UNISYS CORPORATION
Executive Life Insurance Plan
Effective September 12, 1998
Article 1 - Establishment and Purpose
1.1 Establishment.
The Unisys Corporation Executive Life Insurance Plan (the "Plan") is
established September 12, 1998. The Plan as set forth herein, unless
otherwise stated, is effective and applicable only for Participants terminating
active employment on or after September 12, 1998.
1.2 Purpose.
The purpose of the Plan is to provide life insurance protection under a split-
dollar arrangement as a benefit to certain executive employees of the
Employer, in order to encourage such employees to continue their
employment with the Employer, to reward such employees for their service
with the Employer, and to induce desirable persons to enter into the
Employer's employ in the future. The Plan supersedes the Prior Plan and
the life insurance policies thereunder to replace the life insurance protection
provided to a Participant under the Prior Plan with the life insurance
protection provided under this Plan.
Article 2 - Definitions
Except as otherwise provided, the following terms have the definitions
hereinafter indicated whenever used in this Plan with initial capital letters:
2.1 Base Salary.
"Base Salary" means a Participant's annualized base salary, exclusive of
overtime, bonuses and other compensation, in effect at the time of the
Participant's death or earlier Retirement.
2.2 Beneficiary.
"Beneficiary" means the person, persons, entity or entities designated to be
the recipient of the Participant's share of the proceeds of a Policy.
2.3 Collateral Assignment Split-Dollar Agreement.
"Collateral Assignment Split-Dollar Agreement" means the written
agreement entered into by the Company and an Eligible Employee pursuant
to which such Eligible Employee becomes a Participant in the Plan as of the
date specified in such agreement.
2.4 Committee.
"Committee" means the Executive Life Insurance Plan Committee, which
shall be composed of the Senior Vice President, Worldwide Human Resources
and the Staff Vice President, Strategic and Executive Compensation.
2.5 Company.
"Company" means Unisys Corporation, a Delaware corporation, and its
successors and assigns.
2.6 Eligible Employee.
"Eligible Employee" means an Employee who is an elected officer of the
Company or any other Employee who is selected by the Committee to
participate in the Plan. Retired Employees are not eligible for this Plan.
2.7 Employee.
"Employee" means any person who is or was before Retirement employed by
an Employer on a regular, full-time salaried basis as an executive employee,
including officers of the Employer.
2.8 Employer.
"Employer" means the Company and its subsidiaries.
2.9 Insurer.
"Insurer" means the insurance company that provides life insurance coverage
on a Participant under the Plan or the insurance company to whom
application for such coverage has been made.
2.10 Participant.
"Participant" means an Eligible Employee who is participating in the Plan.
2.11 Plan.
"Plan" means the Unisys Corporation Executive Life Insurance Plan as set
forth herein together with any and all amendments and supplements hereto.
2.12 Policy.
"Policy" means, with respect to each Employee, any policy of individual life
insurance on the Employee's life which the Employee acquires or otherwise
utilizes pursuant to Article 5 to provide benefits under the Plan.
2.13 Policy Proceeds.
"Policy Proceeds" means the aggregate amount payable by the Insurer
pursuant to the Policy to the Participant's Beneficiary and the Employer
upon the death of the Participant.
2.14 Prior Plan.
"Prior Plan" means the UNISYS Executive Life Insurance Plan which
provided life insurance coverage through a group life insurance contract
issued by Cigna and Pacific Life.
2.15 Retirement.
"Retirement" means termination of an Employee's employment with the
Employer, for reasons other than death, on or after the date the Employee
reaches the Employee's earliest retirement date under a retirement plan
sponsored by the Employer.
2.16 Total Compensation.
"Total Compensation" means the total of the Participant's Base Salary plus
Target Annual Bonus.
Article 3 - Plan Rights and Obligations
The rights of Participants are set forth herein. Each Participant is bound by
the terms of the Plan. As a condition of participation in this Plan, an
Eligible Employee's participation in the Prior Plan sponsored by the Employer
shall terminate as of the date specified in the Eligible Employee's Agreement
on which the Eligible Employee becomes a Participant in this Plan.
Article 4 - Amount of Coverage
4.1 Basic Pre-Retirement Coverage.
The amount of life insurance coverage to be provided to a Participant while
the Participant continue to be employed by the Employer shall be equal to
two and one-half (2.5) times the Participant's Base Salary (coverage rounded
up, if necessary, to the next $1,000,000). The Basic Pre-Retirement Coverage
is provided without evidence of insurability.
4.2 Basic Post-Retirement Coverage.
The amount of life insurance coverage to be provided to a Participant after
the Participant's Retirement shall be equal to two and one-half (2.5) times
the Participant's Base Salary (coverage rounded up, if necessary to the next
$1,000), subject to a minimum of $500,000 and a maximum of $1,000,000.
The Basic Post-Retirement Coverage is provided without evidence of
insurability.
4.3 Supplemental Pre-Retirement Coverage.
The Participant will be allowed to purchase additional coverage subject to the
terms of the Plan to increase the total life insurance benefit up to a
maximum of four (4) times the Participant's Total Compensation, when
including the Basic Pre-Retirement Coverage, described in paragraph 4.1.
