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)(1) 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):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] 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:
------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
------------------------------------------------------------------------
(3) Filing party:
------------------------------------------------------------------------
(4) Date filed:
------------------------------------------------------------------------
Unisys Corporation
Unisys Way
Blue Bell, PA 19424-0001
[UNISYS LOGO]
March 16, 2002
Dear Fellow Stockholder:
It is my pleasure to invite you to the Unisys 2002 Annual Meeting of
Stockholders. This year's meeting will be held on Thursday, April 25, 2002, at
The Inn at Penn, which is located at 3600 Sansom Street in Philadelphia,
Pennsylvania. The meeting will begin at 9:30 a.m.
A severe downturn in technology spending made 2001 a very difficult year
for industry providers, and Unisys was not immune. However, despite reduced
sales of high-end servers and systems integration services, the company achieved
profits from operations every quarter in 2001 and generated more than $200
million of operational cash flow. Our ability to deliver profits during this
unprecedented period of volatility speaks to the progress we've made in
refocusing our business portfolio toward value-added services and solutions that
are less subject to the volatility of product cycles. We believe this work
positions us well for a much better year in 2002.
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. Most stockholders
have a choice of voting their shares over the Internet, by telephone, or by
completing, signing, and returning a proxy card. Voting by any of these means
takes only a few minutes, and it will ensure that your shares are represented at
the meeting. If you vote over the Internet, you will also be given the
opportunity to access future proxy statements and annual reports over the
Internet instead of receiving paper copies in the mail. Electronic access saves
the company the cost of producing and mailing these documents. I encourage you
to take advantage of it.
I look forward to seeing you at the annual meeting and to reporting on the
actions we took in 2001 and our goals for 2002.
Sincerely,
/s/ Larry A. Weinbach
Lawrence A. Weinbach
Chairman, President and
Chief Executive Officer
[UNISYS LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2002
Unisys Corporation will hold its 2002 Annual Meeting of Stockholders at The
Inn at Penn, 3600 Sansom Street, Philadelphia, Pennsylvania, on Thursday, April
25, 2002, at 9:30 a.m. to:
1. elect four directors;
2. ratify the selection of independent auditors for 2002; and
3. transact any other business properly brought before the meeting.
Only holders of Unisys common stock of record at the close of business on
February 28, 2002 will be entitled to vote at the annual meeting.
By Order of the Board of Directors,
/s/ Nancy Straus Sundheim
Nancy Straus Sundheim
Senior Vice President, General Counsel
and Secretary
Blue Bell, Pennsylvania
March 16, 2002
IMPORTANT
YOUR VOTE IS IMPORTANT. MOST STOCKHOLDERS WILL HAVE A CHOICE OF VOTING OVER THE
INTERNET, BY TELEPHONE, OR BY USING A TRADITIONAL PROXY CARD. PLEASE CHECK THE
INFORMATION YOU HAVE RECEIVED TO SEE WHICH OPTIONS ARE AVAILABLE TO YOU.
TABLE OF CONTENTS
PROXY STATEMENT
Required Vote............................................. 1
Voting Procedures and Revocability of Proxies............. 1
ELECTION OF DIRECTORS....................................... 2
Information Regarding Nominees and Directors.............. 2
Board Meetings............................................ 5
Committees................................................ 5
Audit Committee Report.................................... 6
Corporate Governance Guidelines........................... 7
Stock Ownership Guidelines................................ 8
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS........... 8
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND 8
MANAGEMENT................................................
EXECUTIVE COMPENSATION...................................... 10
Summary Compensation Table................................ 10
Option Grants in Last Fiscal Year......................... 11
Option Exercises and Fiscal Year-End Values............... 11
Pension Plans............................................. 11
Employment Agreements..................................... 12
Change in Control Employment Agreements................... 13
Transactions with Management.............................. 14
Compensation of Directors................................. 14
REPORT OF THE CORPORATE GOVERNANCE AND COMPENSATION 14
COMMITTEE.................................................
