DEFERRED COMPENSATION
PLAN FOR DIRECTORS OF UNISYS CORPORATION
ARTICLE I
PURPOSE & AUTHORITY
1.1 Purpose. The purpose of the Plan is to offer members of the
Board of Directors who are not employees of the Corporation the opportunity
to defer receipt of a portion of their Compensation, under terms advantageous
to both the Director and the Corporation.
1.2 Effective Date. The Board originally approved the Plan on
November 20, 1981, and the Plan was subsequently amended, effective January
1, 1994. This document reflects the Plan as amended and restated effective
September 22, 2000. The terms of this amended and restated Plan shall apply
to all Account Balances and elections made pursuant to the Plan prior to its
amendment.
1.3 Authority. Any decision made or action taken by the
Corporation and any of its officers or employees involved in the
administration of this Plan, or any member of the Board or the Committee
arising out of or in connection with the construction, administration,
interpretation and effect of the Plan shall be within the absolute discretion
of all and each of them, as the case may be, and will be conclusive and
binding on all parties. No member of the Board and no employee of the
Corporation shall be liable for any act or action hereunder, whether of
omission or commission, by any other member or employee or by any agent to
whom duties in connection with the administration of the Plan have been
delegated or, except in circumstances involving the member's or employee's
bad faith, for anything done or omitted to be done by himself or herself.
ARTICLE II
DEFINITIONS
2.1 "Account" means, for any Participant, each memorandum
account established for the Participant under Section 4.1.
2.2 "Account Balance" means, for any Participant as of any date,
the aggregate amount reflected in his or her Account.
2.3 "Beneficiary" means the person or persons designated from
time to time in writing by a Participant to receive payments under the Plan
after the death of such Participant or, in the absence of such designation or
in the event that such designated person or persons predeceases the
Participant, the Participant's estate.
2.4 "Board" means the Board of Directors of the Corporation.
2.5 "Committee" means the Corporate Governance and Compensation
Committee of the Board, or such other committee as may be appointed by the
Board to administer the Plan.
2.6 "Compensation" means amounts payable by the Corporation,
absent deferral, with respect to services provided by a Participant to the
Corporation as a Director, including retainer and meeting fees, but shall not
include non-elective stock unit amounts credited, payable or paid under the
Stock Unit Plan.
2.7 "Corporation" means Unisys Corporation.
2.8 "Deferral Election" means an election by an Eligible
Director to defer a portion of his or her Compensation under the Plan, as
described in Section 3.1.
2.9 "Eligible Director" means a member of the Board who is not
an employee of the Corporation.
2.10 "Executives' Plan" means the Unisys Corporation Deferred
Compensation Plan .
2.11 "Investment Measurement Option" means any of the
hypothetical investment alternatives available for determining the additional
amounts to be credited to a Participant's Account under Section 4.2. The
Investment Measurement Options available are all of the investment options
available to eligible participants under the USP other than the Unisys Common
Stock Fund.
2.12 "Participant" means an Eligible Director or former Eligible
Director who has made a Deferral Election and who has not received a
distribution of his or her entire Account Balance.
2.13 "Plan" means the Deferred Compensation Plan for Directors of
Unisys Corporation, as set forth herein and as amended from time to time.
2.14 "Revised Election" means an election made by a Participant,
in accordance with Section 5.2, to change the date as of which payment of his
or her Account Balance is to commence and/or the form in which such payment
is to be made.
2.15 "USP" means the Unisys Savings Plan.
2.16 "Valuation Date" means any business day as of which the
interest of a Participant in each of the Participant's Accounts is valued.
ARTICLE III
DEFERRAL OF COMPENSATION
3.1 Deferral Election.
(a) Prior to or during any calendar year, each Eligible
Director may elect to defer all or a portion of his or her Compensation that,
absent deferral, would be paid to him or her for services rendered during the
following calendar year or the remainder of the current calendar year, as
applicable, by properly completing a Deferral Election form.
(b) To be effective, a Deferral Election must be made in
writing by the Eligible Director on a form furnished by the Secretary of the
Corporation on or before the date that is (I) no later than the December 31
prior to the calendar year to which the Deferral Election applies or (II) at
least three months and one day before the date on which the amounts to be
deferred, absent deferral, would be paid to the Eligible Director, provided,
however, that an individual who becomes an Eligible Director after January 1
of a calendar year may make a Deferral Election with respect to Compensation
that, absent deferral, would be paid to him or her during the remainder of
the
calendar year in which he or she has become an Eligible Director, by filing
the required written election on or before the date that is 30 days after the
date on which he or she becomes an Eligible Director.
(c) Once made, a Deferral Election shall become effective
upon approval by the Secretary of the Corporation and is thereafter
irrevocable, except to the extent otherwise provided in Section 5.2. A
Deferral Election will be deemed to have been approved by the Secretary of
the Corporation if it is not disapproved by the Secretary of the Corporation
within ten days of the date on which it is received.