The Supplemental Pre-Retirement Coverage will require full underwriting
and death benefits will only be provided to the extent of the coverage issued
by the carrier.
4.4 Supplemental Post-Retirement Coverage.
The Participant will be allowed to purchase an unlimited amount of
additional post-retirement life insurance coverage by using a portion or all of
the Participant's Short-Term Incentive Compensation (EVC). The Company
will not participate in the purchase of any Supplemental Post-Retirement
Coverage.
4.5 Estate Planning Option.
The Participant may elect to include a spouse under a joint-life second-to-die
(survivorship) policy for the same amount of combined Basic and
Supplemental Coverage. This election is an alternative option and is not
being offered in addition to the coverage described in paragraphs 4.1 through
4.4. Full underwriting will be required for the participant's spouse.
4.6 Termination of Participation and Coverage: Repayment of
Premiums.
Termination of a Participant's participation hereunder will occur upon any of
the following events: (1) termination of the Plan, (2) failure of the
Participant to pay contributions within the time prescribed by the
Committee, (3) termination of the Participant's employment with the
Employer for reasons other than the Participant's death or Retirement, or (4)
the termination of the Collateral Assignment Agreement at the Employee's
retirement or, if later, fifteen years from the date of issuance of the
Policy. Thereafter, the Participant shall have no life insurance coverage
under this Plan, but the Policy will be distributed to the Employee with its
residual cash values.
Article 5 - Policy Ownership and Rights
5.1 Introduction.
The provisions of this Article establish certain rights and obligations of the
Employer and each Participant with respect to the Policy (or Policies) used to
provide benefits under this Plan. The terms of this Article shall apply
separately to each Participant.
5.2 Acquisition of Policy.
The Participant shall apply for a Policy. The Employer and the Participant
shall take all reasonable actions to (1) cause the Insurer to issue the Policy,
and (2) cause the Policy to conform to the provisions of this Plan. The Policy
shall be subject to the terms and conditions of this Plan. Participants
failing to take reasonable actions to cause the Policy to be issued in a
timely manner will not be eligible for Benefits under this Plan.
5.3 Policy Ownership.
The Participant shall be the sole and absolute owner of the Policy and may
exercise all ownership rights granted to the owner by terms of the Policy,
except as may otherwise be provided within the Plan.
5.4 Participant's Obligation to the Employer.
The Participant shall be obligated to repay the Employer the aggregate
amount that the Employer pays on behalf of the Participant under the Plan.
5.5 Collateral Assignment.
The Participant shall assign the Policy to the Employer to secure the
Participant's obligation under Section 5.4 by completing a Collateral
Assignment Agreement.
5.6 Beneficiary Designation.
The Participant will be able to select the Beneficiary to receive the death
benefit to which the Participant is entitled under Article 4 of this Plan. The
Employer shall be the Beneficiary of the portion of the death benefit needed
to repay the Participant's obligation under this Plan.
5.7 Investment Decisions.
Prior to the Participant's retirement or termination of this Plan, the
Employer shall reserve the right to select the investments within the Policy,
if any. After the Employer's obligation is satisfied, under paragraph 5.4, the
Participant will have full control of the mix of investment vehicles available
within the Policy.
5.8 Assignment of Participant's Interest.
The Participant may elect to transfer his/her rights in the Policy, but not the
rights assigned to the Employer, to a third party, such as a life insurance
trust. If a transfer of rights is made, the Participant will not have any
further rights in the Policy or this Plan.
5.9 Limitations on Participant's Rights in the Policy.
Except as provided in the Plan, the Participant shall not sell, assign,
transfer, borrow against, surrender or cancel the Policy, change the
beneficiary designation provision, nor change any other part of the Policy
without the written consent of the Employer.
Article 6 - Death Benefits
6.1 Prompt Collection.
Upon the death of a Participant, the Employer with the cooperation of the
Beneficiary, shall promptly take all action necessary to initiate payment by
the Insurer of the Policy Proceeds.
6.2 Division of Policy Proceeds.
A death benefit equal to the amount of life insurance coverage to which the
Participant is entitled under Article 4 of this Plan, if any, shall be paid
directly from the Insurer to the Participant's designated Beneficiary, and any
remaining Policy Proceeds shall be paid to the Employer, provided that in no
event shall the portion of the Policy proceeds paid to the Employer be more
than the amount to which the Employer is entitled pursuant to Section 7.2.
To the extent that the death benefit is insufficient to pay the Basic Coverage
due to the Participant under Articles 4.1 and 4.2 and reimburse the
Employer in Article 7.2, the Employer shall ensure that the full death benefit
is paid under the Basic Coverage. To the extent that the death benefit
exceeds the amount due to the Participant under Article 4 plus the amount
due the Employer in Article 7.2, the excess benefit will be paid to the
Participant's designated Beneficiary. To the extent the death benefit is
insufficient to meet all payment requirements, the following priority will be
effective:
First Payment of Participant's Basic Coverage due under
Article 4.1 & 4.2
Second Repayment of the Employer due under Article 7.2
Third Payment of Supplemental Coverage due under Articles 4.3 & 4.4
6.3 Interest on Policy Proceeds.
Any interest payable by the Insurer with respect to a Beneficiary's share of
the Policy Proceeds shall be paid to the Beneficiary and any interest payable
by the Insurer with respect to the Employer's share of the Policy Proceeds
shall be paid to the Employer.
