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DEFERRED COMPENSATION PLAN
FOR EXECUTIVES OF UNISYS CORPORATION
Article I
Purpose & Authority
1.1 Purpose. The purpose of the Plan is to offer
Eligible Executives the opportunity to defer receipt of a
portion of their compensation from the Corporation, under terms
advantageous to both the Eligible Executive and the Corporation.
1.2 Effective Date. The Board originally approved
the Officers' Plan on January 29, 1982. That plan was
subsequently amended, most recently to be effective January 1,
1994. The Board determined to further amend that plan to, inter
alia, expand the group of employees eligible to participate and
the types of compensation that can be deferred. Effective
November 1, 1994, the Officers' Plan is amended, restated and
renamed, and continues as the Plan.
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
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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, the
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 Compensation and
Organization Committee of the Board.
2.6 "Corporation" means Unisys Corporation.
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2.7 "Deferral Election" means an election by an
Eligible Executive to defer a portion of his or her compensation
from the Corporation under the Plan, as described in Section
3.1.
2.8 "Directors' Plan" means the Deferred
Compensation Plan for Directors of Unisys Corporation.
2.9 "Eligible Executive" means, for any calendar
year, an individual: (1) who is employed by the Corporation at
Level 25 or above (or at Level P3 or above, if the individual is
employed in the Information Services Division of the
Corporation); (2) for whom the sum of (A) the individual's base
salary from the Corporation and (B) 75 percent of the
individual's Target EVC for the calendar year equals or exceeds
the maximum amount of compensation that is permitted to be taken
into account under section 401(a)(17) of the Internal Revenue
Code during a plan year that begins in the calendar year; and
(3) who is designated by the Vice President, Human Resources as
an Eligible Executive.
2.10 "EVC" means, for any individual, the amount
payable to such individual under the Unisys Executive Annual
Variable Compensation Plan (or under any successor annual
incentive plan of the Corporation) or under any other similar
annual incentive plan of the Corporation approved by the Vice
President, Human Resources.
2.11 "Investment Measurement Option" means any of
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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 currently available are (a) the Fidelity
Retirement Money Market Portfolio, (b) the Fidelity Asset
Manager: Growth Fund, (c) the Fidelity Magellan Fund, (d) the
Fidelity Asset Manager Fund, and (e) the Insurance Contract
Fund, all of which are investment options available under the
USP.
2.12 "Officers' Plan" means the Deferred
Compensation Plan for Officers of Unisys Corporation, the
predecessor of this Plan.
2.13 "Participant" means an Eligible Executive or
former Eligible Executive who has made a Deferral Election and
who has not received a distribution of his or her entire Account
Balance.
2.14 "Plan" means the Deferred Compensation Plan for
Executives of Unisys Corporation, as set forth herein and as
amended from time to time.
2.15 "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.
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2.16 "Target EVC" means, for any individual, the
amount that will be payable to such individual as EVC if the
criteria applicable to such individual are satisfied.
2.17 "USP" means the Unisys Savings Plan.
2.18 "Valuation Date" means the last business day of
each calendar month.
Article III
Deferral of Compensation
3.1 Deferral Election.
(a) During any calendar year, each individual who is
an Eligible Executive for such calendar year may, by properly
completing a Deferral Election, elect to defer:
(1) all or a portion of his or her salary that,
absent deferral, would be paid to him or her for services
rendered during the remainder of the current calendar year
and/or the next following calendar year; and/or
(2) all or a portion of his or her EVC that, absent
deferral, would be paid to him/her in the next following
calendar year.
