an advisory basis, of an advisory vote on executive compensation EVERY YEAR, (4) FOR the ratification of the selection of independent registered public accounting firm, (5) FOR the approval of the Unisys Corporation 2023 Long-Term Incentive and Equity Compensation Plan, and (6) in their discretion on any other matters that properly come before the annual meeting.
If you are a beneficial owner of shares held in street name and you do not provide specific voting instructions to the organization that holds your shares, the organization will be prohibited under the current rules of the NYSE from voting your shares on “non-routine” matters. This is commonly referred to as a “broker non-vote”. The election of directors, the advisory resolution regarding the compensation of the Company’s named executive officers, the advisory vote regarding the frequency of advisory votes on executive compensation and the approval of the new long-term incentive and equity compensation plan are considered “non-routine” matters and therefore may not be voted on by your bank or broker absent specific instructions from you. The ratification of the selection of independent registered public accounting firm is considered “routine” and therefore may be voted on by your bank or broker without instructions from you. Please instruct your bank or broker so your vote can be counted.
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 shares of Unisys common stock credited to your account as of March 6, 2023. The trustee will vote those shares in accordance with your instructions if it receives your completed proxy by May 2, 2023. 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 timely instructions from other participants.
Virtual Meeting OnlyWebcast
In order to allow all of our stockholders, regardless of their physical location, to participate more easily in the
meeting,Annual Meeting, the
annual meetingAnnual Meeting once again will be held entirely online. You will be able to attend and participate in the
annual meetingAnnual Meeting online by visiting www.virtualshareholdermeeting.com/
UIS2023,UIS2024, where you will be able to listen to the
meetingAnnual Meeting live, submit questions, and vote. Only record holders of Unisys common stock at the close of business on March
6, 20234, 2024 will be entitled to vote or submit questions at the
annual meeting.Annual Meeting. Even if you plan to attend the annual meetingAnnual Meeting online, we recommend that you also vote by proxy as described herein so that your vote will be counted if you decide not to attend the annual meeting.Annual Meeting.
Access to the Audio Webcast of the Annual Meeting.The live audio webcast of the
annual meetingAnnual Meeting will begin promptly at 8:00 a.m.
Eastern time.(Eastern Time). Online access to the audio webcast will open approximately thirty minutes prior to the start of the
annual meetingAnnual Meeting to allow time for you to log in and test the computer audio system. We encourage our stockholders to access the
meetingAnnual Meeting prior to the start time.
Log in instructions.To attend the online annual meeting,Annual Meeting, log in at www.virtualshareholdermeeting.com/UIS2023.UIS2024. Stockholders as of the record date will need their unique 16-digit control number, which appears on the Notice and the instructions that accompanied the proxy materials, in order to be able to submit a question or vote at the meeting. Annual Meeting.
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If you are the beneficial owner of shares held in “street name” by a bank, broker or other holder of record, you may gain access to the
meetingAnnual Meeting by following the instructions in the voting instruction card provided by your bank, broker of other nominee. You may not vote your shares electronically at the
annual meetingAnnual Meeting unless you receive a valid proxy from your bank, brokerage firm, broker dealer or other nominee holder and those institutions will likely require your instructions to be submitted before the deadline listed above.
Submitting Questions prior to or at the Virtual Annual Meeting.If you would like to submit a question to be addressed during the question and answer portion of the
annual meeting,Annual Meeting, you may do so in advance at www.virtualshareholdermeeting.com/
UIS2023,UIS2024, or you may type it into the dialog box provided at any point during the virtual
meetingAnnual Meeting (until the floor is closed to questions). We intend to answer questions submitted prior to or during the
meetingAnnual Meeting that are pertinent to the Company and the meeting matters, as time permits.
Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once. Technical Assistance.Beginning thirty minutes prior to the start of and during the annual meeting,Annual Meeting, we will have a support team ready to assist stockholders with any technical difficulties they may have accessing or hearing the virtual meeting.Annual Meeting.
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If you encounter any difficulties accessing the virtual meetingAnnual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the annual meetingAnnual Meeting website log-in page.
Availability of live webcast to associates and other constituents.The live audio webcast will be available to not only our stockholders, but also to our
associatesemployees and other constituents. An audio replay of the
annual meeting,Annual Meeting, including the questions answered during the meeting, will be available at www.unisys.com/investor-relations until the
2024 Annual Meeting of Stockholders.2025 annual meeting.
Each share of Unisys common stock outstanding on the record date is entitled to one vote on each matter to be voted upon.
Election of Directors (Item 1).Directors will be elected by the vote of a majority of the votes cast at the
meeting.Annual Meeting. This means that a nominee will be elected if the number of votes cast “FOR” his or her election exceeds 50% of the total number of votes cast with respect to that nominee’s election. Abstentions and broker non-votes will not be included in the vote totals and therefore will have no effect on the
vote.vote for the proposal to elect directors. There is no cumulative voting. Advisory Vote to Approve Executive Compensation (Item 2).The
non-binding advisory resolution
to approveapproving the compensation of the Company’s named executive
compensationofficers will be approved if it receives the affirmative vote of a majority of shares present, in person or by proxy, and entitled to vote on the matter. Abstentions will have the same effect as a vote “AGAINST” the proposal. Broker non-votes will not be included in the vote totals and therefore will have no effect on the
vote to approve the non-binding advisory
vote onresolution approving the compensation of the Company’s named executive
compensation.officers.Advisory Vote on Frequency of Advisory Vote on Executive Compensation (Item 3). Stockholders will have the option of selecting a frequency of every year, every two years or every three years for the advisory vote on executive compensation. The Company will consider the alternative receiving the greatest number of votes as the frequency the stockholders approve. Abstentions and broker non-votes will have no effect on the vote.
The advisory
votesvote to approve executive compensation
(Item 2) and on the frequency of the advisory vote on executive compensation (Item 3) areis not binding on the Company. However, the Company will review and consider the results of
thesethis advisory
votesvote when making future executive compensation
decisions and when making determinations as to when the Company will again submit the advisory vote on executive compensation to stockholders for approval.decisions.Ratification of the Selection of Independent Registered Public Accounting Firm (Item 4)3).The proposal to ratify the selection of the Company’s independent registered public accounting firm will be approved if it receives the affirmative vote of a majority of shares present, in person or by proxy, and entitled to vote on the matter. Abstentions will have the same effect as a vote
“Against”“AGAINST” the proposal. There will be no broker non-votes for the proposal to ratify the selection of the Company’s independent registered public accounting firm since brokers will be entitled to vote on this “routine” proposal.
Approval of the Unisys Corporation 20232024 Long-Term Incentive and Equity Compensation Plan (Item 5)4).The proposal to approve a new long-term incentive and equity compensation plan will be approved if it receives the affirmative vote of a majority of shares present, in person or by proxy, and entitled to vote on the matter.proposal. Abstentions will have the same effect as a vote “Against”“AGAINST” the proposal. Broker non-votes will not be included in the vote totals and therefore will have no effect on the vote onfor the proposal.
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Cautionary Statement Regarding Forward-Looking Information
These proxy materials contain forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. Unisys cautions readers that the assumptions forming the basis for forward-looking statements include many factors that are beyond Unisys’ ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other market participants. Words such as “anticipates,” “estimates,” “expects,” “projects,” “may,” “will,” “intends,” “plans,” “believes,” “should” and similar expressions may identify forward-looking statements and such forward-looking statements are made based upon management’s current expectations, assumptions and beliefs as of this date concerning future developments and their potential effect upon Unisys. There can be no assurance that future developments will be in accordance with management’s expectations, assumptions and beliefs or that the effect of future developments on Unisys will be those anticipated by management. Forward-looking statements in these proxy materials include, but are not limited to, any projections or expectations of revenue growth, profit, margin expansion, future growth of our Next-Gen solutions, New Business, backlog and pipeline and statements regarding future economic conditions or performance.
Additional information and factors that could cause actual results to differ materially from Unisys’ expectations are contained in Unisys’ filings with the SEC, including Unisys’ Annual Reports on Form 10-K and subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings, which are available at the SEC’s web site, http://www.sec.gov. Information included in these proxy materials are representative as of the date of these proxy materials only and while Unisys periodically reassesses material trends and uncertainties affecting Unisys’ results of operations and financial condition in connection with its preparation of management’s discussion and analysis of results of operations and financial condition contained in its Quarterly and Annual Reports filed with the SEC, Unisys does not, by including this statement, assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events
Policy 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 pursuant to Rule 14a-8 of the Exchange Act (“Rule 14a-8”) for inclusion in the proxy materials for the
20242025 annual meeting
of stockholders must be received by the Company by November
25, 2023.22, 2024.
Any stockholder who intends to present a proposal at the
20242025 annual meeting and has not sought to include the proposal in the Company’s proxy materials pursuant to Rule 14a-8 must deliver notice of the proposal to the Company no later than
February 5, 2024.January 31, 2025.
Any stockholder who intends to make a nomination for the Board of Directors at the 20242025 annual meeting must deliver to the Company no later than February 1, 2024January 31, 2025 (a) a notice setting forth (i) the name, age, business and residence addresses
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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 and (b) the directors’ questionnaire, representation and agreement required by Article I, Section 8 of the Company’s Bylaws.
In addition to satisfying the requirements under the Company’s Bylaws, if a stockholder intends to comply with the SEC’s universal proxy rules and to solicit proxies in support of director nominees other than the Company’s nominees, the stockholder must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, which notice must be postmarked or transmitted electronically to us at the address stated above for recommendations on director candidates no later than 60 calendar days prior to the one-year anniversary date of the Annual Meeting (for the
20242025 annual meeting,
of stockholders, no later than March
6, 2024)3, 2025). If the date of the
20242025 annual meeting
of stockholders is changed by more than 30 calendar days from such anniversary date, however, then the stockholder must provide notice by the later of 60 calendar days prior to the date of the
20242025 annual meeting
of stockholders and the
10th10th calendar day following the date on which public announcement of the date of the
20242025 annual meeting
of stockholders is first made by the Company.
Householding of Proxy Materials
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 the Notice and/or this
proxy statementProxy Statement and the
2022 annual reportAnnual 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 the proxy materials, and you would prefer to receive separate copies of these documents, either now or in the future, please call us at 215-986-6999,215-986-4011, or write us at Investor Relations,Secretary, Unisys Corporation, 801 Lakeview Drive, Suite 100, Blue Bell, PA 19422. 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.
