UNISYS CORPORATION
ELECTED OFFICER PENSION PLAN
EFFECTIVE JUNE 1, 1988
(As Amended through May 22, 1997)
ARTICLE I
PURPOSE
1.01 The Unisys Corporation Elected Officer Pension Plan (the "Plan")
has been adopted by Unisys Corporation (the "Company") to provide
a minimum level of retirement benefits for elected Officers (as
defined in Section 2.12 below) of the Company. The Plan is effective
June 1, 1988 and applies to any elected Officer or other eligible
employee of the Company who terminates employment on or after that
date. This document is a restatement which includes all amendments
made through January 23, 1997. Prior to June 1, 1988, elected
Officers of the Company were provided executive pension benefits
under the Unisys Corporation Supplemental Executive Retirement
Income Plan - Part IV or the Sperry Corporation Executive Pension
Plan. Officers who terminated employment prior to June 1, 1988 will
receive executive pension benefits, if any, under the terms of the
prior plan in effect on their termination date.
ARTICLE II
DEFINITIONS
2.01 "Board" shall mean the Board of Directors of Unisys Corporation.
2.02 "Bonus Plan" shall mean the Unisys Executive Bonus Plan, the
Unisys Senior Manager Bonus Plan or any predecessor or successor
annual bonus plan.
2.03 "Company" shall mean Unisys Corporation, a Delaware corporation.
2.04 "Company Plan" shall mean the Unisys Pension Plan.
2.05 "Committee" shall mean the Administrative Committee as appointed
from time to time by the Board.
2.06 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
2.07 "Credited Service" shall mean the Participant's Credited Service,
as defined in Article IV.
2.08 "Disability" shall refer to a Participant who is determined by the
Committee or its designee to be unable to perform, because of
injury or sickness, each of the regular duties of the Participant's
occupation for a period of up to 24 months. After 24 months, the
Participant will continue to be considered Disabled if the Committee
or its designee determines that the Participant cannot perform each
of the regular duties of any gainful occupation for which he or she
is fitted by training, education or experience.
2.09 "Effective Date" shall mean June 1, 1988.
2.10 "Final Average Compensation" shall mean the Participant's Final
Average Compensation, as defined in the Company Plan, except that
any annual bonus amount payable under the Bonus Plan and deferred
by the Participant (or any salary amounts deferred under an
arrangement approved by the Board) and any amounts excluded from
consideration under the Company Plan due to the application of
Section 401(a)(17) of the Code shall be included in the calculation
of Final Average Compensation in the month in which such amounts were
or would otherwise have been paid; provided, however, that no more
than the most recent five annual bonus amounts (whether paid or
deferred) shall be included in the calculation of Final Average
Compensation.
2.11 "Employee" shall mean any person employed by Unisys Corporation or
one of its subsidiaries.
2.12 "Officer" shall mean any officer of the Company elected by the
Board, but excluding assistant officers, appointed officers or
the general auditor.
2.13 "Part IV" shall mean Part IV of the Unisys Corporation
Supplemental Executive Retirement Income Plan, as in effect
immediately prior to the Effective Date.
2.14 "Participant" shall mean any person entitled to participate in
this Plan under Article III.
2.15 "Plan" shall mean the Unisys Corporation Elected Officer Pension
Plan, as set forth herein and as hereafter amended.
2.16 "Primary Social Security Benefit" shall mean the annualized amount
calculated according to the rules for computing the primary social
security benefit payable to a Participant upon attainment of
Social Security Retirement Age under the Federal Social Security Act
as in effect at the time the Participant retires. In the event that a
Participant retires prior to attainment of eligibility for Social
Security benefits, the Participant's Primary Social Security Benefit
shall be deemed to be 80% of the Primary Social Security Benefit
payable at Social Security Retirement Age. In the event the
Participant retires after attainment of eligibility for Social
Security benefits, but before Social Security Retirement Age, the
Primary Social Security Benefit shall be deemed to be an amount
prorated between the benefit payable at Social Security Retirement
Age and 80% of such amount. For purposes of this calculation, it will
be assumed that the Participant has no earnings for Social Security
purposes beyond the date of retirement.