(d) An Eligible Director's Deferral Election must specify
either a percentage or a certain dollar amount of his or her Compensation to
be deferred under the Plan. In addition, the Deferral Election must specify
the date on which payment of the amount deferred is to commence and the
manner in which such payment is to be made.
(1) The Eligible Director must specify the date as of
which payment of the amount deferred is to commence, subject to Section
5.1(b) hereof, and may specify that such payment is to commence as of:
(A) his or her termination of service as a member of
the Board (including as a result of disability); or
(B) a specific date (which may be determined by
reference to the Eligible Director's termination of service) that is at least
two years after the date on which the initial amounts to be deferred, absent
deferral, would be paid to the Eligible Director.
(2) The Eligible Director must specify the manner in which
payment of his or her Account Balance is to be made and may specify that such
payment is to be made either in a single sum or in annual installments.
(3) Notwithstanding the foregoing, an Eligible Director
may not elect a time of benefit commencement and/or a form of payment to the
extent that such an election would cause any payments to be made after the
March 31 first following the date that is 20 years after the date of the
Eligible Director's termination of service.
(e) Deferrals of an Eligible Director's Compensation shall
be credited to the Plan at the time at which the Compensation, absent
deferral, would be payable to the Participant.
(f) Unless the Deferral Election form specifically provides
otherwise, a Deferral Election shall expire as of the last day of the
calendar year that includes the first day on which any amount, absent
deferral, would be paid to the Eligible Director.
ARTICLE IV
TREATMENT OF DEFERRED AMOUNTS
4.1 Memorandum Account. The Corporation shall establish on its
books a separate Account for each Participant for each calendar year in which
the Participant elects to defer Compensation. Amounts deferred by a
participant pursuant to a Deferral Election shall be credited to the
Participant's Account on the date on which the deferred amounts, absent
deferral, would have been paid to the Participant. In addition, as of each
Valuation Date, incremental amounts determined in accordance with Section 4.2
will be credited or debited to each Participant's Account. Any payments made
to or on behalf of the Participant and for his or her Beneficiary shall be
debited from the Account. No assets shall be segregated or earmarked in
respect to any Account and no Participant or Beneficiary shall have any right
to assign, transfer, pledge or hypothecate his or her interest or any portion
thereof in his or her Account. The Plan and the crediting of Accounts
hereunder shall not constitute a trust or a funded arrangement of any sort
and shall be merely for the purpose of recording an unsecured contractual
obligation of the Corporation.
4.2 Investment Measurement Options.
(a) Subject to the provisions of this Section 4.2, a
Participant's Account shall be credited or debited with amounts equal to the
amounts that would be earned or lost with respect to the Participant's
Account Balance if amounts equal to that Account Balance were actually
invested in the Investment Measurement Options in the manner specified by the
Participant.
(b) Each Eligible Director may elect, at the same time as a
Deferral Election is made, to have one or more of the Investment Measurement
Options applied to current deferrals. Such election with respect to current
deferrals may be changed at any time upon appropriate notice to the Corporate
Executive Compensation Department.
(c) Subject to the restrictions described in Subsection (d),
a Participant may elect to change the manner in which Investment Measurement
Options apply to existing Account Balances. In addition, a Participant may
elect to transfer all or any portion of his/her Account balance to the
Director Stock Unit Plan and such amounts will be credited under that Plan as
Elective Stock Units, subject to the terms and conditions of the Director
Stock Unit Plan. Any election described in this subsection (c) will be
effective upon appropriate notice to the Corporate Executive Compensation
Department.
(d) The following rules apply to Investment Measurement
Options.
(1) The percentage of a Participant's current deferrals
and/or Account Balance to which a specified Investment Measurement Option is
to be applied must be a multiple of one percent (1%). The Participant may
change the specified Investment Measurement Options which shall apply to his
or her Account(s) on any business day as of which the Plan's recordkeeper is
open for business. Changes in a specified Investment Measurement Option with
respect to a Participant's Account will be effective as soon as
administratively practicable following receipt of the Participant's election.
(2) To the extent that a Participant has not specified an
Investment Measurement Option to apply to all or a portion of his or her
current deferrals and/or Account Balance, the Insurance Contract Fund or such
other fund as is designated by the Committee shall be deemed to be the
applicable Investment Measurement Option.
(3) The chosen Investment Measurement Option or Options
shall apply to deferred amounts on and after the date on which such amounts,
absent deferral, would have been paid to the Participant.
(e) The Committee shall have the authority to modify the
rules and restrictions relating to Investment Measurement Options (including
the authority to change such Investment Measurement Options prospectively) as
it, in its discretion, deems necessary and in accord with the investment
practices in place under the USP.