Annual Report
TableUnisys filed its Annual Report with the SEC on February 26, 2024. The Annual Report includes our audited financial statements, along with other financial information about us. Our Annual Report is not part of
Contents82 | | General Matters |
the proxy solicitation materials. Nonetheless, we have furnished the Annual Report with this Proxy Statement and you may read, print or download our Annual Report, including the financial statements for 2023, at www.proxyvote.com. You may obtain, free of charge, a copy of our Annual Report by: (1) accessing our Internet site at www.unisys.com/investor-relations/; (2) writing to us at Secretary, Unisys Corporation, 801 Lakeview Drive, Suite 100, Blue Bell, PA 19422; or (3) calling us at 215-986-4011. You may also obtain a copy of our Annual Report and other periodic and current reports that we file with, or furnish to, the SEC from the SEC’s EDGAR database at www.sec.gov.
At the date of this
proxy statement,Proxy Statement, the Board
of Directors knows of no matter that will be presented for consideration at the
annual meetingAnnual Meeting other than those described in this
proxy statement.Proxy Statement. If any other matter properly
comesarises before the
annual meeting,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 by the Company’s directors, officers and regular employees
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without additional compensation. In addition, the Company has retained Alliance Advisors to assist in the solicitation of proxies for a fee of approximately
$11,000$12,500 plus
reasonable out-of-pocket expenses.
By Order of the Board of Directors,
Claudius Sokenu
Senior Vice President, General Counsel,
Corporate Secretary and Chief AdministrativeAdministration Officer
Dated: March 24, 2023
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Appendix A
Non-GAAP Information
This proxy statement includes certain non-GAAP financial measures that exclude certain items such as postretirement expense; certain legal and other matters related to professional services and legal fees, including legal defense costs, associated with certain legal proceedings; environmental matters related to previously disposed businesses; and cost-reduction activities and other expenses that the company believes are not indicative of its ongoing operations, as they may be unusual or non-recurring. The inclusion of such items in financial measures can make the company’s profitability and liquidity results difficult to compare to prior periods or anticipated future periods and can distort the visibility of trends associated with the Company’s ongoing performance. Management also believes that non-GAAP measures are useful to investors because they provide supplemental information about the company’s financial performance and liquidity, as well as greater transparency into management’s view and assessment of the company’s ongoing operating performance.
Non-GAAP financial measures are often provided and utilized by the Company’s management, analysts, and investors to enhance comparability of year-over-year results and to isolate in some instances the impact of software license renewals, which tend to be lumpy, and related support services in order to evaluate the Company’s business outside of these areas. These items are uncertain, depend on various factors, and could have a material impact on the Company’s GAAP results for the applicable period. These measures should not be relied upon as substitutes for, or considered in isolation from, measures calculated in accordance with U.S. GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found below except for financial guidance and other forward-looking information since such a reconciliation is not practicable without unreasonable efforts as the company is unable to reasonably forecast certain amounts that are necessary for such reconciliation. This information has been provided pursuant to the requirements of SEC Regulation G.
Reconciliations of GAAP to NON-GAAP
| | | | | Year Ended December 31, | |
| | | | | 2023 | | | 2022 | | | 2021 | |
| | Operating profit | | | $76.9 | | | $52.2 | | | $154.0 | |
| | Certain legal matters(1) | | | 35.2 | | | 16.0 | | | 1.1 | |
| | Cost reduction and other expenses(2) | | | 27.4 | | | 88.7 | | | 34.2 | |
| | Postretirement expense(1) | | | 1.3 | | | 2.1 | | | 3.5 | |
| | Non-GAAP operating profit | | | $140.8 | | | $159.0 | | | $192.8 | |
| | Revenue | | | $2,015.4 | | | $1,979.9 | | | $2,054.4 | |
| | Operating profit percent | | | 3.8% | | | 2.6% | | | 7.5% | |
| | Non-GAAP operating profit percent | | | 7.0% | | | 8.0% | | | 9.4% | |
(1)
Included in selling, general and administrative expenses within the consolidated statements of income (loss)
(2)
Included in cost of revenue, selling, general and administrative and research and development on the consolidated statements of income (loss)
| | | | | Year Ended
December 31, | |
| | | | | 2023 | | | 2022 | |
| | Net (loss) attributable to Unisys Corporation | | | $(430.7) | | | $(106.0) | |
| | Net income attributable to noncontrolling interests | | | 3.6 | | | 1.1 | |
| | Interest expense, net of interest income of $26.3 and $12.4, respectively(1) | | | 4.5 | | | 20.0 | |
| | Provision for income taxes | | | 79.3 | | | 42.3 | |
| | Depreciation | | | 79.4 | | | 114.7 | |
| | Amortization | | | 59.4 | | | 68.8 | |
| | EBITDA | | | $(204.5) | | | $140.9 | |
| | Postretirement expense | | | 388.5 | | | 45.3 | |
| | Certain legal matters(2) | | | 35.7 | | | 16.0 | |
| | Environmental matters(1) | | | 24.7 | | | 32.4 | |
| | Cost reduction and other expenses(3) | | | 13.5 | | | 55.4 | |
| | Non-cash share based expense | | | 16.6 | | | 19.0 | |
| | Other expense, net adjustment(4) | | | 11.4 | | | 16.8 | |
| | Adjusted EBITDA | | | $285.9 | | | $325.8 | |
(1)
Included in other (expense), net on the consolidated statements of income (loss)
(2)
Included in selling, general and administrative expenses and other (expense), net within the consolidated statements of income (loss)
(3)
Reduced for depreciation and amortization included above
(4)
Other expense, net as reported on the consolidated statements of income (loss) less postretirement expense, interest income and items included in environmental matters, cost reduction and other expenses
| | | | | Year Ended
December 31, | |
| | | | | 2023 | | | 2022 | |
| | Revenue | | | $2,015.4 | | | $1,979.9 | |
| | Net (loss) earnings attributable to Unisys Corporation as a percentage of revenue | | | (21.4)% | | | (5.4)% | |
| | Adjusted EBITDA as a percentage of revenue | | | 14.2% | | | 16.5% | |
| | | | | Year Ended
December 31, | |
| | | | | 2023 | | | 2022 | |
| | Cash provided by operations | | | $74.2 | | | $12.7 | |
| | Additions to marketable software | | | (46.0) | | | (46.3) | |
| | Additions to properties | | | (21.3) | | | (31.0) | |
| | Additions to outsourcing assets | | | (11.4) | | | (8.6) | |
| | Free cash flow | | | (4.5) | | | (73.2) | |
| | Postretirement funding | | | 48.0 | | | 43.7 | |
| | Pre-pension free cash flow | | | 43.5 | | | (29.5) | |
| | Certain legal payments | | | 30.2 | | | 5.5 | |
| | Environmental matters payments | | | 21.8 | | | 28.1 | |
| | Cost reduction and other payments | | | 25.0 | | | 22.9 | |
| | Adjusted free cash flow | | | $120.5 | | | $27.0 | |
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2024 Long-Term Incentive and Equity
Compensation Plan
The purpose of the Plan is to provide (i) designated employees of the Company and its subsidiaries and (ii) non-employee members of the Board with the opportunity to receive grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, other equity-based awards and incentive awards. The Company believes that the Plan will 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 linked to increases in
shareholderstockholder value.
The Plan is a successor to the
2023 Long-Term Incentive and Equity Compensation Plan (the “2023 Equity Plan”) and the 2019 Long-Term Incentive and Equity Compensation Plan (collectively, the “Prior Plans”). To the extent the Prior
Plan. NoPlans were otherwise still available to make additional grants, no additional grants will be made under the Prior
PlanPlans after the Effective Date. Outstanding grants under the Prior
PlanPlans shall continue in effect according to their terms, consistent with the Prior
Plan.Plans.
Capitalized terms used in the Plan shall have the definitions specified or otherwise referenced in Section
2827 below.
Section 1. Administration
(a)
Committee. The Plan shall be administered by a committee comprised of no fewer than two members of the Board who are appointed by the Board to administer the Plan (the “Committee”). To the extent deemed necessary by the Board, each Committee member shall satisfy the requirements for (i) an “independent director” under rules adopted by the New York Stock Exchange or other stock exchange on which the Common Stock is at the time primarily traded and (ii) a “nonemployee director” for purposes of such Rule 16b-3 under the Exchange Act. Notwithstanding the foregoing, the mere fact that a Committee member shall fail to qualify under any of the foregoing requirements shall not invalidate any Award made by the Committee which Award is otherwise validly made under the Plan. Neither the Company nor any member of the Committee shall be liable for any action or determination made in good faith by the Committee with respect to the Plan or any Award thereunder. The Board shall have the authority to execute the powers of the Committee under the Plan and the Board shall approve and administer all grants made to Non-Employee Directors. The Committee may delegate authority to one or more subcommittees or one or more officers, as it deems appropriate; provided, however, that any delegation to one or more officers of the Company shall be subject to such guidelines as prescribed by the Committee and shall apply only to Grantees who are not subject to section 16 of the Exchange Act. To the extent the Board, a subcommittee or one or more officers administers the Plan, references in the Plan to the “Committee” shall be deemed to refer to such Board, subcommittee or officer.
(b) Committee Authority. The Committee shall have the sole authority to (i) construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan, (ii) determine who from among the Eligible Participants will receive Awards under the Plan, (iii) determine the type, size and terms and conditions of the Awards to be made under the Plan, (iv) determine the time when the Awards will be made and the duration of any applicable exercise, vesting or restriction period, including the criteria for exercisability, vesting and the restriction period and the acceleration of exercisability, vesting and lapse of a restriction period, (v) determine whether the grant, vesting, exercise, issuance, retention and/or payment of an Award shall be subject to the attainment of one or more Performance Goals or other performance conditions, (vi) amend the terms and conditions of any previously issued Award, subject to Section 1918 below, (vii) determine any restrictions on resale applicable to the shares to be issued or transferred pursuant to the Award, (viii) determine whether, and to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price may be paid in, cash, Common Stock, or Other Awards or property, or an Award may be canceled,cancelled, forfeited or surrendered; (ix) determine the number of shares of Common Stock or other consideration subject to Awards; (x) determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of or as alternatives to, other Awards under this Plan or any other incentive or compensation plan of the Company or any subsidiary, (xi) establish, adopt or revise any rules and regulations, including adopting sub-plans to this Plan, for the purposes of facilitating compliance with applicable laws, easing administration of this Plan and/or taking advantage of tax-favorable treatment for Awards, in each case as it may deem necessary or advisable, (xii) determine whether any Award shall be subject to any non-competition, non-solicitation, confidentiality, clawback or other covenants, (xiii) determine whether an Incentive Award or Performance-Based Award has been earned, and (xiv) make all other determinations necessary or
advisable for the administration of the Plan. The Committee may accelerate the vesting of any Awards at any time for any reason and may provide for complete or partial exceptions to any service or performance requirement as it deems appropriate.
