SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrantþ
Filed by a Party other than the Registranto
Check the appropriate box:
o | Preliminary Proxy Statement | o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
þ | Definitive Proxy Statement | |||||
o | Definitive Additional Materials | |||||
o | Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 |
UNISYS CORPORATION |
(Name of Registrant as Specified in Its Charter) |
(Name of Person(s) Filing Proxy Statement if other than the Registrant) |
Payment of Filing Fee (Check the appropriate box):
þ | No fee required. | ||||
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | ||||
(1) | Title of each class of securities to which transaction applies: | ||||
(2) | Aggregate number of securities to which transaction applies: | ||||
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): | ||||
(4) | Proposed maximum aggregate value of transaction: | ||||
(5) | Total fee paid: | ||||
o | Fee paid previously with preliminary materials. | ||||
o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. | ||||
(1) | Amount previously paid: | ||||
(2) | Form, schedule or registration statement no.: | ||||
(3) | Filing party: | ||||
(4) | Date filed: | ||||
Unisys Corporation | |
Unisys Way | |
Blue Bell, PA 19424-0001 |
![(UNISYS LOGO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w0574110.gif)
Sincerely, | |
![]() | |
Lawrence A. Weinbach | |
Chairman of the Board |
![(UNISYS LOGO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w0574110.gif)
1. elect four directors; | |
2. ratify the selection of the Company’s independent registered public accounting firm for 2005; and | |
3. transact any other business properly brought before the meeting. |
By Order of the Board of Directors, | |
![]() | |
Nancy Straus Sundheim | |
Senior Vice President, General Counsel | |
and Secretary |
PROXY STATEMENT | |||||
Required Vote | 1 | ||||
Voting Procedures and Revocability of Proxies | 1 | ||||
ELECTION OF DIRECTORS | 2 | ||||
Information Regarding Nominees and Directors | 2 | ||||
Board Meetings; Attendance at Annual Meetings | 7 | ||||
Independence of Directors | 7 | ||||
Committees | 7 | ||||
Code of Ethics and Business Conduct | 8 | ||||
Corporate Governance Guidelines | 8 | ||||
Stock Ownership Guidelines | 10 | ||||
Communications with Directors | 10 | ||||
Audit Committee Report | 10 | ||||
Relationship with Independent Registered Public Accounting Firm | 11 | ||||
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 11 | ||||
EQUITY COMPENSATION PLAN INFORMATION | 12 | ||||
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 13 | ||||
EXECUTIVE COMPENSATION | 15 | ||||
Summary Compensation Table | 15 | ||||
Option Grants in Last Fiscal Year | 16 | ||||
Option Exercises and Fiscal Year-End Values | 16 | ||||
Pension Plans | 16 | ||||
Employment Agreements | 17 | ||||
Change in Control Employment Agreements | 19 | ||||
Transactions with Management | 19 | ||||
Compensation of Directors | 20 | ||||
REPORT OF THE COMPENSATION COMMITTEE | 20 | ||||
Compensation Program and Policies | 20 | ||||
Base Salary | 21 | ||||
Variable Incentive Compensation | 21 | ||||
Long-Term Incentive Awards | 21 | ||||
Compensation of the Chief Executive Officer | 21 | ||||
Deductibility of Executive Compensation | 22 | ||||
STOCK PERFORMANCE GRAPH | 23 | ||||
GENERAL MATTERS | 24 | ||||
Policy on Confidential Voting | 24 | ||||
Stockholder Proposals and Nominations | 24 | ||||
Electronic Access to Proxy Materials and Annual Report | 24 | ||||
Householding of Proxy Statement and Annual Report | 24 | ||||
Other Matters | 25 | ||||
APPENDIX A | |||||
Audit Committee Charter | A-1 |
1
2
![(BOLDUC PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w05741o6.gif)
J. P. BOLDUC | |
Mr. Bolduc, 65, is Chairman and Chief Executive Officer of JPB Enterprises, Inc., a merchant banking, venture capital and real estate investment holding company. Since April 2003, he has also served as Chief Executive Officer of J. A. Jones, a multi-national construction and construction-related services company. He previously served in the positions of President and Chief Executive Officer, Vice Chairman, and Chief Operating Officer of W. R. Grace & Co., a specialty chemicals and health care company. He is a Director of Proudfoot PLC and EnPro Industries, Inc. He has served as a Director of Unisys since 1992 and is a member of the Finance Committee. | |
