<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
UNISYS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
Unisys Corporation
Township Line and Union Meeting Roads
Blue Bell, PA 19424-0001
[UNISYS LOGO]
March 12, 1998
Dear Fellow Stockholder:
It is my pleasure to invite you to the Unisys 1998 Annual Meeting of
Stockholders. This year's meeting will be held on Thursday, April 23, 1998 at
the Park Hyatt Philadelphia at the Bellevue, which is located at Broad and
Walnut Streets in Philadelphia, Pennsylvania. The meeting will begin at 9:30
a.m.
As you will note in our annual report to stockholders, we have much to
celebrate this year. In 1997 our net income before one-time charges more than
tripled over 1996. We continued to grow our services business, made great
strides in reducing debt, and -- most important -- sharply increased shareholder
value. And we're not slowing down. We are taking aggressive actions to
accelerate our progress in 1998 by focusing on high-potential markets where we
can grow profitably and help our customers be more successful.
Whether you plan to attend the annual meeting or not, I urge you to take a
moment to vote on the items in this year's proxy statement. Please sign, date,
and return the enclosed proxy card as soon as possible. It only takes a few
minutes, and it will ensure that your shares are represented at the meeting.
I look forward to seeing you at the annual meeting and sharing my plans and
vision for the "new Unisys."
Sincerely,
/s/ Lawrence A. Weinbach
Lawrence A. Weinbach
Chairman, President and
Chief Executive Officer
<PAGE> 3
[UNISYS LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 1998
Unisys Corporation will hold its 1998 Annual Meeting of Stockholders at The
Park Hyatt Philadelphia at the Bellevue, Broad and Walnut Streets, Philadelphia,
Pennsylvania, on Thursday, April 23, 1998 at 9:30 a.m. to:
1. elect three directors;
2. ratify the selection of independent auditors for 1998;
3. consider and vote upon a proposal to amend the Certificate of
Incorporation to increase the number of authorized shares of Common
Stock;
4. consider and vote upon the stockholder proposal set forth in the
attached Proxy Statement; and
5. transact any other business properly brought before the meeting.
Only holders of Unisys Common Stock of record at the close of business on
February 23, 1998 will be entitled to vote at the Annual Meeting.
By Order of the Board of Directors,
/s/ Harold S. Barron
Harold S. Barron
Senior Vice President, General Counsel
and Secretary
Blue Bell, Pennsylvania
March 12, 1998
IMPORTANT
PLEASE COMPLETE AND MAIL THE ENCLOSED PROXY CARD PROMPTLY WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING. THE ENCLOSED RETURN ENVELOPE REQUIRES NO
POSTAGE IF MAILED IN THE U.S.A.
<PAGE> 4
UNISYS CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 23, 1998
The Board of Directors of Unisys Corporation ("Unisys" or the "Company")
solicits your proxy for use at the 1998 Annual Meeting of Stockholders to be
held on April 23, 1998 and at any adjournment(s) thereof (the "Annual Meeting").
At the Annual Meeting, stockholders will be asked to elect directors, ratify the
selection of independent auditors, approve an amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock and consider and vote upon a stockholder proposal.
The record date for the Annual Meeting is February 23, 1998. Only holders
of record of Unisys Common Stock as of the close of business on the record date
are entitled to vote at the meeting. On the record date, 250,392,803 shares of
Common Stock were outstanding. The presence, in person or by proxy, of a
majority of those shares will constitute a quorum at the meeting.
This Proxy Statement, the accompanying form of proxy/voting instruction
card and the annual report of Unisys, including 1997 financial statements, are
being mailed on or about March 12, 1998.
VOTING
Each record holder of Unisys Common Stock as of the record date is entitled
to cast one vote per share on each matter to be voted upon. Directors will be
elected by a plurality of the votes cast. The amendment to the Certificate of
Incorporation will be approved if it receives the affirmative vote of a majority
of the outstanding shares of Common Stock. Each of the other matters scheduled
to come before the Annual Meeting will be approved if it receives the
affirmative vote of a majority of shares present, in person or by proxy, and
entitled to vote on the matter. Abstentions and broker non-votes will have the
same effect as negative votes on the proposal to amend the Company's Certificate
of Incorporation. For purposes of the matters requiring a majority vote of
shares present and entitled to vote, abstentions will be included in the vote
totals, and therefore will have the same effect as a negative vote. Broker
non-votes will not be included in the vote totals for these matters and
therefore will have no effect on the vote.
If you properly execute and return the enclosed proxy/voting instruction
card, and do not revoke it, the proxy holders will vote the shares represented
by the proxy in accordance with your instructions. If a properly executed proxy
gives no instructions, the proxy holders will vote the shares represented
thereby FOR the election of directors, FOR the selection of independent
auditors, FOR the amendment to the Certificate of Incorporation, AGAINST the
adoption of the stockholder proposal and in their discretion on any other
matters that properly come before the Annual Meeting. You may revoke an executed
proxy at any time prior to its exercise by giving notice in writing to the
Secretary of Unisys or by voting in person at the meeting.
If you are a participant in the Unisys Savings Plan (the "Savings Plan"),
the enclosed proxy/voting instruction card will serve as voting instructions to
the Savings Plan trustee for any whole shares of Unisys Common Stock credited to
your account as of February 23, 1998. The trustee will vote those shares in
accordance with your instructions if it receives your signed proxy/voting
instruction card by April 17, 1998. If you do not sign and return the
proxy/voting
<PAGE> 5
instruction card in a timely manner, or if you give no instructions with respect
to a matter to be voted upon, the trustee will vote the shares credited to your
account in the same proportion as it votes those shares for which it received
proper instructions from other participants.
ELECTION OF DIRECTORS
The Board of Directors currently consists of 11 members, divided into three
classes. One class of directors is elected each year to hold office for a
three-year term. Three of the four directors whose terms expire in 1998, Henry
C. Duques, Theodore E. Martin and Lawrence A. Weinbach, have been nominated for
reelection. Under the Company's Bylaws, no person may be elected a director
after having attained the age of 70. Alan E. Schwartz will therefore retire from
the Board of Directors at the Annual Meeting, and the Board will then consist of
ten members. The remaining seven directors will continue to serve as set forth
below. Each of the nominees has agreed to serve as a director if elected, and
Unisys believes that each nominee will be available to serve. However, the proxy
holders have discretionary authority to cast votes for the election of a
substitute should any nominee not be available to serve as a director.
INFORMATION REGARDING NOMINEES AND DIRECTORS
The names and ages of the nominees and directors, their principal
occupations or employment during the past five years and other data regarding
them are set forth below.
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
[DUQUES PHOTO]
HENRY C. DUQUES
Mr. Duques, 54, is Chairman and Chief Executive Officer of
First Data Corporation, an electronic payments and information
management company. He has served as a director of Unisys
since February 1998 and is a member of the Nominating
Committee of the Board of Directors.
