UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | ||||
| Preliminary Proxy Statement | |||
☐ | Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) | |||
| Definitive Proxy Statement | |||
☐ | Definitive Additional Materials | |||
☐ | Soliciting Material under Rule14a-12 |
Unisys Corporation
(Name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
801 Lakeview Drive, Suite 100 Blue Bell, PA 19422 March Dear Fellow Stockholder: It is my pleasure to invite you to the Unisys Unisys entered We are pleased to continue our practice of making proxy materials available to our stockholders over the Internet. We believe that doing so allows us to provide our stockholders with the information they 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, I urge you to take a moment 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. Sincerely, Peter A. Altabef President and Chief Executive Officer NOTICE OF ANNUAL MEETING OF STOCKHOLDERS April 26, Unisys Corporation will hold its
Only record holders of Unisys common stock at the close of business on February
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on April 26, The Company’s proxy statement and annual report are available at www.proxyvote.com
Your vote is important. Whether or not you plan to attend the 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.
UNISYS CORPORATION ANNUAL MEETING OF STOCKHOLDERS April 26, The Board of Directors of Unisys Corporation solicits your proxy for use at the The record date for the annual meeting is February This proxy statement, the proxy/voting instruction card and the annual report of Unisys, including the financial statements for Internet Availability of Proxy Materials; Multiple Sets of Proxy Materials Pursuant to the “notice and access” rules adopted by the Securities and Exchange Commission (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. 1 Voting Procedures and Revocability of Proxies Your vote is important. Shares may be voted at the annual meeting only if you are present in person or represented by proxy. 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 at the meeting. The method by which you vote will in no way limit your right to vote at the meeting if you later decide to attend in person. If you are the beneficial owner of shares held in “street name” by a bank, broker or other holder of record, you must obtain a proxy, executed in your favor, from the holder of record if you wish to vote in person at the meeting. 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 ratification of the
selection of independent registered public accounting firm, (3) 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 New York Stock Exchange (the “NYSE”) from voting your shares on 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 February Each share of Unisys common stock outstanding on the record date is entitled to one vote on each matter to be voted upon. 2 Election of Directors (Item 1). Directors will be elected by the vote of a majority of the votes cast at the 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. Votes cast with respect to the election of directors do not include abstentions and brokernon-votes. Independent Registered Public Accounting Firm (Item 2). 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. Any shares not voted by abstention or otherwise will have the same effect as a vote “Against” the proposal. There will be no brokernon-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.
Advisory Vote to Approve Executive Compensation (Item
The advisory
(Item 1) The Board of Directors of Unisys Corporation (the “Board of Directors” or the “Board”) currently consists of 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. 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.
TENURE
BACKGROUND AND EXPERIENCE
Information The names and ages of the nominees, their principal occupations and employment during the past five years, and other information regarding them are as follows. The Board of Directors recommends a vote “FOR” all nominees
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Board Meetings; Attendance at Annual Meetings The Board of Directors held It is the Company’s policy that all directors should attend the annual meeting of stockholders. All of the Company’s current directors who were directors at the time of the 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 below in paragraph 2 of “Corporate Governance Guidelines”. Allnon-employee directors met these criteria in 11 The Board of Directors has a standing Audit and Finance Committee, Compensation Committee and Nominating and Corporate Governance Committee. The specific functions and responsibilities of each committee are set forth in its charter, which is available on the Company’s web site 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:
Alison Davis | X | X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nathaniel A. Davis | Chair | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Denise K. Fletcher | Chair | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Philippe Germond | X | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deborah Lee James | X | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paul E. Martin | X | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regina Paolillo(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lee D. Roberts | X | Chair | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paul E. Weaver | X |
(1) | Ms. Paolillo was elected to the Board of Directors on March 13, 2018 and has not yet been appointed to a standing committee. |
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COMPENSATION COMMITTEE |
Members: Dr. Cohon, Ms. Davis, Mr. Roberts (chair) and Mr. Weaver Number of Meetings: 5 Independence and Qualifications: The Board has determined that each of Dr. Cohon, Ms. Davis, Mr. Roberts and Mr. Weaver qualifies as independent
Purpose:The
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NOMINATING AND CORPORATE GOVERNANCE COMMITTEE |
Members:Dr. Cohon, Mr. Davis (chair), Mr. Germond and Ms. James
Number of Meetings: 7
Purpose: The Nominating and Corporate Governance Committee identifies and reviews candidates and recommends to
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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 currentmake-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. Since the last annual meeting, the Nominating and Corporate Governance Committee recommended, and the Board elected, two new directors, Ms. James in August 2017 and Ms. Paolillo in March 2018. As part of the selection process, the Board considered Ms. James’ unparalled senior homeland and national security experience in the federal government and private sector and Ms. Paolillo’s experience as a financial and operational leader with a broad understanding of the strategic priorities of technology and services organizations.
As set forth above, the Nominating and Corporate Governance Committee considers diversity as one of a number of factors in identifying nominees for director. It does not, however, have a formal policy in this regard. The committee views diversity broadly to include diversity of experience, skills and viewpoint as well as traditional diversity concepts such as race and gender.
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. The committee will also consider recommendations for Board membership received from stockholders and other qualified sources. Recommendations on director candidates must be in writing and addressed to the Chair of the Nominating and Corporate Governance Committee, c/o Corporate Secretary, Unisys Corporation, 801 Lakeview Drive, Suite 100, Blue Bell, Pennsylvania 19422.
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The full Board is responsible for final approval of new director candidates, as well as the nomination of existing directors for reelection. With respect to existing directors, prior to making its recommendation to the full Board, the Nominating and Corporate Governance Committee, in consultation with the Chairman of the Board and Chief Executive Officer, reviews each director’s continuation on the Board as a regular part of the annual nominating process. Specific information on the qualifications of each of the Company’s directors is included above.
Stockholders and other interested parties may send communications to the Board of Directors or to thenon-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.
The Board believes that it should have the flexibility to make the selection of Chairman of the Board and Chief Executive Officer 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, one way or the other, on whether the same person should serve as both the CEO and Chairman of the Board or, if the roles are separate, whether the Chairman should be selected from thenon-employee directors or should be an employee. The Company’s corporate governance guidelines require the Board to elect a lead director from its independent directors whenever the Chairman is an employee of the Company.
When Mr. Altabef began as the Company’s CEO in January 2015, the Board determined to separate the positions of Chairman and CEO as Mr. Altabef transitioned into the role and appointed Mr. Weaver asnon-executive Chairman to provide the Board with independent leadership during the CEO transition and to enable Mr. Altabef, as incoming CEO, to concentrate on the Company’s business operations.
In accordance with the Company’s Bylaws, the current Chairman of the Board, Mr. Weaver, will not stand for reelection at the annual meeting because he has reached age 72. In preparation for this transition, the Board conducted anin-depth review of its leadership structure and considered the individuals best-suited to lead the Board as the Company implements and executes its business strategy. As a part of this review, the Nominating and Corporate Governance Committee hired a third-party firm to conduct interviews of each director to assess the skill set and qualifications that each director believed was important for the Chairman to possess and to discuss with each director who would most effectively lead the Board. In making its recommendation to the Board, the Nominating and Corporate Governance Committee also reviewed recommended best practices for corporate governance.
As a result of this process, based on the recommendation of the Nominating and Corporate Governance Committee, the Board determined that combining the positions of Chairman and CEO and electing Mr. Altabef to serve as the Chairman and Mr. Davis to serve as independent lead director upon Mr. Weaver’s retirement best positions the Board and management to implement the Company’s strategy and deliver value to the Company’s stockholders going forward. The Board believes that adopting this leadership structure will provide independent board leadership and oversight while benefiting the Company by
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having Mr. Altabef also serve as Chairman following his transition as incoming CEO, during which he demonstrated the strong leadership and vision necessary to drive the Company’s strategies and achieve its objectives.
In its oversight role, the Board of Directors annually reviews the Company’s strategic and operating plans, which address, among other things, the risks and opportunities facing the Company. The Board also has overall responsibility for executive officer succession planning and reviews succession plans each year. The Board has delegated certain risk management oversight responsibility to the Board committees. As part of its responsibilities as set forth in its charter, the Audit and Finance Committee is responsible for discussing with management the Company’s major financial risk exposures and the steps management has taken to monitor and control those exposures, including the Company’s risk assessment and risk management policies. In this regard, the Company’s chief audit executive prepares annually a corporate risk assessment report and provides that report to the Board of Directors each year. 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. The Company’s management regularly evaluates these controls, and the chief audit executive periodically reports to the Audit and Finance Committee regarding their design and effectiveness. The Audit and Finance Committee also receives annual reports from management on the Company’s ethics program and on environmental compliance, regularly reviews with management the Company’s financial arrangements, capital structure and the Company’s ability to access the capital markets, and oversees the allocation policies with respect to the Company’s pension assets, as well as the performance of pension plan investments. As part of its responsibilities as set forth in its charter, the Compensation Committee annually reviews management’s assessment of risk as it relates to the Company’s compensation arrangements. The Nominating and Corporate Governance Committee annually reviews the Company’s corporate governance guidelines and their implementation. Each committee regularly reports to the full Board.