In February 2003, the SEC and Mr. Bolduc settled public administrative and cease-and-desist proceedings. Without admitting or denying the SEC’s findings, Mr. Bolduc consented to the entry of a cease-and-desist order in which the SEC found that, between 1991 and 1995, while Mr. Bolduc was president and either chief operating officer or chief executive officer of W. R. Grace & Co. and a member of its board of directors, Grace fraudulently used reserves to defer income earned by a subsidiary, primarily to smooth earnings of its health care segment, in violation of the antifraud provisions of the federal securities laws, as well as the provisions that require public companies to keep accurate books and records, maintain appropriate internal accounting controls and file accurate annual and quarterly reports. The order generally finds that Mr. Bolduc, through his actions or omissions, was a cause of these violations. The order also notes that, during the period in question, Mr. Bolduc did not sell any of the substantial number of Grace shares that he owned. The SEC ordered Mr. Bolduc to cease and desist from committing or causing any violation or future violation of the antifraud and reporting requirements of the federal securities laws. It did not impose any fines, penalties or bars on Mr. Bolduc. |
![(DUDERSTADT PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w05741o7.gif)
JAMES J. DUDERSTADT | |
Dr. Duderstadt, 62, is President Emeritus and University Professor of Science and Engineering at the University of Michigan. He has served as a Director of Unisys since 1990 and is a member of the Nominating and Corporate Governance Committee. |
3
![(ESPE PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w0574116.gif)
MATTHEW J. ESPE | |
Mr. Espe, 45, is a Director and Chairman and Chief Executive Officer of IKON Office Solutions, Inc., a provider of integrated document management systems and services. Prior to joining IKON in 2002, Mr. Espe had been with General Electric Company since 1980, most recently serving as President and Chief Executive Officer of GE Lighting. He has served as a Director of Unisys since July 2004 and is a member of the Finance Committee. |
![(FLETCHER PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w05741o8.gif)
DENISE K. FLETCHER | |
Ms. Fletcher, 56, has been Chief Financial Officer of DaVita, Inc., an independent provider of dialysis services in the United States, since 2004. From 2000 to 2003, she was Executive Vice President and Chief Financial Officer of MasterCard International, an international payment solutions company. Before joining MasterCard, she served as Chief Financial Officer of Bowne Inc., a global document management and information services provider. She is a Director of Sempra Energy. She has served as a Director of Unisys since 2001 and is a member of the Audit Committee and the Nominating and Corporate Governance Committee. |
4
![(HOGAN PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w0574101.gif)
RANDALL J. HOGAN | |
Mr. Hogan, 49, is a Director and Chairman and Chief Executive Officer of Pentair, Inc., a diversified manufacturer of water and wastewater transport, storage and treatment products and enclosures for the protection of electronic controls and components. He has also held the positions of President and Chief Operating Officer and Executive Vice President of that company and President of its Electronic Enclosures Group. He has served as a Director of Unisys since March 2004 and is a member of the Nominating and Corporate Governance Committee. |
![(HUSTON PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w0574111.gif)
EDWIN A. HUSTON | |
Mr. Huston, 66, is a retired Vice Chairman of Ryder System, Inc., an international logistics and transportation solutions company. He has also served as Senior Executive Vice President-Finance and Chief Financial Officer of that company. He is a Director of Answerthink, Inc., Enterasys Networks, Inc. and Kaman Corporation. He has served as a Director of Unisys since 1993 and is a member of the Audit Committee. |
![(MCGRATH PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w0574117.gif)
JOSEPH W. MCGRATH | |
Mr. McGrath, 52, is President and Chief Executive Officer of Unisys. He has been with Unisys since 1999, serving as President and Chief Operating Officer from April 2004 through December 2004; Executive Vice President and President of the Company’s Enterprise Transformation Services business from 2000 to 2004; and Senior Vice President of Major Accounts Sales and Chief Marketing Officer from 1999 to 2000. He has served as a Director of Unisys since January 2005. |
5
Term Expiring in 2007 |
![(DUQUES PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w0574112.gif)
HENRY C. DUQUES | |
Mr. Duques, 61, is a retired Chairman and Chief Executive Officer of First Data Corporation, an electronic commerce and payment services company. He is a Director of SunGard Data Systems, Inc. He has served as a Director of Unisys since 1998 and is a member of the Compensation Committee. |
![(JONES PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w0574100.gif)
CLAYTON M. JONES | |
Mr. Jones, 55, is a Director and Chairman, President and Chief Executive Officer of Rockwell Collins, Inc., a global aviation electronics and communications company. He has also held the positions of Executive Vice President of that company and Senior Vice President of its former parent company, Rockwell International Corporation. He has served as a Director of Unisys since February 2004 and is a member of the Compensation Committee. |
