UNISYS CORPORATION
DIRECTOR STOCK UNIT PLAN
1. Purpose. The purpose of the Unisys Corporation Director Stock
Unit Plan (the "Plan") is to provide a vehicle through which all or a portion
of the remuneration paid to Directors of Unisys Corporation (the
"Corporation") who are not employees of the Corporation may be paid in a form
which (1) more closely aligns directors' and stockholders' interests and (ii)
permits Directors to defer recognition of income until termination of service
with the Corporation.
2. Effective Date. The Board of Directors (the "Board")
approved the Plan on November 21, 1991. The Plan has been amended and
restated from time to time since its original adoption and the effective
date of this amended and restated Plan is May 22, 1997.
3. Definitions.
(A) "Account" means, for any Director, the memorandum
account established for the Director under Section 6.
(B) "Beneficiary" means the person or persons
designated from time to time in writing by a participating Director to
receive payments after the death of such Director or, in the absence of
any such designation or in the event that such designated person or persons
shall predecease such Director, his/her estate.
(C) "Board" shall mean the Board of Directors of the
Corporation.
(D) "Change in Control" shall have the same
meaning as is ascribed to that term under the 1990 Long-Term Incentive
Plan, or any successor stock option plan.
(E) "Committee" means the Compensation and Organization
Committee of the Board.
(F) "Compensation" includes remuneration (other than that
paid in accordance with Section 4(B) hereof) for services as a Director,
including Directors' retainer fees ("Retainer Fees")and Board and Committee
meeting fees ("Meeting Fees").
(G) "Compensation Payment Date" means, with respect to a
Retainer Fee, the first business day of the month for which such monthly
Retainer Fee or Meeting Fee is due and payable or such other date as may be
designated by the Board or Committee from time to time as the payment date
for Retainer Fees or Meeting Fees. If Unisys Common Stock is not traded on
such date, the Compensation Payment Date shall be the next preceding trading
day.
(H) "Corporation" means Unisys Corporation.
(I) "Deferred Compensation" means the amount the
Director elects to defer pursuant to Section 4(A) hereof.
(J) "Director" means a member of the Board who is not an
employee of the Corporation.
(K) "Fair Market Value" means, on any date, the closing
sales price of a share of Unisys Common Stock as reported on the Composite
Tape for New York Stock Exchange Companies.
(L) "Stock Units" means Unisys common stock-equivalent
units, which may be awarded pursuant to the Plan as Elective or Non-elective
Stock Units. Stock Units also include Frozen Stock Units held under the
Directors Deferred Compensation Plan and transferred to this Plan effective
July 25, 1996.
(M) "Stock Unit Award Value" means the dollar amount of
the Retainer Fee or Meeting Fee, as established by the Board from time to time,
payable on a Compensation Payment Date.
(N) "Valuation Date" shall mean the last business day of
a calendar month.
4. Crediting of Stock Units.
(A) Elective Stock Units. Prior to or during any
calendar year, a Director may elect (i) to defer all or a portion of his
or her cash Compensation that would be paid to him for services rendered
during the following calendar year or for the remainder of the current
calendar year, as applicable, and (ii) to be credited in lieu of such amount
with Stock Units.
(B) Non-Elective Stock Unit Awards. On the Compensation
Payment Date, each Director's Account shall be credited with Stock Units
equal to the Stock Unit Award Value. The Board shall have the discretion
to make additional Stock Unit awards at such times and in such amounts as
it deems appropriate.
(C) Amount Credited. The number of Stock Units to be
credited to a Director's Account shall be the quotient of (a) divided by (b)
where (a) equals the Deferred Compensation or Stock Unit Award Value, as
applicable, and (b) equals the Fair Market Value on the Compensation Payment
Date.