The Company’snon-employee directors receive an annual retainer of $60,000. Mr. Weaver receives an additional $100,000 annual retainer for serving as Chairman of the Board. The chair of the Audit and Finance Committee receives a $26,000 annual retainer, the chair of the Compensation Committee receives a $19,000 annual retainer and the chair of the Nominating and Corporate Governance Committee receives a $16,250 annual retainer. Each other member of the Audit and Finance Committee receives a $12,000 annual retainer and each other member of the Compensation Committee and the Nominating and Corporate Governance Committee receives a $7,500 annual retainer. On February 9, 2017, eachnon-employee director at the time of the Board meeting on that date received an annual grant of 10,639 restricted stock units having a value of $150,010 based on the fair market value of Unisys common stock on that date that vested immediately. On April 26, 2017, Mr. Martin received an annual grant of 12,500 restricted stock units having a value of $150,000 based on the fair market value of Unisys common stock on that date that vested immediately. On October 20, 2017, Ms. James received a grant of 8,427 restricted stock units having a value of $75,000 based on the fair market value of Unisys common stock on
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that date that vested immediately. Directors may defer receipt of these restricted stock units until termination of service, or until a specified date, under the Company’s deferred compensation plan for directors.
The annual retainers described above are paid in monthly installments in cash. However, directors may defer until termination of service, or until a specified date, all or a portion of their cash fees under the Company’s 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 could 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 option. Directors do not have the right to vote with respect to any stock units. This plan was terminated in 2004 and no shares (other then 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 units for their services as directors. The following table provides a summary of the 2017 compensation of currentnon-employee directors who served during 2017.
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 ($) | |||||||||||||||||||||
Jared L. Cohon | 72,500 | 150,010 | — | — | — | — | 222,510 | |||||||||||||||||||||
Alison Davis | 79,500 | 150,010 | — | — | — | — | 229,510 | |||||||||||||||||||||
Nathaniel A. Davis Chair, Nominating and Corporate Governance Committee | 73,333 | 150,010 | — | — | — | — | 223,343 | |||||||||||||||||||||
Denise K. Fletcher Chair, Audit and Finance Committee | 86,750 | 150,010 | — | — | — | — | 236,760 | |||||||||||||||||||||
Philippe Germond | 67,500 | 150,010 | — | — | — | — | 217,510 | |||||||||||||||||||||
Deborah Lee James | 20,000 | 75,000 | — | — | — | — | 95,000 | |||||||||||||||||||||
Paul E. Martin | 58,000 | 150,000 | — | — | — | — | 208,000 | |||||||||||||||||||||
Lee D. Roberts Chair, Compensation Committee | 91,000 | 150,010 | — | — | — | — | 241,010 | |||||||||||||||||||||
Paul E. Weaver Chairman of the Board | 173,667 | 150,010 | — | — | — | — | 323,677 |
(1) | Amounts shown are the |
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(2) | Amounts shown are the
|
(3) | At December 31, 2017, directors had outstanding stock units in respect of directors’ fees as follows: Dr. Cohon — 0; Ms. Davis — 0; Mr. Davis — 0; Ms. Fletcher — 1,314.8; Mr. Germond — 0; Ms. James — 0; Mr. Martin — 0; Mr. Roberts — 0; Mr. Weaver — 0. |
(4) | At December 31, 2017, none of the
|
Under the Company’s 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. The number of shares owned by each director is set forth in the stock ownership table on page 26.
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 Officer and principal accounting officer or controller) and directors. The code is posted on the Company’s web site 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 Officer or principal accounting officer or controller) at this location on its web site.
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 web site at www.unisys.com/governance and is also available in print to any stockholder who requests it. Among other matters, the guidelines cover the following:
1. A majority of the Board of Directors shall qualify as independent under the listing standards of the NYSE. Members of the Audit and Finance, Compensation, and Nominating and Corporate Governance Committees must also meet the NYSE independence criteria, as well as any applicable independence criteria prescribed by the SEC.
2. 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.
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3. The Nominating and Corporate Governance Committee is responsible for determining the appropriate skills and characteristics required of Board members in the context of its currentmake-up, and will consider factors such as independence, experience, expertise, strength of character, mature judgment, leadership ability, technical skills, diversity and age in its assessment of the needs of the Board.
4. The Board is free to make the selection of Chairman of the Board and Chief Executive Officer any way that seems best to assure the success of the Company so as to provide appropriate leadership at a given point in time. Therefore, the Board does not have a policy, one way or the other, on whether or not the role of the Chief Executive and Chairman of the Board should be separate and, if it is to be separate, whether the Chairman should be selected from thenon-employee directors or be an employee. If the Chairman of the Board is not an employee of the Company, the Chairman should qualify as independent under the listing standards of the NYSE.
5. In accordance with the Company’s Bylaws, no director shall stand forre-election at any annual stockholders’ meeting following attainment of age 72 and no person shall be elected a director (as a result of an increase in the number of directors, to fill a vacancy or otherwise) if such person has attained the age of 72.
6. Directors should volunteer to resign from the Board upon a change in primary job responsibility. The Nominating and Corporate Governance Committee will review the appropriateness of continued Board membership under the circumstances and will recommend, and the Board will determine, whether or not to accept the director’s resignation. In addition, if the Company’s Chief Executive Officer resigns from that position, he is expected to offer his resignation from the Board at the same time.
7.Non-employee directors are encouraged to limit the number of public company boards on which they serve to no more than four in addition to the Company’s and should advise the Chairman of the Board and the general counsel of the Company before accepting an invitation to serve on another board.
8. Thenon-employee directors will meet in executive session at all regularly scheduled Board meetings. They may also meet in executive session at any time upon request. If the Chairman of the Board is an employee of the Company, the Board will elect from the independent directors a lead director who will preside at executive sessions. If the Chairman is not an employee, the Chairman will preside at executive sessions.
9. Board members have complete access to Unisys management. Members of senior management who are not Board members regularly attend Board meetings, and the Board encourages senior management, from time to time, to bring into Board meetings other managers who can provide additional insights into the matters under discussion.
10. The Board and its committees have the right at any time to retain independent outside financial, legal or other advisors.
11. It is appropriate for the Company’s staff to report once a year to the Compensation Committee on the status of Board compensation in relation to other large U.S. companies. Changes in Board compensation, if any, should come at the suggestion of the Compensation Committee, but with full discussion and concurrence by the Board. Particular attention will be paid to structuring Board compensation in a
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manner aligned with stockholder interests. In this regard, a meaningful portion of a director’s compensation should be provided and held in stock options and/or stock units. Directors should not, except in rare circumstances approved by the Board, draw any consulting, legal or other fees from the Company. In no event shall any member of the Audit and Finance Committee receive any compensation from the Company other than directors’ fees.
12. The Company will provide an orientation program for new directors. The Company will also provide directors with presentations from time to time on topics designed by the Company or third-party experts to assist directors in carrying out their responsibilities. Directors may also attend appropriate continuing education programs at the Company’s expense.
13. The Board will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. In addition, each committee will conduct an annual self-evaluation of its performance and will make a report annually to the Board.
14. Thenon-employee directors will evaluate the performance of the Chief Executive Officer annually and will meet in executive session, led by the chairperson of the Compensation Committee, to review this performance. The evaluation is based on objective criteria, including performance of the business, accomplishment of long-term strategic objectives and development of management. Based on this evaluation, the Compensation Committee will recommend, and the members of the Board who meet the independence criteria of the NYSE will determine and approve, the compensation of the Chief Executive Officer.
15. To assist the Board in its planning for the succession to the position of Chief Executive Officer, the Chief Executive Officer is expected to provide an annual report on succession planning to the Board.
16. Members of the Board should at all times act in accordance with the Company’s confidentiality policy for directors.
17. The Company’s stockholder rights plan expired on March 17, 2006, and it has no present intention to adopt a new one. Subject to its continuing fiduciary duties, which may dictate otherwise depending on the circumstances, the Board shall submit the adoption of any future stockholder rights plan to a vote of the stockholders. Any stockholder rights plan adopted or extended without stockholder approval shall be approved by a majority of the independent members of the Board and shall be in response to specific, articulable circumstances that are deemed to warrant such action without the delay that might result from seeking prior stockholder approval. If the Board adopts or extends a rights plan without prior stockholder approval, the Board shall, within one year, either submit the plan to a vote of the stockholders or redeem the plan or cause it to expire.
The Company is required to disclose any transactions since the beginning of 2017 (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. The Company does not have any such transactions to report.
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Currently the Company has 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 Corporate Ethics Office, 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 Officer 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 customer of the Company as a particularly sensitive area that requires careful review.
Audit and Finance Committee Report
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 2017, including internal controls over financial reporting, with management and with KPMG LLP, the Company’s independent registered public accounting firm. The committee has also discussed with KPMG LLP the matters required to be discussed by the Public Company Accounting Oversight Board (the “PCAOB”) Auditing Standard No. 1301, Communications with Audit Committees. In addition, the committee has received from KPMG LLP the written disclosures and the letter required by applicable requirements of the PCAOB regarding KPMG LLP’s communications with the committee concerning independence and has discussed with KPMG LLP their independence. The committee has also considered the compatibility of audit-related services, tax services and othernon-audit services with KPMG LLP’s independence.