2.17 "Prior Plan(s)" shall mean Part IV and/or the Sperry Plan.
2.18 "Sperry Plan" shall mean the Sperry Corporation Executive Pension
Plan, as in effect immediately prior to the Effective Date.
2.19 "Supplemental Plan" shall mean the Unisys Corporation Supplemental
Executive Retirement Income Plan-Part I, as amended and restated
effective April 1, 1988. Unless otherwise specified, capitalized
words and phrases used in this Plan shall have the same meaning as
such words or phrases when used in the Company Plan.
2.20 Change in Control means any of the following events:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more
of either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change of Control:
(i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (c) of
this Section 2.20; or
(b) Individuals who, as of May 25, 1995, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each case,
unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result
of such transaction owns the Company or all or substantially all
of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no Person (excluding
any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the
initial agreement, or of the action of the Board, providing for
such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
2.21 "Date of an Insolvency" shall mean the date on which the Company
(i) voluntarily files a petition under the United States
Bankruptcy Code, (including a petition for Chapter 11 reorganization)
or (ii) has filed involuntarily against it a petition under the United
States Bankruptcy Code and an Order for Relief is entered thereon.
ARTICLE III
ELIGIBILITY FOR PARTICIPATION
3.01 Participation
(a) Each Employee who is or becomes an Officer on or after the
Effective Date shall become a participant in this Plan and
shall have a vested right to a retirement benefit calculated
in accordance with Article V on the earliest to occur of the
following:
(1) the date on which the Employee attains age 55 and
completes 10 years of Credited Service, provided that
the Employee is or becomes an Officer on or after such
date; or
(2) the date on which occurs a Change in Control or the
Date of an Insolvency, provided the Employee is an
Officer on such date; or
(3) for an Employee who is an Officer on or after January
1, 1997, the date on which the Employee attains age 50
and completes 5 years of Credited Service, provided
that the Employee continues to be an Officer as of such
date and provided that such Employee is employed by the
Company or an AffiliatedCompany on or after December 31,
1998; or
(4) The date specified in a written agreement between a
Participant and the Company, provided that for
agreements entered into on and after May 22, 1997,
such agreements must be approved by the Compensation
and Organization Committee of the Board.
(b) An Officer who is eligible under paragraph (a) above and who
retires or terminates employment due to Disability or death,
or a former Officer who was eligible under paragraph (a) above
and retires from active employment with the Company or
terminates employment with the Company due to death or
Disability within twelve months of ceasing to be an Officer,
shall be eligible, upon application, to receive the
retirement and surviving spouse benefits provided in Article
V below.
(c) A former Officer who was eligible under paragraph (a) above
and continues in active employment for more than twelve
months after ceasing to be an Officer shall be eligible, upon
application, to receive a vested annual retirement benefit
calculated in accordance with Sections 5.01(a), 5.03, 5.05
and 5.06, utilizing as an offset the amount of benefits
payable under the Company Plan and the Supplemental Plan
calculated as if the Participant had elected a single
life annuity form of benefit under the Company Plan, and
such former Officer shall not be eligible for the survivor
benefits described in Section 5.04. This Section 3.01(c)
shall not apply after the occurrence of a Change in Control
with respect to any individual who was an Officer on the date
of the Change in Control.
(d) Each Employee who was a participant in a Prior Plan, but who
is not eligible to participate in this Plan, shall continue
to have his or her rights to executive pension benefits
determined under such Prior Plan.
(e) Notwithstanding anything to the contrary in Section 3.01(a)(3),
if an Employee who would otherwise become a participant on
December 31, 1998 under Section 3.01(a)(3) is terminated by the
Company without "cause" prior to December 31, 1998, then that
employee will become a participant as of December 31, 1998
provided that Credited Service and Final Average Compensation
will be determined as of the employee's termination date. For
purposes of this Section 3.01(e), "cause" shall mean intentional
dishonesty, gross neglect of the employee's duties, or the
continued failure by the employee to perform his/her duties
(provided that the Company has provided the employee with notice
identifying the manner in which it reasonably believes that the
employee has failed to adequately perform his/her duties, and
the employee has failed to discontinue the inadequate
performance within 30 days of receiving such notice). The
determination of whether an employee was terminated without
cause shall be made by the Committee and that determination
shall be final and binding on all parties.