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(c) Committee Determinations. The Committee shall have full power and express discretionary authority to administer and interpret the Plan, to make factual determinations and to adopt or amend such rules, procedures, regulations, agreements and instruments for implementing the Plan and for the conduct of its business as it deems necessary or advisable, in its sole discretion. The Committee’s interpretations of the Plan and all determinations made by the Committee pursuant to the powers vested in it hereunder shall be conclusive and binding on all persons having any interest in the Plan or in any Awards granted hereunder. All powers of the Committee shall be executed in its sole discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the objectives of the Plan and need not be uniform as to similarly situated Grantees. No person acting under this Section 1 shall be held liable for any action or determination made with respect to the Plan or any Award under the Plan, except for the willful misconduct or gross negligence of such person.
(d)
Delegation of Administration. The Committee may delegate certain administrative matters under the Plan to such officer or officers of the Company as determined in the Committee’s discretion, and such administrator(s) may have the authority to execute and distribute Award Agreements in accordance with the Committee’s determinations, to maintain records relating to the granting, vesting, exercise, forfeiture or expiration of Awards, to process or oversee the issuance of shares or cash upon the exercise, vesting and/or settlement of an Award, and to take such other administrative actions as the Committee may specify. Any delegation by the Committee pursuant to this subsection shall be subject to and limited by applicable law or regulation, including without limitation the rules and regulations of the New York Stock Exchange or such other securities exchange on which the Common Stock is then listed.
(a) Awards under the Plan may consist of grants of Incentive Stock Options as described in Section 5, Nonqualified Stock Options as described in Section 5 (Incentive Stock Options and Nonqualified Stock Options are collectively referred to as “Options”), SARs as described in Section 6, Restricted Stock Awards as described in Section 7, Restricted Stock Units (including Dividend Equivalents) as described in Section 8, Other Equity Awards as described in Section 9 and Incentive Awards as described in Section 10 (hereinafter collectively referred to as “Awards”).
(b) All Awards shall be subject to such terms and conditions as the Committee deems appropriate and as are specified in writing by the Committee to the Grantee in the Award Agreement, including the treatment of the Awards upon a termination of employment or service; provided, however, that in no event shall any Award provide for the Grantee’s receipt of Dividends or Dividend Equivalents in any form prior to the vesting of such Award or applicable portion thereof.
(c) All Awards shall be made conditional upon the Grantee’s acknowledgment, in writing or by acceptance of the Award, that all decisions and determinations of the Committee shall be final and binding on the Grantee, his or her beneficiaries and any other person having or claiming an interest under such Award. Awards under a particular Section of the Plan need not be uniform as among the Grantees.
Section 3. Shares Subject to the Plan
(a) Shares Authorized. Subject to adjustment as described in subsection (d), the total aggregate number of shares of Common Stock that may be issued or transferred under the Plan is the sum of the following: (i) 3,625,0006,340,000 shares, plus (ii) shares of Common Stock subject to outstanding awards under the Prior PlanPlans immediately prior to the Effective Date, to the extent that such awards terminate, expire, or are canceled,cancelled, forfeited, exchanged, or surrendered without having been exercised, vested or paid under the applicable Prior PlanPlans on or after the Effective Date, plus (iii) the aggregate number of shares of Common Stock remaining available for issuance under the Prior2023 Equity Plan immediately prior to the Effective Date that are not subject to outstanding awards under the Prior2023 Equity Plan immediately prior to the Effective Date (the “Plan Limit”); provided that in no event shall the Plan Limit exceed 9,085,00010,000,000 shares of Common Stock, and provided further that, for purposes of clauses (ii) and (iii), (x) the Plan Limit shall not include shares of Common Stock surrendered in payment of the exercise price of outstanding options under any Prior Plan,Plans, shares withheld or surrendered for payment of taxes with respect to outstanding awards of any type under any Prior Plan,Plans, and shares repurchased by the Company on the open market with the proceeds of the exercise price of outstanding options under any Prior Plan,Plans, and (y) if stock appreciation rights outstanding under any Prior PlanPlans are exercised and settled in Common Stock, the full number of shares subject to such stock appreciation rights shall not be again available for issuance under the Plan, without regard to the number of shares issued upon settlement of the stock appreciation rights.
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(b) Source of Shares; Share Counting. Shares issued under the Plan may be authorized but unissued shares of Common Stock or reacquired shares of Common Stock, including shares purchased by the Company on the open market for
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purposes of the Plan. The issuance of any shares of Common Stock shall result in a reduction of the number of shares of Common Stock available for Awards on a one-for-one basis. If and to the extent Options or SARs granted under the Plan terminate, expire or are canceled, forfeited, exchanged or surrendered without having been exercised, and if and to the extent that any Restricted Stock Awards, Restricted Stock Units, Other Equity Awards or Incentive Awards are forfeited or terminated, or otherwise are not paid in full, the shares reserved for such Awards shall again be available for purposes of the Plan. To the extent that any Awards are designated in an Award Agreement to be paid in cash, and not in shares of Common Stock, such Awards shall not count against the Plan Limit. Shares of Common Stock surrendered in payment of the exercise price of an Option, and shares repurchased by the Company on the open market with the proceeds of the exercise price of Options, shall not be available for re-issuance under the Plan. If SARs are exercised and settled in Common Stock, the full number of shares subject to the SARs shall be considered issued under the Plan, without regard to the number of shares issued upon settlement of the SARs.
The preceding provisions of this subsection (a) shall apply only for purposes of determining the aggregate number of shares of Common Stock that may be issued under the Plan but shall not apply for purposes of determining the maximum number of shares of Common Stock with respect to which Awards may be granted to any Grantee under the Plan.
(i)
The maximum aggregate number of shares of Common Stock with respect to which Awards may be made under the Plan to any Employee during any calendar year is 1,000,000 shares, subject to adjustment as described in subsection (d) below.(ii) Notwithstanding any provision to the contrary in the Plan or in any policy of the Company regarding compensation payable to a Non-Employee Director, the sum of the grant date fair value (determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of all Awards payable in shares of Common Stock and the maximum amount that may become payable pursuant to all cash-settled Awards that may be granted under the Plan to an individual as compensation for services as a Non-Employee Director, together with cash compensation paid to the Non-Employee Director in the form of Board and Committee retainer, meeting or similar fees, during any calendar year shall not exceed $600,000. For avoidance of doubt, compensation shall count towards this limit for the calendar year in which it was granted or earned, and not later when distributed, in the event it is deferred.
(iii) A Grantee may not accrue Dividend Equivalents or receive Incentive Awards during any calendar year that are payable in cash, for an Award measured with respect to a performance period of one year or less in excess of $5,000,000.
(iv) A Grantee may not accrue Dividend Equivalents or receive Incentive Awards during any calendar year that are payable in cash, for an Award measured with respect to a performance period of more than one year in excess of $10,000,000.
(v)
(ii) The foregoing individual limits shall apply without regard to whether such Awards are to be paid in shares of Common Stock or cash.
(d) Adjustments. If there is any change in the number or kind of shares of Common Stock outstanding by reason of (i) a stock dividend, spinoff, recapitalization, stock split or combination or exchange of shares, (ii) a merger, reorganization or consolidation, (iii) a reclassification or change in par value, or (iv) any other extraordinary or unusual event affecting the outstanding Common Stock as a class without the Company’s receipt of consideration, or if the value of outstanding shares of Common Stock is substantially reduced as a result of a spinoff or the Company’s payment of an extraordinary dividend or distribution: (A) the maximum number of shares of Common Stock available for issuance under the Plan, (B) the maximum number of shares of Common Stock for which any individual may receive Awards in any year as set forth in subsection (c) above, (C) the kind and number of shares covered by outstanding Awards, (D)(C) the kind and number of shares issued or transferred and to be issued or transferred under the Plan, (E)(D) the price per share or the applicable market value of such Awards, and (F)(E) any other terms of outstanding Awards that are affected by the event, shall be equitably adjusted by the Committee, in such manner as the Committee deems appropriate, to reflect any increase or decrease in the number of, or change in the kind or value of, the issued shares of Common Stock to preclude, to the extent practicable, the enlargement or dilution of rights and benefits under the Plan and such outstanding Awards, provided, however, that any fractional shares resulting from such adjustment shall be eliminated. In addition, in the event of a Change in Control of the Company, the provisions of Section 1514 of the Plan shall apply. Any adjustments to outstanding Awards shall be consistent with section 409A or 424 of the Code, to the extent applicable. Any adjustments determined by the Committee shall be final, binding and conclusive.
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Section 4. Eligibility for Participation
(a)
Eligible Participants. Unless otherwise set forth in Section 5(b)(i), all Employees and Non-Employee Directors shall be eligible to participate in the Plan (referred to individually as an “Eligible Participant” and collectively as “Eligible Participants”).
(b)
Selection of Grantees. The Committee shall select the Eligible Participants to receive Awards, type of Award and the number of shares of Common Stock subject to each Award in such manner as the Committee determines. Eligible Participants who receive Awards under this Plan shall hereinafter be referred to as “Grantees.”
(c)
Continued Service. For purposes of this Plan, unless provided otherwise by the Committee in the Award Agreement, a Grantee’s employment or service will not be deemed to have terminated merely because of a change in the capacity in which the Grantee renders service to the Employer as an employee or non-employee member of the Board or a change in the Employer entity for which the Grantee renders such service, provided that there is no interruption or termination of the Grantee’s continuous employment or service to the Employer, as determined by the Committee.
(a)
General Requirements. The Committee may grant Options to an Eligible Participant upon such terms as the Committee deems appropriate under this Section 5.
(b)
Type of Option, Price and Term.
(i) The Committee may grant Incentive Stock Options that are intended to qualify as “incentive stock options” within the meaning of section 422 of the Code or Nonqualified Stock Options that are not intended to so qualify or any combination of Incentive Stock Options and Nonqualified Stock Options, all in accordance with the terms and conditions set forth herein. Incentive Stock Options may be granted only to Employees of the Company or its subsidiaries, as defined in section 424 of the Code. Nonqualified Stock Options may be granted to any Eligible Participant.
(ii) The purchase price (the “Exercise Price”) of Common Stock subject to an Option shall be determined by the Committee and shall be equal to or greater than the Fair Market Value of a share of Common Stock on the date the Option is granted; provided, however, that an Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any subsidiary of the Company, as defined in section 424 of the Code, unless the Exercise Price per share is not less than 110% of the Fair Market Value of a share of Common Stock on the date of grant.