[MARTIN PHOTO]
THEODORE E. MARTIN
Mr. Martin, 58, is a Director and President and Chief
Executive Officer of Barnes Group Inc., a manufacturer and
distributor of automotive and aircraft components and
maintenance products. He has also held the positions of
Executive Vice President-Operations of that company and
President and Chief Operating Officer and Group Vice President
of one of that company's principal business units. He is a
director of Ingersoll-Rand Company and RJR Nabisco Holding
Corp. He has served as a director of Unisys since 1995 and is
a member of the Audit Committee and the Nominating Committee
of the Board of Directors.
2
<PAGE> 6
[WEINBACH PHOTO]
LAWRENCE A. WEINBACH
Mr. Weinbach, 58, is Chairman of the Board, President and
Chief Executive Officer of Unisys. He previously served in the
position of Managing Partner-Chief Executive of Andersen
Worldwide, a global professional services organization. He has
served as a director of Unisys since September 1997.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING IN 1999
[BOLDUC PHOTO]
J. P. BOLDUC
Mr. Bolduc, 58, is Chairman and Chief Executive Officer of JPB
Enterprises, Inc., a merchant banking, venture capital and
real estate investment holding company with interests in the
food, beverage, real estate, retail and manufacturing
industries. He previously served in the positions of Vice
Chairman, Chief Operating Officer, President and Chief
Executive Officer of W. R. Grace & Co., a specialty chemicals
and health care company, from 1986 to 1995. He is a director
of Brothers Gourmet Coffees, Inc., Marshall & Ilsley
Corporation, Newmont Gold and Mining Corporations, Proudfoot
PLC and Sundstrand Corporation. He has served as a director of
Unisys since 1992 and is a member of the Finance Committee and
the Nominating Committee of the Board of Directors.
[DUDERSTADT PHOTO]
JAMES J. DUDERSTADT
Dr. Duderstadt, 55, is President Emeritus of the University of
Michigan and University Professor of Science and Engineering
at that university. He is a director of CMS Energy
Corporation. He has served as a director of Unisys since 1990
and is a member of the Audit Committee and the Nominating
Committee of the Board of Directors.
[MACKE PHOTO]
KENNETH A. MACKE
Mr. Macke, 59, is General Partner of Macke Partners, a venture
capital firm. He previously served as Chairman and Chief
Executive Officer of Dayton Hudson Corporation, a general
merchandise retailer, from 1984 to 1994. He is a director of
Fingerhut Companies, Inc., U.S. Bancorp and General Mills,
Inc. He has served as a director of Unisys since 1989 and is a
member of the Compensation and Organization Committee and the
Nominating Committee of the Board of Directors.
3
<PAGE> 7
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING IN 2000
[FOSLER PHOTO]
GAIL D. FOSLER
Ms. Fosler, 50, is Senior Vice President and Chief Economist
of The Conference Board, a business-sponsored, nonprofit
research organization. She is a director of H. B. Fuller
Company and a Trustee of the John Hancock Mutual Funds. She
has served as a director of Unisys since 1993 and is a member
of the Finance Committee and the Nominating Committee of the
Board of Directors.
[GOODES PHOTO]
MELVIN R. GOODES
Mr. Goodes, 62, is a Director and Chairman and Chief Executive
Officer of Warner-Lambert Company, a diversified worldwide
health care, pharmaceutical and consumer products company. He
is a director of Ameritech Corporation and Chase Manhattan
Corporation. He has served as a director of Unisys since 1987
and is a member of the Compensation and Organization Committee
and the Nominating Committee of the Board of Directors.
[HUSTON PHOTO]
EDWIN A. HUSTON
Mr. Huston, 59, is Senior Executive Vice President-Finance and
Chief Financial Officer of Ryder System, Inc., an
international highway transportation services company. He has
served as a director of Unisys since 1993 and is a member of
the Compensation and Organization Committee and the Nominating
Committee of the Board of Directors.
[MCCLEMEN PHOTO]
ROBERT MCCLEMENTS, JR.
Mr. McClements, 69, is a retired Chairman, President and Chief
Executive Officer of Sun Company, Inc., a diversified energy
company. He is a director of Bethlehem Steel Corporation. He
has served as a director of Unisys since 1991 and is a member
of the Audit Committee and the Nominating Committee of the
Board of Directors.
4
<PAGE> 8
BOARD MEETINGS
The Board of Directors held 15 meetings in 1997. During 1997, all directors
attended at least 75 percent of the meetings of the Board of Directors and
standing Committees on which they served.
COMMITTEES
The Board of Directors has a standing Audit Committee, Compensation and
Organization Committee and Nominating Committee, as well as certain other
committees.
The Audit Committee held four meetings in 1997. Its principal functions are
to review compliance with Company policies, review internal control procedures,
recommend to the Board of Directors the firm of independent auditors to serve
the Company, review the scope, fees and results of the audit by the independent
auditors and review the internal audit organization and annual audit plan. The
members of the Audit Committee are Messrs. Duderstadt, Martin and McClements.
The Compensation and Organization Committee held six meetings in 1997. Its
principal functions are to review and approve remuneration of the Company's
elected officers, evaluate performance, review and approve senior executive
compensation programs, administer remuneration plans, including the Company's
variable compensation plan and the 1990 Unisys Long-Term Incentive Plan (the
"1990 Plan"), and review management succession and related matters. The members
of the Compensation and Organization Committee are Messrs. Goodes, Huston and
Macke.
The Nominating Committee held three meetings in 1997. All directors other
than Mr. Weinbach are members of the Nominating Committee. The principal
functions of the Nominating Committee are to identify and review candidates and
recommend to the Board of Directors nominees for membership on the Board of
Directors. In fulfilling this responsibility, the Nominating Committee will
consider recommendations received from stockholders and other qualified sources.
Stockholder recommendations must be in writing and addressed to the Chairman of
the Nominating Committee, c/o Corporate Secretary, Unisys Corporation, Township
Line and Union Meeting Roads, Blue Bell, Pennsylvania 19424. If a stockholder
intends to make a nomination at an Annual Meeting, the Company's Bylaws require
that the stockholder deliver a notice to the Company not less than 90 days prior
to such meeting setting forth (i) the name, age, business and residence
addresses of each nominee, (ii) the principal occupation or employment of each
nominee, (iii) the number of shares of Unisys capital stock beneficially owned
by each nominee, (iv) a statement that the nominee is willing to be nominated
and (v) such other information concerning each nominee as would be required by
the Securities and Exchange Commission in a proxy statement soliciting proxies
for the election of such nominee.
The Board has also designated a standing Finance Committee and may
establish other committees from time to time.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of its Audit Committee, has
selected the firm of Ernst & Young LLP as independent auditors to audit the
Company's books and accounts for the year ending December 31, 1998 and
recommends ratification of such selection by the stockholders. Ernst & Young LLP
has served as independent auditors for Unisys since the
5
<PAGE> 9
merger of Burroughs Corporation and Sperry Corporation in 1986, having
previously served in that capacity for Sperry Corporation. Its representatives
will be present at the Annual Meeting and will have the opportunity to make a
statement if they desire to do so and to respond to appropriate questions asked
by stockholders.