ARTICLE IV
CREDITED SERVICE
4.01 Credited Service
Credited Service under this Plan shall be calculated on the basis of
Credited Service as defined in the Company Plan for the
following periods:
(a) period of employment as an Officer; and
(b) up to twelve months of active employment with the Company
immediately following termination of Officer status, or, if
longer, the number of months of a Company approved leave of
absence due to Disability immediately following termination
of Officer status; and
(c) employment prior to becoming an Officer with the Company
including a predecessor or an Affiliated Company or 50%
Affiliated Company for the period of time such company was an
Affiliated Company or 50% Affiliated Company. However, if a
Participant receives Credited Service under the Company Plan
for employment with a company before it became an Affiliated
Company or 50% Affiliated Company, Credited Service shall
include the period of employment with such company.
ARTICLE V
CALCULATION OF BENEFITS
5.01 Amount of Benefits
(a) Subject to the adjustments set forth in Sections 5.02 and
5.03, a Participant shall receive an annual retirement
benefit payable at Normal Retirement Date equal to:
(1) 40% of the Participant's Final Average Compensation
for the Participant's first 10 years of Credited
Service, or, for a Participant who has less than 10
years of Credited Service, one-third of one percent
of the Participant's Final Average Compensation for each
month of Credited Service; plus
(2) 1% of the Participant's Final Average Compensation for
each year of Credited Service in excess of 10 (but not
in excess of 30) including proportional credit for a
fraction of a year; minus
(3) 50% of the Participant's Primary Social Security
Benefit.
(b) The benefit payable from this Plan and described in
paragraph (a) shall be a monthly benefit paid in the form of
a single life annuity if the Participant is unmarried on the
date that the Participant commences receipt of benefits, or in
the form of a joint and 50% surviving spouse annuity if the
Participant is married on the date the Participant commences
receipt of benefits. The benefit payable to a Participant
shall not be reduced or increased as a result of such payment
in the surviving spouse benefit form or for any age difference
between the Participant and spouse.
5.02 Optional Forms of Benefit Payments
In lieu of the normal form of benefit payment described in Section
5.01(b), a Participant who is married at commencement of benefit
payments may elect to receive the benefit payable from this Plan
and described in Section 5.01(a) in either of the following
optional forms:
(a) a joint and 75% surviving spouse annuity which will provide
the Participant with a reduced lifetime benefit equal to 95%
of the benefit described in Section 5.01(a) and with a
benefit equal to 75% of such reduced benefit payable to the
Participant's surviving spouse for the spouse's life; or
(b) a joint and 100% surviving spouse annuity which will provide
the Participant with a reduced lifetime benefit equal to 90%
of the benefit described in Section 5.01(a) and with a
benefit equal to 100% of such reduced benefit payable to the
Participant's surviving spouse for the spouse's life.
5.03 Early Retirement Prior to Age 62
Benefits paid under this Plan shall be reduced by one- half of one
percent (0.5%) for each calendar month by which the commencement
of benefits precedes the first day of the month following the
Participant's 62nd birthday.
5.04 Death Benefits
(a) In the event of the death of a Participant who, at the time
of death, is eligible under Section 3.01(b) above, and who:
(1) has not commenced retirement benefits under this Plan; and
(2) who has a surviving spouse, such Participant's
surviving spouse shall receive a survivor's benefit in
the amount described in paragraph (b).
(b) The amount payable under this paragraph shall be equal to
the benefit the spouse would have received if the
Participant:
(1) had terminated employment on the earlier of the date
of death or the date of the Participant's actual
termination of employment; and
(2) had survived to the benefit commencement date
described in subsection (c); and
(3) had begun to receive an immediate retirement benefit
in the Normal Form under Section 5.01(b); and
(4) had died on the following day.
(c) The benefit payable under this Section shall be paid to the
surviving spouse in the form of a single life annuity and
shall commence on the date on which the Surviving Spouse's
Benefit under the Company Plan commences (or, if the Participant
was not a participant in the Company Plan, the first day of any
month elected by the surviving spouse).