Based on the reviews and discussions referred to above, the committee recommended to the Board of Directors that the audited financial statements be included in the Annual Report on Form10-K for the year ended December 31, 2017 for filing with the SEC.
Audit and Finance Committee
Alison Davis
Denise K. Fletcher (Chair)
Paul E. Martin
Lee D. Roberts
Independent Registered Public Accounting Firm Fees and Services
KPMG LLP was the Company’s independent registered public accounting firm for the years ended December 31, 2017 and 2016. KPMG LLP has billed the Company the following fees for professional services rendered in respect of 2017 and 2016 (in millions of dollars):
2017 | 2016 | |||||||
Audit Fees | $ | 8.9 | $ | 8.8 | ||||
Audit-Related Fees | 1.7 | 2.3 | ||||||
Tax Fees | 0.2 | 0.1 | ||||||
All Other Fees | — | — |
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Audit fees consist of fees for the audit and review of the Company’s financial statements, statutory audits, comfort letters, consents, 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, accounting advice regarding specific transactions and various attestation engagements. Tax fees principally represent fees for tax compliance services.
The Audit and Finance Committee annually reviews andpre-approves the services that may be provided by the independent registered public accounting firm. The committee has adopted an Audit andNon-Audit ServicesPre-Approval Policy that contains a list ofpre-approved services, which the committee may revise from time to time. In addition, the Audit and Finance Committee has delegatedpre-approval authority to the chair of the committee. The chair of the committee reports any suchpre-approval decision to the Audit and Finance Committee at its next scheduled meeting.
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
(Item 2)
The Audit and Finance Committee has engaged the firm of KPMG LLP as the independent registered public accounting firm to audit the Company’s financial statements for the year ending December 31, 2018. KPMG LLP has been the Company’s independent registered public accounting firm since 2008. The Company expects that representatives of KPMG LLP 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 KPMG LLP 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 Board of Directors recommends a vote “FOR” the proposal to ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for 2018.
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
(Item 3)
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 on compensation of its named executive officers, as described below in this proxy 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 27, the Company’s executive compensation program is designed to attract, motivate and retain the executives who lead the Company’s business, to reward them for achieving financial and strategic company goals and to align their interests with the interests of stockholders. The Company believes that the compensation of its 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. The Company
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emphasizes compensation opportunities that appropriately reward executives for delivering financial results that meet or exceedpre-established goals, and executive compensation varies depending upon the achievement of those goals. Through stock ownership requirements and equity incentives, the Company also aligns the interests of its executive officers with those of stockholders and the long-term interests of the Company. The Company believes that the policies and procedures articulated in “Compensation Discussion and Analysis” are effective in achieving the Company’s goals and that the executive compensation reported in this proxy statement was appropriate and aligned with 2017 results. Please read the “Compensation Discussion and Analysis” below, as well as the compensation tables and narrative that follow it, for additional details about the Company’s executive compensation programs and compensation of the named executive officers in 2017.
For the reasons set forth above, the Company is asking stockholders to approve the following advisory resolution at the 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 2018 Annual Meeting of Stockholders.
This advisory resolution, commonly referred to as a“say-on-pay” resolution, isnon-binding on the Company’s Board of Directors. However, the Board and the Compensation Committee will review and consider the vote when making future executive compensation decisions.
The Board of Directors recommends a vote “FOR” the advisory resolution approving the compensation of the Company’s named executive officers as described in this proxy statement.
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EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information as of December 31, 2017 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 options, 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 | | 1.757 million 1.688 million | (1) (2) | $ $ | 26.35 0 |
| 3.172 million | (3) | ||||
Equity compensation plans not approved by security holders(4) | 0.002 million | (5) | $ | 0 | 0 | |||||||
Total | 3.447 million | 3.172 million |
(1) | Represents stock options. |
(2) | Represents restricted stock units. Assumes that unearned performance-based restricted stock units will vest at target. |
(3) | Shares issuable under the Unisys Corporation 2016 Long-Term Incentive and Equity Compensation Plan (the “2016 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 |
Plan category |
| Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) |
| Weighted-average exercise price of outstanding options, 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 |
| 2.099 million 1.454 million | (1) (2) | $ $ | 25.41 0 |
| 3.808 million |
| (3) | |
Equity compensation plans not approved by security holders(4) |
| 0.002 million | (5) | $ | 0 |
|
| 0 |
|
|
Total |
| 3.555 million |
|
|
|
| 3.808 million |
|
|
|
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SECURITY OWNERSHIP BY 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 February 28, 2018. 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. |
| 4,315,305 | (1) |
| 8.6 |
|
55 East 52nd Street New York, NY 10055 |
|
|
|
|
|
|
Fairpointe Capital LLC |
| 5,752,957 | (2) |
| 11.5 |
|
1 N. Franklin Street, Suite 3300 Chicago, IL 60606 |
|
|
|
|
|
|
FMR LLC |
| 7,512,498 | (3) |
| 14.999 |
|
Abigail P. Johnson 245 Summer Street Boston, MA 02210 |
|
|
|
|
|
|
JPMorgan Chase & Co. |
| 3,500,161 | (4) |
| 6.9 |
|
270 Park Avenue New York,, NY 10017 |
|
|
|
|
|
|
Royce & Associates, LP |
| 2,660,101 | (5) |
| 5.31 |
|
745 Fifth Avenue New York, NY 10151 |
|
|
|
|
|
|
The Vanguard Group |
| 4,422,731 | (6) |
| 8.83 |
|
100 Vanguard Blvd. Malvern, PA 19355 |
|
|
|
|
|
|
Name and Address of Beneficial Owner | Number of Shares Of Common Stock | Percent of Class | ||||||
AllianceBernstein L.P. | 2,953,145(1) | 5.9 | ||||||
1345 Avenue of the Americas New York, NY 10105 | ||||||||
BlackRock, Inc. | 3,946,796(2) | 7.8 | ||||||
55 East 52nd Street New York, NY 10055 | ||||||||
Fairpointe Capital LLC | 5,920,461(3) | 11.7 | ||||||
1 N. Franklin Street, Suite 3300 Chicago, IL 60606 | ||||||||
FMR LLC | 7,570,995(4) | 14.999 | ||||||
245 Summer Street Boston, MA 02210 | ||||||||
JPMorgan Chase & Co. | 4,319,466(5) | 8.5 | ||||||
270 Park Avenue New York, NY 10017 | ||||||||
Towle & Co | 3,215,524(6) | 6.37 | ||||||
1610 Des Peres Road, Suite 250 St. Lous, MO 63131 | ||||||||
The Vanguard Group | 6,942,315(7) | 13.75 | ||||||
100 Vanguard Blvd. Malvern, PA 19355 |
(1) | Sole dispositive power has been reported for all shares. Sole voting power has been reported for 2,391,765 shares. |
(2) | Sole dispositive power has been reported for all shares. Sole voting power has been reported for 3,799,875 shares. |
(3) | Sole dispositive power has been reported for all shares. Sole voting power has been reported for 5,444,558 shares and shared voting power has been reported for 67,503 shares. |
(4) | Sole dispositive power has been reported for all shares. Sole voting power has been reported for 223,538 shares. |
(5) | Sole dispositive power has been reported for 4,292,800 shares and shared dispositive power has been reported for 166 shares. Sole voting power has been reported for 3,792,680 shares. |
(6) | Sole dispositive and sole voting power have been reported for all shares. |
(7) | Sole dispositive power has been reported for 6,856,454 shares, and shared dispositive power has been reported for 85,861 shares. Sole voting power has been reported for 83,727 shares and shared voting power has been reported for 4,802 shares. |
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Shown below are the number of shares of Unisys common stock (or stock units) beneficially owned as of February 26, 2018 by all directors, each of the executive officers named on page 33, and all directors and current 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)(3) | Percent of Class | |||||||||
Peter A. Altabef | 231,056 | 140,000 | * | |||||||||
Jared L. Cohon | 54,651 | 0 | * | |||||||||
Alison Davis | 59,028 | 0 | * | |||||||||
Nathaniel A. Davis | 28,928 | 0 | * | |||||||||
TarekEl-Sadany | 35,147 | 14,667 | * | |||||||||
Denise K. Fletcher | 86,973 | 0 | * | |||||||||
Philippe Germond | 39,039 | 0 | * | |||||||||
Eric Hutto | 33,380 | 8,091 | * | |||||||||
Deborah Lee James | 23,062 | 0 | * | |||||||||
Paul E. Martin | 27,135 | 0 | * | |||||||||
Regina Paolillo | 1,000 | 0 | * | |||||||||
Jeffrey E. Renzi | 60,304 | 66,750 | * | |||||||||
Lee D. Roberts | 58,015 | 0 | * | |||||||||
Inder M. Singh | 15,898 | 0 | * | |||||||||
Paul E. Weaver | 78,490 | 0 | * | |||||||||
All directors and current officers as a group | 945,460 | 364,845 | 2.2 |
* | Less than 1% |
(1) | Includes shares reported by directors and officers as held directly or in the names of spouses, children or trusts as to which beneficial ownership may have been disclaimed. |
(2) | Includes: |
(a) | Shares held under the Unisys Savings Plan, a qualified plan under Sections 401(a) and 401(k) of the Internal Revenue Code, for current officers as a group, 1,292.1. With respect to such shares, plan participants have authority to direct voting. |
(b) | Stock units, as described on page 17, 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: Dr. Cohon, 54,651; Ms. Davis, 44,393; Ms. Fletcher, 65,826; Mr. Germond, 14,635; and Ms. James, 23,062. Deferred stock units are distributed in shares of common stock 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) | Shares shown are shares subject to options exercisable within 60 days following February 26, 2018. |
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Compensation Discussion and Analysis
Section | Page | |||
Executive Summary | 27 | |||
How We Set Pay | 33 | |||
Principal Components of Executive Compensation | 41 | |||
Deductibility of Executive Compensation | 51 |
Executive Summary
Our Business
Unisys is a global information technology company that builds high-performance, security-centric solutions for clients across the government, financial services and commercial markets. The Company’s offerings include security software and services; digital transformation and workplace services; industry applications and services; and innovative software operating environments for high-intensity enterprise computing.