Article 7 - Policy Premiums
7.1 Payment of Premiums and Participant Contributions.
The Employer shall pay the premiums on each Policy to the Insurer on or
before the due date or within the grace period provided therein.
7.2 Repayment To Company.
The Employer shall be repaid from the Policy Proceeds or cash surrender
value of each Policy the amount of the premiums on the Policy which the
Employer paid hereunder (not including any contributions by a participant),
reduced by the outstanding balance of any indebtedness which was incurred
by the Employer and secured by the Policy, including any interest due on
such indebtedness. Any such indebtedness shall be satisfied out of the Policy
Proceeds or cash surrender value of the Policy. In no event shall the amount
repaid to the Employer exceed the amount of the Policy Proceeds or cash
surrender value of the Policy remaining after satisfaction of any such
indebtedness.
Article 8 - Plan Administration
8.1 Named Fiduciary; Administration.
The Committee is hereby designated as the named fiduciary under this Plan.
The named fiduciary shall have authority to control and manage the
operation and administration of this Plan, and it shall be responsible for
establishing and carrying out a funding policy and method consistent with
the objectives of this Plan. The Committee shall also have the power to
establish, adopt, or revise such rules, regulations, procedures and forms as it
may deem advisable for the administration of the Plan. The interpretation
and construction of the Plan by the Committee and any action taken
thereunder, shall be binding and conclusive upon all parties in interest. No
member of the Committee shall, in any event, be liable to any person for any
action taken or omitted to be taken in connection with the interpretation,
construction or administration of the Plan, so long as such action or omission
to act is made in good faith. (Members of the Committee shall be eligible to
participate in the Plan while serving as members of the Committee, but a
member of the Committee shall not vote or act upon any matter that relates
solely to such member's interest in the Plan as a Participant.)
8.2 Determination of Benefits.
The Committee shall make all determinations concerning eligibility to
participate, rights to benefits, the amount of benefits, and any other question
under this Plan. Any decision by the Committee denying a claim by a
Participant or Beneficiary for benefits under this Plan shall be stated in
writing and delivered or mailed to the Participant or Beneficiary. Such
decision shall set forth the specific reasons for the denial written in a manner
calculated to be understood by the Participant or Beneficiary. In addition,
the Committee shall afford a reasonable opportunity to the Participant or
Beneficiary for a full and fair review of the decision denying such claim.
Article 9 - General Provisions
9.1 No Contract of Employment.
Nothing contained herein shall be construed to be a contract of employment
of any term of years, nor as conferring upon an Employee the right to
continue in the employ of the Company in any capacity.
9.2 Amendment and Termination of Plan.
The Company, through action of the Compensation and Organization (C&O)
Committee of its Board of Directors, may, in its sole discretion, amend or
terminate the Plan in whole or in part at any time. In addition, without
limiting the foregoing, the C&O Committee shall delegate to the Executive
Life Insurance Plan Committee the power to amend the Plan on behalf of the
Company where such amendment would not result in a material increase in
the cost of the Plan for the Company. The Plan will also terminate, without
notice, upon the total cessation of the business of the Company or upon the
bankruptcy, receivership or dissolution of the Company.
9.3 Conflicting Provisions.
In the event of a conflict between the provisions of this Plan and the
provisions of any collateral assignment, beneficiary designation or other
document related to a Policy, the provisions of the Plan shall prevail.
9.4 Notice.
Any notice, consent, or demand required or permitted to be given under the
provisions of this Plan shall be in writing, and shall be signed by the party
giving or making the same. If such notice, consent, or demand is mailed, it
shall be sent by Untied States certified mail, postage prepaid, addressed to
such party's last known address as shown on the records of the Company. If
notice, consent or demand is sent to the Company, it shall be sent to:
Executive Compensation
MS-B381
Township Line & Union Meeting Road
Blue Bell, Pennsylvania 19424-0001
The date of such mailing shall be deemed the date of notice, consent, or
demand. Either party may change the address to which notice is to be sent
by giving notice of the change of address in the manner aforesaid.
9.5 Governing Law.
This Plan shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania.
9.6 Gender, Singular and Plural.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, or neuter, as the identity of the person or persons may
require. As the context may require, the singular may be read as the plural
and the plural as the singular.
9.7 Captions.
The captions of the articles, sections, and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction
of any of its provisions.
9.8 Validity.
In the event any provision of this Plan is held invalid, void, or unenforceable,
the same shall not affect, in any respect whatsoever, the validity of any other
provision of this Plan.
9.9 Binding Effect.
This Plan shall be binding upon, and inure to the benefit of the Employer
and its successors and assigns, and the Participants and their successors,
assigns, heirs, executors, administrators and beneficiaries.