(d) No benefits shall be payable from this Plan to a surviving
spouse (or any other beneficiary) of a Participant unless
the form of benefit paid to the Participant provides for the
payment of benefits upon the Participant's death or except as
otherwise provided in this Section.
5.05 Special Minimum Benefit Provisions
(a) The value of the accrued benefit determined under this
Article (but without regard to this Section 5.05) for a
Participant who was a participant in a Prior Plan shall in no
event be less than the value of the Participant's accrued benefit
under the terms of such Prior Plan as of May 31, 1988, including
early retirement reduction factors in effect under the Prior
Plan on such date.
(b) Notwithstanding anything in this Article to the contrary,
any Participant who was a participant in a Prior Plan may
elect to continue to have annual retirement benefits
determined under the terms of such Prior Plan as in effect
on May 31, 1988 provided that:
(1) such election shall expire as to an Participant who
continues in employment beyond May 31, 1991, and
(2) for purpose of calculating a Participant's benefit
under the Sperry Plan, the actuarial equivalent
factors in converting the Participant's benefit to an
optional form of payment shall be those factors in effect
on March 31,1988.
(c) In the event that a Participant's benefit under the Company
Plan is determined under the grandfather provision described
in Section 4.5 of the Company Plan (as in effect April 1, 1988),
such Participant may elect to have the normal retirement
benefit otherwise determined under Section 5.01 determined
under the benefit formula set forth in the Participant's
Prior Plan.
5.06 Benefit Offset
(a) The retirement benefit determined under this Article and payable
to a Participant or surviving spouse shall be reduced by any
benefit payable under the Company Plan and the Supplemental
Plan, calculated in accordance with Section 6.01.
(b) With respect to a Participant who is not a participant in the
Company Plan, the retirement benefit payable to the Participant
or surviving spouse shall be reduced by the amount of retirement
pension payable under the plan of any Affiliated Company or 50%
Affiliated Company, including any governmental plan retirement
benefit or lump sum termination or similar entitlements,
in effect at the time of the Participant's termination of
employment.
ARTICLE VI
BENEFIT PAYMENTS
6.01 Form of Benefit Payment
If a Participant should elect a form of benefit payment under the
Company Plan (or such other plan or program, unless impracticable
not to so elect) which is different than the form of benefit payment
under this Plan, then for purposes of determining the offset under
Section 5.06, the Participant shall be deemed to be in receipt of the
amount of benefit payable as if the Participant had elected the Normal
Form of Benefit under the Company Plan.
6.02 Commencement of Benefits
Benefit payments to a Participant shall commence at the same time that
benefit payments commence under the Company Plan. If a Participant is
not a Participant in the Company Plan, the Participant will commence
receipt of benefits under this Plan as of the first day of the
calendar month following the Participant's termination of employment,
unless the Committee, in its sole discretion, agrees to an
alternative commencement date.
6.03 Funding of Benefits
Benefits under this Plan shall not be funded and shall be paid out
of the general assets of the Company. The Company shall not be
required to segregate any funds for the Plan's Participants.
Notwithstanding any provision in this Section 6.03 to the contrary,
the Committee shall have the discretion but not the obligation to
fund this Plan through a trust of the type described in Internal
Revenue Service Private Letter Ruling 8502023.
6.04 Forfeiture and Suspension of Benefits
(a) Any benefit payable under this Plan shall be suspended for any
period during which it is determined by the Committee that a
Participant is engaged or employed as a business owner,
employee or consultant in any activity which is in competition
with any line of business of the Company existing as of the
date of the Participant's termination of employment from the
Company.
(b) Additionally, any benefit payable under this Plan shall be
forfeitable in the event it is found by the Committee that a
Participant, either during or following termination of
employment with the Company, willfully engaged in any activity
which is determined by the Committee to be materially adverse
or detrimental to the interests of the Company, including any
activity which might reasonably be considered by the Committee
to be of a nature warranting dismissal of an employee for
cause. If the Committee so finds, it may suspend benefits to
the Participant and, after furnishing notice to the
Participant, may terminate benefits under this Plan. The
Committee will consider in its deliberation relative to this
provision any explanation or justification submitted to it in
writing by the Participant within 60 days following the giving
of such notice.