The Company has gone through significant changes since the beginning of 2015. We have transformed the company structure to support an industrygo-to-market effort to differentiate ourselves. We have streamlined our cost structure and increased liquidity. In 2017, the Company made substantial progress towards strengthening ourgo-to-market approach and deliverednon-GAAP operating profit margin and adjusted free cash flow that exceeded our full year guidance range while achieving the high end of our revenue guidance for the full year. While more work remains to be done with ouron-going strategicre-positioning, we believe we are on the right path to further improving our Services margins, growing revenue, strengthening our balance sheet and managing our pension obligations.
27
We continue to execute against our business strategy and improve our financial performance as depicted below.
Since 2015, we have continued to improve the rate of revenue decline and believe we are making progress on driving to our revenue inflection point to grow our company. We believe that continued focus on increasing our services productivity and efficiency will drive a leaner competitive cost structure and improve our operating margin.
In 2017, we exceeded or achieved full-year guidance on all guidance metrics as shown below. Our 2017 results represent the second consecutive year of exceeding or achieving full-year guidance since were-established the process of issuing guidance two years ago.
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As of the end of 2017, the pension deficit improved by $390 million compared to the end of the prior year. This decline of 18% represented the largest percentage decline since 2013. The estimated required cash contributions over the next five years also declined by $300 million compared to the estimates as of the end of the prior year. We are proactively addressing our pension obligation to strengthen our balance sheet. Effective January 1, 2018, the company approved an amendment to reorganize its U.S. defined benefit pension plan from one plan into two distinct plans. Participants were divided between plans to maximize administrative efficiencies in compliance with all regulations. The company estimates administrative costs, including Pension Benefit Guaranty Corporation premiums, and the resulting contributions to fund such costs, will be reduced by approximately $10 million per year through 2021. Benefits offered to participants in the plans are unchanged. This amendment had no impact on the Company’s consolidated results of operations and financial position for the year ended and as of December 31, 2017. In August 2017, a new Treasurer joined the Company who is focusing on funding and risk management for the corporate pension plans to continue strengthening the balance sheet.
Stockholder Feedback
The Company has undertaken a comprehensive approach to improving the results of the stockholder advisory vote on our executive compensation(“say-on-pay”), which includes:
Continuing our dialogue and engagement with stockholders regarding executive compensation
|
Continuing to incorporate stockholder feedback in developing the design and goal-setting process for 2018 Enhancing our proxy to continually improve transparency and presentation The Compensation Committee, with input from its independent compensation consultant, regularly evaluates its compensation programs and considers the results of its most recent stockholdersay-on-pay vote as well as feedback received directly from stockholders through our ongoing engagement. In 2017, a comprehensive effort was made to engage with many of our largest stockholders to discuss how our executive compensation program supports our strategy and oursay-on-pay vote. At the April 2017 annual meeting, we receivedsay-on-pay support from holders of approximately 68% of our shares of common stock present at the meeting. Following that meeting, we reached out to holders of over 85% of outstanding shares of our common stock to request a call to discuss corporate governance and executive compensation matters. Holders of over 60% of our shares responded to our request and either accepted our invitation for engagement or declined our invitation saying they had no concerns with our compensation program. During these calls, senior executives and directors of the Company provided information regarding our executive compensation programs, responded to questions and discussed investor feedback. This process resulted in valuable insight regarding stockholder views. Feedback received directly from stockholders, as well as from proxy advisory firms, is summarized below. 29
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Performance assessments should include consideration of relative performance | In 2018, the metric for Performance-Based RSUs will be changed fromNon-GAAP Operating Profit toTotal Shareholder Return (TSR) assessment relative to a
|
We will continue this dialogue with our stockholders and consider their perspectives regarding compensation and governance matters.
Overview of Our Compensation Programs
This section describes 2017 compensation and benefit programs for the executive officers listed in the Summary Compensation Table on page 52 and referred to as “Named Officers”.
Peter Altabef joined the Company in January 2015 to reposition our company by establishing our strategy with a focus on higher growth markets, building a management team that would have the full confidence of the Board to achieve our strategic priorities and, ultimately, creating the stockholder value that is expected from our investors. As our industry evolves and our opportunities for competitive business advantages change over time, we must likewise evolve in order to create value. Our compensation programs are tailored to our strategic priorities and our current outlook, while also motivating and retaining our management team.
Highlights of our compensation program include:
Strong emphasis on performance-based pay with the majority of target compensation (86% in the case of Mr. Altabef and 76% on average for the other Named Officers)at-risk
Incorporation of feedback from our stockholders with respect to performance measure selection and overall design of our incentive programs
Rigorous and progressively challenging performance goals that are aligned with our business strategy
Increase in the emphasis on performance-based incentives over time to align management long-term interests with the long-term interest of our stockholders
Programs designed so that our new leadership is both focused on and held accountable for execution relative to the turnaround strategy
Additional detail on each compensation element is provided starting on page 41.
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Short-Term Incentives • Increased target | • Annual cash incentives under the Executive Variable Compensation (EVC) Plan • Targeted award amounts set as a percentage of salary for • No award paid ifpre-setnon-GAAPpre-tax profit level gate is not met • Metrics: • 40%gnon-GAAPpre-tax profit • 35%g revenue • 25%g adjusted free cash flow • No funding on a metric if performance below threshold; payout capped at 200% of target • Goals aligned with Company’s operating plan and financial guidance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Incentives (“LTI”) • Largest increases allocated to Named Officers with significant increases in responsibility | • Consists of performance-based LTI (67% of target LTI value) and time-based restricted stock units (“Time-Based RSUs”) (33% of target LTI value) • Performance-based LTI earned per achievement ofpre-establishednon-GAAP operating profit goals • 1/3 of target shares or cash award linked to each of specific 2017, 2018, and 2019 performance objectives • Rewards consistent profitability over time while addressing the uncertainty given the current business context • No payout for performance below • Vesting or settlement — per achievement of specific performance objectives for
• Goals aligned with Company’s operating plan and
31 Good Governance Practices The Compensation Committee continually evaluates the Company’s compensation policies and practices to ensure that they are consistent with good governance principles. The Committee receives regular updates on governance matters from its independent consultant. Below are highlights of our governance practices: What We Do
What We Don’t Do
This section describes how we set pay for our
Our Compensation Strategy Our executive compensation program is designed to:
A significant portion of target compensation for Named Officers isat-risk and performance-based. In order to maximize our ability to compete effectively,
Total target compensation for Mr. Altabef and the average total target compensation for the other Components of Compensation
33 Further detail on Mr. Altabef’s compensation is shown below:
While actual compensation reflects Given the Company’s ongoing transformation, our executive compensation programs are designed to both hold executives accountable for meeting short-term objectives expected to result in long-term value creation and align realizable pay with long-term performance.
The
How We Measure Performance and Set Goals The table below describes measures used in our incentive plans and the rationale for their inclusion.
35 The Committee regularly assesses
The above performance metrics includenon-GAAP financial measures, which will therefore differ from the amounts shown in the Company’s financial statements. The Company defines adjusted free cash flow as cash from operations less capital expenditures. In setting performance targets for both our short-term and long-term incentive goals, Based on 36 believe to be consistent with practices at other companies with size and complexity similar to our own, the
Due to the volatility and transition of our business, Role of Compensation Consultants and Management The Compensation Committee retains and regularly consults with an independent compensation consultant, which in The independent compensation consultant performed duties requested by the Committee including: Providing recommendations on the composition of the peer group described under Market References below Analyzing executive and director compensation in comparison to the market references described below Updating the Compensation Committee on executive compensation and governance market trends Advising the Committee on the
The consultant spoke with the chair of the Compensation Committee, as well as with management, in preparing for committee meetings, regularly attended committee meetings and met from time to time in executive session with the Compensation Committee without the presence of management.