The Board of Directors considers Ernst & Young LLP to be well qualified to
serve as the independent auditors for Unisys. If, however, stockholders do not
ratify the selection of Ernst & Young LLP, the Board will reconsider the
appointment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE
SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR 1998. PROXIES
SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS
OTHERWISE SPECIFY IN THEIR PROXIES.
PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION
The Board of Directors has unanimously approved, and recommends that
stockholders consider and approve, an amendment to the Company's Certificate of
Incorporation to increase the aggregate number of authorized shares of Common
Stock from 360,000,000 to 720,000,000. The amendment would not change the
authorized amount of the Company's preferred stock.
If the amendment is approved by the stockholders, the first sentence of
Section 1 of Article IV of the Certificate of Incorporation would be amended to
read as follows:
Section 1. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 760,000,000, divided into
two classes consisting of 720,000,000 shares of Common Stock, par value
$.01 per share ("Common Stock"), and 40,000,000 shares of Preferred
Stock, par value $1 per share ("Preferred Stock").
As of March 1, 1998, the Company had approximately 250,000,000 shares of
Common Stock issued and outstanding and had reserved approximately 81,000,000
shares for issuance upon the conversion of shares of preferred stock and other
convertible securities and in connection with the Company's various employee
benefit and compensation plans. This leaves approximately 29,000,000 authorized
but unissued shares of Common Stock available for future use.
The Board of Directors believes that an increase in the number of
authorized shares of Common Stock is necessary to provide the Company with
additional flexibility to meet its future business needs. If the proposed
amendment is approved by the stockholders, the Company will have additional
shares available for acquisitions, equity financings, equity compensation plans,
stock dividends or stock splits and other corporate purposes. The additional
shares would be available for issuance without further stockholder approval,
except as may be required by applicable law or the rules of the New York Stock
Exchange. Although the Company does not have any commitment or understanding at
this time for the issuance of additional shares of Common Stock (other than as
permitted or required under the Company's employee benefit plans), the proposed
amendment should enable the Company to take timely advantage of favorable
opportunities and market conditions when they arise.
Holders of Unisys Common Stock have no preemptive rights with respect to
any additional shares of Common Stock. The issuance of such additional shares
could have a dilutive effect on earnings per share of the Common Stock and on
the equity and voting power of those holding
6
<PAGE> 10
Common Stock at the time of issuance. In addition, the proposed amendment could
have an anti-takeover effect, as additional shares of Common Stock could be
issued to dilute the stock ownership and voting power of, or increase the cost
to, a person seeking to obtain control of the Company. However, the amendment is
not being proposed in response to any known effort to accumulate Common Stock or
obtain control of the Company.
Although the proposed increase in the number of authorized shares of Common
Stock is not intended for anti-takeover purposes, the rules of the Securities
and Exchange Commission require disclosure of charter, bylaw and other
provisions that could have an anti-takeover effect. These include: (i) a
classified Board of Directors, (ii) the requirement of a supermajority vote for
the removal of directors, (iii) a fair price provision requiring a supermajority
vote for certain business transactions involving a significant stockholder, (iv)
a prohibition on stockholder actions by written consent and on stockholder calls
of special meetings, (v) an advance notice provision for director nominations
and (vi) a stockholder rights plan.
The affirmative vote of the holders of a majority of the outstanding shares
of Common Stock will be required to adopt the proposed amendment.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND THE
CERTIFICATE OF INCORPORATION. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL
BE SO VOTED UNLESS STOCKHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
STOCKHOLDER PROPOSAL
The New York City Teachers' Retirement System, c/o The City of New York
Office of the Comptroller, 1 Centre Street, New York, NY 10007-2341, beneficial
owner of 226,400 shares of Unisys Common Stock, has proposed the adoption of the
following resolution:
BE IT RESOLVED, that the shareholders of Unisys Corporation request
that the Board of Directors amend the certificate of incorporation to
reinstate the rights of the shareholders to take action by written
consent and to call special meetings.
SUPPORTING STATEMENT OF THE PROPONENT
The rights of the shareholders to take action by written consent and to
call special meetings should not be abridged.
The Company's elimination of these rights, in our opinion, effectively
removes important processes by which shareholders can act expeditiously to
protect their investment interests.
For example, the right of shareholders to act to remove incumbent directors
for egregious conduct should not be limited to the annual meeting. Also,
shareholders should not be prevented from giving timely consideration to a
bidder's proposal to acquire control of the company, or a dissident
shareholders' slate of nominees for election to the Board of Directors, because
such proposals are required to be presented only at the annual meeting.
STATEMENT OF UNISYS IN OPPOSITION TO STOCKHOLDER PROPOSAL
The Company's Certificate of Incorporation and/or Bylaws (collectively, the
"Corporate Documents") (i) require the Company to hold an annual meeting of
stockholders each year, (ii) prohibit stockholder action by written consent and
(iii) allow special meetings to be called only by a majority of the Board of
Directors. The proposed amendments would allow stockholders to call special
meetings and to act by written consent without a meeting for any
7
<PAGE> 11
reason and at any time. The Board believes that adoption of these amendments
would undermine, rather than foster, stockholder democracy, would be disruptive
and would impose significant administrative and financial burdens.
The Board believes that permitting stockholders to solicit written consents
on any matter at any time would be both confusing and disruptive in a publicly
held corporation with more than 250,000,000 shares outstanding and more than
37,000 stockholders of record. In addition, amending the Corporate Documents to
permit written consents could disenfranchise many stockholders. Under the
current provisions in the Corporate Documents, which prohibit stockholder action
by written consent, all the stockholders of the Company have the opportunity to
participate in meetings called to determine proposed actions. These provisions
thus allow the opportunity for discussion and increase the ability of all
stockholders to have their views considered. The proposed amendments, on the
other hand, would make it possible for the holders of a simple majority of
voting shares to use the consent procedure to take action without a meeting and
before all arguments can be heard. The Board believes that this does not further
stockholder democracy.
At the annual meeting of stockholders, which is already required by the
Corporate Documents, stockholders have an opportunity to raise any appropriate
matter. Allowing stockholders to call an unlimited number of special meetings
for any reason and at any time would be disruptive to the conduct of business
and would impose significant administrative and financial burdens on the
Company. Special meetings are costly in terms of both time and money. Each of
the thousands of holders of the Company's common stock must receive proxy
materials for every special meeting. This involves legal, printing and postage
expense, in addition to those costs normally associated with the Company's
annual meeting. In addition, preparing for a stockholder meeting requires
significant attention from corporate officers and employees, diverting them from
running the business. The current provisions in the Corporate Documents, which
allow only the Board of Directors to call special meetings, ensure the orderly
conduct of corporate affairs. They also prevent a minority of the shares from
imposing upon the Company the burden and expense of a stockholder meeting that
may not be desired by the majority.