(c)
Option Term. The Committee shall determine the term of each Option. The term of any Option shall not exceed ten years from the date of grant. However, an Incentive Stock Option that is granted to an Employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, or any subsidiary of the Company, as defined in section 424 of the Code, may not have a term that exceeds five years from the date of grant.
(d)
Exercisability of Options. Options shall become exercisable in accordance with such terms and conditions, as may be determined by the Committee and specified in the Award
Agreement; provided, that Options shall be subject to time-based vesting over a period of not less than one year and/or performance-based vesting over a performance period of not less than one year.Agreement. The Committee may grant Options that are subject to achievement of
Performance Goalsperformance or other conditions.
(e)
Effect of Termination of Service. Except as provided in the Award Agreement, an Option may only be exercised while the Grantee is employed by, or providing service to, the Employer.
(f)
Exercise of Options. A Grantee may exercise an Option that has become exercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee shall pay the Exercise Price for an Option as specified by the Committee (i) by certified or bank check or such other instrument as the Committee may permit, (ii) with the approval of the Committee, by delivering shares of Common Stock owned by the Grantee (including Common Stock acquired in connection with the exercise of an Option, subject to such restrictions as the Committee deems appropriate) and having a Fair Market Value on the date of exercise equal to the Exercise Price or by attestation (on a form prescribed by the Committee) to ownership of shares of Common Stock having a Fair Market Value on the date of exercise equal to the Exercise Price, (iii) payment through a
broker- assistedbroker-assisted sale in accordance with procedures permitted by Regulation T of the Federal Reserve Board, (iv) with approval of the Committee, by surrender of all or any part of the vested shares of Common Stock for which the Option is exercisable to the Company for an appreciation distribution payable in shares of Common Stock with a Fair Market Value at the time of the Option surrender equal
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to the dollar amount by which the then Fair Market Value of the shares of Common Stock subject to the surrendered portion exceeds the aggregate Exercise Price payable for those shares, (v) by such other method as the Committee may approve, to the extent permitted by applicable law, or (vi) by any combination of the foregoing. Shares of Common Stock used to exercise an Option shall have been held by the Grantee for the requisite period of time to avoid adverse accounting consequences to the Company with respect to the Option. The Grantee shall pay the Exercise Price and the amount of any Tax-Related Items (pursuant to Section 13)12) at such time as may be specified by the Committee. No person shall have any rights as a stockholder with respect to any shares of Common Stock covered by an Option unless and until such person shall have become the holder of record of such share, and, except as otherwise permittedprovided in Section 3(d) hereof, no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property or distributions or other rights) in respect of such share for which the record date is prior to the date on which such person shall have become the holder of record thereof.
(g)
Limits on Incentive Stock Options. Each Incentive Stock Option shall provide that, if the aggregate Fair Market Value of the Common Stock on the date of the grant with respect to which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year, under the Plan or any other stock option plan of the Company or a subsidiary, as defined in section 424 of the Code, exceeds $100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option. The aggregate number of shares of Common Stock that may be issued under the Plan
asthrough Incentive Stock Options is 2,500,000 shares, subject to adjustment as described in Section 3(d), and all shares issued under the Plan
asthrough Incentive Stock Options shall count against the Plan Limit.
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(h)
Notice of Disposition. A Grantee shall give the Company prompt notice of any disposition of Common Stock acquired by exercise of an Incentive Stock Option within two years of the date of grant of such Incentive Stock Option or one year after the issuance of shares of Common Stock to the Grantee pursuant to the exercise of the Incentive Stock Option.
Section 6. Stock Appreciation Rights
(a)
General Requirements. The Committee may grant SARs to an Eligible Participant pursuant to the terms of this Section 6.
(b)
Base Amount. The Committee shall establish the base amount of the SAR at the time the SAR is granted. The base amount of each SAR shall be equal to, or greater than, the Fair Market Value of a share of Common Stock as of the date of grant of the SAR.
(c)
Exercisability; Term.
(i) A SAR shall be exercisable during the period specified by the Committee in the Award Agreement and shall be subject to such vesting and other restrictions as may be specified in the Award Agreement, consistent with the
Plan, provided, however, that SARs shall be subject to time-based vesting over a period of not less than one year and/or performance-based over a performance period of not less than one year.Plan. The Committee may grant SARs that are subject to achievement of
Performance Goalsperformance or other conditions. No SAR shall be exercisable later than ten years after the date of grant.
(ii) SARs may only be exercised while the Grantee is employed by, or providing service to, the Employer or during the applicable period after termination of employment or service as set forth in the Award Agreement.
(d)
Exercise of SARs. When a Grantee exercises SARs, the Grantee shall receive in settlement of such SARs an amount equal to the value of the stock appreciation for the number of SARs exercised. The stock appreciation for a SAR is the amount by which the Fair Market Value of the underlying Common Stock on the date of exercise of the SAR exceeds the base amount of the SAR as specified in the Award Agreement.
(e)
Form of Payment. The Committee shall determine whether the appreciation in a SAR shall be paid in the form of cash, shares of Common Stock or a combination of the two, in such proportion as the Committee deems appropriate. For purposes of calculating the number of shares of Common Stock to be received, shares of Common Stock shall be valued at their Fair Market Value on the date of exercise of the SAR. If shares of Common Stock are to be received upon exercise of a SAR, cash shall be delivered in lieu of any fractional share.
Section 7. Restricted Stock Awards
(a)
General Requirements. The Committee may issue or transfer shares of Common Stock to an Eligible Participant under a Restricted Stock Award, upon such terms and conditions as the Committee deems appropriate under this Section 7. Shares of
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Common Stock issued or transferred pursuant to Restricted Stock Awards may be issued or transferred for cash consideration or for no cash consideration and be subject to restrictions or to no restrictions, as determined by the Committee. Each Restricted Stock Award shall be subject to such terms and conditions as shall be determined by the Committee and as set forth in the Award Agreement, including, without limitation, restrictions based upon the sale or other disposition of such shares, vesting conditions that lapse based on the passage of time, achievement of certain performance conditions or Performance Goals or as otherwise determined by the Committee and the right of the Company to reacquire such shares for no consideration upon termination of the Grantee’s employment or service within specified periods; provided, however, the Restricted Stock Awards shall be subject to time-based vesting over a period of not less than one year and/or performance-based vesting over a performance period of not less than one year.periods. The period of time during which the Restricted Stock Awards will remain subject to restrictions will be designated in the Award Agreement as the “Restriction Period.”
(b)
Requirement of Employment or Service.Service. Unless provided otherwise in the Award Agreement, if the Grantee ceases to be employed by, or provide service to, the Employer during a period designated in the Award Agreement as the Restriction Period, or if other specified conditions are not met, the Restricted Stock Award shall terminate as to all shares covered by the Award as to which the restrictions have not lapsed, and those shares of Common Stock must be immediately returned to the Company. The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.
(c)
Restrictions on Transfer and Legend on Stock Certificate.Certificate. During the Restriction Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose of the shares of a Restricted Stock Award except to a successor under Section
15.14. To the extent that the Company determines to issue certificates, each certificate for a share of a Restricted Stock Award shall contain a legend giving appropriate notice of the restrictions in the Award. The Grantee shall be entitled to have the legend removed from the stock certificate covering the shares subject to restrictions when all restrictions on such shares have lapsed. The Committee may determine that the Company will not issue certificates for Restricted Stock Awards until all restrictions on such shares have lapsed, or that the Company will retain possession of any certificates for Restricted Stock Awards until all restrictions on such shares have lapsed.
(d)
Right to Vote and to Receive Dividends. The Committee shall determine to what extent, and under what conditions, the Grantee shall have the right to vote shares of Restricted Stock Awards and to accrue the right to any Dividends or other distributions paid on such shares during the Restriction Period; provided, however, that no Dividends shall be payable until the underlying Restricted Stock Award vests.. All Dividends on Restricted Stock Awards shall be withheld while the Restricted Stock Awards are subject to restrictions and shall be payable only upon the lapse of the restrictions on the Restricted Stock Awards, or on such other terms as the Committee determines. Dividends shall be credited to bookkeeping accounts on the Company’s records for purposes of the Plan. Accumulated dividends may accrue interest, as determined by the Committee, and shall be paid in cash, shares of Common Stock or in such other form as dividends are paid on Common Stock, as determined by the Committee.
(e)
Lapse of Restrictions.Restrictions. All restrictions imposed on Restricted Stock Awards shall lapse upon the expiration of the applicable Restriction Period and the satisfaction of all conditions imposed by the Committee.
Section 8. Restricted Stock Units
(a)
General Requirements.Requirements. The Committee may grant Restricted Stock Units representing one or more shares of Common Stock to Eligible Participants, upon such terms and conditions as the Committee deems appropriate under this Section 8, consistent with the Plan.
(b)
Crediting of Units.Units. Each Restricted Stock Unit shall represent an unsecured right of the Grantee to receive a share of Common Stock or an amount based on the value of a share of Common Stock, if specified conditions established by the Committee are met. All Restricted Stock Units shall be credited to bookkeeping accounts established on the Company’s records for purposes of the Plan.
(c) Terms of Restricted Stock Units.Units. The Committee may grant Restricted Stock Units that are payable if specified Performance Goalsperformance or other conditions are met or under other circumstances. Restricted Stock Units may be paid at the end of a specified vesting or performance period or other period, or payment may be deferred to a date authorized by the Committee; provided, that Restricted Stock Units shall be subject to time-based vesting over a period of not less than one year and/or performance-based vesting over a performance period of not less than one year.Committee. A Restricted Stock Unit granted by the Committee shall provide for payment in shares of Common Stock, cash or a combination thereof and shall be made in accordance with the terms and conditions prescribed or authorized by the Committee. The Committee shall specify in writing the maximum number of shares that can be issued under the Restricted Stock Units.
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(d) Requirement of Employment or Service. Unless provided otherwise in the Award Agreement, if the Grantee ceases to be employed by, or provide service to, the Employer during a specified period, or if other conditions established by the Committee are not met, the Grantee’s Restricted Stock Units shall be forfeited. The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.
(e)
Payment With Respect to Restricted Stock Units. Payments with respect to Restricted Stock Units shall be made in cash, in Common Stock or in a combination of the two, as determined by the Committee.
(f)
Dividend Equivalents. The Committee may grant Dividend Equivalents in connection with Restricted Stock Units, under such terms and conditions as the Committee deems
appropriate; provided however, that noappropriate. If Dividend Equivalents
shall be payable until the underlying Restricted Stock Units vest. Dividend Equivalentsare granted, they will be subject to the same vesting restrictions,
Performance Goals orperformance conditions, if any, and risk of forfeiture as the underlying Restricted Stock Units. Dividend Equivalents shall be credited to bookkeeping accounts on the Company’s records for purposes of the Plan. Dividend Equivalents may be accrued as a cash obligation or may be converted to additional Restricted Stock Units for the Grantee, and may accrue interest, all as determined by the Committee. The Committee may provide that Dividend Equivalents shall be payable based on the achievement of specific
Performance Goals orperformance conditions. Dividend Equivalents may be payable in cash or shares of Common Stock or in a combination of the two, as determined by the Committee.