The Compensation Committee also receives reports and recommendations from management. In particular, throughout The Compensation Committee met from time to time in executive session without the presence of Mr. Altabef or any other members of management to consider the Chief Executive Officer’s compensation package and discuss other matters. The Committee uses data, analysis and advice provided by the independent compensation consultant in reviewing Mr. Altabef’s compensation, which is then recommended to and approved by the independent members of the Board of Directors. The executive compensation program takes into account the compensation practices of companies with which the Company competes or could compete for executive talent. In its review of The list of peer group companies was developed with input from the Committee’s consultant using a
Based on the above methodology, in the
The Compensation Committee regularly reviews the composition of the peer group and its selection criteria to ensure that they remain appropriate in light of the evolving 38 competitive
The Compensation Committee believes that the
Graph data from materials reviewed by the Committee in October 2017 When determining Comparisons to “market” in the “Executive Compensation” section of this proxy statement generally are based on the market consisting of the 39 Risk Assessment and Mitigation of Compensation Policies and Practices
compensation mix that balancesat-risk pay opportunity with fixed pay sufficient to promote basic financial security and discourage excessive risk-taking; performance metrics which align with performance ranges, including appropriate caps and thresholds, to motivate desired behavior and ensure payouts are fiscally prudent; performance and vesting periods to encourage a long-term view and promote retention; and the existence of other risk mitigating factors such as stock ownership guidelines.
Stock Ownership Guidelines Since 1998, the Company has had stock ownership guidelines in place for elected officers in order to more closely link their interests with those of stockholders.
Unvested stock options, vested “under water” stock options and Performance-Based RSUs that have not yet met the performance criteria do not count toward fulfillment of the ownership guidelines. Officers are expected to meet the ownership guidelines within five years of election. The Compensation Committee reviews the adequacy of and compliance with the guidelines on an annual basis. The number of shares owned by each of the Named Officers is set forth in the stock ownership table on page 40 Clawback Policy The Company maintains a clawback policy, which applies to all the Named Officers and other executive officers of the Company. Under the clawback policy, the Company will seek to recover incentive-based compensation (including cash and equity) if the Company’s financial statements are required to be restated as a result of the Company’s materialnon-compliance with the financial reporting requirements under U.S. securities laws and if the executive officer engaged in fraud or intentional misconduct that caused or otherwise contributed to the need for the restatement. Insider Trading, Anti-Hedging, and Anti-Pledging Policy The Company maintains an Insider Trading Policy, which applies to all the employees, officers and directors of the Company and its subsidiaries. The policy prohibits trading in securities of the Company while aware of materialnon-public information. Individuals identified as
Principal Components of Executive Compensation As set forth above, the principal elements of
41 Base Salary Elected officers’ base salaries are determined by evaluating factors such as the responsibilities and complexity of the position, the experience and performance of the individual, market data for similar roles, overall
Short-term Incentive Compensation During The EVC Plan design for
42 In order to promote profitable growth,
Target annual bonus amounts for elected officers are approved by the Committee and are intended to be competitive in the market in which the Company competes for talent and reflect the level of responsibility of the role. They are therefore set at or around the median for comparable positions in the market. For
The EVC Plan performance goals were set to
In order to receive any payments, the threshold level of
In The graphs below show the threshold, target and maximum performance levels and
44 Over the last five years, total payouts under the plan based on corporate performance have averaged
The above performance measures includenon-GAAP financial measures and will differ from amounts shown in the Company’s The following table shows incentives paid to the Named Officers under the EVC Plan. Total target amounts for each individual represent the percentage of base salary referred to above in this section. The EVC Plan gives the Compensation Committee discretion to consider individual performance and to adjust awards accordingly. In
Long-Term Incentive Awards Long-term incentives 45 The Committee evaluates the LTI program annually relative to its objectives as well as practices within the peer group. In 2016, changes were made to better reflect the Company’s strategic direction and
The following table
46 The above changes resulted in
Performance-based LTI vests over 3 years, with distinct goals for each fiscal year within the vesting period, in order to measure performance over the entire three-year period while creating a strong focus on
Time-Based RSUs, which vest over a3-year period, serve as a retention vehicle and align the recipients’ interests with those of stockholders because the value of the RSUs, The
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increase each successive year within a grant. The table below illustrates goals and achievement for performance periods completed through 2017:
Goals are aligned with the Company’s operating plan and financial guidance at the time of the grant. The Committee also considered the probability of achieving different performance levels at the time of grant as well as the uncertainty in the Company’s near-term performance. Performance-based LTI is earned for each year in the three-year performance cycle at a rate ranging from 50% of the target number of shares or cash units 48 individuals under the EVC Plan as a result of the Company’s performance in 2018. The table below summarizes the threshold, target and maximum performance levels,
Performance-Based RSU awards are settled in stock and Long-term incentive awards granted to each Named Officer in
Long-Term Incentive Granting Practices Most awards are granted at the time of the annual grant in the first quarter of the year, although awards may be granted as part of the hiring process or in connection with a change in responsibility. Annual grants are approved at a specified, regularly scheduled meeting of the Compensation Committee. The Compensation Committee approves the type and number of awards to be granted and the performance criteria for performance-based awards. For grants in the United States, the grant date is no earlier than the date of the meeting. The dates of regularly scheduled Board and Committee meetings are generally determined many months in advance as part of the normal Board calendaring process. LTI awards granted during the year have a grant date no earlier than the date of approval. Grants that require the approval of the Compensation Committee are typically reviewed and approved at a regularly scheduled Compensation Committee meeting or by written consent in advance of the individual’s employment commencement or promotion date. For these awards, typically the grant date is the date of the meeting if the individual receiving the grant has already commenced employment. If the individual has not yet commenced employment, the date of grant is the business day following the individual’s first day of employment. 49 The Compensation Committee has delegated to the Chief Executive Officer the authority to grant a limited number of RSU awards as part of the annual grant process and during the year to eligible individuals (other than the Chief Executive Officer, his direct reports and employees subject to Section 16 of the Securities Exchange Act of 1934). The Committee’s delegation of authority specifies that for these RSUs the grant date will be either (a) the first business day of the month following the date of the Chief Executive Officer’s approval, if the individual has commenced employment at Other Bonuses The Company has a strong bias towards incentives based onpre-established goals and limits use of discretionary bonuses. In limited cases, the Company has provided modestsign-on bonuses to executives Other Benefits Elected officers participate in the retirement programs discussed below under Perquisites available to executive officers In order to attract and retain key executives, the Company has entered into severance and change in control agreements with the Named Officers. The severance agreements were put in place in December 2014 with input from the
Deductibility of
The exemption for qualifying performance-based compensation was repealed by recent tax legislation effective for taxable years beginning after December 31, 2017. As a result, compensation paid to our executive officers in future years in excess of $1 million may not be deductible unless it qualifies for certain transition relief (with the scope of such transition relief being uncertain at this time). While the Company will monitor guidance and developments in this area, the Compensation Committee believes that its primary responsibility is to provide a compensation program that attracts, retains and rewards the executive talent necessary for our success. Consequently, the Compensation Committee may pay or provide, and has paid or provided, compensation that is not tax deductible or is otherwise limited as to tax deductibility. The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with management. Based on such review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement. Compensation Committee Jared L. Cohon Alison Davis
Lee D. Roberts (Chair) Paul E. Weaver 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 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.
Summary The following table sets forth information concerning the compensation of the Named Officers for services rendered in all capacities to Unisys.
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Grants of The following table sets forth information on grants of plan-based awards during
Awards shown under “Estimated Future Payouts UnderNon-Equity Incentive Plan Awards” are annual bonuses in the form of cash incentive compensation through the EVC Plan. As discussed more fully in “Compensation Discussion and Analysis” above, the amount of incentive compensation paid to the Named Officers under the EVC Plan generally depends upon (a) the officer’s target annual bonus amount and (b) the degree to which Long-term performance-based awards include performance cash awards shown under “Estimated Future Payouts UnderNon-Equity Incentive Plan Awards” and equity awards shown under “Estimated Future Payouts Under Equity Incentive Plan Awards”. These awards are long-term cash awards and Performance-Based RSUs granted under the Awards shown under “All Other Stock Awards” are Time-Based RSUs granted under the
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Outstanding Equity The following table shows equity awards to the Named Officers that were outstanding as of December 31,
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|
(3) | Market value reflects the |
UNISYS
49 55
(4) | Awards shown are Performance-Based RSUs for which the number of shares earned has not yet been determined. If earned, these awards are scheduled to vest as follows if the individual is then employed by the Company. |
|
|
| |||||
|
|
| |||||
Name |
| Number of Shares |
| ||||
Peter A. Altabef | 2/5/2018 | 23,333 | |||||
2/ |
| ||||||
2/11/ |
| ||||||
2/9/2019 | 36,250 | ||||||
2/11/2019 | 47,509 | ||||||
2/9/2020 | 36,250 | ||||||
Inder M. Singh |
|
| |||||
|
| ||||||
7/3/ |
| ||||||
9/1/2018 | 1,467 | ||||||
|
| ||||||
|
| ||||||
7/3/2019 | 1,287 | ||||||
9/1/2019 | 1,467 | ||||||
2/9/2020 | 5,910 | ||||||
7/3/2020 | 1,288 | ||||||
Eric Hutto | 2/9/2018 | 5,910 | |||||
2/11/2018 | 7,180 | ||||||
7/3/2018 | 1,287 | ||||||
9/2/2018 | 1,351 | ||||||
2/9/2019 | 5,910 | ||||||
2/11/2019 | 7,179 | ||||||
7/3/2019 | 1,287 | ||||||
2/9/2020 | 5,911 | ||||||
7/3/2020 | 1,288 | ||||||
TarekEl-Sadany | 2/9/2018 | 5,520 | |||||
2/11/2018 | 7,163 | ||||||
6/2/2018 | 3,333 | ||||||
2/9/2019 | 5,520 | ||||||
2/11/2019 | 7,163 | ||||||
2/9/2020 | 5,521 | ||||||
Jeffrey E. Renzi | 2/5/ |
| |||||
2/ |
| ||||||
2/ |
| ||||||
2/ |
| ||||||
2/11/2019 | 9,336 | ||||||
| 2/ |
| |||||
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Option Exercises and Stock Vested
The following table givesprovides information on stock option exercises and the vesting of stock awards during 20162017 for each of the Named Officers.