For the reasons stated above, the Board of Directors believes that the
proposed amendments are not in the best interests of the Company or its
stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE ADOPTION OF THE
FOREGOING STOCKHOLDER PROPOSAL. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL
BE SO VOTED UNLESS STOCKHOLDERS OTHERWISE SPECIFY IN THEIR PROXIES.
8
<PAGE> 12
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
FMR Corp., Edward C. Johnson 3d, Abigail P. Johnson and Fidelity Management
& Research Company, 82 Devonshire Street, Boston, Massachusetts 02109, have
jointly filed a Schedule 13G with the Securities and Exchange Commission dated
February 14, 1998 reporting beneficial ownership of 29,585,516 shares (or
11.72%) of Unisys Common Stock. Of such shares, 3,406,141 represent shares
issuable upon conversion of the Company's convertible debt securities and
preferred stock. Sole dispositive power has been reported for 29,585,516 shares.
Sole voting power has been reported for 1,327,133 shares.
Shown below are the number of shares of Unisys Common Stock (or Stock
Units) beneficially owned as of March 1, 1998, by all directors and nominees,
each of the executive officers named on page 10, and all current directors and
executive officers of Unisys as a group. No individual or group named below
beneficially owns more than one percent of the outstanding shares of Unisys
Common Stock.
<TABLE>
<CAPTION>
ADDITIONAL SHARES OF
NUMBER OF SHARES COMMON STOCK DEEMED
BENEFICIAL OWNER OF COMMON STOCK(1)(2) BENEFICIALLY OWNED(1)(3)
---------------- --------------------- ------------------------
<S> <C> <C>
Harold S. Barron........................... 70,295 176,750
J. P. Bolduc............................... 10,881 --
James J. Duderstadt........................ 9,232 --
Henry C. Duques............................ -- --
Gail D. Fosler............................. 31,938 --
Gerald A. Gagliardi........................ 80,920 56,959
George R. Gazerwitz........................ 76,453 196,483
Melvin R. Goodes........................... 9,173 --
Edwin A. Huston............................ 10,239 --
Kenneth A. Macke........................... 35,291 --
Theodore E. Martin......................... 16,081 --
Robert McClements, Jr...................... 16,323 --
Lawrence C. Russell........................ 108,339 170,000
Alan E. Schwartz........................... 25,018 --
James A. Unruh (4)......................... 333,483 1,625,299
Lawrence A. Weinbach....................... 254,643 --
All current directors and executive
officers as a group...................... 1,070,853 1,142,150
</TABLE>
- ---------------
(1) Includes shares reported by directors and executive officers as held
directly or in the names of spouses, children or trusts as to which
beneficial ownership may have been disclaimed.
(2) Includes 1,381 shares for Mr. Unruh, 605 shares for Mr. Gagliardi, 1,668
shares for Mr. Gazerwitz and 5,674 shares for current executive officers as
a group, all held under the Savings Plan, a qualified plan under Sections
401(a) and 401(k) of the Internal Revenue Code. With respect to such shares,
plan participants have authority to direct voting. Also includes restricted
shares and restricted share units, as follows: Mr. Barron, 66,695; Mr.
Gagliardi, 80,000; Mr. Gazerwitz, 65,000; Mr. Russell, 108,339; Mr. Unruh,
269,474; Mr. Weinbach, 169,762; current executive officers as a group,
787,872. Also includes Stock Units, as described on page 15, for directors
as follows: Mr. Bolduc, 7,881; Dr. Duderstadt, 8,182; Ms. Fosler, 6,788; Mr.
Goodes, 8,973; Mr. Huston, 9,239; Mr. Macke, 34,091; Mr. Martin, 16,081; Mr.
McClements, 15,323 and Mr. Schwartz, 16,018.
(3) Shares shown are shares subject to options exercisable within 60 days
following March 1, 1998.
(4) Mr. Unruh resigned as a director and executive officer in September 1997.
9
<PAGE> 13
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual and
long-term compensation paid to (i) the current chief executive officer and the
former chief executive officer and (ii) the other four most highly compensated
executive officers of Unisys in 1997 (the "Named Officers"), for services
rendered in all capacities to Unisys for 1997, 1996 and 1995.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- ------------------------------------------------------------------------ ----------------------- -------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
COMPEN- AWARD(S) OPTIONS/ PAYOUTS COMPEN-
NAME AND SALARY BONUS(1) SATION(2) (3) SARS(4) (4) SATION(5)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
------------------ ---- ------- --------- --------- ---------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence A. Weinbach(6).......... 1997 327,692 1,992,000 766,742 2,058,364 1,000,000 -- --
Chairman, President and Chief
Executive Officer
James A. Unruh(7)................ 1997 836,004 418,000 286,374 -- 180,000 -- 366,999
Chairman and Chief 1996 824,004 585,000 4,642 2,021,055 180,000 -- 15,999
Executive Officer 1995 800,004 -- 2,025 -- 180,000 -- 15,999
Gerald A. Gagliardi.............. 1997 426,669 194,000 61,788 -- 60,000 -- 87,310
Executive Vice President 1996 397,504 205,000 8,198 594,000 60,000 -- 25,140
1995 257,086 75,000 11,921 -- 30,000 -- 12,881
George R. Gazerwitz.............. 1997 350,004 256,000 65,506 -- 60,000 -- 85,116
Executive Vice President 1996 283,554 145,000 -- 472,928 50,000 -- 15,616
1995 271,333 100,000 -- -- 30,000 -- 15,616
Lawrence C. Russell(8)........... 1997 450,000 216,000 12,095 -- 60,000 -- 260,900
Executive Vice President 1996 450,000 270,000 163,575 682,103 60,000 -- --
1995 75,000 50,000 16,747 104,352 250,000 -- 200,000
Harold S. Barron................. 1997 375,000 216,000 59,980 -- 35,000 -- 113,440
Senior Vice President, 1996 362,500 145,000 5,266 500,213 35,000 -- 48,230
General Counsel and 1995 351,250 30,000 -- -- 34,000 -- 43,710
Secretary
</TABLE>
- ---------------
(1) Amount shown for Mr. Weinbach includes the one-time bonus described at page
13.
(2) Amounts shown for Mr. Weinbach are tax reimbursements and personal benefits,
including $102,072 for relocation. All amounts shown for the other Named
Officers for 1997 are tax reimbursements.
(3) Amounts shown are the dollar value of restricted stock awards based on the
closing market price of Unisys Common Stock on the date of grant. At
December 31, 1997, the number and value of restricted share holdings for
each of the Named Officers were as follows: Mr. Weinbach - 169,762 shares,
$2,355,448; Mr. Unruh - 269,474 shares, $3,738,952; Mr. Gagliardi - 80,000
shares, $1,110,000; Mr. Gazerwitz - 23,316 shares, 41,684 restricted share
units, $901,875; Mr. Russell - 108,339 shares, $1,503,204; Mr.
Barron - 66,695 shares, $925,393. The grant to Mr. Weinbach is more fully
described at page 12.
(4) Although the 1990 Plan permits grants of free-standing stock appreciation
rights and the payment of performance awards, no such grants or payments
were made to any of the Named Officers during the years presented.