ARTICLE V
PAYMENT OF DEFERRED AMOUNTS
5.1 Form and Time of Payment. The benefits to which a
Participant or a Beneficiary may be entitled under the Plan shall be paid in
accordance with this Section 5.1.
(a) All payments under the Plan shall be made in cash.
(b) Except as otherwise provided in Sections 5.3 and 5.4,
payment of a Participant's Account Balance shall commence as of the Valuation
Date next following the date or dates specified in the Participant's Deferral
Election or Elections or (where applicable) the Participant's Revised
Election or Elections; provided, however, that where the Participant's
Deferral Election or Elections or (where applicable) the Participant's
Revised Election or Elections specify that payments with respect to a
Participant's Account Balance are to commence as of a specified date or
specified dates not determined by reference to the Participant's retirement
or other termination of service and the Participant terminates service with
the Corporation prior to such date or dates, payment of the portion of the
Participant's Account Balance that was deferred to such date or dates shall
commence as of the Valuation Date next following the Participant's
termination of service, but in the same form specified in the Participant's
Deferral Election or Elections or (where applicable) the Participant's
Revised Election or Elections.
(c) All payments shall be made in the form or forms
specified in the Participant's Deferral Election or Elections or (where
applicable) the Participant's Revised Election or Elections.
(d) To the extent a Participant has not specified the form
or time of payment of all or a part of his or her Account Balance, payment of
the amounts not specified will be made in a single sum as soon as
administratively practicable, but within 90 days, after the first Valuation
Date following the Participant's termination of service as a Director.
(e) Where a Participant has elected payment in the form of
annual installments, each installment payment after the initial installment
payment shall be made on or about March 31 of each year following the year in
which the first installment was paid. With respect to each Deferral Election
made by a Participant, the amount of each annual installment payment to be
made to a Participant under such Deferral Election shall be determined by
dividing the portion of the Participant's Account Balance covered by such
Deferral Election as of the latest Valuation Date preceding the date of
payment by the number of installments remaining to be paid under such
Deferral Election.
(f) Notwithstanding any Deferral Election made by the
Participant:
(1) If the Participant terminates service as a Director
before the specific date as of which a Participant's Account Balance is
scheduled to be paid to the Participant, the Participant's election with
respect to the time of commencement of payment will be accelerated to the
date as of which the Participant terminated service as a director.
(2) If a Participant terminates service as a Director
after beginning to receive any portion of an Account Balance that was to be
paid to the Participant as of a specific date, the remaining Account Balance
shall be distributed in accordance with the distribution election in effect
at the time of the Participant's termination of service as a Director.
(3) If the balance in all of a Participant's Accounts is
less than a minimum amount established by the Committee at the time of a
Participant's termination of service as a Director, the balance in all the
Participant's Accounts shall be paid to the Participant in a single sum.
(4) Any portion of a Participant's Account Balance that
has not been paid to the Participant as of the date of his or her death shall
be paid to the Participant's Beneficiary in a single sum as soon as
administratively practicable after the Valuation Date following the date on
which the Corporation receives notification of the Participant's death.
5.2 Revised Election.
(a) Pursuant to a Revised Election, a Participant may
specify:
(1) a date for the commencement of the payment of the
Participant's Account Balance that is either the date of the Participant's
termination of service as a Director or a date at least one year after the
date specified in the Participant's applicable Deferral Election; and/or
(2) a form of payment that calls for a greater number of
annual installment payments than that specified in the Participant's
applicable Deferral Election, or a number of annual installment payments
where the Participant specified a single sum payment in his or her applicable
Deferral Election.
(3) Notwithstanding the foregoing, a Participant may not
elect a time of benefit commencement and/or a form of payment to the extent
that such an election would cause any payments to be made after the March 31
first following the date that is 20 years after the date of the Eligible
Executive's termination of service as a Director.
(b) A Participant may only make three Revised Elections with
respect to each of the Participant's Accounts.
(c) To be effective, a Revised Election must be:
(1) made in writing by the Participant on a form furnished
for such purpose by the Corporate Executive Compensation Department;
(2) submitted to the Corporate Executive Compensation
Department on or before the date that is three months and one day before the
date on which the portion of the Participant's Account Balance that is the
subject of the Revised Election would, absent the Revised Election, first
become payable; and
(3) approved by the Corporate Executive Compensation
Department. A Revised Election will be deemed to have been approved by the
Corporate Executive Compensation Department if it is not disapproved by the
Corporate Executive Compensation Department within ten days of the date on
which it is received.
5.3 Special Payment.
(a) Notwithstanding any other provision of the Plan to the
Contrary, a Participant may receive payment of all or a portion of his or her
Account Balance as soon as administratively practicable following the receipt
by the Secretary of the Corporation of the Participant's written request for
such payment.