|
| Option Awards |
|
| Stock Awards |
| 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 ($) |
| Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||||
Peter A. Altabef |
|
| — |
|
|
| — |
|
|
| 35,015 |
|
|
| 372,209 |
| — | — | 131,868 | 1,846,043 | ||||||||||||
Inder M. Singh |
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
| — | — | 11,425 | 142,855 | ||||||||||||
Eric Hutto | — | — | 16,339 | 216,662 | ||||||||||||||||||||||||||||
TarekEl-Sadany | — | — | 21,481 | 290,553 | ||||||||||||||||||||||||||||
Jeffrey E. Renzi |
|
| — |
|
|
| — |
|
|
| 11,505 |
|
|
| 115,496 |
| — | — | 30,739 | 424,333 | ||||||||||||
Eric Hutto |
|
| — |
|
|
| — |
|
|
| 2,052 |
|
|
| 21,012 |
| ||||||||||||||||
Andrew J. Stafford |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
| ||||||||||||||||
Janet B. Haugen |
|
| — |
|
|
| — |
|
|
| 9,675 |
|
|
| 99,540 |
|
Certain of the Company’s officers participate in the following three pension plans sponsored by Unisys in the United States. Effective December 31, 2006, each of these plans was frozen and benefits thereunder ceased to accrue. No new participants are now allowed.
Unisys Pension Plan (the “Pension Plan”) – a qualified defined benefit pension plan available to all U.S. employees who met eligibility requirements by December 31, 2006.
UNISYS 50
Unisys Corporation Supplemental Executive Retirement Income Plan (the “Supplemental Plan”) – a non-qualified excess defined benefit plan available to all U.S. employees who met eligibility requirements by December 31, 2006 and whose qualified plan benefits are limited by the Internal Revenue Code or limited because they have deferred compensation under non-qualified plans. The plan is designed to make up for the benefit shortfall created by the Internal Revenue Code limits and the non-qualified deferrals of compensation.
Unisys Corporation Elected Officer Pension Plan (the “Officer Plan”) – a non-qualified defined benefit plan available to all elected officers who met eligibility requirements by December 31, 2006. The plan is designed to provide a minimum target of retirement income for executives.
The table below presents pension plan information as of December 31, 2016 for Ms. Haugen. Mr. Altabef, Mr. Singh, Mr. Renzi, Mr. Hutto and Mr. Stafford are not participants in any of the three pension plans because they were not employed by the Company prior to when the plans were frozen.
Name |
| Plan Name |
| Number of Years of Credited Service (#) |
| Present Value of Accumulated Benefit ($) |
|
| Payments During Last Fiscal Year ($) |
| ||
Janet B. Haugen |
| Pension Plan |
| 10.667 |
| 562,265 |
|
|
| — |
| |
|
| Supplemental Plan |
| 10.667 |
|
| 255,243 |
|
|
| — |
|
|
| Officer Plan |
| 10.667 |
|
| 1,999,637 |
|
|
| — |
|
The present value of the accumulated benefit has been determined assuming benefits commence as of the earliest date at which Ms. Haugen is entitled to unreduced benefits. This is generally the later of age 62 and achievement of vesting requirements. The calculations use the same actuarial assumptions used for financial disclosure requirements for the pension plans, except that the calculations assume that Ms. Haugen has terminated employment and therefore do not apply any decrements in respect of termination, mortality before age 62, disability and the like. Assumptions as to life expectancy post age 62 are based on the MRP-2007 base table (sex distinct) projected with Scale MMP-2007. The discount rate used is 4.38% per annum. Where benefits are payable as a 50% contingent annuity without actuarial reduction, which is the case for Ms. Haugen, who is an Officer Plan participant who is married, benefits have been valued using actual spouse information. Post-2004 non-qualified benefits for terminated executives have been valued assuming benefit commencement at the later of age 55 or termination of employment with a 6 month delay reflected for key employees and the form of payment required under plan provisions.
The following summarizes the benefits under the specific plans:
Unisys Pension Plan
On or before December 31, 2006, all employees of Unisys were eligible to participate in the Pension Plan on the January 1 or July 1 first following attainment of both age 21 and one year of service with Unisys.
The Pension Plan provides benefits under two benefit formulas:
1. For service beginning on or after January 1, 2003, benefits accrue each year under a cash balance formula under which a participant’s bookkeeping account is credited with an amount equal to 4% of plan compensation. In addition, the account balance is credited with interest on a monthly basis using the annual interest rates on 5-Year Constant Maturity Treasury Notes, plus 0.25%. Generally, participants vest in the benefit after completion of three years of service with Unisys. The vested cash balance benefit is available for payment following termination of employment, and the normal form of payment is a life annuity for single participants (the participant receives the periodic amount during his or her lifetime, with no survivor benefit payable after his or her death), or an actuarially reduced 50% contingent annuity for married participants (the participant receives a reduced periodic benefit during his or her lifetime to reflect the survivor payments, and the participant’s surviving beneficiary receives 50% of the periodic amount the participant received). Other annuity forms are also available on an actuarially equivalent basis. The benefit is also available in the form of a lump sum distribution. Ms. Haugen is eligible for the cash balance benefit.
UNISYS 51
2. For employees hired prior to January 1, 2003, benefits are also based on a career pay formula. Each year, the annual accrued benefit payable to a participant at normal retirement date (age 65) is increased by 1% of plan compensation, plus 0.35% of plan compensation in excess of one-half of the average Social Security taxable wage base for the five preceding years. Participants ultimately are eligible for the larger of: (a) the career pay formula through the date of termination of employment; or (b) the career pay formula accrued through December 31, 2002 plus the cash balance benefit described above. Generally, participants vest in the benefit after completion of three years of service with Unisys. The vested benefit is available for payment following termination of employment and attainment of early retirement eligibility (age 55). The benefit is reduced by 0.5% for each month that the benefit commences prior to age 65. Should the employee terminate employment after attainment of both age 55 and 20 years of service with Unisys, the benefit is reduced by 0.5% for each month that the benefit commences prior to age 62. The normal form of payment of the vested career pay benefit is a life annuity for single participants, or an actuarially reduced 50% contingent annuity for married participants. Other annuity forms are also available on an actuarially equivalent basis. Ms. Haugen is eligible for the career pay benefit.
For both formulas, plan compensation is salary, commissions, overtime pay, paid bonus and paid accrued and unused vacation. Compensation includes amounts deferred on a before-tax basis under the Unisys Savings Plan. Excluded from compensation are severance payments, supplements, compensation deferred under a non-qualified plan and other forms of extraordinary compensation. Plan compensation is limited by Section 401(a)(17) of the Internal Revenue Code.
As of December 31, 2016, Ms. Haugen, whose employment with the Company terminated as of November 1, 2016, was vested in her Pension Plan benefit and is eligible to immediately receive the cash balance portion of her benefit. She is also eligible to receive an early retirement benefit under the career pay formula.
Although benefits ceased to accrue under the Pension Plan effective December 31, 2006, the cash balance bookkeeping accounts continue to grow with interest credits until paid.
Unisys Corporation Supplemental Executive Retirement Income Plan
On or before December 31, 2006, all employees of Unisys were eligible to participate in the Supplemental Plan on the January 1 or July 1 first following attainment of both age 21 and one year of service with Unisys.
The Supplemental Plan provides benefits under the same provisions as the Pension Plan except as follows:
Plan compensation includes compensation deferred under non-qualified plans and is not limited by Internal Revenue Code Section 401(a)(17).
The benefit payable under the Pension Plan is applied as an offset to the benefits available under the Supplemental Plan.
Benefits accrued and vested prior to January 1, 2005 are payable at the same time and form as the Pension Plan benefit. Benefits accrued or vested on or after January 1, 2005 are payable following the later of (a) termination of employment (or six months thereafter if the individual is among the top 50 most highly compensated officers, as defined under Section 409A of the Internal Revenue Code (“Section 409A”)) or (b) attainment of age 55. Such benefit is payable in the form of a life annuity for single participants, or an actuarially reduced 50% contingent annuity for married participants. No optional forms of benefit are currently available for benefits accrued or vested on or after January 1, 2005 under the Supplemental Plan.