(g)
No Rights as Stockholder. The Grantee shall not have any rights as a stockholder with respect to the shares of Common Stock subject to a Restricted Stock Unit until such time as shares of Common Stock are delivered to the Grantee pursuant to the terms of the Award Agreement.
Section 9. Other Equity Awards
The Committee may grant Other Equity Awards, which are awards (other than those described in Section 5, Section 6, Section 7, Section 8 or Section 10 of the Plan) that are based on, measured by or payable in Common Stock to any Eligible Participant, on such terms and conditions as the Committee shall determine. Other Equity Awards may be granted subject to the achievement of
Performance Goalsperformance or other
conditions; provided, however, the Other Equity Awards shall be subject to time-based vesting over a period of not less than one year and/or performance-based vesting over a performance period of not less than one year.conditions.
Other Equity Awards may be denominated in cash, shares of Common Stock or other securities, in stock-equivalent units, in stock appreciation units, in securities or debentures convertible into Common Stock, or in any combination of the foregoing, and may be paid in cash, Common Stock or other securities, or in a combination of cash, Common Stock and other securities, all as determined by the Committee in the Award Agreement.
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Section 10. Incentive Awards
The Committee may grant Incentive Awards to Eligible Participants. Incentive Awards are performance-based Awards that are expressed in U.S. currency, but may be payable in the form of cash, Common Stock, or a combination of both. The Committee shall determine the terms and conditions applicable to Incentive Awards, including the criteria for the vesting and payment of Incentive
Awards; provided, however, the Incentive Awards shall be subject to time-based vesting over a period of not less than one year and/or performance-based vesting over a performance period of not less than one year.Awards. Incentive Awards shall be based on such measures as the Committee deems appropriate and need not relate to the value of shares of Common Stock. The target amount of the Incentive Award, the
Performance Goals,performance goals, the 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 Agreement.
Payment with respect to an Incentive Award will be at the time or times set forth in the Award Agreement.
Section 11.
Performance-Based AwardsDeferrals(a) Designation as Performance-Based Awards. The Committee may determine that Restricted Stock Awards, Restricted Stock Units, Dividend Equivalents, Other Equity Awards or Incentive Awards granted to an Employee will be designated as
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Performance-Based Awards. In such case, the provisions of this Section 11 shall control over any contrary provision contained in Sections 7 through 10; provided that the Committee may in its discretion grant Awards to Eligible Participants that are based on Performance Goals or other performance conditions but that do not satisfy the requirements of this Section 11.
(b) Procedures with respect to Performance-Based Awards. When Awards are made under this Section 11, within the first 25% of the performance period or period of service in question, the Committee shall establish in writing (i) the Performance Goals that must be met, (ii) the performance period during which the Performance Goals will be measured, (iii) the maximum amounts that may be paid if the Performance Goals are met, and (iv) any other conditions that the Committee deems appropriate and consistent with the Plan, including the employment requirements and payment terms. The Performance Goals need not be uniform as among Grantees. Following the completion of each performance period, the Committee shall certify in writing whether the applicable Performance Goals have been achieved for such performance period. In determining the amount earned by a Grantee, the Committee shall have the right to adjust or eliminate the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment of individual or corporate performance for the performance period. Unless otherwise provided in the applicable Award Agreement, a Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a performance period only if the Performance Goals for such period are achieved.
Section 12. Deferrals
Subject to applicable laws, the Committee may permit or require a Grantee to defer receipt of the payment of cash or the delivery of shares that would otherwise be due to such Grantee in connection with any Award or may permit a Grantee to defer compensation payable to the Grantee in the form of an Award under the Plan. If any such deferral election is permitted or required, the Committee shall establish rules and procedures for such deferrals, subject in all respects to the applicable provisions of section 409A of the Code.
Section
13.12. Withholding of Taxes
(a)
Required Withholding. All Awards under the Plan shall be subject to applicable withholding requirements for all Tax-Related Items. The Company and its subsidiaries each shall have the authority and the right to deduct or withhold or require the Grantee to remit to the Company or any subsidiary, an amount sufficient to satisfy Tax-Related Items with respect to any taxable event occurring as a result of the Grantee’s participation in the Plan or any other action as may be necessary in the opinion of the Company or any subsidiary, as appropriate, to satisfy withholding obligations for the payment of Tax-Related Items, including but not limited to (i) withholding from the Grantee’s wages or other cash compensation; (ii) withholding from the sale of shares of Common Stock underlying the Award either through a voluntary or mandatory sale arranged by the Company on the Grantee’s behalf; or (iii) if the Committee so permits, by withholding in shares of Common Stock otherwise deliverable under the Award. The Company may require the payment of any Tax-Related Items before issuing any shares of Common Stock pursuant to an Award.
Section
14.13. Transferability of Awards
(a)
Nontransferability of Awards. Except as provided in subsection (b) below, only the Grantee may exercise rights under an Award during the Grantee’s lifetime. A Grantee may not transfer those rights except (i) by will or by the laws of descent and distribution or (ii) with respect to Awards other than Incentive Stock Options, if permitted in any specific case by the Committee, pursuant to a domestic relations order or otherwise as permitted by the Committee. When a Grantee dies, the personal representative or other person entitled to succeed to the rights of the Grantee may exercise such rights. Any such successor must furnish proof satisfactory to the Company of his or her right to receive the Award under the Grantee’s will or under the applicable laws of descent and distribution.
(b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the Committee may provide, in an Award Agreement, that a Grantee may transfer Nonqualified Stock Options to family members, or one or more trusts or other entities for the benefit of or owned by family members, consistent with the applicable securities and intestacy laws, according to such terms as the Committee may determine; provided that the Grantee receives no consideration for the transfer of a Nonqualified Option and the transferred Nonqualified Option shall continue to be subject to the same terms and conditions as were applicable to the Nonqualified Option immediately before the transfer.
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Section 15.14. Consequences of a Change in Control
(a) Assumption of Outstanding Awards. Upon a Change in Control where the Company is not the surviving corporation (or survives only as a subsidiary of another corporation), unless the Committee determines otherwise, all outstanding Options and SARs that are not exercised or paid at the time of the Change in Control shall be assumed by, or replaced with comparable options or rights by, the surviving corporation (or a parent or subsidiary of the surviving corporation), and other outstanding Awards shall be converted to similar grants of the surviving corporation (or a parent or subsidiary of the surviving corporation). Notwithstanding the immediately preceding sentence, if, in connection with such Change in Control, any outstanding Options and SARs are not assumed by, or replaced with comparable options or rights by, the
surviving corporation (or a parent or subsidiary of the surviving corporation), and any other outstanding Awards are not converted to similar grants of the surviving corporation (or a parent or subsidiary of the surviving corporation), then upon such Change in Control the Committee shall provide that (i) all such outstanding Options and SARs that are not assumed or replaced shall accelerate and become fully exercisable, (ii) the restrictions and conditions on all such outstanding Restricted Stock Awards that are not converted to similar grants shall fully lapse, (iii) all such outstanding Restricted Stock Units, Dividend Equivalents, Other Equity Awards and Incentive Awards that are not converted to similar grants shall be fully vested; provided that if the vesting of any such Awards is based, in whole or in part, on performance, the applicable Award shall become vested at the target level of performance, (iv) the Committee may require that Grantees surrender their outstanding Options and SARs in exchange for a payment by the Company, in cash or Common Stock as determined by the Committee, in an amount equal to the amount, if any, by which the then Fair Market Value of the shares of Common Stock subject to the Grantee’s unexercised Options and SARs exceeds the Exercise Price of the Options or the base amount of the SARs, as applicable; (v) after giving Grantees an opportunity to exercise their outstanding Options and SARs, terminate any or all unexercised Options and SARs at such time as the Committee deems appropriate;
and/or (vi) determine that Grantees shall receive a payment in settlement of outstanding Restricted Stock Awards, Restricted Stock Units, Dividend Equivalents, Incentive Awards or Other Equity Awards, if permitted under section 409A of the Code. Such surrender, termination or payment shall take place as of the date of the Change in Control or such other date as the Committee may specify. Without limiting the foregoing, if the per share Fair Market Value of the Common Stock equals or is less than the per share Exercise Price or base amount, as applicable, the Company shall not be required to make any payment to the Grantee upon surrender of the Option or SAR. After a Change in Control, references to the “Employer” as they relate to employment matters shall include the successor employer.
(b)
Vesting upon Certain Terminations of Employment or Service. Unless the Award Agreement provides otherwise, if a Grantee’s Award is assumed as provided in Section
15(a)14(a) and if, within the two year period following the occurrence of such Change in Control, the Grantee’s employment is terminated by the Company without Cause, or the Grantee resigns for Good Reason, then as of the date of such Grantee’s termination of employment or service all of such Grantee’s then outstanding (i) Options and SARs shall automatically accelerate and become fully exercisable, (ii) Restricted Stock Awards shall have all restrictions and conditions immediately lapse and (iii) Restricted Stock Units, Dividend Equivalents, Other Equity Awards and Incentive Awards shall be fully vested; provided that if the vesting of any such Awards is based, in whole or in part, on performance, the applicable Award shall become vested at the target level of
performance.performance; provided further that such accelerated exercisability, vesting or lapse of restrictions may be conditioned on the Grantee’s execution of a release of claims in a form reasonably prescribed by the Company.
Section
16.15. Agreement with Grantees
Each Award made under the Plan shall be evidenced by an Award Agreement containing such terms and conditions as the Committee shall approve. In the event of a conflict between the provisions of the Plan and the provisions of any Award Agreement, the provisions of the Plan shall control.