![(MARTIN PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w0574114.gif)
THEODORE E. MARTIN | |
Mr. Martin, 65, is a retired President and Chief Executive Officer of Barnes Group Inc., a manufacturer and distributor of automotive and aircraft components and maintenance products. He has also held the position of Executive Vice President-Operations of that company. He is a Director of Ingersoll-Rand Company, Applera Corporation and C.R. Bard, Inc. He has served as a Director of Unisys since 1995 and is a member of the Audit Committee and the Compensation Committee. |
![(WEINBACH PHOTO)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w05741o5.gif)
LAWRENCE A. WEINBACH | |
Mr. Weinbach, 65, is Chairman of the Board of Unisys. He joined Unisys in 1997 as Chairman of the Board, President and Chief Executive Officer, a position he held until April 2004. From April through December 2004, Mr. Weinbach served as Chairman of the Board and Chief Executive Officer. He stepped down as Chief Executive Officer effective January 1, 2005. Prior to joining Unisys, Mr. Weinbach served in the position of Managing Partner-Chief Executive of Andersen Worldwide, a global professional services organization. He is a Director of Avon Products, Inc. and UBS AG. He has served as a Director of Unisys since 1997. |
6
7
1. A majority of the Board of Directors shall qualify as independent under the listing standards of the New York Stock Exchange. | |
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 New York Stock Exchange 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 donates less than one percent of that organization’s charitable receipts. |
8
3. Directors should not, except in rare circumstances approved by the Board, draw any consulting, legal or other fees from the Company. In no event shall any member of the Audit Committee receive any compensation from the Company other than directors’ fees. | |
4. Membership on the Audit, Compensation and Nominating and Corporate Governance Committees is limited to directors who meet the independence criteria of the New York Stock Exchange. | |
5. Directors may not stand for election after age 70 or continue to serve beyond the annual stockholders’ meeting following the attainment of age 70. | |
6. Directors should volunteer to resign from the Board upon a change in position, including retirement, from the position they held when they were elected to the Board. The Board, through the Nominating and Corporate Governance Committee, will then make a determination whether continued Board membership is appropriate under the circumstances. In addition, if the Company’s chief executive officer resigns from that position, he is expected to offer his resignation from the Board at the same time. | |
7. The Nominating and Corporate Governance Committee is responsible for determining the appropriate skills and characteristics required of Board members in the context of its current make-up, and will consider factors such as independence, experience, strength of character, mature judgment, technical skills, diversity and age in its assessment of the needs of the Board. | |
8. The Company should maintain an orientation program for new directors and continuing education programs for all directors. | |
9. The Board will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. | |
10. The non-management directors will meet in executive session at all regularly scheduled Board meetings. They may also meet in executive session at any time upon request. The position of presiding director for these meetings will rotate, meeting by meeting, among the chairpersons of the Audit Committee, the Compensation Committee, the Finance Committee and the Nominating and Corporate Governance Committee. | |
11. The non-management 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 New York Stock Exchange will determine and approve, the compensation of the chief executive officer. | |
12. To assist the Board in its planning for the succession to the position of chief executive officer, the chief executive officer is expected to provide an annual report on succession planning to the Compensation Committee. | |
13. Board members have complete access to Unisys management. Members of senior management who are not Board members regularly attend Board meetings, and the Board encourages senior management, from time to time, to bring into Board meetings other managers who can provide additional insights into the matters under discussion. |
9
14. The Board and its committees have the right at any time to retain independent outside financial, legal or other advisors. |
10
2004 | 2003 | |||||||
Audit Fees | $ | 7.2 | $ | 4.4 | ||||
Audit-Related Fees | 1.0 | 1.3 | ||||||
Tax Fees | 1.0 | 2.0 | ||||||
All Other Fees | 0.1 | — |
11
Number of securities | ||||||||||||
Number of securities | remaining available for | |||||||||||
to be issued | Weighted-average | future issuance under | ||||||||||
