January 2, 2008
Xx. Xxxxxx X. XxXxxxx
c/o Xxxxxx Xxxxxxxxxxx
Xxxxxx Xxx
Xxxx Xxxx, Xxxxxxxxxxxx 00000
Dear Xx. XxXxxxx:
You are presently employed by Xxxxxx Xxxxxxxxxxx (the "Corporation" or
"Unisys") as President and Chief Executive Officer. The purpose of this
letter is to set forth certain agreements between you and the
Corporation.
1. In the event that the Corporation terminates your employment for
other than "cause" (as defined below) or you terminate your
employment for "good reason" (as defined below), you will be
entitled to the following:
a. An amount equal to two times your (i) base salary (at its
then current rate on the date of termination) plus (ii) your
annual bonus under the Corporation's Executive Variable
Compensation Plan (in an amount equal to the average
percentage of the target bonus paid for the three years
preceding your date of termination times the target bonus
amount as in effect on the date of termination). Such
termination payment shall be paid in a lump sum in cash
within 30 days of the date of termination, subject to the
provisions of Section 409A of the Internal Revenue Code, as
amended from time to time (for example, if you are a
"specified employee" within the meaning of that section of
the Code, such payment will be made on the first day of the
seventh month following the date of your separation from
service with Unisys).
b. Continued participation, at the same costs applicable to
active Unisys employees, for a period of up to two years
following termination of employment, in the Unisys Medical
and Dental Plans for you and your eligible dependents,
subject, however, to the generally applicable terms of such
plans. If you become employed during such two-year period,
your right to such participation in the Unisys Medical and
Dental Plans will cease. You will promptly advise the Senior
Vice President, Worldwide Human Resources, if you become
employed.
c. You shall be entitled to all other benefits generally
available to executive officers of Unisys upon termination of
employment in accordance with their normal terms except that
you shall not be entitled to receive payments under the
Unisys Income Assistance Plan or any other severance or
income assistance plan generally applicable to employees of
Unisys.
d. In the event that you become entitled to termination payments
under this agreement and payments under your Executive
Employment Agreement dated January 5, 1999 (the "Executive
Employment Agreement"), then you shall not receive duplicate
payments under both agreements. Instead, if you are entitled
to benefits under both agreements, the provisions of this
agreement as to any matter or the corresponding provisions of
the Executive Employment Agreement, whichever is more
favorable to you or provide you with the greater benefit (it
being understood that with respect to base salary and bonus,
you are entitled to choose only between the base salary and
bonus offered under one agreement or the other) as determined
by a nationally recognized accounting firm mutually agreed to
by the Corporation and you, shall be used in determining your
status, compensation and benefits, and other rights and
obligations.
2. In the event of your disability or death, all compensation and
benefits under this agreement (other than those amounts and
benefits described in the following sentence) shall terminate. You
or your estate shall receive (a) if termination of employment by
reason of disability or death occurs prior to the Executive
Variable Compensation (EVC) payout date for the previous EVC award
year, an EVC award for such previous award year determined by the
Board of Directors in its sole discretion after receiving a
recommendation from the Compensation Committee, as if you had
continued to be employed through the EVC payout date, such payment
to be made at the same time that such EVC payment would have been
made had you continued to be employed, (b) an annual EVC award for
the year in which your employment is terminated by reason of
disability or death in an amount equal to a pro rata portion, based
on the period of service rendered in such year, of the EVC amount
paid for the previous year, (c) benefits under the retirement,
welfare, incentive, fringe and perquisite programs generally
available to executive officers upon disability or death and (d)
any deferred account balance under the Unisys Deferred Compensation
Plan (or any successor deferred compensation program) in accordance
with the terms of such plan. For purposes of this agreement,
disability means a mental or physical injury or illness that
renders you incapable of substantially performing your duties
hereunder for a period of six consecutive months and shall commence
for purposes of this agreement at the end of such six-month period.
In the event of your disability or death, you will be entitled to
the benefits described in this section 2, and not those described
in section 1.
3. In the event that your employment is terminated for "cause" (as
defined below) or you terminate your employment for other than
"good reason" (as defined below), you shall be entitled only to the
benefits provided to Unisys executive employees upon termination of
employment.
4. For purposes of this agreement, "cause" shall mean intentional
dishonesty or gross neglect of your duties. "Good reason" shall
mean (i) a reduction in your aggregate compensation target (base
salary plus bonus target), unless such reduction is due to your
continued failure to adequately perform your duties (provided that
the Corporation has provided notice identifying the manner in which
the Corporation believes that you failed to adequately perform your
duties, and you have failed to discontinue your inadequate
performance within 90 days of receiving such notice) or is due to a
reduction in compensation generally applicable to executive
officers or (ii) a reduction in your duties or authority or your
removal as Chief Executive Officer of the Corporation or its
successor (unless such reduction or removal is for cause, as
defined above) or is on account of your inability to substantially
perform your duties for an aggregate of 120 days within any
consecutive 12 month period due to a mental or physical injury or
illness, and provided that your resignation occurs within 120 days
after such reduction or removal.
