Exhibit 10.1
June 3, 2002
Mr. Joseph W. McGrath
Executive Vice President
President, Global Industries
Unisys Corporation
Unisys Way
Blue Bell, PA 19424
Dear Joe:
You are presently employed by Unisys Corporation (the "Corporation") as
Executive Vice President and President, Global Industries. The purpose
of this letter agreement (the "Agreement") is to set forth the terms and
conditions that will apply should your employment with the Corporation
be terminated by the Corporation without "cause" (as defined below) or
by you for "good reason" (as defined below). This Agreement shall be
effective from the date hereof through December 31, 2004.
Your employment may be terminated by the Corporation at any time with or
without cause. However, in the event that your employment is terminated
by Unisys without "cause" (as defined below) or you terminate your
employment for "good reason" (as defined below) before December 31,
2004, you will be entitled to the following:
(1) You will continue to be paid your base salary (at its then
current rate on the date of termination of employment) for a period of
two years following your termination of employment. Such termination
payments will be made in the same manner and at the same times as the
base salary payments would have been paid during employment and the
period during which such payments are to be made will be referred to as
the "Salary Continuation Period".
(2) If termination of employment occurs prior to the EVC Plan
payout date for the previous EVC award year, you will be eligible to
receive an EVC award for such previous award year in an amount
determined under the normal EVC Plan procedures as if you had continued
to be employed through the EVC payout date for such year. Any EVC
payment will be paid in the same manner and at the same time that such
EVC payment would have been made had you continued to be employed. (For
purposes of this Agreement, "EVC" means Executive Variable Compensation
or any successor annual bonus and "EVC Plan" means the Unisys Executive
Variable Compensation Plan or any successor annual bonus plan in which
you participate.)
(3) You will be eligible to receive an EVC payment for the year
in which termination of employment occurs in an amount determined under
the normal EVC Plan procedures as if you had continued to be employed
through the EVC payout date for such year, but prorated to take into
account your actual period of employment for such year. Any EVC payment
will be paid in the same manner and at the same time that such EVC
payment would have been made had you continued to be employed.
(4) You will be eligible to receive annual EVC awards for each
year of the Salary Continuation Period. Any EVC award payable for the
first year of the Salary Continuation Period will be paid on the normal
EVC payment date for officers of the Corporation for the EVC award year
in which occurs the first anniversary of your termination of employment
and any EVC award payable for the second year of the Salary Continuation
Period will be paid on the normal EVC payment date for officers of the
Corporation for the EVC award year in which occurs the second
anniversary of your termination of employment. The amount of the EVC
award for the first year of the Salary Continuation Period will be equal
to (a) the amount of the continued base salary payments made to you
under Section (1) during such first year, times (b) the percentage of
funding approved by the Board of Directors for the corporate level EVC
pool under the EVC Plan for the EVC award year in which occurs the first
anniversary of your termination of employment, times (c) your target EVC
percentage in effect on your termination date. The amount of the EVC
award for the second year of the Salary Continuation Period will be
equal to (a) the amount of the continued base salary payments made to
you under Section (1) during such second year, times (b) the percentage
of funding approved by the Board of Directors for the corporate level
EVC pool under the EVC Plan for the EVC award year in which occurs the
second anniversary of your termination of employment, times (c) your
target EVC percentage in effect on your termination date.
(5) You and your eligible dependents will be eligible to
continue to participate, at the same costs applicable to active
employees, in the Unisys Medical and Dental Plans through the Salary
Continuation Period, subject, however, to the generally applicable terms
of such plans.
(6) The Salary Continuation Period will be counted as Credited
Service for you for purposes of the Unisys Elected Officer Pension Plan
(regardless of whether you become "employed", as defined below, after
your termination of employment with the Corporation) and the termination
payments paid to you under Sections (1) through (4) above prior to the
date on which you become "employed" with an entity other than Unisys
will be considered as eligible compensation for purposes of such Plan.
For purposes of this Section (6), you will be considered to be
"employed" if you provide services to any other entity as an employee,
independent contractor, consultant, officer or director (provided that
service as an outside director of another entity will not be considered
as employment to the extent that the fees received by you for such
services are based on the same fee structure as is paid to other outside
directors of the entity).
You agree to accept the termination payments described above as the sole
and exclusive remedy against Unisys for any claims arising out of your
employment relationship, including, but not limited to, the termination
thereof. Except as provided in Section (6) above, the special
termination payments described above shall not be considered as
compensation for purposes of any employee benefit plan, including, but
not limited to, the Unisys Pension Plan and the Unisys Savings Plan.
The amounts payable to you hereunder will be reduced by the amount of
cash compensation, if any, earned by you if you become "employed", as
defined in Section (6), after your termination of employment with the
Corporation. You will promptly advise the Senior Vice President,
Worldwide Human Resources of the Corporation of any facts that could
cause such a reduction in the amounts payable to you under this
Agreement. Upon written notice from the Corporation, you will promptly
reimburse to the Corporation any overpayments made to you as a result of
your receipt of the cash compensation described above.
For purposes of this agreement, "cause" means intentional dishonesty;
conviction of a felony; or your conviction of a misdemeanor involving
moral turpitude that, in the opinion of Unisys, impairs your ability to
substantially perform your job; gross neglect of your duties; engaging
in conduct which is against the best interest of Unisys, including but
not limited to conduct which violates the Unisys Code of Ethical
Conduct; your continued failure to adequately perform your job duties,
provided that Unisys has given you a written notice identifying the
manner in which it believes that you have failed to adequately perform
your job duties and you fail to cure your inadequate performance within
30 days of receiving such notice; your inability to perform your duties
because of a mental or physical disability which extends for a period of
six months; your death. "Good reason" means a reduction in your base
pay or annual bonus target as such amounts may be increased from time to
time; the assignment to you of job duties inconsistent with your
position as Executive Vice President and President, Global Industries
(or such other position to which you may be appointed during the term of
this Agreement), unless as a result of a promotion; any material
reduction in your responsibilities or status unless such reduction or
change is (a) for cause, as defined above, or (b) is done with your
written consent. You recognize that the dynamic nature of Unisys
business may result in changes in your duties, responsibilities and
status. It is agreed that the assignment to you of duties comparable to
the duties of your position and changes in your responsibilities or
status that are not material reductions thereof, will not constitute
"good reason" under this Agreement.
In the event that you are terminated by the Corporation for cause, as
defined above, or you terminate your employment for other than good
reason, as defined above, or your termination of employment occurs after
December 31, 2004, no amounts will be payable to you hereunder and
termination payments, if any, shall be paid under the normal terms of
the retirement, welfare, incentive, fringe and perquisite programs in
which you participate at your termination date.
The payments under this agreement are not intended to duplicate payments
under any other Unisys agreement or severance program, including,
without limitation, the Employment Agreement applicable to Unisys
elected officers which covers and takes effect only upon change in
control situations, as defined therein. To the extent that you may be
entitled to receive duplicate payments under this and any other Unisys
agreement or program, the provisions of that agreement or program which
is most favorable to you or provides you with the greater benefit shall
be effective.
Any dispute or controversy arising under or in connection with this
agreement shall be settled exclusively by arbitration in accordance with
the rules of the American Arbitration Association in Philadelphia,
Pennsylvania.
Sincerely,
Lawrence A. Weinbach
Chairman, President, and Chief Executive Officer
CC: David O. Aker
Accepted: _______________________ Date: _________________
Joseph W. McGrath