upon exercise of | exercise price of | equity compensation plans | ||||||||||
outstanding options, | outstanding options, | (excluding securities | ||||||||||
warrants and rights | warrants and rights | reflected in column (a)) | ||||||||||
Plan category | (a) | (b) | (c) | |||||||||
Equity compensation | ||||||||||||
plans approved by | 35.802 million | (1) | $20.19 | (3) | 21.977 million | (4) | ||||||
security holders | .244 million | (2) | $0 | |||||||||
Equity compensation | ||||||||||||
plans not approved | 7.384 million | (6) | $10.49 | 0 | ||||||||
by security holders(5) | .161 million | (7) | $0 | |||||||||
Total | 43.591 million | $18.53 | 21.977 million |
(1) | Represents stock options, including options for approximately 2,100 shares granted under compensation plans assumed in connection with acquisitions. |
(2) | Represents restricted share units and stock units. |
(3) | Weighted-average exercise price of outstanding options under compensation plans assumed in connection with acquisitions is $29.00. |
(4) | Comprises 15.014 million shares under the Unisys Corporation 2003 Long-Term Incentive and Equity Compensation Plan (the “2003 Plan”) and 6.963 million shares under the Unisys Corporation Employee Stock Purchase Plan. |
(5) | Comprises the Unisys Corporation Director Stock Unit Plan (the “Stock Unit Plan”) and the 2002 Stock Option Plan (the “2002 Plan”). Under the Stock Unit Plan, directors received a portion of their annual retainers and attendance fees in common stock equivalent units, as described on page 20. The Stock Unit Plan was terminated in 2004, and stock units are now granted to directors under the 2003 Plan, approved by stockholders in 2003. Under the 2002 Plan, stock options could be granted to key employees other than officers to purchase the Company’s common stock at no less than 100% of fair market value at the date of grant. Options generally have a maximum duration of ten years and become exercisable in four equal annual installments beginning one year after the date of grant. The 2002 Plan was replaced by the 2003 Plan in 2003. No further awards will be made under either the Stock Unit Plan or the 2002 Plan, and no shares (other than shares subject to outstanding options and other awards previously made) are available for future issuance under either Plan. |
(6) | Represents options granted under the 2002 Plan. |
(7) | Represents stock units granted under the Stock Unit Plan. |
12
Name and Address of | Number of Shares | Percent | ||||||
Beneficial Owner | of Common Stock | of Class | ||||||
Brandes Investment Partners, L.P. | 45,997,597 | (1) | 13.7 | |||||
Brandes Investment Partners, Inc. | ||||||||
Brandes Worldwide Holdings, L.P. | ||||||||
Charles H. Brandes | ||||||||
Glenn R. Carlson | ||||||||
Jeffrey A. Busby | ||||||||
11988 El Camino Real, Suite 500 | ||||||||
San Diego, CA 92130 | ||||||||
Merrill Lynch & Co. Inc. | 33,266,622 | (2) | 9.9 | |||||
(on behalf of Merrill Lynch Investment | ||||||||
Managers) | ||||||||
World Financial Center, North Tower | ||||||||
250 Vesey Street | ||||||||
New York, NY 10381 |
(1) | Shared dispositive power has been reported for 45,997,597 shares. Shared voting power has been reported for 35,720,334 shares. |
(2) | Shared dispositive and shared voting power has been reported for all shares. |
13
Additional Shares of | ||||||||
Beneficial | Number of Shares | Common Stock Deemed | ||||||
Owner | of Common Stock(1)(2) | Beneficially Owned(1)(3) | ||||||
J. P. Bolduc | 25,043 | 38,000 | ||||||
James J. Duderstadt | 22,407 | 38,000 | ||||||
Henry C. Duques | 32,357 | 38,000 | ||||||
Matthew J. Espe | 1,724 | 0 | ||||||
Denise K. Fletcher | 9,345 | 18,000 | ||||||
George R. Gazerwitz | 16,234 | 796,250 | ||||||
Janet B. Haugen | 23,066 | 447,250 | ||||||
Randall J. Hogan | 2,479 | 3,000 | ||||||
Edwin A. Huston | 24,923 | 38,000 | ||||||
Clayton M. Jones | 2,653 | 3,000 | ||||||
Theodore E. Martin | 64,950 | 38,000 | ||||||
Joseph W. McGrath | 49,144 | 601,250 | ||||||
Janet B. Wallace | 13,872 | 377,500 | ||||||
Lawrence A. Weinbach | 384,131 | 3,793,000 | ||||||
All directors and officers as a group | 861,278 | 8,132,900 |
(1) | Includes shares reported by directors and officers as held directly or in the names of spouses, children or trusts as to which beneficial ownership may have been disclaimed. |
(2) | Includes: |
(a) | Shares held under the Unisys Savings Plan, a qualified plan under Sections 401(a) and 401(k) of the Internal Revenue Code, as follows: Mr. Gazerwitz, 3,234; Ms. Haugen, 1,530; Mr. McGrath, 1,411; Ms. Wallace, 1,345; Mr. Weinbach, 1,365; officers as a group, 26,949. With respect to such shares, plan participants have authority to direct voting. |
(b) | Stock units deferred under the Unisys Corporation Deferred Compensation Plan as follows: Mr. Gazerwitz, 13,000; Mr. McGrath, 34,894; officers as a group, 48,896. Deferred stock units are payable in shares of Unisys common stock upon termination of employment or on a date specified by the executive. They may not be voted. |