5. Elections.
(A) A Director's election shall be executed in writing on
a form furnished by the Secretary of the Corporation on or before the date
that is (I) no later than December 31 of the year preceding the calendar year
to which the election applies or (II) at least three months and one day before
the date on which the Retainer Fee or Meeting Fee to be deferred, absent
deferral, would be paid to the Director, provided, however, that an
individual who becomes a Director after January 1 of a calendar year may make
an Election with respect to Compensation that has not been paid and, absent
deferral, would be paid to him or her during the remainder of the calendar
year in which he or she has become a Director, by executing the required
written election on or before the date that is 30 days after the date on
which he or she becomes a Director. The election must specify that the
Director desires to be credited Stock Units in lieu of receiving his/her
Compensation in cash.
(B) An election, once made, shall be irrevocable with
respect to Compensation payable for the calendar year or years to which it
applies.
(C) An election must specify either a percentage or a
certain dollar amount of the Compensation to be deferred under the Plan.
(D) An election must specify whether the Stock Units will
be paid in cash or in common stock of the Corporation, provided, however, that
no election to be paid Stock Units in the form of stock shall become effective
until November 1, 1996.
(E) An election shall specify the date on which payment
of the amount deferred is to commence, subject to Sections 8 and 9 hereof, and
may specify that such payment is to commence as of:
(1) the Director's termination of service as a
member of the Board (including as a result of disability); or
(2) a specific date (which may be determined by
reference to the Director's termination of service) that is at least five
years after the date on which the initial amounts to be deferred, absent
deferral, would be paid to the Director.
(F) The Director must specify the manner in which
payment of his or her Account is to be made and may specify that such payment
is to be made either in a single sum or in annual installments.
(G) Notwithstanding the foregoing, a 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 Director's
termination of service.
(H) Deferrals of a Director's Compensation shall be
credited to the Plan at the time at which the Compensation, absent deferral,
would otherwise be payable to the Director.
(I) Unless the Election form specifically provides
otherwise, an Election shall expire as of the last day of the calendar year
that includes the first day on which any compensation, absent deferral, would
be paid to the Director.
(J) Additional payment elections with respect to
Non-Elective Stock Unit Awards may be provided if deemed necessary and
appropriate by the Committee.
6. Memorandum Account. The Corporation shall establish on its
books a memorandum account for each Director denoted as the Director's
Corporation Stock Units Account. Stock Units, dividends and other adjustments
shall be credited to the account and payments made to the Director or
Beneficiary shall be debited to the account. No assets shall be segregated
or earmarked in respect of any amounts credited to the Account and no Director
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 and shall be
merely for the purpose of recording an unsecured contractual obligation.
7. Dividends and Other Adjustments. If the Corporation shall
issue a stock dividend on the common stock, stock dividend equivalents shall
be credited to the Account, as of the dividend payment date, as Stock Units in
the same amount as the stock dividends to which the Director would have been
entitled if the Stock Units were shares of common stock. Cash dividends, if
any, shall be credited to the Account, as of the dividend payment date, in
the form of Stock Units determined in the manner set forth in Section 4(C)
hereof based on the Fair Market Value of the Common Stock on the dividend
payment date. The Account shall be appropriately adjusted to reflect splits,
reverse splits, or comparable changes to the Corporation's common stock.
8. Distribution of Accounts.
(A) Payment Election. Except as otherwise provided in
Section 9, payment of an Account shall commence as of the Valuation Date next
following the date or dates specified in the Election or Elections or (where
applicable) the Revised Election or Elections; provided, however, that where
the Election or Elections or (where applicable) the Revised Election or
Elections specify that payments with respect to an Account are to commence as
of a specified date or specified dates not determined by reference to the
Director's termination of service and the Director terminates service prior
to such date or dates, payment of the portion of the Director's Account that
was to commence on such date or dates shall commence as of the Valuation Date
next following the Director's termination of service, but in the same form
specified in the Director's Election or Elections or (where applicable) the
Revised Election or Elections.
(1) All payments shall be made in the form or
forms specified in the Election or Elections or (where applicable) the
Revised Election or Elections.
(2) To the extent a Director has not specified
the form or time of payment of all or a part of his or her Account, 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 Director's termination of service as a Director.
(3) Where a Director 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
Election made by a Director, the amount of each annual installment payment to
be made to the Director shall be determined by dividing the portion of the
Director's Account covered by such Election as of the latest Valuation Date
preceding the date of payment by the number of installments remaining to be
paid under such Election.