5. You previously signed Employee Proprietary Information, Invention
and Non-Competition and Stock Option and Restricted Stock Unit
Agreements, and you understand that your duties and obligations
under these agreements continue beyond your employment termination.
Without prejudice to these agreements, you further agree that for a
period of 12 months from and after the termination of your
employment for any reason:
a. You shall not engage in or become employed as a business
owner, employee, agent, representative or consultant in any
activity which is in competition with any line of business of
Unisys (or its subsidiaries or affiliates) existing as of
your termination date, except with the express prior written
consent of the Compensation Committee of the Board of
Directors, provided, however, you shall be deemed not to be
in competition for purposes of this agreement (A) if you are
an employee of or a consultant to an entity a unit of which
is in competition with Unisys, provided that it can be
demonstrated to the reasonable satisfaction of the
Compensation Committee that procedures are in place to assure
that any unit that is in competition with Unisys and any
director, officer, employee, consultant or other
representative of such unit cannot directly or indirectly
avail itself or themselves of your services, (B) if you are
an employee of or a consultant to an entity that provides
consulting services to other entities, one or more of which
are in competition with Unisys, provided that it can be
demonstrated to the reasonable satisfaction of the Committee
that procedures are in place to assure that no entity that is
in competition with Unisys nor any director, officer,
employee, consultant or other representative of such unit can
directly or indirectly avail itself or themselves of your
services, (C) if you invest in securities which are listed
for trading on a national exchange or NASDAQ and this
investment does not exceed 1% of the issued and outstanding
shares of stock or (D) if you acquire an ownership interest
in a non-public company, provided that such ownership
represents a passive investment;
b. You shall not negatively comment publicly or privately about
Unisys (or its subsidiaries or affiliates), any of its
products, services or other businesses, its present or past
Board of Directors, its officers, or employees, nor shall you
in any way discuss the circumstances of your termination of
employment, except that (A) you may give truthful testimony
before a court or governmental agency, (B) you may make
comments about the circumstances of your termination with the
prior written approval of the Corporation, (C) you may
respond publicly to any untrue public comment made by the
Corporation, (D) you may discuss the circumstances of your
termination with your attorneys, financial and tax advisers,
members of your family and any prospective employer, provided
that you take all necessary steps to assure that each such
person does not, as a result of these discussions, make any
such negative comment prohibited under this agreement and (E)
you may make comments to an arbitrator or court for the
purpose of determining or enforcing your rights under this
agreement or any entitlement under any agreement, plan,
award, policy or program with or sponsored by Unisys (or any
of its subsidiaries or affiliates);
c. You shall not, directly or indirectly, induce or attempt to
induce any employee of Unisys (or any of its subsidiaries or
affiliates) to render services for any other person, firm or
business entity, except that you will be permitted to give
recommendations, if requested, for employees seeking
employment outside of Unisys;
d. Unisys (and its subsidiaries and affiliates) agrees not to
negatively comment publicly or privately about you or the
circumstances of your termination of employment, except (A)
Unisys may give truthful testimony before a court or
governmental agency, (B) Unisys may make comments about the
circumstances of your termination with your prior written
approval, (C) Unisys may respond publicly to any untrue
public comment made by you, (D) Unisys may discuss the
circumstances of your termination with its attorneys and its
financial and tax advisers, provided that it takes reasonable
steps to assure that each such person does not, as a result
of Unisys discussions with them, make any such negative
comment prohibited under this agreement, and (E) Unisys may
make comments to an arbitrator or court for the purpose of
determining its rights under this agreement or any other
agreement, plan, award, policy or program with or sponsored
by Unisys (or any of its subsidiaries or affiliates).
6. In the event that you should materially breach your obligations
under Section 5.b. of this agreement or breach any other obligation
described in Section 5 of this agreement, Unisys shall have the
right, in addition to any other legal or equitable remedies, to
terminate any payments due you under Section 1.a. of this
agreement.
7. This agreement shall be binding upon Unisys and its successors and
assigns.
8. Except as expressly set forth herein, this agreement constitutes
the entire agreement between the parties concerning the subject
matter hereof and supersedes all prior agreements. For the
avoidance of doubt, your Executive Employment Agreement will
continue in full force and effect. No provision of this agreement
may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by you
and the Chairman of the Compensation Committee or his designee.
The validity, interpretation, construction and performance of this
agreement shall be governed by the laws of the Commonwealth of
Pennsylvania without giving effect to the previsions thereof
relating to conflicts of laws.
If the foregoing sets forth our agreement with you, please sign and
return to us the enclosed copy of this agreement.
Very truly yours,
XXXXXX XXXXXXXXXXX The foregoing is accepted:
By: /s/ Xxxxx X. Xxxxxx /s/ Xxxxxx X. XxXxxxx
------------------- ----------------------
Xxxxx X. Xxxxxx Xxxxxx X. XxXxxxx
Chairman of the Board
Date: January 2, 2008 Date: January 2, 2008
