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. The Plan has been amended and
restated from time to time since its original adoption and this amended
and restated version of the Plan is effective May 22, 1997.
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, 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.
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 the
hypothetical investment alternatives available for determining the
additional amounts to be credited to a Participant's Account under
Section 4.2. Effective January 1, 1997, the Investment Measurement
Options available are all of the investment options available to
eligible participants 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.
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
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)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.
(d) 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
(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.
(e) 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.
(f) Unless the Deferral Election form specifically 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.
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 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 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
month, provided that notice of such election is made prior to the first
day of that month with the Corporate Executive Compensation Department
or its designee.
(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 month following the date on which an
election is made with the Corporate Executive Compensation Department or
its designee.
(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.
(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 commence as of the
Valuation Date next following the Participant's termination of
employment, 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 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. With
respect to each Deferral Election made by a Participant, the amount of
each annual installment payment to be made to a Participant or
Beneficiary under such Deferral Election shall be determined by dividing
the portion of the Participant's Account Balance attributable to 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 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 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.
(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.
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 Subsection5.3(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 Compensation Department his or her request for
payment pursuant to Subsection5.3(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 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.
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) rights hereunder with
respect to the amounts transferred shall cease.