(5) Amounts shown for 1997 include the full amount of premiums paid by Unisys
for life insurance under split-dollar arrangements and premiums reimbursed
to the Named Officers for indemnity insurance as follows: Mr. Unruh -
$15,999, $351,000; Mr. Gagliardi - $30,810, $56,500; Mr.
Gazerwitz - $15,616, $69,500; Mr. Barron - $49,940, $63,500. Amount shown
for Mr. Russell consists of $53,900 for split dollar life insurance, $7,000
for indemnity insurance and $200,000 in respect of the incentive forfeiture
payments referred to on page 13.
(6) Mr. Weinbach joined Unisys on September 23, 1997.
(7) Mr. Unruh served as Chairman and Chief Executive Officer until September
1997.
(8) Mr. Russell joined Unisys in November 1995.
10
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth further information on grants of stock
options during 1997 to the Named Officers pursuant to the 1990 Plan. No stock
appreciation rights were granted during 1997.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERMS(1)
- -------------------------------------------------------------------------- ------------------------------
NUMBER OF % OF
SECURITIES TOTAL
UNDERLYING OPTIONS EXERCISE
OPTIONS GRANTED TO OR BASE
GRANTED(2) EMPLOYEES PRICE(3) EXPIRATION
NAME (#) IN 1997 ($/SH) DATE(4) 0%($) 5%($) 10%($)
---- ---------- ---------- -------- ---------- ----- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Lawrence A. Weinbach..... 1,000,000 19.0 11.7813 9/23/07 -- 7,422,219 18,732,267
James A. Unruh........... 180,000 3.4 6.2500 4/23/07 -- 708,750 1,788,750
Gerald A. Gagliardi...... 60,000 1.1 6.2500 4/23/07 -- 236,250 596,250
George R. Gazerwitz...... 60,000 1.1 6.2500 4/23/07 -- 236,250 596,250
Lawrence C. Russell...... 60,000 1.1 6.2500 4/23/07 -- 236,250 596,250
Harold S. Barron......... 35,000 0.7 6.2500 4/23/07 -- 137,813 347,813
</TABLE>
- ---------------
(1) Illustrates value that might be realized upon exercise of options
immediately prior to the expiration of their term, assuming specified
compounded rates of appreciation on Unisys Common Stock over the term of the
options. Assumed rates of appreciation are not necessarily indicative of
future stock performance.
(2) Options granted to Mr. Weinbach were granted on September 23, 1997. Options
granted to the other Named Officers were granted on April 23, 1997. Options
become exercisable in four equal annual installments, beginning one year
after the date of grant. Options become immediately exercisable in the event
of a change in control (as defined in the 1990 Plan).
(3) The exercise price per share is the fair market value (calculated as the
average of the high and low sales prices reported on the Composite Tape for
New York Stock Exchange Listed Companies) of a share of Unisys Common Stock
on the date of grant. Options may be exercised with cash and/or with other
shares of Unisys Common Stock or with any other form of consideration
permitted by the Compensation and Organization Committee.
(4) The options were granted for a term of ten years, subject to earlier
termination in certain events related to termination of employment.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to option exercises
during 1997 and unexercised stock options held by the Named Officers at December
31, 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1997 DECEMBER 31, 1997(1)
ACQUIRED VALUE (#) ($)
ON EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lawrence A. Weinbach....... -- -- -- 1,000,000 -- 2,093,700
James A. Unruh............. 70,000 697,814 1,175,299 450,000 4,946,250 2,857,500
Gerald A. Gagliardi........ 15,000 42,657 67,459 123,500 161,375 865,563
George R. Gazerwitz........ -- -- 157,733 120,000 638,750 813,750
Lawrence C. Russell........ -- -- 140,000 247,392 1,130,000 1,957,560
Harold S. Barron........... -- -- 174,750 88,250 788,156 557,219
</TABLE>
- ---------------
(1) Difference between the closing price reported on the Composite Tape for New
York Stock Exchange Listed Companies for Unisys Common Stock at December 31,
1997 and the exercise price.
11
<PAGE> 15
LONG-TERM INCENTIVE PLAN AWARDS
On September 23, 1997, Lawrence A. Weinbach received an award of 169,762
restricted shares of Unisys Common Stock under the 1990 Plan. The grant vested
25% on September 23, 1997. The remaining restricted shares will vest in
installments over the three-year period ending September 23, 2000, provided Mr.
Weinbach remains in the employ of Unisys. Restricted shares may be voted and
will receive dividends if and to the extent that dividends are paid on
unrestricted shares of Unisys Common Stock. They may not be sold or pledged
until the award vests.
PENSION PLANS
The table below shows the aggregate annual amounts at age 65 that would be
received from the Unisys Pension Plan (the "Pension Plan"), the Supplemental
Executive Retirement Plan (the "Supplemental Plan") and the Elected Officer
Pension Plan (the "Officer Plan").
The Pension Plan and Supplemental Plan generally are available to all
employees located in the United States. The Officer Plan is available to
officers, including the Named Officers, who satisfy certain minimum service
requirements. The aggregate pension amount payable under the Officer Plan is
offset by benefits paid under the Pension Plan, the Supplemental Plan and any
applicable subsidiary plan. The amounts shown in the table are computed on a
single life annuity basis and are subject to a reduction equal to 50% of the
participant's primary social security benefit.
<TABLE>
<CAPTION>
YEARS OF SERVICE
ASSUMED FINAL -----------------------------------------------------------------
AVERAGE COMPENSATION 5 10 15 20 25 30 OR MORE
-------------------- -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 400,000 $ 80,000 $160,000 $180,000 $200,000 $220,000 $ 240,000
500,000 100,000 200,000 225,000 250,000 275,000 300,000
600,000 120,000 240,000 270,000 300,000 330,000 360,000
700,000 140,000 280,000 315,000 350,000 385,000 420,000
800,000 160,000 320,000 360,000 400,000 440,000 480,000
900,000 180,000 360,000 405,000 450,000 495,000 540,000
1,000,000 200,000 400,000 450,000 500,000 550,000 600,000
1,100,000 220,000 440,000 495,000 550,000 605,000 660,000
1,200,000 240,000 480,000 540,000 600,000 660,000 720,000
1,300,000 260,000 520,000 585,000 650,000 715,000 780,000
1,400,000 280,000 560,000 630,000 700,000 770,000 840,000
1,500,000 300,000 600,000 675,000 750,000 825,000 900,000
1,600,000 320,000 640,000 720,000 800,000 880,000 960,000
1,700,000 340,000 680,000 765,000 850,000 935,000 1,020,000
</TABLE>
Final Average Compensation generally corresponds to the amounts shown in
the Summary Compensation Table under the headings Salary and Bonus. However,
Final Average Compensation is calculated using the individual's highest 60
consecutive months of compensation out of the final 120 months of employment and
thus will differ somewhat from the amounts shown in the Summary Compensation
Table. Final Average Compensation for the eligible Named Officers as of March 1,
1998 is as follows: J. A. Unruh - $1,378,803; G. A. Gagliardi - $428,691; G. R.