(b) To be effective, a Deferral Election with
respect to EVC must be made in writing by the Eligible Executive
on a form
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furnished by the Corporate Executive Compensation
Department on or before September 30 of the calendar year
immediately preceding the calendar year in which the amounts to
be deferred, absent deferral, would be paid to the Eligible
Executive, and a Deferral Election with respect to salary must
be made in writing by the Eligible Executive on a form furnished
by the Corporate Executive Compensation Department on or before
the date that is 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 Executive provided, however, that an
individual who becomes an Eligible Executive after the effective
date of the Plan (as set forth in Section 1.2) may make a
Deferral Election with respect to salary that, absent deferral,
would be paid to him or her during the remainder of the calendar
year in which he or she becomes an Eligible Executive and with
respect to all or a portion of the EVC that, absent deferral,
would be paid to him or her in the next following calendar year
by filing the required written election with the Corporate
Executive Compensation Department on or before the date that is
30 days after the date on which he or she becomes an Eligible
Executive.
(c) Notwithstanding any provision of the Plan to the
contrary, an Eligible Executive may make a Deferral Election
with respect to salary that, absent deferral, would be paid to
him or her in 1995 but less than three months and one day after
the date on which he files a Deferral Election by filing the required
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written election with the Corporate Executive
Compensation Department on or before November 30, 1994.
(d) Once made, a Deferral Election shall become
effective upon approval by the Corporate Executive Compensation
Department 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 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.
(e) An Eligible Executive's Deferral Election must
specify either a percentage or a certain dollar amount of his or
her salary and/or EVC to be deferred under the Plan. In
addition, the Deferral Election must specify the date on which
payment of the Eligible Executive's Account Balance is to
commence and the manner in which such payment is to be made.
(1) The Eligible Executive must specify the date as
of which payment of his or her Account Balance is to commence
and may specify that such payment is to commence as of:
(A) his or her termination of active employment
(including as a result of retirement or disability) with the
Corporation; or
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(B) a specific date (which may be determined by
reference to the Eligible Executive's retirement or other
termination of employment) that is at least five years after the
date on which the amounts to be deferred, absent deferral, would
be paid to the Eligible Executive.
(2) The Eligible Executive 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
Executive 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
retirement or other termination of employment.
(f) Deferrals of an Eligible Executive's salary
shall be credited to the Plan ratably throughout the year (or,
where applicable, the portion of the year) to which the Deferral
Election applies. Deferrals of an Eligible Executive's EVC
shall be credited at the time at which the EVC, absent deferral,
would be payable to the Participant.
(g) Unless the Deferral Election form specifically
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provides otherwise, a Deferral Election with respect to salary
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 Executive and a Deferral Election
with respect to EVC shall expire as of the date on which the EVC
that is the subject of the Deferral Election is credited under
the Plan.
(h) Notwithstanding any provision of the Plan to the
contrary, any election made under the Officer's Plan prior to
the effective date of the Plan (as set forth in Section 1.2) to
defer amounts that, absent deferral, would be payable in 1995
shall be treated as a Deferral Election. A Participant who has
made such an election may, however, elect a different form or
time of payment of the amounts to be deferred under such an
election (other than a form or time of payment that could have
been elected by the Participant under the Officers' Plan at the
time the original election was made) by making a new Deferral
Election that satisfies the requirements of this Section 3.1 on
or before November 30, 1994.
3.2 Payment of FICA and Other Taxes. To the extent
that, as a result of a Deferral Election, the compensation
currently payable to an Eligible Executive during any period is
insufficient to permit an amount equal to the FICA and other
taxes that are payable by the Eligible Executive, and required
to be withheld by the Corporation, during that period to be withheld from
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such current compensation, the Eligible Executive
shall be notified by the Corporation and shall provide the
Corporation with a check in an amount equal to the difference
between the amount of FICA and other taxes payable by the
Eligible Executive during the period and the amount of
compensation otherwise currently payable to the Eligible
Executive during the period. If the Eligible Executive does not
provide such check within the time period specified by the
Corporation, the Eligible Executive's Account Balance shall be
reduced by an amount equal to the sum of (a) the difference
between the amount of FICA and other taxes payable by the
Eligible Executive, and required to be withheld by the
Corporation, during the period and the amount of compensation
otherwise currently payable to the Eligible Executive during the
period and (b) any additional Federal, state and local income
taxes payable by the Eligible Executive with respect to the
reduction in his or her Account Balance made pursuant to this
Section 3.2.