As of December 31, 2016, Ms. Haugen, whose employment with the Company terminated as of November 1, 2016, was vested in her Supplemental Plan benefit. Ms. Haugen was vested as of December 31, 2004 and is eligible to immediately receive the pre-2005 cash balance portion of her benefit. Ms. Haugen is also eligible to receive an early retirement benefit. Ms. Haugen is required to commence the post-2004 portion of her benefit at termination with a 6 month delay, specifically on May 1, 2017.
Although benefits ceased to accrue under the Supplemental Plan effective December 31, 2006, the cash balance bookkeeping accounts continue to grow with interest credits until paid.
The Company has established a grantor trust relating to the Supplemental Plan. If a change in control of the Company occurs, the Company is required to fund the trust in an amount equal to the present value of the accrued pension benefits under the plan.
UNISYS 52
Unisys Corporation Elected Officer Pension Plan
Only elected officers of Unisys are eligible to participate in the Officer Plan. The Officer Plan was closed to entrants as of December 31, 2006. As a result, Ms. Haugen is the only Named Officer who is eligible for the plan.
The Officer Plan provides a gross annual accrued benefit equal to 4% of final average compensation for each of the first 10 years of credited service, plus 1% of final average compensation for each year of credited service in excess of 10 (but not in excess of 30), minus 50% of the participant’s Social Security benefit. This benefit is reduced by 0.5% for each month that the benefit commences prior to age 62. The gross benefit is offset by the benefits payable under both the Pension Plan and the Supplemental Plan.
Final average compensation is the average of the highest consecutive 60 months of plan compensation out of the last 120 months of employment, but no compensation after December 31, 2006 is included. Plan compensation is identical to that used for the Supplemental Plan.
Benefits accrued and vested prior to January 1, 2005 are payable at the same time and form as the Pension Plan benefit. Benefits accrued or vested on or after January 1, 2005 are payable following the later of (a) termination of employment (or six months thereafter if the individual is among the top 50 most highly compensated officers, as defined under Section 409A) or (b) attainment of age 55. Such benefit is payable in the form of a life annuity for single participants, or a 50% contingent annuity, which is not actuarially reduced, for married participants. No optional forms of benefit are currently available for benefits accrued or vested on or after January 1, 2005 under the Officer Plan.
Generally, benefits under the Officer Plan vest upon the earliest to occur of (a) attainment of age 55 and 10 years of service with Unisys, (b) for executives who were participants on or after January 1, 1997 and before July 19, 2001, attainment of age 50 and five years of service with Unisys or (c) a change in control of Unisys. As of December 31, 2016, Ms. Haugen, whose employment terminated as of November 1, 2016, was vested in her Officer Plan benefits. Ms. Haugen is currently eligible to receive an early retirement benefit. Ms. Haugen is required to commence the post-2004 portion of her benefit at termination with a 6 month delay, specifically on May 1, 2017.
The Company has established a grantor trust relating to the Officer Plan. If a change in control of the Company occurs, the Company is required to fund the trust in an amount equal to the present value of the accrued pension benefits under the plan.
Defined Contribution Plans
The Named Officers based in the U.S. are eligible to participate in the Unisys Savings Plan, which is atax-qualified defined contribution plan with a matching contributions feature. In 2016,2017, the Company made matching contributions under the plan of 50% of each 1% of eligible pay contributed by a participant on abefore-tax basis, up to the first 6% of eligible pay contributed.
Mr. Stafford is eligible to participate in the U.K. Unisys Defined Contribution Plan, which is a U.K. tax-qualified defined contribution plan with a matching contribution feature. In 2016, the Company made matching contributions under the plan of 150% of each 1% of eligible pay contributed by a participant on a before-tax basis, up to the first 4% of eligible pay contributed.
UNISYS 53
Non-Qualified Deferred Compensation
The table below shows unaudited information with respect to compensation of the Named Officers that has been deferred under a plan that is not tax-qualified. Under the Company’s non-qualified deferred compensation plans, 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. However, the Company has established a grantor trust relating to its pre-2005 non-qualified deferred compensation plan. If a change in control of the Company occurs, the Company is required to fund the trust in an amount equal to the aggregate account balances under that plan.
Name |
| Executive Contributions in 2016 ($) |
|
| Company Contributions in 2016 ($) |
|
| Aggregate Earnings in 2016 ($) (1) |
|
| Aggregate Withdrawals/ Distributions in 2016 ($) |
|
| Aggregate Balance at December 31, 2016 ($) (1) |
| |||||
Peter A. Altabef |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Inder M. Singh |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Jeffrey E. Renzi |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Eric Hutto |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Andrew J. Stafford |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Janet B. Haugen |
|
| - |
|
|
| - |
|
|
| 13,273 |
|
|
| - |
|
|
| 63,621 |
|
|
|
Potential Payments upon Termination or Change in Control
Under the agreements and plans discussed below, the Current Named Officers would be entitled to the following payments and benefits upon termination of employment and/or a change in control of the Company.
Mr. Altabef’s Letter Agreement
Under the letter agreement covering the terms and conditions of Mr. Altabef’s employment as President and Chief Executive Officer, if Mr. Altabef’s employment is terminated by the Company without cause 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) prior to a change of control of the Company, Mr. Altabef will be entitled to receive an amount equal 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, subject to his execution of a release of claims in favor of the Company. The letter agreement includesnon-compete,non-solicitation andnon-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.
UNISYS
54 57
Executive Officer Severance Agreements
The Company has entered into letter agreements with certain of its executive officers, including the Current Named Officers 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 such 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.
The amount of the termination payments to which the Current Named Officers would be entitled if their employment had terminated on the last business day of 20162017 under circumstances entitling them to the payments above are set forth below, along with the total amounts that would have been payable to them in respect of medical, dental and vision coverage under the terms of their respective agreements.
Name |
| Aggregate Termination Payments ($) |
|
| Aggregate Medical, Dental and Vision Payments ($) |
| ||
Peter A. Altabef |
|
| 4,374,000 |
|
|
| 36,041 |
|
Inder M. Singh |
|
| 997,500 |
|
|
| 17,420 |
|
Jeffrey E. Renzi |
|
| 926,250 |
|
|
| 11,320 |
|
Eric Hutto |
|
| 950,000 |
|
|
| 17,420 |
|
Andrew J. Stafford |
|
| 1,122,841 |
|
|
| 1,653 |
|
Name | Aggregate Termination Payments ($) | Aggregate Medical, Dental and Vision Payments ($) | ||||||
Peter A. Altabef | 4,756,800 | 34,306 | ||||||
Inder M. Singh | 1,160,250 | 16,581 | ||||||
Eric Hutto | 1,160,250 | 18,789 | ||||||
TarekEl-Sadany | 945,750 | 18,773 | ||||||
Jeffrey E. Renzi | 926,250 | 11,404 |
The Current Named Officers 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.
Change in Control Agreements
The Company has entered into change in control employment agreements with its executive officers, including the Current Named Officers. The agreements are intended to retain the services of these executives and provide for continuity of management in the event of any actual or threatened change in control. Mr. Altabef’s change in control employment agreement is substantially similar to the other executive officer’s 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 of control, the highest annual bonus paid in the three years prior to the change of control or the annual bonus paid after the change of control. Mr. Stafford’s change in control employment agreement is also substantially similar to the other executive officer’s change in control employment agreements except that his has been modified to reflect that he is employed by and receives benefits from a subsidiary of the Company in the U.K. with terms relating to the continuation of health and benefits customary in that country. The material terms of each of the change in control employment agreements with the Current Named Officers are summarized below.
58
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”).
UNISYS 55
If, following a change in control, the Company terminates the executive without cause 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) apro-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 thetwo-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 (6)(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 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 greaterafter-tax benefits to the executive. The executive is under no obligation to mitigate amounts payable under these agreements.