Section
17.16. Foreign Awards and Rights
Notwithstanding any provision of this Plan to the contrary, in order to comply with the laws in countries and other jurisdictions in which the Company and its subsidiaries have Eligible Participants, the Committee, in its sole discretion, shall have the power and authority to (i) modify the terms and conditions of any Award granted to Eligible Participants to comply with applicable laws of jurisdictions where Eligible Participants reside; (ii) establish sub-plans and determine the Exercise Price, exercise procedures and other terms and procedures and rules, to the extent such actions may be necessary or advisable, including adoption of rules, procedures or sub-plans applicable to particular subsidiaries or Grantees residing in particular locations; provided, however, that no such sub-plans and/or modifications shall increase the share limits contained in Section 3 or otherwise require stockholder approval; and (iii) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals. Without limiting the generality of the foregoing, the Committee is specifically authorized to adopt rules, procedures and sub-plans with provisions that limit or modify
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rights on eligibility to receive an Award under this Plan or on termination of employment or service, available methods of exercise or settlement of an Award, payment of Tax-Related Items, the shifting of employer tax liability to a Participant, the withholding procedures and handling of any share certificates or other indicia of ownership which may vary with local requirements. The Committee may also adopt sub-plans to this Plan intended to allow the Company to grant tax-qualified Awards in a particular jurisdiction and, as part of such sub-plan, may restrict the sale of shares and/or modify the Change in Control and adjustments provisions of this Plan to the extent necessary to comply the tax requirements of the jurisdiction. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate the Securities Act, Exchange Act, the Code, or any applicable law.
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Section
18.17. Requirements for Issuance of Shares
No shares of Common Stock shall be issued or transferred in connection with any Award hereunder unless and until all legal requirements applicable to the issuance or transfer of such shares of Common Stock have been complied with to the satisfaction of the Committee. The Committee shall have the right to condition any Award made to any Grantee hereunder on such Grantee’s undertaking in writing to comply with such restrictions on his or her subsequent disposition of such shares of Common Stock as the Committee shall deem necessary or advisable, and if the Company determines to issue certificates representing such shares, such certificates may be legended to reflect any such restrictions. Any certificates representing shares of Common Stock issued or transferred under the Plan will be subject to such stop-transfer orders and other restrictions as may be required by applicable laws, regulations and interpretations, including any requirement that a legend be placed thereon. Notwithstanding any other provision of this Plan, unless otherwise determined by the Committee or required by applicable laws, rules or regulations, the Company shall not deliver to a Grantee certificates evidencing shares of Common Stock and instead such shares of Common Stock shall be recorded in the books of the Company (or as applicable, its transfer agent or stock plan administrator).
No Grantee shall have any right as a stockholder with respect to Common Stock covered by an Award until shares have been issued to the Grantee. After shares of Common Stock are issued to the Grantee, the Grantee will be a stockholder and have all the rights of a stockholder with respect to such shares, including the right to vote and
(subject to Section 7(d)) receive any Dividends or other distributions made or paid with respect to such shares; provided, that if such shares of Common Stock are Restricted Stock Awards, then any new, additional or different securities the Grantee may become entitled to receive with respect to such shares by virtue of a stock dividend, stock split or any other change in the corporate or capital structure of the Company will be subject to the same restrictions as the Restricted Stock Award.
Section
19.18. Amendment and Termination of the Plan
(a)
Amendment. The Board may amend or terminate the Plan at any time, provided, however, that the Board shall not amend the Plan without stockholder approval if such approval is required in order to comply with the Code or other applicable laws or to comply with applicable stock exchange requirements.
(b)
No Repricing Without Stockholder Approval. Except as provided in Section 3(d), the Committee shall not (i) implement any cancellation/regrant program pursuant to which outstanding Options or SARs under the Plan are
canceledcancelled and new Options or SARs are granted in replacement with a lower exercise price per share, (ii) cancel outstanding Options or SARs under the Plan with exercise or base prices per share in excess of the then current Fair Market Value per share of Common Stock for consideration payable in cash, equity securities of the Company or in the form of any other award under the Plan, except in connection with a Change in Control transaction or (iii) otherwise directly reduce the exercise price in effect for outstanding Options or SARs under the Plan, without in each such instance obtaining stockholder approval.
(c)
Termination of Plan. The Plan shall terminate on the day immediately preceding the tenth anniversary of its
Effective Date,adoption by the Board, unless the Plan is terminated earlier by the Board or is extended by the Board with the approval of the stockholders. The termination of the Plan shall not impair Awards outstanding or the power and authority of the Committee with respect to an outstanding Award.
(d) Termination and Amendment of Outstanding Awards. A termination or amendment of the Plan that occurs after an Award is made shall not materially impair the rights of a Grantee unless the Grantee consents or unless the Committee acts under a right that has been reserved in the Plan or the Award Agreement, including under Section 1514 and Section 27(a)26(a). The termination of the Plan shall not impair the power and authority of the Committee with respect to an outstanding Award. Whether or not the Plan has terminated, an outstanding Award may be terminated or amended under Section 1514 and Section 27(a)26(a) or may be amended by agreement of the Company and the Grantee consistent with the Plan. Notwithstanding anything in the Plan to the contrary, the Board may amend the Plan in such manner as it deems appropriate in the event of a change in applicable law or regulations.
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(e) Governing Document. The Plan shall be the controlling document. No other statements, representations, explanatory materials or examples, oral or written, may amend the Plan in any manner. The Plan shall be binding upon and enforceable against the Company and its successors and assigns.
Section
20.19. Funding of the Plan
This Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the payment of any Awards under this Plan. InExcept as otherwise provided in Section 7(d) or 8(f), in no event shall interest be paid or accrued on any Award, including unpaid installments of Awards. No Grantee or any other person shall under any circumstances acquire any property interest in any specific assets of the
Company. To the extent that any person acquires a right to receive payment from the Company hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company.
Section
21.20. Rights of Grantees
Nothing in this Plan shall entitle any Employee, Non-Employee Director or other person to any claim or right to be granted an Award under this Plan. Neither this Plan nor any action taken hereunder shall be construed as giving any individual any rights to be retained by or in the employ of the Employer or any other employment rights.
Section
22.21. No Fractional Shares
No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other awards or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
Section
23.22. Severability
In case any provision of this Plan or of any Award Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section headings are for reference only. In the event of a conflict between a title and the content of a Section, the content of the Section shall control.
Section
25.24. Effective Date of the Plan
The Plan,
as amended and restated herein, shall be effective as of May
5, 20231, 2024 (the “Effective Date”), subject to approval of the Company’s stockholders.
All notices under the Plan shall be in writing, and shall be addressed to the General Counsel and shall be delivered to the Company at:
Unisys Corporation
801 Lakeview Drive, Suite 100
Blue Bell, PA 19422
Attention: General Counsel
Any notices to the Grantee, shall be delivered to the Grantee personally, sent by facsimile transmission or mailed to the Grantee at the address appearing in the records of the Company.
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Section 27.26. Miscellaneous
(a)
Awards in Connection with Corporate Transactions and Otherwise. Nothing contained in this Plan shall be construed to (i) limit the right of the Committee to make Awards under this Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business or assets of any corporation, firm or association, including Awards to employees thereof who become Employees, or for other proper corporate purposes, or (ii) limit the right of the Company to grant stock options or make other awards outside of this Plan. Without limiting the foregoing, the Committee may make an Award to an employee of another corporation who becomes an Employee by reason of a corporate merger, consolidation, acquisition of stock or property, reorganization or liquidation involving the Company, the parent or any of their subsidiaries in substitution for a stock option, stock award or other grant made by such corporation. The terms and conditions of the substitute grants may vary from the terms and conditions required by the Plan and from those of the substituted stock incentives. The Committee shall prescribe the provisions of the substitute grants. Shares of Common Stock issued or granted in connection with such substitute grants shall not reduce the number of shares available for issuance under Section 3(a) of the
Plan or to an Employee in any calendar year under Section 3(c) of the Plan.
(b) Company Policies. All Awards under the Plan (including Awards that have vested in accordance with the Award Agreement) shall be subject to any applicable clawback or recoupment policies, share trading policies and any other
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policies implemented by the Board or the Committee, as in effect from time to time, as well as to any clawback or recoupment requirement imposed under applicable laws, rules, regulations or stock exchange listing standards, including, without limitation, requirements imposed pursuant to section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, section 304 of the Sarbanes-Oxley Act of 2002, or any regulations promulgated thereunder, or recoupment requirements under the laws of any other jurisdiction.
(c)
Compliance with Law. The Plan, the exercise of Options and SARs and the obligations of the Company to issue or transfer shares of Common Stock under Awards shall be subject to all applicable laws and to approvals by any governmental or regulatory agency as may be required. The Committee may also adopt rules regarding the withholding of Tax-Related Items on payments to Grantees. The Committee may, in its sole discretion, agree to limit its authority under this Section.
(d) The obligation of the Company to make payment of Awards in shares of Common Stock or otherwise shall be subject to all applicable laws, and to such approvals by government agencies, including government agencies in jurisdictions outside of the U.S., in each case as may be required or as the Company deems necessary or advisable. Without limiting the foregoing, the Company shall have no obligation to issue or deliver evidence of title for shares of Common Stock subject to Awards granted hereunder prior to: (i) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable, and (ii) completion of any registration or other qualification with respect to the shares of Common Stock under any applicable laws in the U.S. or in a jurisdiction outside of the U.S. or ruling of any governmental body that the Company determines to be necessary or advisable or at a time when any such registration or qualification is not current, has been suspended or otherwise has ceased to be effective. The inability or impracticability of the Company to obtain or maintain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any shares of Common Stock hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such shares of Common Stock as to which such requisite authority shall not have been obtained and shall constitute circumstances in which the Committee may determine to amend or cancel Awards pertaining to such shares of Common Stock, with or without consideration to the affected Grantee. The Company shall be under no obligation to register, pursuant to the Securities Act or otherwise, any offering of shares of Common Stock issuable under this Plan. If, in certain circumstances, the shares of Common Stock paid pursuant to this Plan may be exempt from registration pursuant to the Securities Act, the Company may restrict the transfer of such shares of Common Stock in such manner as it deems advisable to ensure the availability of any such exemption. With respect to persons subject to section 16 of the Exchange Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. In addition, it is the intent of the Company that Incentive Stock Options comply with the applicable provisions of section 422 of the Code and that, to the extent applicable, Awards comply with the requirements of section 409A of the Code. To the extent that any provision that is designed to comply with section 16 of the Exchange Act or the legal requirements of section 422 or 409A of the Code as set forth in the Plan ceases to be necessary under section 16 of the Exchange Act or required under section 422 or 409A of the Code, that Plan provision shall cease to apply.
(e) Paperless Administration. In the event the Company established, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website, intranet or interactive voice response, then the paperless administration, granting or exercise of Awards by the Grantee may be permitted through the use of such automated system.