(c) | Restricted share units as follows: Mr. Weinbach, 128,123; officers as a group, 153,123. Restricted share units are payable in shares of Unisys common stock upon vesting. They may not be voted. |
(d) | Stock units, as described on page 20, for directors as follows: Mr. Bolduc, 22,043; Dr. Duderstadt, 21,357; Mr. Duques, 27,357; Mr. Espe, 1,724; Ms. Fletcher, 9,345; Mr. Hogan, 2,479; Mr. Huston, 23,923; Mr. Jones, 2,653; and Mr. Martin, 44,950. They may not be voted. |
(3) | Shares shown are shares subject to options exercisable within 60 days following February 28, 2005. |
14
Long-Term Compensation | |||||||||||||||||||||||||||||||||
Annual Compensation | Awards | Payouts | |||||||||||||||||||||||||||||||
Other | Securities | ||||||||||||||||||||||||||||||||
Annual | Restricted | Underlying | LTIP | All Other | |||||||||||||||||||||||||||||
Compen- | Stock | Options/ | Payouts | Compen- | |||||||||||||||||||||||||||||
Name and | Salary(1) | Bonus(1) | sation(2) | Award(s) | SARs(3) | (3) | sation(4) | ||||||||||||||||||||||||||
Principal Position | Year | ($) | ($) | ($) | ($) | (#) | ($) | ($) | |||||||||||||||||||||||||
Lawrence A. Weinbach | 2004 | 1,400,000 | — | 240,307 | — | 320,000 | — | 4,100 | |||||||||||||||||||||||||
Chairman and | 2003 | 1,400,000 | 770,000 | 190,776 | — | 300,000 | — | 4,000 | |||||||||||||||||||||||||
Chief Executive Officer(5) | 2002 | 1,380,000 | 1,050,000 | 249,689 | — | 1,500,000 | — | 332,813 | |||||||||||||||||||||||||
Joseph W. McGrath | 2004 | 704,168 | — | 2,543 | — | 335,000 | — | 4,100 | |||||||||||||||||||||||||
President and Chief | 2003 | 550,008 | 220,000 | 1,710 | — | 100,000 | — | 4,000 | |||||||||||||||||||||||||
Operating Officer(6) | 2002 | 533,340 | 310,000 | 9,725 | — | 400,000 | — | 74,461 | |||||||||||||||||||||||||
George R. Gazerwitz | 2004 | 550,000 | — | 112 | — | 85,000 | — | 4,100 | |||||||||||||||||||||||||
Vice Chairman | 2003 | 541,669 | 220,000 | 176 | — | 100,000 | — | 4,000 | |||||||||||||||||||||||||
2002 | 500,012 | 275,000 | — | — | 400,000 | — | 115,494 | ||||||||||||||||||||||||||
Janet B. Wallace | 2004 | 491,667 | — | — | — | 70,000 | — | 4,100 | |||||||||||||||||||||||||
Executive Vice President | 2003 | 450,000 | 130,000 | — | — | 75,000 | — | 4,000 | |||||||||||||||||||||||||
2002 | 435,000 | 200,000 | — | — | 250,000 | — | 48,441 | ||||||||||||||||||||||||||
Janet B. Haugen | 2004 | 491,667 | — | 3,404 | — | 75,000 | — | 4,100 | |||||||||||||||||||||||||
Senior Vice President | 2003 | 450,000 | 135,000 | — | — | 80,000 | — | 4,000 | |||||||||||||||||||||||||
and Chief Financial | 2002 | 433,333 | 210,000 | 11,041 | — | 250,000 | — | 25,800 | |||||||||||||||||||||||||
Officer |
(1) | Amounts shown include compensation deferred under the Unisys Savings Plan or the Unisys Corporation Deferred Compensation Plan. |
(2) | Amounts shown for 2004 for Mr. Weinbach are $103,331 in tax reimbursements and $136,976 in personal benefits, including $59,884 for supplemental long-term disability insurance and $35,000 for personal use of a corporate apartment. Amounts shown for Mr. McGrath, Mr. Gazerwitz and Ms. Haugen for 2004 are tax reimbursements. |
(3) | Although the Company’s long-term incentive plan permits grants of free-standing stock appreciation rights and the payment of performance awards, no such grants or payments were made to any of the Named Officers during the years presented. |
(4) | Amounts shown for 2004 for each Named Officer are Company matching contributions under the Unisys Savings Plan. |
(5) | Effective January 1, 2005, Mr. Weinbach stepped down as Chief Executive Officer. He currently serves as Chairman of the Board. |
(6) | Effective January 1, 2005, Mr. McGrath was named President and Chief Executive Officer. |
15
Potential Realizable Value | ||||||||||||||||||||||||
at Assumed Annual Rates | ||||||||||||||||||||||||
of Stock Price Appreciation | ||||||||||||||||||||||||
Individual Grants(1) | for Option Terms(2) | |||||||||||||||||||||||
Number | ||||||||||||||||||||||||
of | % of | |||||||||||||||||||||||
Securities | Total | |||||||||||||||||||||||
Underlying | Options | Exercise | ||||||||||||||||||||||
Options | Granted to | or Base | ||||||||||||||||||||||
Granted | Employees | Price(3) | Expiration | |||||||||||||||||||||
Name | (#) | in 2004 | ($/Sh) | Date(4) | 5%($) | 10%($) | ||||||||||||||||||
Lawrence A. Weinbach | 320,000 | 7.0 | 14.27 | 2/11/14 | 2,871,776 | 7,277,664 | ||||||||||||||||||
Joseph W. McGrath | 85,000 | 1.9 | 14.27 | 2/11/14 | 762,816 | 1,933,130 | ||||||||||||||||||
250,000 | 5.5 | 9.975 | 12/22/14 | 1,568,301 | 3,974,393 | |||||||||||||||||||
George R. Gazerwitz | 85,000 | 1.9 | 14.27 | 2/11/14 | 762,816 | 1,933,130 | ||||||||||||||||||
Janet B. Wallace | 70,000 | 1.5 | 14.27 | 2/11/14 | 628,201 | 1,591,989 | ||||||||||||||||||
Janet B. Haugen | 75,000 | 1.6 | 14.27 | 2/11/14 | 673,073 | 1,705,703 |