59
Summary
If the Current Named Officers had become entitled to the special termination benefits described above on the last business day of 2016,2017, 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) |
| 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 |
|
| 1,312,200 |
|
|
| 5,710,500 |
|
|
| 50,000 |
|
|
| 32,816 |
|
|
| 36,041 |
|
|
| 7,141,557 |
| 1,551,555 | 6,356,388 | 50,000 | 20,264 | 34,306 | 8,012,513 | ||||||||||||||||||
Inder M. Singh |
|
| 472,500 |
|
|
| 1,995,000 |
|
|
| 50,000 |
|
|
| 14,535 |
|
|
| 36,041 |
|
|
| 2,568,076 |
| 459,777 | 2,109,554 | 50,000 | 13,543 | 34,306 | 2,667,180 | ||||||||||||||||||
Eric Hutto | 574,650 | 2,339,300 | 50,000 | 13,820 | 38,877 | 3,016,646 | ||||||||||||||||||||||||||||||||||||||||||
TarekEl-Sadany | 415,664 | 1,801,328 | 50,000 | 11,384 | 38,842 | 2,317,218 | ||||||||||||||||||||||||||||||||||||||||||
Jeffrey E. Renzi |
|
| 487,350 |
|
|
| 1,924,700 |
|
|
| 50,000 |
|
|
| 9,500 |
|
|
| 23,421 |
|
|
| 2,494,971 |
| 576,246 | 2,102,492 | 50,000 | 9,789 | 23,596 | 2,762,123 | ||||||||||||||||||
Eric Hutto |
|
| 340,200 |
|
|
| 1,680,400 |
|
|
| 50,000 |
|
|
| 15,931 |
|
|
| 36,041 |
|
|
| 2,122,572 |
| ||||||||||||||||||||||||
Andrew J. Stafford |
|
| 547,025 |
|
|
| 2,245,682 |
|
|
| 50,000 |
|
|
| 1,046 |
|
| 607 |
|
|
| 2,844,361 |
|
(1) | The 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 |
UNISYS 56
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 cause within 24 months of the change in control, all stock options and Time-Based RSUs will become fully vested, apro-rata portion (based on the completed portion of the related performance cycle) of the target amount of Performance-Based RSUs granted under the Unisys Corporation 2003 Long-Term Incentive and Equity Compensation Plan, and the full amount of the target amount of Performance-Based RSUs granted under the Unisys Corporation 2010 Long-Term Incentive and Equity Compensation Plan and the 2016 Plan will vest. If a change in control and a termination of employment had occurred on the last business day of 2016,2017, the Current Named Officers 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 cash:
Name |
| Vested Restricted Stock Units (#) |
|
| Value of Vested Restricted Stock Units (1)($) |
|
| Value of Vested Long-Term Performance Cash ($) |
| Vested Restricted Stock Units (#) | Value of Vested Restricted Stock Units (1)($) | Value of Vested Long- Term Performance Cash ($) | ||||||||||||
Peter A. Altabef |
|
| 328,393 |
|
|
| 4,909,475 |
|
|
| 1,434,000 |
| 440,869 | 3,593,082 | 2,489,300 | |||||||||
Inder M. Singh |
|
| 35,000 |
|
|
| 523,250 |
|
|
| 189,000 |
| 66,522 | 542,154 | 426,000 | |||||||||
Eric Hutto | 75,856 | 618,226 | 444,467 | |||||||||||||||||||||
Tarek El-Sadany | 68,440 | 557,786 | 377,134 | |||||||||||||||||||||
Jeffrey E. Renzi |
|
| 75,518 |
|
|
| 1,128,994 |
|
|
| 281,800 |
| 78,883 | 642,896 | 420,867 | |||||||||
Eric Hutto |
|
| 48,986 |
|
|
| 732,341 |
|
|
| 216,700 |
| ||||||||||||
Andrew J. Stafford |
|
| 59,600 |
|
|
| 891,020 |
|
|
| 300,000 |
|
(1) | Based on the |
60
In addition, the following number of stock options would have become exercisable at the following exercise prices:
Name | Stock Options (#) | Exercise Price ($) | ||||||
Peter A. Altabef | 46,666 | 28.19 | ||||||
Inder M. Singh | - | - | ||||||
Eric Hutto | 2,378 | 13.00 | ||||||
1,666 | 21.77 | |||||||
TarekEl-Sadany | 7,333 | 20.95 | ||||||
Jeffrey E. Renzi | 10,249 | 22.60 |
Pursuant to Item 402(u) of RegulationS-K, the Company is required to provide the following information with respect to the year ended December 31, 2017:
Name |
| Stock Options (#) |
|
| Exercise Price ($) |
| ||
Peter A. Altabef |
|
| 93,333 |
|
| 28.19 |
| |
Inder M. Singh |
|
| - |
|
|
| - |
|
Jeffrey E. Renzi |
|
| 11,999 |
|
|
| 32.90 |
|
|
|
| 20,499 |
|
|
| 22.60 |
|
Eric Hutto |
|
| 3,333 |
|
|
| 21.77 |
|
|
|
| 4,756 |
|
|
| 13.00 |
|
Andrew J. Stafford |
|
| - |
|
|
| - |
|
The median of the annual total compensation of all employees of the Company (other than Mr. Altabef, the Company’s Chief Executive Officer) was $30,381.
A discussionThe annual total compensation of amounts payableMr. Altabef, the Company’s Chief Executive Officer, was $7,530,080.
Based on this information, the ratio of the annual total compensation of the Company’s Chief Executive Officer to the Named Officers undermedian of the pension plans sponsored byannual total compensation of all employees is 248 to 1.
To identify the median paid employee and determine such employee’s annual total compensation, the Company beginsassessed its employee population as of December 31, 2017 and determined employee compensation using the12-month period ending December 31, 2017. On this date, the Company’s employee population consisted of 20,593 individuals. Approximately 75% of the Company’s employees are based in countries in which the average pay is less than the average pay of the Company’s associates in the United States. The Company also calculated the Chief Executive Officer pay ratio using its U.S. population. The median of the annual total compensation of the Company’s U.S. employees (other than Mr. Altabef) was $85,201 as of December 31, 2017. Based on page 50.this information, the ratio of total annual compensation of the Company’s Chief Executive Officer to the median of the annual total compensation of the Company’s U.S. employees is 88 to 1.
UNISYS 57The Company determined its median employee by: (i) calculating total target cash compensation as the sum of salary and target variable compensation, including target sales bonus, for each of the Company’s employees, (ii) ranking the total target cash compensation of all employees except for the Chief Executive Officer from lowest to highest, and (iii) picking the employee who was in the middle of the list.
Section 16(a) Beneficial Ownership Reporting Compliance
The Company’s directors and officers are required to file reports with the SEC concerning their ownership of Unisys equity securities. During 2016,2017, no officers or directors had any late filings.
61
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 Rule14a-8 of the Exchange Act (“Rule14a-8”) for inclusion in the proxy materials for the 20182019 annual meeting of stockholders must be received by the Company by November 18, 2017.16, 2018.
Any stockholder who intends to present a proposal at the 20182019 annual meeting and has not sought to include the proposal in the Company’s proxy materials pursuant to Rule14a-8 must deliver notice of the proposal to the Company no later than January 26, 2018.25, 2019.
Any stockholder who intends to make a nomination for the Board of Directors at the 20182019 annual meeting must deliver to the Company no later than January 26, 2018February 8, 2019 (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 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.
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 statement and the 20162017 annual report may have been sent to you and the other Unisys stockholders who share your address. Householding is designed to reduce the volume of duplicate information that stockholders receive and the Company’s printing and mailing expenses.
If your household has received only one copy of the proxy materials, and you would prefer to receive separate copies of these documents, either now or in the future, please call us at215-986-6999, or write us at Investor Relations, 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.
UNISYS
58 62
Forward LookingForward-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 “Factors that may affect future results” and “Cautionary Statement Pursuant to the U.S. Private Securities Litigation Reform Act of 1995”“Risk Factors” in Part I, Item 1A of the Company’s 20162017 Form10-K. 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.
At the date of this proxy statement, the Board of Directors knows of no matter that will be presented for consideration at the annual meeting other than those described in this proxy statement. If any other matter properly comes before the annual meeting, the persons appointed as proxies will vote thereon in their discretion.
The Company will bear the cost of soliciting proxies. Such cost will include charges by brokers and other custodians, nominees and fiduciaries for forwarding proxies and proxy material to the beneficial owners of Unisys common stock. Solicitation may also be made personally or by telephone by the Company’s directors, officers and regular employees without additional compensation. In addition, the Company has retained Alliance Advisors to assist in the solicitation of proxies for a fee of approximately $22,500, plus expenses.
By Order of the Board of Directors, Gerald P. Kenney Senior Vice President, General Counsel and Secretary Dated: March 16, 2018 63
UNISYS CORPORATION 801 LAKEVIEW DRIVE, SUITE 100 BLUE BELL, PA 19422 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions. Your Internet vote authorizes the named proxies to vote the shares in the same manner as if you marked, dated, signed and returned the 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 website and follow the instructions provided. ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by Unisys Corporation in mailing proxy materials, you can consent to receive all future proxy statements, annual reports and proxy cards electronically. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. VOTE BY TELEPHONE -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 thecut-off or annual meeting date. Have your proxy card in hand when you call and follow the instructions provided. VOTE BY MAIL Mark, date, sign and return your proxy card in the enclosed envelope or return it to Unisys Corporation, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E41085-P00838-Z71595 KEEP THIS PORTION FOR YOUR RECORDS — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
Annual Meeting of Stockholders April 26, 2018 8:00 a.m., local time Courtyard Philadelphia Downtown 21 N. Juniper Street Philadelphia, PA 19107 YOUR VOTE IS IMPORTANT THANK YOU FOR VOTING Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: Notice of 2018 Annual Meeting and Proxy Statement and 2017 Annual Report are available at www.proxyvote.com. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — E41086-P00838-Z71595 UNISYS CORPORATION PROXY FOR ANNUAL MEETING TO BE HELD APRIL 26, 2018 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Peter A. Altabef, Nathaniel A. Davis and Denise K. Fletcher, 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 2018 Annual Meeting of Stockholders of Unisys Corporation, and at any adjournments thereof, as directed on the reverse side hereof with respect to the items set forth in the accompanying proxy statement and in their discretion upon such other matters as may properly come before the meeting. This card also provides voting instructions (for shares credited to the account of the undersigned, if any) to the trustee for the Unisys Savings Plan (the “Savings Plan”) as more fully described on page 2 of the proxy statement. 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. IF YOU ARE VOTING BY MAIL, PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY/VOTING INSTRUCTION CARD IN THE ENCLOSED ENVELOPE.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
|