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(f) Section 409A. The Plan is intended to comply with the requirements of section 409A of the Code, to the extent applicable. All Awards shall be construed and administered such that the Award either (i) qualifies for an exemption from the requirements of section 409A of the Code or (ii) satisfies the requirements of section 409A of the Code. If an Award is subject to section 409A of the Code, (A) distributions shall only be made in a manner and upon an event permitted under section 409A of the Code, (B) payments to be made upon a termination of employment or service shall only be made upon a “separation from service” under section 409A of the Code, (C) payments to be made upon a Change in Control shall only be made upon a “change of control event” under section 409A of the Code, (D) unless the Award specifies otherwise, each payment shall be treated as a separate payment for purposes of section 409A of the Code and all installment payments shall be treated as a separate payment, and (E) in no event shall a Grantee, directly or indirectly, designate the calendar year in which a distribution is made except in accordance with section 409A of the Code. Any Award granted under the Plan (or applicable portion thereof) that is subject to section 409A of the Code and that is to be distributed to a key employee (as defined below) upon separation from service shall be administered so that any distribution with respect to such Award (or applicable portion thereof) shall be postponed for six months following the date of the Grantee’s separation from service, if required by section 409A of the Code. If a distribution is delayed pursuant to section 409A of the Code, the distribution shall be paid within 30 days after the end of the six-month period. If the Grantee dies during such six-month period, any postponed amounts shall be paid within 60 days of the Grantee’s death. The determination of key employees, including the number and identity of persons considered key employees and the identification date, shall be made by the Committee or its delegate each year in accordance with section 416(i) of the Code and the “specified employee” requirements of section 409A of the Code. To the extent that
an Award is intended to qualify as “performance-based compensation” under section 409A of the Code,
the Performance Goals or other performance conditions will be established in writing within 90 days of the commencement of the period of service to which they relate and at a time when the outcome is substantially uncertain and the applicable performance cycle will be at least 12 consecutive months. Notwithstanding anything in this Plan or any Award Agreement to the contrary, each Grantee shall be solely responsible for the tax consequences of Awards under this Plan, and in no event shall the Company have any responsibility or liability if any Award does not meet the applicable requirements of section 409A of the Code. Although the Company intends to administer the Plan to prevent taxation under section 409A of the Code, the Company does not represent or warrant that the Plan or any Award complies with any provision of federal, foreign, state, local or other tax law.
(g)
No Fiduciary Relationship. Nothing contained in the Plan, and no action taken pursuant to the provisions of the Plan, shall create or shall be construed to create a trust of any kind, or a fiduciary relationship between the Company, its subsidiaries or affiliates, or their directors or officers or the Committee, on the one hand, and the Grantee, the Company, its subsidiaries or affiliates or any other person or entity, on the other.
(h)
Governing Law. The validity, construction, interpretation and effect of the Plan and Award Agreements issued under the Plan shall be governed and construed by and determined in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the conflict of laws provisions thereof.
Section
28.27. Definitions
When used in this Plan, the following terms will have the respective meanings set forth below.
(a) “Award” shall have the meaning set forth in Section 2(a).
(b) “Award Agreement” means the written instrument that sets forth the terms and conditions of an Award, including all amendments thereto.
(c) “Board” means the Board of Directors of the Company.
(d) “Cause” with respect to any Grantee, unless otherwise specified in the Award Agreement, means the Grantee (i) is intentionally dishonest in any aspect of his or her employment; (ii) is convicted (including pursuant to a plea of guilty or nolo contendere) of any felony, or a misdemeanor that impairs his or her ability to substantially perform his or her job or is otherwise injurious to the Company; (iii) engages in conduct which is against the best interest of the Company, including conduct that violates the Unisys Code of Ethical Conduct or Unisys’ policies and practices, including without limitation, sexual misconduct, harassment or discrimination; (iv) violates any law or administrative regulation related to the Company’s business; (v) willfully fails to perform his or her duties to a substantial degree; (vi) breaches any restrictive covenant agreement that the Grantee has entered into with the Company, including, non-competition, non-solicitation and/or confidentiality; (vii) breaches any material agreement that Grantee has entered into with the Company or (viii) uses the Company’s confidential or proprietary information improperly. The termination of employment or service of the Grantee shall not be deemed to be for Cause unless and until there shall have been delivered to the Grantee a written notice from the finding that, in the good faith opinion of the Committee, the Grantee is guilty of the conduct alleged, and specifying the particulars thereof in detail.
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(e) “Change in Control” shall be deemed to have occurred if:
(i) 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 subsection (iii) below; or
(ii) Individuals who, as of the Effective Date, 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
(iii) 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
| | 2024 Proxy Statement | | | 101 | |
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 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 Voting 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.
Notwithstanding the foregoing, the Committee may modify the definition of Change in Control for a particular Award as set forth in the Award Agreement, as the Committee deems appropriate, to comply with section 409A of the Code.
(f) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, and successor provisions and rules and regulations thereto.
(g) “Committee” shall have the meaning set forth in Section 1(a).
(h) “Common Stock” means the common stock of the Company.
(i) “Company” means Unisys Corporation, and any successor corporation, as determined by the Committee.
(j) “Dividend” means a dividend paid on shares of Common Stock, either in cash or additional shares of Common Stock.
(k) “Dividend Equivalent” means a right to receive, in such form and such terms as the Committee may determine, an amount calculated with respect to a Restricted Stock Unit, which is determined by multiplying the number of shares of Common Stock subject to the Restricted Stock Unit by the per-share cash Dividend, or the per-share fair market value (as determined by the Committee) of any Dividend in consideration other than cash, paid by the Company on its Common Stock. If interest is credited on accumulated dividend equivalents, the term “Dividend Equivalent” shall include the accrued interest.
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(l) “Effective Date” shall have the meaning set forth in Section 25.24.
(m) “Eligible Participant” shall have the meaning set forth in Section 4(a).
(n) “Employed by, or provide service to, the Employer” means, unless otherwise specified in the Award Agreement, employment or service as an Employee or member of the Board (so that, for purposes of exercising Options and SARs and satisfying conditions with respect to Restricted Stock Awards, Restricted Stock Units, Incentive Awards, Dividend Equivalents
Performance-Based Awards and Other Equity Awards, a Grantee shall not be considered to have terminated employment or service until the Grantee ceases to be an Employee and member of the Board). The Committee shall determine if a leave of absence constitutes employment or service and when employment or service terminates for all purposes under this Plan. Notwithstanding the foregoing, with respect to any Award subject to section 409A of the Code, “employed by, or provide service to, the Employer” shall be interpreted within the meaning of section 409A of the Code and the related Treasury Regulations.
(o) “Employee” means an employee of the Employer (including an officer or director who is also an employee) but excluding any person who is classified by the Employer as a “contractor” or “consultant,” no matter how characterized by the Internal Revenue Service, other governmental agency or a court. Any change of characterization of an individual by the Internal Revenue Service or any court or government agency shall have no effect upon the classification of an individual as an Employee for purposes of this Plan, unless the Committee determines otherwise.
(p) “Employer” means the Company or its applicable subsidiary which employs a Grantee, as determined by the Committee.
(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(r) “Exercise Price” shall have the meaning set forth in Section 5(b).
(s) “Fair Market Value” per share of Common Stock means, unless the Committee determines otherwise with respect to a particular Award, the closing price of a share of Common Stock (i) on the New York Stock Exchange as of the official close of the New York Stock Exchange at 4 p.m. U.S. Eastern Standard Time or Eastern Daylight Time, as the case may be, on the relevant date (or if there were no trades on that date, the latest preceding date upon which a sale was reported) or (ii) on such other stock exchange, designated by the Committee in its sole discretion, as the official close of such exchange on such date (or if there were no trades on that date, the latest preceding date upon which a sale was reported). Notwithstanding the foregoing, for income tax reporting purposes and for such other purposes as the Committee deems appropriate including, but not limited to, where Fair Market Value is used in reference to exercise, vesting, settlement or payout of an Award, the Fair Market Value shall be determined by the Company in accordance with uniform and
nondiscriminatorynon-discriminatory standards adopted by the Company from time to time.
(t) “Disability” means unless otherwise provided in an Award Agreement, that the Grantee would qualify to receive benefit payments under the Employer’s long-term disability plan or policy, as may be amended from time to time. If the Employer does not have a long-term disability policy, “Disability” means that the Grantee is unable to carry out the responsibilities and functions of the position held by the Grantee by reason of any medically determined physical or mental impairment for a period of not less than 90 consecutive days. A Grantee shall not be considered to have incurred a Disability unless the Grantee furnishes proof of such impairment sufficient to satisfy the Company, in its discretion. Notwithstanding the foregoing, (i) for purposes of Incentive Stock Options. “Disability” means that the Grantee is disabled within the meaning of section 22(e)(3) of the Code, and (ii) with respect to an Award subject to section 409A of the Code where payment or settlement of the Award will be made as a result of the Grantee’s Disability, no event will constitute a Disability for purposes of this Plan or any Award Agreement unless such event also constitutes a Disability as defined under section 409A of the Code.
(u) “Good Reason” with respect to any Grantee, unless otherwise specified in the Award Agreement, means (i) a material diminution in the Grantee’s authority, duties or responsibilities; (ii) any material breach by the Company of the terms of the Plan or an Award Agreement issued under the Plan; (iii) a material change in the Grantee’s work location, at a minimum of 50 miles radius from the Grantee’s then primary work location; or (iv) a material diminution in the Grantee’s compensation, including,
but not limited to, base salary or annual target bonus, in each case, without the Grantee’s consent. Notwithstanding the foregoing, a Grantee shall not have Good Reason unless the Grantee provides written notice to the Company in accordance with Section
2625 of the condition the Grantee claims gives rise to Good Reason within 90 days of the initial occurrence of such condition, the Company fails to remedy the condition within 30 days after receiving notice from the Grantee, and the Grantee’s termination of employment or service occurs within 30 days after the lapse of the Company’s cure period;
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98 | | Appendix |
provided, however, that in the event that a Grantee provides written notice to the Company of a condition that the Grantee claims gives rise to Good Reason, the Committee shall make a determination in good faith as to whether the condition constitutes Good Reason, and the determination by the Committee shall be binding upon all parties. This definition of “Good Reason” shall be interpreted and applied in a manner that is consistent with the terms of Treasury Regulation Section 1.409A-1(n)(2) and guidance thereunder.
(v) “Grantee” shall have the meaning set forth in Section 4(b).
(w) “Incentive Award” shall mean an incentive award granted under the Plan as described under Section 10.
(x) “Incentive Stock Option” means an Option that is intended to meet the requirements of an incentive stock option under section 422 of the Code, as described in Section 5.
(y) “Non-Employee Director” means a member of the Board, or a member of the Board of Directors of a subsidiary of the Company, who is not an Employee.
(z) “Nonqualified Stock Option” means an Option that is not intended to be taxed as an incentive stock option under section 422 of the Code, as described in Section 5.
(aa) “Option” means an Incentive Stock Option or Nonqualified Stock Option, as described in Section 5.