(4) Notwithstanding any election made by a
Director, any portion of a Director's Account that has not been paid to the
Director as of the date of his or her death shall be paid to the Director's
Beneficiary in a single sum as soon as administratively practicable, but
within 90 days following the Valuation Date on which the Corporation receives
notification of the Director's death.
(B) Revised Election.
(1) Pursuant to a Revised Election, a Director
may specify:
(I) a date for the commencement of the
payment of the Director's Account that is after the date specified in the
Director's Election; and/or
(II) a form of payment that calls for a
greater number of annual installment payments than that specified in the
Director's Election, or a number of annual installment payments where the
Director specified a single sum payment in his or her Election.
(III) Notwithstanding the foregoing, a
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
Director's termination of service as a Director.
(2) 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.
(3) To be effective, a Revised Election must be:
(I) made in writing by the Director
on a form furnished for such purpose by the Secretary of the Corporation;
(II) submitted to the Secretary of
the Corporation on or before the date that is three months and one day
before the date on which the portion of the Director's Account that is
the subject of the Revised Election would, absent the Revised Election,
first become payable; and
(III) approved by the Secretary of the
Corporation. A Revised 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.
(C) Valuation of Account. In determining the amount
to be paid upon termination of service, the cash value of a Director's
Account shall equal the product of the number of Stock Units credited to
the Account multiplied by the Fair Market Value as of the applicable
Valuation Date. The value of Stock Units payable in stock shall equal
shares of Unisys Common Stock equal to the number of whole Stock Units.
The value of fractional Stock Units shall be paid in cash. The amount of
each annual installment payment shall be determined by dividing the value
determined in according with the preceding sentence as of the date of the
installment payment by the number of installments remaining to be paid.
(D) No Early Withdrawals. No early withdrawal of a
Director's Account shall be permitted. Except as provided in Section 9
hereof or as provided in an Election or Revised Election, distribution of
a Director's Account may be made only upon termination of service as a
Director.
9. Accelerated Payment.
(A) Change in Control.
(1) Notwithstanding any other provision of
the Plan to the contrary, in the event of a "change in control," each
Director may elect to receive a single sum payment of all or any portion
of his or her Stock Unit 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.
(2) If an election is timely made, the Director
(or Beneficiary) will be entitled to receive, as soon as practicable after
the expiration of the ninety-day period, an amount equal to (a) the full
value or any portion thereof of the Stock Unit Account minus (b) an early
withdrawal penalty equal to 8% of the total value of (a). 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.
(3) If litigation is brought by the Director or
the 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 Director (or Beneficiary) for the reasonable fees
and disbursements of counsel incurred in such litigation.
(B) Change in Circumstances. Notwithstanding any other
provision of this Plan to the contrary, the Committee in its sole discretion
may accelerate the payment of Stock Units Accounts to all or any group of
similarly situated Directors or Beneficiaries, whether before or after the
Director's termination of service, in response to changes in the tax laws or
accounting principles.
10. Amendment and Termination. The Board may modify or amend, in
whole or in part, any or all of 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 participating
Director's consent, adversely affect any amount credited to his/her Account
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.
11. Administration. The Plan shall be administered by the
Committee. Any decision made or action taken by the Committee arising out
of or in connection with the construction, administration, interpretation,
or effect of the Plan shall be within the absolute discretion of the
Committee and shall be conclusive and binding on all parties.
12. Expenses and Taxes. 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.
13. 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 any
federal law.
14. SEC Rule 16b. The Plan is intended to comply with SEC
Rule 16b-3 as adopted by the Securities and Exchange Commission effective
November 1, 1996, and as amended thereafter, and the Committee is authorized
to interpret the Plan, modify the Plan and/or adopt rules pursuant to the Plan
in order to comply with Rule 16b-3 or such other exemptions as may be
applicable. Specifically, the Committee may delay payment of accounts which
have been deferred or credited for a period of less than six months as of
the payment date.