(1) | Options were granted on February 11, 2004 (and, for Mr. McGrath, also on December 22, 2004) and become exercisable in four equal annual installments, beginning one year after the date of grant. Options become immediately exercisable in the event of a change in control (as defined in the long-term incentive plan). |
(2) | Illustrates value that might be realized upon exercise of options immediately prior to the expiration of their term, assuming specified annual rates of appreciation on Unisys common stock over the term of the options. Assumed rates of appreciation are not necessarily indicative of future stock performance. |
(3) | The exercise price is the fair market value (calculated as the average of the high and low quoted sales prices through the official close of the New York Stock Exchange at 4:00 p.m.) of a share of Unisys common stock on the date of grant. |
(4) | The options were granted for a term of ten years, subject to earlier termination in certain events related to termination of employment. |
Number of Securities | ||||||||||||||||||||||||
Underlying Unexercised | Value of Unexercised | |||||||||||||||||||||||
Options at | In-the-Money Options at | |||||||||||||||||||||||
Shares | December 31, 2004 | December 31, 2004(1) | ||||||||||||||||||||||
Acquired | Value | (#) | ($) | |||||||||||||||||||||
on Exercise | Realized | |||||||||||||||||||||||
Name | (#) | ($) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Lawrence A. Weinbach | — | — | 3,163,000 | 1,470,000 | 132,375 | 397,125 | ||||||||||||||||||
Joseph W. McGrath | — | — | 436,250 | 628,750 | 44,125 | 183,625 | ||||||||||||||||||
George R. Gazerwitz | — | — | 625,000 | 385,000 | 44,125 | 132,375 | ||||||||||||||||||
Janet B. Wallace | — | — | 263,750 | 266,250 | 33,094 | 99,281 | ||||||||||||||||||
Janet B. Haugen | — | — | 333,500 | 272,500 | 176,473 | 105,900 |
(1) | Difference between the closing price for Unisys common stock on December 31, 2004 and the exercise price. |
16
Years of Service | ||||||||||||||||||||||||||
Assumed Final | ||||||||||||||||||||||||||
Average Compensation | 5 | 10 | 15 | 20 | 25 | 30 or more | ||||||||||||||||||||
$ | 200,000 | $ | 40,000 | $ | 80,000 | $ | 90,000 | $ | 100,000 | $ | 110,000 | $ | 120,000 | |||||||||||||
300,000 | 60,000 | 120,000 | 135,000 | 150,000 | 165,000 | 180,000 | ||||||||||||||||||||
400,000 | 80,000 | 160,000 | 180,000 | 200,000 | 220,000 | 240,000 | ||||||||||||||||||||
500,000 | 100,000 | 200,000 | 225,000 | 250,000 | 275,000 | 300,000 | ||||||||||||||||||||
600,000 | 120,000 | 240,000 | 270,000 | 300,000 | 330,000 | 360,000 | ||||||||||||||||||||
700,000 | 140,000 | 280,000 | 315,000 | 350,000 | 385,000 | 420,000 | ||||||||||||||||||||
800,000 | 160,000 | 320,000 | 360,000 | 400,000 | 440,000 | 480,000 | ||||||||||||||||||||
900,000 | 180,000 | 360,000 | 405,000 | 450,000 | 495,000 | 540,000 | ||||||||||||||||||||
1,000,000 | 200,000 | 400,000 | 450,000 | 500,000 | 550,000 | 600,000 |
17
18
19
20
21
22
![(Line Graph)](https://capedge.com/proxy/DEF 14A/0000893220-05-000583/w05741w0574102.gif)
1999 | 2000 | 2001 | 2002 | 2003 | 2004 | |||||||||||||||||||
Unisys Corporation | 100 | 46 | 39 | 31 | 46 | 32 | ||||||||||||||||||
S & P 500 | 100 | 91 | 80 | 62 | 80 | 89 | ||||||||||||||||||
S & P 500 IT Services | 100 | 71 | 75 | 33 | 37 | 39 | ||||||||||||||||||
S & P 500 Computer Hardware | 100 | 64 | 62 | 44 | 56 | 64 |
23
24
By Order of the Board of Directors, | |
![]() | |
Nancy Straus Sundheim | |
Senior Vice President, General Counsel | |
and Secretary |
25
III. | Responsibilities |
a. | Review and discuss the Corporation’s quarterly and annual financial statements, including disclosures made in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the Corporation’s financial reporting process, including the system of internal controls, with management and the independent registered public accounting firm prior to the filing of the Corporation’s quarterly report on Form 10-Q or annual report on Form 10-K, as the case may be. Also discuss with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 61, as amended. | |
b. | Keep informed of the progress of management’s documentation, testing and evaluation of the Corporation’s system of internal control over financial reporting required by the Sarbanes-Oxley Act of 2002 and related regulations, provide |
A-1
oversight to management during the process, and at the conclusion of the process, review a report on the effectiveness of the Corporation’s internal control over financial reporting. | ||
c. | Discuss with management the Corporation’s earnings press releases (paying particular attention to the use of any “pro forma” or “adjusted” non-GAAP information), as well as the nature of financial information and earnings guidance provided to securities analysts and rating agencies. The Audit Committee’s discussion in this regard may be general in nature and need not take place in advance of each instance in which the Corporation may provide financial information or earnings guidance. | |