(c) Except as heretofore provided for in this Section 6.04, the
acceptance by a Participant of any benefit under this Plan
shall constitute an agreement with the provisions of this
Plan and a representation that he or she is not engaged or
employed in any activity serving as a basis for suspension or
forfeiture of benefits hereunder. The Committee may require
each Participant eligible for a benefit under this Plan to
acknowledge in writing prior to the payment of such benefit
that he or she will accept payment of benefits under this
Plan only if there is no basis for such suspension or
forfeiture.
ARTICLE VII
ADMINISTRATION
7.01 Committee
The Plan shall be administered by the Committee, which shall
administer the Plan in a manner consistent with the administration
of the Company Plan, except that this Plan shall be administered as
an unfunded plan which is not intended to meet the requirements of
Section 401 of the Code.
7.02 Claims Procedure
(a) In the event that the Committee denies, in whole or in part,
a claim for benefits by a Participant or surviving spouse,
the Committee shall furnish notice of the denial to the
claimant, setting forth:
(1) the specific reasons for the denial,
(2) specific reference to the pertinent Plan provisions on
which the denial is based,
(3) a description of any additional information necessary
for the claimant to perfect the claim and an
explanation of why such information is necessary, and
(4) appropriate information as to the steps to be taken
if the claimant wishes to submit the claim for review.
Such notice shall be forwarded to the claimant within 90 days
of the Committee's receipt of the claim; provided, however,
that in special circumstances the Committee may extend the
response period for up to an additional 90 days, in which
event it shall notify the claimant in writing of the
extension, and shall specify the reason or reasons for
the extension.
(b) Within 60 days of receipt of a notice of claim denial, a
claimant or the claimant's duly authorized representative
may petition the Committee in writing for a full and fair review
of the denial. The claimant or the claimant's duly authorized
representative shall have the opportunity to review pertinent
documents and to submit issues and comments in writing to the
Committee. The Committee shall review the denial and shall
communicate its decision and the reasons therefore to the
claimant in writing within 60 days of receipt of the petition;
provided, however, that in special circumstances the Committee
may extend the response period for up to an additional 60 days,
in which event it shall notify the claimant in writing prior to
the commencement of the extension.
7.03 Plan Amendment and Termination
The Company expects to continue this Plan indefinitely, but reserves
the right to amend or discontinue it if, in its sole judgment, such
a change is deemed necessary or desirable. However, if the Company
should amend or discontinue this Plan, the Company shall be liable
for any benefits accrued under this Plan (determined on the basis
of each Employee's presumed termination of employment as of the
date of such amendment or discontinuance) as of the date of such
action. Any change to the Plan which adversely affects a
Participant's or Beneficiary's rights to benefits and/or the
amount, form and manner in which benefits are accrued, vested
and/or paid shall not affect the Participant's or Beneficiary's
benefits accrued up to the date of the change. Changes which
adversely affect a Participant's or Beneficiary's rights under the
Plan may only take effect on the adoption date of the change and
on a going forward basis.
7.04 No Employment Rights
Neither the action of the Company in establishing the Plan, nor any
provisions of the Plan, nor any action taken by the Company or
by the Committee shall be construed as giving to any employee of the
Company or any of its subsidiaries the right to be retained in its
employ, or any right to payment except to the extent of the benefits
provided by the Plan.
7.05 Severability of Provisions
If any provision of this Plan is determined to be void by any court of
competent jurisdiction, the Plan shall continue to
operate and, for the purposes of the jurisdiction of that court only,
shall be deemed not to include the provision determined to be void.
7.06 Non-Assignability
Except as required by applicable law, no benefits under this Plan
shall be subject in any manner to alienation, anticipation, sale,
transfer, assignment, pledge, or encumbrance.
7.07 Withholding
The Company shall have the right to withhold any and all state, local,
and Federal taxes which may be withheld in accordance with applicable
law.
7.08 Governing Law
Except to the extent superseded by ERISA, all questions pertaining to
the validity, construction, and operation of the Plan shall be
determined in accordance with the laws of the Commonwealth
of Pennsylvania.