Gazerwitz - $419,168; L. C. Russell - $679,715; H. S. Barron - $481,450. Full
years of credited service under the pension plans for the eligible Named
Officers as of March 1, 1998 are as follows: J. A. Unruh - 16 years; G. A.
Gagliardi - 26 years; G. R. Gazerwitz - 16 years; L. C. Russell - 2 years; H. S.
Barron - 7 years.
12
<PAGE> 16
Pursuant to the employment agreement described below, Lawrence A. Weinbach
is vested in an annual pension benefit as follows: 0-3 years of
service - $350,000; 4 years - $570,000; 5 years - $710,000; 6 years - $860,000;
7 or more years - $1,000,000.
EMPLOYMENT AGREEMENTS
On September 23, 1997, the Company entered into a five-year employment
agreement with Lawrence A. Weinbach, covering the terms and conditions of Mr.
Weinbach's employment as Chairman of the Board, President and Chief Executive
Officer. The agreement provides for a minimum base salary of $1,200,000 per
year, subject to annual review by the Compensation and Organization Committee,
and eligibility for an annual bonus award at a target bonus level of not less
than 100% of base salary. The actual bonus payable, if any, is to be determined
by the Compensation and Organization Committee in its sole discretion, except
that, for the 1997, 1998 and 1999 award years, Mr. Weinbach is guaranteed a
minimum bonus equal to 100% of the base salary paid to him in that year. Under
the agreement, Mr. Weinbach also received a one-time bonus in the amount of
$1,500,000 at the time his employment commenced. Mr. Weinbach is eligible to
participate in the benefit programs generally made available to executive
officers, is entitled to the pension benefits discussed above and is eligible to
receive stock option and other long-term incentive awards under the 1990 Plan.
Effective as of his first day of employment, Mr. Weinbach received the stock
option grant disclosed on page 11 and the restricted share award described on
page 12. He also purchased Unisys Common Stock having a fair market value of
$1,000,000 from the Company. If Mr. Weinbach's employment is terminated under
certain circumstances, the agreement provides for him to receive continued
payment of his base salary for the remainder of the term (but in no event less
than one year's base salary) and, for the one-year period following the date of
termination, a bonus in an amount equal to his target bonus percentage times the
base salary paid during such period. He will also be entitled to continued
medical and dental coverage through the remaining term of the agreement, full
vesting in outstanding awards under the 1990 Plan and one additional year of
service for pension purposes. Salary continuation amounts paid to Mr. Weinbach
after two years from the date of employment termination will be reduced by the
amount of any cash compensation he earns for services rendered to any entity
other than Unisys. Mr. Weinbach is also party to a change in control agreement
with the Company, as described on page 14. He is not entitled to receive
duplicate payments under the change in control agreement and his employment
agreement.
Effective November 1995, the Company entered into a three-year employment
agreement with Lawrence C. Russell, covering the terms and conditions of his
employment as Executive Vice President of Unisys and President of Unisys
Information Services. The agreement provides for an annual base salary of
$450,000, subject to annual review, and eligibility for an annual bonus under
the Unisys Executive Variable Compensation Plan at a target of not less than 60%
of base salary. The agreement provides that the actual bonus amount can vary
from zero to 150% of target. Mr. Russell is eligible to participate in the
benefit programs generally made available to executive officers and is eligible
to receive stock option and other long-term incentive awards under the 1990
Plan. The agreement provides that, if Mr. Russell remains employed with the
Company on the applicable payment date, the Company will make periodic payments,
totaling $700,000, through the year 2000, to compensate Mr. Russell for the
value of incentives forfeited from his previous employment. If the Company
terminates Mr. Russell's employment other than for cause, he will be entitled to
receive continued payment of his base salary and bonus for the remainder of the
term of the agreement (with a minimum of one year's
13
<PAGE> 17
salary plus bonus). He will also be entitled to immediate vesting of all
outstanding awards under the 1990 Plan, a lump-sum payment of any remaining
incentive forfeiture installments and continued medical and dental coverage
through the remaining agreement term. Mr. Russell is also party to a change in
control agreement. He is not entitled to receive duplicate payments under the
change in control agreement and his employment agreement.
The Company and James A. Unruh, former Chairman and Chief Executive
Officer, are parties to an agreement dated July 2, 1997. The agreement provides
for Mr. Unruh to receive, during the period beginning July 2, 1997 and ending
April 30, 1998 (the "Term"), a base salary at the annual rate of $836,000. Under
the agreement, Mr. Unruh was also entitled to receive a bonus award for 1997 at
the discretion of the Compensation and Organization Committee of the Board of
Directors. For a period of two years following the completion of the Term, Mr.
Unruh will be entitled to receive termination payments consisting of base salary
continuation at the annual rate of $836,000 and an annual bonus equal to 50% of
that amount. Amounts payable by the Company during the second year following
completion of the Term will be reduced by the amount earned by Mr. Unruh for
services rendered to any entity other than Unisys. Under the agreement, Mr.
Unruh is entitled to full vesting on April 30, 1998 of all outstanding awards
under the 1990 Plan and an extension of the repayment period on his home
mortgage loan.
CHANGE IN CONTROL EMPLOYMENT AGREEMENTS
The Company has entered into change in control employment agreements with
its executive officers including the Named Officers. The agreements are intended
to retain the services of these executives and provide for continuity of
management in the event of any actual or threatened change in control. A change
in control is generally defined as (i) the acquisition of 20% or more of Unisys
Common Stock, (ii) a change in the majority of the Board of Directors unless
approved by the incumbent directors (other than as a result of a contested
election) and (iii) certain reorganizations, mergers, consolidations,
liquidations or dissolutions. Each agreement has a term ending on the third
anniversary of the date of the change in control. These agreements, which are
the same in substance for each executive, provide that in the event of a change
in control each executive will have specific rights and receive certain
benefits. Those benefits include the right to continue in the Company's employ
during the term, performing comparable duties to those being performed
immediately prior to the change in control and at compensation and benefit
levels that are at least equal to the compensation and benefit levels in effect
immediately prior to the change in control. Upon a termination of employment
under certain circumstances following a change in control, the terminated
executive will be entitled to receive special termination benefits, including a
lump sum payment equal to three years base salary and bonus and the actuarial
value of the pension benefit the executive would have accrued had the executive
remained employed for three years following the termination date. The special
termination benefits are payable if the Company terminates the executive without
cause, the executive terminates employment for certain enumerated reasons
(including a reduction in the executive's compensation or responsibilities or a
change in the executive's job location), or the executive voluntarily terminates
employment for any reason during the 30-day period following the first
anniversary of the date of the change in control. If any payment or distribution
by the Company to the executive is determined to be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code, the executive is entitled
to receive a payment on an after-tax basis equal to the excise tax imposed. The
executive is under no obligation to mitigate amounts payable under these
agreements, and to
14
<PAGE> 18
the extent the executive has a separate employment agreement with the Company
with conflicting rights, the executive is allowed the greater entitlement.