Article IV
Treatment of Deferred Amounts
4.1 Memorandum Account. The Corporation shall
establish on its books an Account for each Participant. 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
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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 Executive 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
as of the first day of any quarter, provided that written notice
of such election is filed prior to the first day of that quarter
with the Corporate Executive Compensation Department.
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(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. Such an election will be effective as of the first
day of the calendar quarter following the date on which a
written election is filed with 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 five
percent.
(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 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.
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(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 employment and the Participant terminates
employment 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
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commence as of the Valuation Date next following the Participant's
termination of employment.
(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 his or her Account Balance,
payment 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 employment with the
Corporation.
(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. The amount of each annual installment payment to a
Participant or Beneficiary shall be determined by dividing the
Account Balance as of the latest Valuation Date preceding the
date of payment by the number of installments remaining to be
paid.
(f) Notwithstanding any election made by a
Participant, 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
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paid to the Participant's Beneficiary in a single sum as soon as
administratively practicable, but within 90 days, 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 after the date
specified in the Participant's 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 Deferral Election, or a number of annual
installment payments where the Participant specified a single
sum payment in his or her Deferral Election.
(3) Notwithstanding the foregoing, an Eligible
Executive 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
retirement or other termination of employment.
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(b) If a Participant has made a Revised Election
with respect to amounts the payment of which has been deferred
to a certain date, the Participant may not thereafter make
another Revised Election with respect to amounts the payment of
which, as of the date on which such Revised Election is made and
before giving effect to the Revised Election, has been deferred
to the same date.
(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.
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5.3 Special Payments.
(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
Corporate Executive Compensation Department of the Participant's
written request for such payment.
(b) (1) As a condition of receiving any payment made
pursuant to Subsection 5.3(a), a Participant will be subject to,
and must elect the application of, one of the following
penalties:
(A) 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 or any equivalent plan or plans
maintained by the Corporation or a subsidiary of the Corporation
for the entire calendar year described in "(B)" below; or
(B) payment to the Company of an amount equal to six
percent of the amount of the payment made pursuant to Subsection
5.3(a), and suspension of the Participant's tax-deferred
contributions to the Plan and the USP or any equivalent plan or
plans maintained by the Corporation or a subsidiary of the
Corporation for the entire calendar year that follows the date
on which the Participant submits to the Corporate Executive
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Compensation Department his or her request for payment pursuant
to Subsection 5.3(a).
(2) The payment to the Company specified in
Paragraph 5.3(b)(1) shall generally be deducted from the amount
otherwise payable to the Participant under Subsection 5.3(a).
(c) Where 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
percentages 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 final
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
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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 Participants'
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.
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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 to Director's Plan. Notwithstanding
any election of form of payments made hereunder, a Participant
who, following his termination of employment with the
Corporation will be eligible to participate in the Directors'
Plan, may elect at any time prior to the date that is three
months and one day before the Participant's termination of
employment to transfer all or any portion of his Account Balance
to the Directors' Plan. Such transfer must occur prior to the
date that payments of the Participant's Account Balance would
otherwise be made, or commence, hereunder. Upon transfer, the
Participant's Account Balance (or the portion thereof
transferred) will be subject to the terms and conditions of the
Directors' Plan; provided, however, that any election of form of
payment made under the Directors' Plan with respect to the
amount transferred may not provide for a form of payment that is
in any way more rapid than the form of payment in effect under
this Plan with respect to such amounts immediately prior to
transfer to the Directors' Plan. Valuation of the Account
Balance (or the portion thereof) to be transferred shall be made
consistent with the valuation provisions described in Article V.
Upon transfer, the Participant's (or his or her Beneficiary's)
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rights hereunder with respect to the amounts transferred shall
cease.