d. | Discuss with management the Corporation’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Corporation’s risk assessment and risk management policies. | |
e. | Review, with management, the internal auditors and the independent registered public accounting firm, major issues regarding accounting principles and financial statement presentations, including any significant changes in the Corporation’s selection or application of accounting principles, and major issues as to the adequacy of the Corporation’s internal controls and any special audit steps adopted in light of material control deficiencies. In this regard, the Audit Committee should obtain and discuss with management and the independent registered public accounting firm reports and analyses from management and the independent registered public accounting firm concerning: (a) all critical accounting policies and practices to be used by the Corporation, (b) significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including all alternative treatments of financial information within generally accepted accounting principles (“GAAP”) that have been discussed with management, the ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the independent registered public accounting firm and (c) any other material written communications between the independent registered public accounting firm and management. |
f. | Review periodically the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Corporation. |
g. | Review with the independent registered public accounting firm (a) any audit problems or other difficulties encountered during the course of the audit process, including any restrictions on the scope of the independent registered public accounting firm’s activities or access to required information and any significant disagreements with management and (b) management’s response to such matters. Also review with them the responsibilities, budget and staffing of the Corporation’s internal audit function. | |
h. | Resolve any disagreements between management and the independent registered public accounting firm regarding financial reporting. |
i. | Review any disclosures made to the Audit Committee in connection with the Corporation’s CEO and CFO certification process for the Form 10-K and Form 10-Q about any significant deficiencies or material weaknesses in the design or operation |
A-2
of internal controls and any fraud involving management or other employees who have a significant role in the Corporation’s internal controls. |
2. | Oversight of the Corporation’s Relationship with its Independent Registered Public Accounting Firm |
a. | Sole authority to appoint or replace the Corporation’s independent registered public accounting firm (subject if applicable to stockholder ratification), and to approve all fees payable to them. The independent registered public accounting firm shall report directly to the Audit Committee. | |
b. | Approve, in advance, all audit services, and all non-audit services provided by the Corporation’s independent registered public accounting firm that are not specifically prohibited under the Sarbanes-Oxley Act, in order to determine that the services do not impair the firm’s independence from the Corporation. In fulfilling this responsibility, the Audit Committee shall adopt and may amend pre-approval policies with respect to such services and shall review such policies annually. | |
c. | Review, at least annually, the qualifications, performance and independence of the independent registered public accounting firm. In conducting its review and evaluation, the Committee should: |
a) | Obtain and review a report by the Corporation’s independent registered public accounting firm describing: (i) the auditing firm’s internal quality-control procedures; (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the auditing firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the auditing firm, and any steps taken to deal with any such issues; and (iii) all relationships between the independent registered public accounting firm and the Corporation; |
b) | Review and evaluate the lead audit partner; |
c) | Assure the rotation of the lead audit partner and the other partners assigned to the engagement as required by law; |
d) | Discuss with the independent registered public accounting firm any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm; |
e) | Consider whether, in order to assure continuing auditor independence, there should be regular rotation of the audit firm itself; |
f) | Take into account the opinions of management and the Corporation’s internal auditors; |
g) | Present its conclusions with respect to the independent registered public accounting firm to the Board and, if necessary, recommend that the Board take appropriate action to satisfy itself of the qualifications, performance and independence of the independent registered public accounting firm; and |