INDEBTEDNESS OF MANAGEMENT
The Company has made no-interest loans to certain of its executive
officers. The loans, which were made in connection with the officer's purchase
of a principal residence upon relocation, are generally for a 20-year term
(assuming continued employment with the Company), are evidenced by promissory
notes and are secured by second mortgages. Mr. Russell has a four-year,
interest-free loan secured by a first mortgage. The maximum amounts outstanding
during the period between January 1, 1997 and March 1, 1998 for each of the
following were: J. F. McHale, $122,500; L. C. Russell, $283,000; J. A. Unruh,
$245,000. Mr. McHale's loan is no longer outstanding. The principal amounts of
Mr. Unruh's and Mr. Russell's loans as of March 1, 1998 were $130,000 and
$212,250, respectively.
COMPENSATION OF DIRECTORS
The Company's non-employee directors receive an annual retainer of $35,000,
an annual attendance fee of $10,000 for regularly scheduled Board and Committee
meetings and a meeting fee of $1,000 for attendance at each Board and Committee
meeting held on other than a regularly scheduled meeting day. The annual
retainer and annual meeting fee are paid in monthly installments, with 50% of
each installment paid in cash and 50% in the form of common stock equivalent
units ("Stock Units"). The value of each Stock Unit at any point in time is
equal to the value of one share of Unisys Common Stock. Stock Units are recorded
in a memorandum account maintained for each director. A director's Stock Unit
account is payable upon termination of service, or at any date at least five
years after the Stock Units are awarded, in either cash or common stock at the
election of the director. Directors do not have the right to vote with respect
to any Stock Units. Directors also have the opportunity to defer until
termination of service, or until any date at least five years after the
deferral, all or a portion of their cash fees. Any deferred cash amounts, and
earnings or losses thereon, are recorded in a memorandum account maintained for
each director. The right to receive future payments of Stock Unit accounts and
deferred cash accounts is an unsecured claim against the Company's general
assets. Directors who are employees of the Company do not receive any cash or
Stock Units for their services as directors.
REPORT OF THE COMPENSATION AND ORGANIZATION COMMITTEE
COMPENSATION PROGRAM AND POLICIES
The Company's executive compensation program is administered by the
Compensation and Organization Committee (the "Committee"). The Committee reviews
compensation levels of elected officers, evaluates performance, considers
management succession and related matters and administers the Company's
incentive plans, including the Executive Variable Compensation Plan (the "EVC
Plan") and the 1990 Plan.
The Company's executive compensation program is designed to attract and
retain executives responsible for the Company's long-term success, to reward
executives for achieving both financial and strategic company goals, to align
executive and stockholder interests through long-term, equity-based plans and to
provide a compensation package that recognizes individual contributions as well
as overall business results. As a result, a substantial
15
<PAGE> 19
portion of each executive's total compensation is intended to be variable and to
be tied closely to the performance of Unisys and the executive's business unit,
as well as the attainment of the executive's individual goals. The Company's
executive compensation program also takes into account the compensation
practices of companies with whom Unisys competes for executive talent. These
companies (the "peer companies") include the principal companies included in the
peer group indices in the Performance Graph on page 18 of this Proxy Statement
and additional companies in various industries.
The three key components of the Company's executive compensation program
for 1997 were base salary, short-term incentive payments and long-term incentive
awards in the form of stock options. Overall compensation is intended to be
competitive for comparable positions at the peer companies.
The Company's policies with respect to each of the elements of its
executive compensation program, as well as the basis for the compensation
awarded to the current and former chief executive officer, are discussed below.
BASE SALARY
Each executive's base salary is initially determined with reference to
competitive pay practices and is dependent upon the executive's level of
responsibility and experience. The Committee uses its discretion, rather than a
formal weighting system, to evaluate these factors and to determine individual
base salary levels. Thereafter, base salaries are reviewed periodically, and
increases are made based on the Committee's subjective assessment of individual
performance, as well as the factors discussed above.
SHORT-TERM INCENTIVE PAYMENTS
For 1997, all of the Company's executive officers participated in the EVC
Plan. This plan's stated purpose is to motivate and reward elected officers and
other key executives for the attainment of individual and/or corporate
performance goals. Under the plan, the Committee has the discretion to determine
the conditions (including performance objectives) applicable to annual award
payments and the amounts of such awards. With respect to current executives
other than Mr. Weinbach, awards under the plan for 1997 were generally
determined as follows.
Early in 1997, executives were assigned target award amounts for the year,
which were typically stated as a percentage of base salary (ranging, in the case
of elected officers other than the chief executive officer, from 45% to 60%).
Performance goals were also established based upon the financial performance of
both Unisys and the executive's business unit (generally, achievement of
pre-established profit, cash flow and revenue objectives) and upon individual
performance objectives. Actual award amounts could range from zero to 150% of
target, depending upon the Committee's evaluation of individual and
corporate/business unit performance. In 1997, the Company substantially met the
performance goals established for the year. Awards paid for 1997 reflected these
results plus individual accomplishments.
LONG-TERM INCENTIVE AWARDS
Under the 1990 Plan, stock options may be granted to the Company's
executive officers and other key employees. The size of stock option awards is
based primarily on the individual's responsibilities and position with Unisys.
The Committee does not determine the size of such awards by reference to the
amount or value of stock options currently held by an executive officer.
16
<PAGE> 20
Stock options are designed to align the interests of executives with those
of stockholders. Stock options are granted with an exercise price equal to the
market price of Unisys Common Stock on the date of grant, and current grants
vest over four years. This approach is designed to encourage the creation of
stockholder value over the long term since no benefit is realized unless the
price of the Common Stock rises over a number of years.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Lawrence A. Weinbach became the Company's Chairman, President and Chief
Executive Officer on September 23, 1997. In connection with his employment, the
Company entered into the employment agreement described at page 13. The terms
and conditions of the employment agreement were approved by the Committee after
consideration of Mr. Weinbach's qualifications and experience, his previous
compensation levels and the competitive marketplace for executive talent.
Under the employment agreement, Mr. Weinbach is entitled to a base salary
at the rate of $1,200,000 per year and, for 1997, 1998 and 1999, is guaranteed a
minimum annual bonus equal to 100% of the base salary paid to him in that year.
Given the marked improvement in the Company's profile under Mr. Weinbach's
leadership, the Committee awarded him a bonus of $492,000, or 150% of base
salary, for 1997. Under the agreement, Mr. Weinbach also received a one-time
bonus in the amount of $1,500,000 at the time his employment began and was
granted the stock options and restricted share awards described on pages 11 and
12.
For 1997, James A. Unruh, the Company's former chief executive officer,
received a base salary of $836,000. This had been Mr. Unruh's salary since 1996.