(bb) “Other Equity Award” means any Award based on, measured by or payable in Common Stock (other than an Option, Restricted Stock Unit, Restricted Stock Award, SAR or Incentive Award), as described in Section 9.
(cc)
“Performance-Based Awards” means Awards that are subject, in whole or in part, to Performance Goals and are granted pursuant to Section 11.(dd) “Performance Goals” means levels of achievement relating to one or more of the following measures or such other measures selected by the Committee for an Award, which may, without limitation, apply to the Company as a whole, or to any business unit, region, sector or industry group, subsidiary, product or service line, on a U.S. GAAP or non-GAAP basis, and which may be measured on an absolute or relative basis or in such other manner as deemed appropriate by the Committee: basic or diluted earnings per share; total shareholder return; operating income; net income; cash flow (including but not limited to, operating cash flow, free cash flow, and cash flow return on capital); return on equity, capital, assets, or sales; revenue or revenue growth; earnings before interest, taxes, depreciation and amortization (“EBITDA”) or EBITDA growth; stock price; debt-to-capital ratio; stockholders’ equity per share; operating income as a percent of revenue; gross profit as a percent of revenue; selling, general and administrative expenses as a percent of revenue; pre-tax profit; orders; improvements in capital structure; budget and expense management; productivity ratios; economic value added or other value added measurements; operating efficiency; working capital targets; enterprise value; customer value; customer satisfaction; completion of acquisition or business expansion. The Committee may provide for such adjustments to the Performance Goals as it deems appropriate, including but not limited to adjustments designed to reflect changes during the performance period in generally accepted accounting principles or in tax rates, currency fluctuations, the effects of acquisitions or dispositions of a business or investments in whole or in part, debt reduction charges, extraordinary or nonrecurring items, the gain or loss from claims or litigation and related insurance recoveries, the effects of impairment of tangible or intangible assets, or the effects of restructuring or reductions in force or other business recharacterization activities, income or expense related to defined benefit or defined contribution pension plans, uninsured losses from natural catastrophes or political and legal developments affecting the Company’s business (including losses as a result of war, terrorism, confiscation, expropriation, seizure, new regulatory requirements, business interruption or similar events).
(ee) “Plan” means this Unisys Corporation 20232024 Long-Term Incentive and Equity Compensation Plan, as may be amended from time to time. Prior to
(dd) “Prior Plans” means the
Effective Date, the Plan was known as the Unisys Corporation 2019Company’s 2023 Long-Term Incentive and Equity Compensation
Plan.(ff) “Prior Plan” means the Company’sPlan and 2019 Long-Term Incentive and Equity Compensation Plan, each as may be amended and restated.and/or restated from time to time.
(gg)
(ee) “Restriction Period” shall have the meaning set forth in Section 7(a).
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(hh)(ff) “SAR” means a stock appreciation right, as described in Section 6.
(ii)
| | 2024 Proxy Statement | | | 103 | |
(gg) “Securities Act” means the U.S. Securities Act of 1933, as amended.
(jj)
(hh) “Restricted Stock Award” means an award of Common Stock, as described in Section 7.
(kk)
(ii) “Restricted Stock Unit” means an award of the right to receive, in cash or shares of Common Stock, the value of a shares of Common Stock, as described in Section 8.
(ll)
(jj) “Tax-Related Items” means any U.S. federal, state, and or local taxes and any taxes imposed by a jurisdiction outside the U.S., including but not limited to income tax, social insurance and other similar contributions, payroll tax, fringe benefits tax, payment on account, employment tax, stamp tax, any other taxes related to the participation in the Plan and legally applicable to a Grantee, including any employer liability for which a Grantee is liable for pursuant to applicable tax or social security laws or the applicable Award Agreement.
UNISYS CORPORATION
801![[MISSING IMAGE: px_24unisysannualmeet01-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-037875/px_24unisysannualmeet01-bw.jpg)
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) DateTO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLYV40212-P04366-Z86824For Against AbstainFor Against Abstain! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !UNISYS CORPORATIONUNISYS CORPORATION801 LAKEVIEW DRIVE, SUITE 100
BLUE100BLUE BELL, PA 19422
 | | SCAN TO
VIEW MATERIALS & VOTE | |  |
VOTEEquity Compensation Plan.1j. Lee D. Roberts2. Advisory vote to approve executive compensation.1k. Roxanne TaylorThe shares represented by this proxy, when properly executed, will be voted in the mannerdirected herein by the undersigned stockholder(s). If no direction is given, this proxy willbe voted as recommended by the Board of Directors. The trustee for the Savings Plan willvote as described on page 82 of the proxy statement.NOTE: This ballot may be used and signed by you only if you arethe stockholder of record in your own name of Unisys commonstock or if you have been given a proxy by a stockholder of record.If your stock is not held in your name but is in the name of a broker,the Unisys Savings Plan, or someone other than yourself, only thebroker or other person may give a proxy or sign a ballot.! ! !! ! !! ! !VOTE BY INTERNET
BeforeINTERNETBefore The Meeting - Go to www.proxyvote.com or scan the QR Barcode above
UseaboveUse the Internet to transmit your voting instructions. Your Internet vote authorizes the namedproxies to vote the shares in the same manner as if you marked, dated, signed and returnedthe proxy card. Internet voting is available until 11:59 p.m. Eastern Time the day before thecut-off or annual meeting date. Have your proxy card in hand when you access the websiteand follow the instructions provided.During The Meeting - Go to www.virtualshareholdermeeting.com/UIS2024You may attend the meeting via the Internet and vote during the meeting. Have the informationthat is printed in the box marked by the arrow available and follow the instructions.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions. Your telephone voteauthorizes the named proxies to vote the shares in the same manner as if you marked, dated,signed and returned the proxy card. InternetTelephone voting is available until 11:59 p.m. Eastern Time theTimethe day before the cut-off or annual meeting date. Have your proxy card in hand when you access the websiteyoucall and follow the instructions provided.
During The Meeting - Go to www.virtualshareholdermeeting.com/UIS2023
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTEprovided.VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Your telephone vote authorizes the named proxies to vote the shares in the same manner as if you marked, dated, signed and returned the proxy card. Telephone voting is available until 11:59 p.m. Eastern Time the day before the cut-off or annual meeting date. Have your proxy card in hand when you call and follow the instructions provided.
VOTE BY MAIL
Mark,to UnisystoUnisys Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.11717.SCAN TOVIEW MATERIALS & VOTE w V40213-P04366-Z86824
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |
V02425-P86853-Z84367 | KEEP THIS PORTION FOR YOUR RECORDS |
| DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
UNISYS CORPORATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ITEMS 1, 2, 4 AND 5 AND FOR EVERY “ONE YEAR” FOR ITEM 3. | | | |
| | | |
1. | Election of Directors | | | |
| | | | |
| Nominees: | For | Against | Abstain |
| | | | |
| 1a. | Peter A. Altabef | ☐ | ☐ | ☐ |
| | | | | |
| 1b. | Nathaniel A. Davis | ☐ | ☐ | ☐ |
| | | | | |
| 1c. | Matthew J. Desch | ☐ | ☐ | ☐ |
| | | | | |
| 1d. | Philippe Germond | ☐ | ☐ | ☐ |
| | | | | |
| 1e. | Deborah Lee James | ☐ | ☐ | ☐ |
| | | | | |
| 1f. | John A. Kritzmacher | ☐ | ☐ | ☐ |
| | | | | |
| 1g. | Paul E. Martin | ☐ | ☐ | ☐ |
| | | | | |
| 1h. | Regina Paolillo | ☐ | ☐ | ☐ |
| | | | | |
| 1i. | Troy K. Richardson | ☐ | ☐ | ☐ |
| | | | |
The shares represented by this proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder(s). If no direction is given, this proxy will be voted as recommended by the Board of Directors. The trustee for the Savings Plan will vote as described on page 79 of the proxy statement. |
| | | | | |
|
|
|
| | For | Against | Abstain |
|
| 1j. Lee D. Roberts | ☐ | ☐ | ☐ |
| | | | |
| 1k. Roxanne Taylor | ☐ | ☐ | ☐ |
|
2. | Advisory vote to approve executive compensation. | ☐ | ☐ | ☐ |
|
| | 1 Year | 2 Years | 3 Years | Abstain |
|
3. | Advisory vote on the frequency of holding an advisory vote on executive compensation. | ☐ | ☐ | ☐ | ☐ |
|
| For | Against | Abstain |
|
4. | Ratification of the selection of Grant Thornton LLP as the Company’s independent registered public accounting firm for 2023. | ☐ | ☐ | ☐ |
|
5. | Approval of the Unisys Corporation 2023 Long-Term Incentive and Equity Compensation Plan. | ☐ | ☐ | ☐ |
| | | | |
NOTE: This ballot may be used and signed by you only if you are the stockholder of record in your own name of Unisys common stock or if you have been given a proxy by a stockholder of record. If your stock is not held in your name but is in the name of a broker, the Unisys Savings Plan, or someone other than yourself, only the broker or other person may give a proxy or sign a ballot. | | | |
|
| | | | | |
Please sign exactly as name appears hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. If a corporation or partnership, please sign in full corporate or partnership name by an authorized officer. | |
| | | | | |
Signature [PLEASE SIGN WITHIN BOX] | Date | | Signature (Joint Owners) | Date | |
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Annual Meeting of
Stockholders
May 5, 2023
StockholdersMay 1, 2024 Virtual Meeting Online Access:
www.virtualshareholdermeeting.com/UIS2023
YOURUIS2024YOUR VOTE IS IMPORTANT
THANKIMPORTANTTHANK YOU FOR VOTING
ImportantVOTINGImportant Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
Notice of 20232024 Annual Meeting and Proxy Statement and 20222023 Annual Report are available at www.proxyvote.com.
UNISYS CORPORATION
PROXYwww.proxyvote.com.UNISYS CORPORATIONPROXY FOR ANNUAL MEETING TO BE HELD MAY 5, 2023
THIS1, 2024THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TheDIRECTORSThe undersigned hereby appoints Peter A. Altabef, Nathaniel A. Davis and Regina Paolillo, 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 20232024 Annual Meeting of Stockholders ofStockholdersof 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”"Savings Plan") as more fully described on page 7982 of the proxy statement.
Thisstatement.This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
IFDirectors' recommendations.IF YOU ARE VOTING BY MAIL, PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY/VOTING
INSTRUCTIONVOTINGINSTRUCTION CARD IN THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
0000746838 uis:FairValueAtLastDayOfPriorYearOfEquityAwardsForfeitedDuringYearForPEOMember ecd:PeoMember 2022-01-01 2022-12-31 0000746838 3 2022-01-01 2022-12-312023-01-01 2023-12-31
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