h) | Set clear hiring policies for employees or former employees of the independent registered public accounting firm. At a minimum, these policies should provide that any registered public accounting firm may not provide audit services to the |
A-3
Corporation if the CEO, controller, CFO, chief accounting officer or any person serving in an equivalent capacity for the Corporation was employed by such accounting firm and participated in the audit of the Corporation within one year of the initiation of the current audit. |
3. | Oversight of the Corporation’s Internal Audit Function |
a. | Review the appointment and replacement of the Corporation’s chief audit executive. | |
b. | Review the scope and effectiveness of the Corporation’s internal audit function including responsibilities, budget and staffing. | |
c. | Review, with the chief audit executive, the proposed audit plan, including explanations for deviations from the original plan and any difficulties encountered in the course of the internal audit function’s work, any restrictions on the scope of work and access to required information. |
a. | Review, with the Corporation’s general counsel, any legal matter that could have a significant impact on the Corporation’s financial statements. | |
b. | Annually review the Corporation’s compliance program for its Code of Ethics and Business Conduct and the results of internal audit’s review of the expense accounts of the Corporation’s elected officers. | |
c. | Annually review the status of the Corporation’s environmental compliance program. | |
d. | Establish procedures for (a) the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters and (b) the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters. |
IV. | Meetings; Operational Matters and Reports |
A-4
V. | Limitation of Audit Committee’s Role |
A-5
Annual Meeting of Stockholders
April 21, 2005
9:30 a.m.
The Hilton Inn at Penn
3600 Sansom Street
Philadelphia, Pennsylvania
YOUR VOTE IS IMPORTANT
THANK YOU FOR VOTING
FOLD AND DETACH HERE ONLY IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
UNISYS CORPORATION
PROXY FOR ANNUAL MEETING TO BE HELD APRIL 21, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R
O
X
Y
The undersigned hereby appoints James J. Duderstadt, Edwin A. Huston and Lawrence A. Weinbach, and each of them, proxies, with power of substitution, to vote all shares of common stock which the undersigned is entitled to vote at the 2005 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.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
Please note any change of address or comments below and mark box on the reverse side of this card.
Unisys Corporation
c/o Wachovia Bank, N.A.
Shareholder Services Group
1525 West W.T. Harris Blvd., 3C3
Charlotte, NC 28262-8522
Unisys Corporation encourages you to take advantage of the convenient ways to vote your shares on proposals covered in this year’s proxy statement. You may vote through the Internet, by telephone or by mail.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, dated, signed and returned the proxy card.
VOTE THROUGH THE INTERNET OR BY TELEPHONE OR BY MAIL
1. | VOTE THROUGH THE INTERNET Access the Internet at https://www.proxyvotenow.com/uis, 24 hours a day, 7 days a week. Have your proxy card in hand when you access the web site and follow the instructions provided. | |||
2. | VOTE BY TELEPHONE Using a touch-tone telephone, call toll-free 1-866-289-1737, 24 hours a day, 7 days a week from the U.S. and Canada. Have your proxy card in hand when you call and follow the instructions provided. | |||
3. | VOTE BY MAIL Mark, date, sign and return this proxy/voting instruction card in the enclosed envelope. |
If you vote through the Internet or by telephone, do not return the proxy card.
THANK YOU FOR VOTING!
FOLD AND DETACH HERE ONLY IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
x | PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE. | [ BAR CODE ] |
This proxy, when properly executed, will be voted in the manner directed herein. If no direction is given, this proxy will be voted FOR the election of directors and FOR the ratification of selection of independent registered public accounting firm and the trustee for the Savings Plan will vote as described on page 2 of the proxy statement.
1. Election of Directors | WITHHELD | |||
Nominees: | FOR ALL | FROM ALL | ||
01. J. P. Bolduc 02. James J. Duderstadt 03. Matthew J. Espe 04. Denise K. Fletcher | o o | o | ||
For all, except nominee(s) written above |
2. | Ratification of Selection | FOR | AGAINST | ABSTAIN | ||||||
of Independent Registered Public Accounting Firm | o | o | o | |||||||
MARK HERE IF AN ADDRESS CHANGE OR COMMENT HAS BEEN NOTED ON THE REVERSE SIDE OF THIS CARD | o | |||||||||
MARK HERE TO HAVE YOUR VOTE REMAIN CONFIDENTIAL | o |
Please sign exactly as name appears hereon. If held in joint tenancy, all persons must sign. When signing as executor, administrator, trustee, guardian, corporate officer, etc., please give your full title.
Signature: |
Date: |
Signature: |
Date: |