Pursuant to the agreement described at page 14, Mr. Unruh was also entitled to
receive a bonus award for 1997 at the discretion of the Committee. For 1997, the
Committee awarded Mr. Unruh a bonus of $418,000, or 50% of salary, in
recognition of his role in the transformation of Unisys and in effecting a
smooth transition to his successor. In April 1997, as in the past several years,
Mr. Unruh received options to purchase 180,000 shares of Unisys Common Stock.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code imposes a $1 million annual
limit on the amount of compensation that may be deducted by the Company with
respect to each Named Officer employed as of the last day of the applicable
year. The limitation does not apply to compensation based on the attainment of
objective performance goals. The Committee has considered the impact of the
deduction limitation and has determined that it is not in the best interests of
the Company or its stockholders to base compensation solely on objective
performance criteria. Rather, the Committee believes that it should retain the
flexibility to base compensation on its subjective evaluation of performance as
well as on the attainment of objective goals.
<TABLE>
<S> <C>
Compensation and Organization Committee
Melvin R. Goodes
Edwin A. Huston
Kenneth A. Macke
</TABLE>
17
<PAGE> 21
STOCK PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the cumulative
total stockholder return on Unisys Common Stock during the five fiscal years
ended December 31, 1997 with the cumulative total return on the Standard &
Poor's 500 Stock Index, the Standard & Poor's Computers (Hardware) Index and the
Standard & Poor's Computers (Software and Services) Index. The comparison
assumes $100 was invested on December 31, 1992 in Unisys Common Stock and in
each of such indices and assumes reinvestment of dividends.
<TABLE>
<CAPTION>
S & P
S & P Computers
Measurement Period Unisys Computers (Software &
(Fiscal Year Covered) Corporation S & P 500 (Hardware) Services)
<S> <C> <C> <C> <C>
1992 100 100 100 100
1993 125 110 104 128
1994 85 112 134 151
1995 54 153 178 212
1996 67 189 239 330
1997 137 252 350 459
</TABLE>
18
<PAGE> 22
GENERAL AND OTHER MATTERS
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During 1996, George R. Gazerwitz received a grant of restricted stock units
while he was on assignment overseas. These units were inadvertently omitted from
Mr. Gazerwitz's Form 4 filings for 1996. The filings have been corrected.
POLICY ON CONFIDENTIAL VOTING
It is the Company's policy that all stockholder proxies, ballots and voting
materials that identify the vote of a specific stockholder shall, if requested
by that stockholder on such proxy, ballot or materials, be kept permanently
confidential and shall not be disclosed to the Company, its affiliates,
directors, officers and employees or to any third parties, except as may be
required by law, to pursue or defend legal proceedings or to carry out the
purpose of, or as permitted by, the policy. Under the policy, vote tabulators
and inspectors of election are to be independent parties who are unaffiliated
with and are not employees of the Company. The policy provides that it may,
under certain circumstances, be suspended in the event of a proxy solicitation
in opposition to a solicitation of management. The Company may at any time be
informed whether or not a particular stockholder has voted. Comments written on
proxies or ballots, together with the name and address of the commenting
stockholder, will also be made available to the Company.
STOCKHOLDER PROPOSALS
Any stockholder who intends to submit a proposal for inclusion in the proxy
materials for the 1999 Annual Meeting of Stockholders must submit such proposal
so that it is received by the Company no later than November 12, 1998.
OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors knows of no
matter other than the matters described herein that will be presented for
consideration at the Annual Meeting. However, if any other matter shall properly
come before the Annual Meeting, the shares represented by proxies that are
signed and returned by stockholders will, unless stockholders otherwise specify,
be voted thereon in the discretion of the persons voting such shares.
The Company will bear the cost of soliciting proxies. Such cost will
include charges by brokers and other custodians, nominees and fiduciaries for
forwarding proxies and proxy material to the beneficial owners of Unisys Common
Stock. Solicitation may also be made personally, or by telephone or telegraph,
by the Company's directors, officers and regular employees without additional
compensation. In addition, the Company has retained Georgeson & Company Inc. to
assist in the solicitation of proxies for a fee of approximately $12,000, plus
expenses.
By Order of the Board of Directors,
/s/ Harold S. Barron
Harold S. Barron
Senior Vice President,
General Counsel and Secretary
Dated: March 12, 1998
19
<PAGE> 23
UNISYS CORPORATION
PROXY FOR ANNUAL MEETING TO BE HELD APRIL 23, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINTS MELVIN R. GOODES, KENNETH A. MACKE AND LAWRENCE
A. WEINBACH, AND EACH OF THEM, PROXIES, WITH POWER OF SUBSTITUTION, TO VOTE ALL
SHARES OF COMMON STOCK WHICH THE UNDERSIGNED IS ENTITLED TO VOTE AT THE 1998
ANNUAL MEETING OF STOCKHOLDERS OF UNISYS CORPORATION, AND AT ANY ADJOURNMENT
THEREOF, AS DIRECTED ON THE REVERSE SIDE HEREOF WITH RESPECT TO THE ITEMS SET
FORTH IN THE ACCOMPANYING PROXY STATEMENT AND IN THEIR DISCRETION UPON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. THIS CARD ALSO PROVIDES
VOTING INSTRUCTIONS (FOR SHARES CREDITED TO THE ACCOUNT OF THE UNDERSIGNED, IF
ANY) TO THE TRUSTEE FOR THE UNISYS SAVINGS PLAN (THE "SAVINGS PLAN") AS MORE
FULLY DESCRIBED BEGINNING ON PAGE 1 OF THE PROXY STATEMENT.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY/VOTING INSTRUCTION
CARD IN THE ENCLOSED ENVELOPE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 24
UNISYS CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [x]
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR ITEMS 1, 2 AND 3.
FOR WITHHELD FOR all
all from all except as noted
1. Election of Directors [ ] [ ] [ ] _______________
Nominees: Henry C. _______________
Duques, Theodore E. (Except
Martin, Lawrence A. nominees written
Weinbach above)
FOR AGAINST ABSTAIN
2. Ratification of Selection [ ] [ ] [ ]
of Independent Auditors
FOR AGAINST ABSTAIN
3. Amendment to Certificate [ ] [ ] [ ]
of Incorporation
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE AGAINST ITEM 4.
FOR AGAINST ABSTAIN
4. Stockholder Proposal To [ ] [ ] [ ]
Act By Written Consent/
Call Special Meetings
Mark Here To Have Your Vote Remain Confidential [ ]
_________________________________________
Signature
_________________________________________
Signature
Date:___________________________, 1998
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH SPECIFICATIONS MADE. IF NO CHOICES
ARE INDICATED, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2 AND 3 AND AGAINST ITEM 4
AND THE TRUSTEE FOR THE SAVINGS PLAN WILL VOTE AS DESCRIBED BEGINNING ON PAGE 1
OF THE PROXY STATEMENT.
NOTE: Please sign exactly as name appears hereon. For joint accounts both
owners should sign. When signing as executor, administrator, attorney, trustee,
guardian, corporate officer, etc., please give your full title.
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
UNISYS
YOUR VOTE IS VERY IMPORTANT
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY/VOTING CARD
IN THE ENCLOSED ENVELOPE.