(b) As a condition of receiving any payment made pursuant to
Subsection 5.3(a), a Participant will be subject to, as a penalty, payment to
the Company of an amount equal to eight percent of the amount of the payment
made pursuant to Subsection 5.3(a) and suspension of the Participant's
further participation in the Plan, the Unisys Corporation Director Stock Unit
Plan, or any equivalent plan or plans maintained by the Corporation or a
subsidiary of the Corporation for the entire full calendar year that follows
the date on which the Participant submits to the Secretary of the Corporation
his or her request for payment pursuant to Subsection 5.3(a). The payment to
the Company shall generally be deducted from the amount otherwise payable to
the Participant under Subsection 5.3(a).
(c) If a Participant receives a payment of less than his or
her entire Account Balance pursuant to Subsection 5.3(a), the portion of the
Participant's Account Balance to which each Investment Measurement Option is
applied shall be reduced proportionately so that the Investment Measurement
Options apply to the Participant's Account Balance in the same percentage
immediately before and immediately after the payment.
(d) Notwithstanding any provision of the Plan to the
contrary, in the event the Committee determines that any portion of a
Participant's Account Balance is the subject of a determination by the
Internal Revenue Service that such portion is includible in the Participant's
taxable income, the Participant's Account Balance shall be distributed to the
extent it is so includible. All income taxes and related interest and
penalties associated with credits to or distributions from a Participant's
Account shall be borne by the Participant.
5.4 Acceleration of Payment. Notwithstanding any other
provision of this Plan to the contrary, the Committee in its sole discretion
may accelerate the payment of Account Balances to all or any group of
similarly situated Participants or Beneficiaries, whether before or after the
Participant's termination of service, in response to changes in the tax laws
or accounting principles.
ARTICLE VI
MISCELLANEOUS
6.1 Amendment. The Board may modify or amend, in whole or in
part, any of or all the provisions of the Plan, or suspend or terminate it
entirely; provided, however, that any such modification, amendment,
suspension or termination may not, without the Participant's consent,
adversely affect any deferred amount credited to him or her for any period
prior to the effective date of such modification, amendment, suspension or
termination. The Plan shall remain in effect until terminated pursuant to
this provision.
6.2 Administration. The Committee shall have the sole authority
to interpret the Plan and in its discretion to establish and modify
administrative rules for the Plan. All expenses and costs in connection with
the operation of this Plan shall be borne by the Corporation. The
Corporation shall have the right to deduct from any payment to be made
pursuant to this Plan any federal, state or local taxes required by law to be
withheld, and any associated interest and/or penalties.
6.3 Governing Law. The Plan shall be construed and its
provisions enforced and administered in accordance with the laws of the
Commonwealth of Pennsylvania except as such laws may be superseded by the
federal law.
ARTICLE VII
TRANSFER OF ACCOUNT BALANCE
7.1 Transfer of Executives' Plan Accounts. Notwithstanding any
other provision of the Plan to the contrary, a Director who is a former
employee of Unisys Corporation and who is a participant in the Executives'
Plan may elect to transfer any or all of his/her account balance in the
Executives' Plan into this Plan. Upon transfer, such amounts shall be
subject to the terms and conditions of this Plan, provided that all elections
previously made under the Executives' Plan with respect to such amounts shall
continue in effect until otherwise modified hereunder. Notwithstanding the
payment election provision described in Article V hereof, in no event may a
Director elect a form of payment with respect to amounts transferred from the
Executives' Plan that is any more rapid than the form of payment in effect
under the Executives' Plan at the time of such transfer.
ARTICLE VIII
CHANGE IN CONTROL
8.1 Withdrawal Election.
(a) Notwithstanding any other provision of the Plan to the
contrary, in the event of a "change in control," as defined below, each
Participant may elect to receive a single sum payment of all or any portion
of his/her account balance. Such election shall only be effective if
delivered to the Secretary of the Corporation within the ninety-day period
immediately following the date of the occurrence of the change in control.
(b) If an election is timely made, the Participant(or
Beneficiary) will be entitled to receive, as soon as practicable after the
expiration of the ninety-day period, an amount equal to (1) the full value or
any portion thereof of the Account Balance minus (2) an early withdrawal
penalty equal to 8% of the total value of (1). The Committee, upon advice of
counsel, may modify the early withdrawal penalty described above in any way
it
deems appropriate and consistent with the purposes of the Plan.
8.2 Litigation Expenses. If litigation is brought by a
Participant or Beneficiary after a change in control to enforce or interpret
any provision of the Plan, the Corporation to the extent permitted by
applicable law shall reimburse the Participant (or Beneficiary) for the
reasonable fees and disbursements of counsel incurred in such litigation.
8.3 Change in Control Definition. For purposes of this Article
VIII, a "change in control" shall have the same meaning as is ascribed to
that term under the 1990 Long-Term Incentive Plan, or any successor plan
designated by the Committee.