Compensation Program and Policies......................... 14
Base Salary............................................... 15
Variable Incentive Compensation........................... 15
Long-Term Incentive Awards................................ 15
Compensation of the Chief Executive Officer............... 16
Deductibility of Executive Compensation................... 16
STOCK PERFORMANCE GRAPH..................................... 17
GENERAL MATTERS............................................. 18
Section 16(a) Beneficial Ownership Reporting Compliance... 18
Policy on Confidential Voting............................. 18
Stockholder Proposals and Nominations..................... 18
Electronic Access to Proxy Materials and Annual Report.... 18
Householding of Proxy Statement and Annual Report......... 19
Other Matters............................................. 19
APPENDIX A
Audit Committee Charter..................................... A-1
UNISYS CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2002
The Board of Directors of Unisys Corporation solicits your proxy for use at
the 2002 Annual Meeting of Stockholders to be held on April 25, 2002 and at any
adjournments. At the annual meeting, stockholders will be asked to elect
directors and to ratify the selection of independent auditors.
The record date for the annual meeting is February 28, 2002. 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, 321,671,609 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 proxy/voting instruction card, and the annual
report of Unisys, including the financial statements for 2001, are being mailed
and made available on the Internet on or about March 16, 2002.
REQUIRED VOTE
Each share of Unisys common stock outstanding on the record date is
entitled to one vote on each matter to be voted upon. Directors will be elected
by a plurality of the votes cast (i.e., the nominees receiving the greatest
number of votes will be elected). Abstentions and broker non-votes are not
counted for purposes of the election of directors. Ratification of the selection
of independent auditors will require the affirmative vote of a majority of
shares present, in person or by proxy, and entitled to vote. Abstentions will be
included in the vote totals for this matter, and therefore will have the same
effect as a negative vote; broker non-votes will not be included in the vote
totals and therefore will have no effect on the vote.
VOTING PROCEDURES AND REVOCABILITY OF PROXIES
Your vote is important. Shares may be voted at the annual meeting only if
you are present in person or represented by proxy. Most stockholders have a
choice of voting (a) by completing a proxy/voting instruction card and mailing
it in the postage-paid envelope provided, (b) over the Internet, or (c) by
telephone using a toll-free telephone number. Check the materials you have
received to see which options are available to you and to obtain the applicable
web site or telephone number. If you elected to receive proxy materials over the
Internet, you should have already received e-mail instructions on how to vote
electronically. Please be aware that if you vote over the Internet, you may
incur costs associated with your electronic access, such as usage charges from
Internet access providers and telephone companies, for which you will be
responsible.
The telephone and Internet voting procedures are designed to authenticate
stockholders' identities by use of a control number, to allow stockholders to
give their voting instructions, and to confirm that stockholders' instructions
have been recorded properly. The Company has been advised by counsel that the
telephone and Internet voting procedures are consistent with the requirements of
applicable law.
You may revoke your proxy at any time before it is exercised by writing to
the Secretary of Unisys, by timely delivery of a properly executed later-dated
proxy (including an Internet or telephone vote), or by voting in person at the
meeting.
The method by which you vote will in no way limit your right to vote at the
meeting if you later decide to attend in person. If your shares are held in the
name of a bank, broker, or other holder of record, you must obtain a proxy,
executed in your favor, from the holder of record to be able to vote at the
meeting.
If you properly complete and return your proxy, and do not revoke it, the
proxy holders will vote your shares in accordance with your instructions. If
your properly completed proxy gives no instructions, the proxy holders will vote
your shares FOR the election of directors, FOR the selection of independent
auditors, and in their discretion on any other matters that properly come before
the annual meeting.
If you are a participant in the Unisys Savings Plan, the proxy/voting
instruction card will serve as voting instructions to the plan trustee for any
whole shares of Unisys common stock credited to your account as of February 28,
2002. The trustee will vote those shares in accordance with your instructions if
it receives your completed proxy by April 19, 2002. If the proxy is not timely
received, or if you give no instructions on 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 ten members, divided into
three classes. One class of directors is elected each year to hold office for a
three-year term. The four directors whose terms expire in 2002, J. P. Bolduc,
James J. Duderstadt, Denise K. Fletcher, and Kenneth A. Macke, have been
nominated for reelection. The remaining six 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 and employment during the past five years, and other data regarding
them are as follows.
2
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
[BOLDUC PHOTO]
J. P. BOLDUC
Mr. Bolduc, 62, is Chairman and Chief Executive Officer of JPB
Enterprises, Inc., a merchant banking, venture capital, and
real estate investment holding company. He previously served
in the positions of President and Chief Executive Officer,
Vice Chairman, and Chief Operating Officer of W. R. Grace &
Co., a specialty chemicals and health care company. He is a
Director of Proudfoot PLC. He has served as a Director of
Unisys since 1992 and is a member of the Finance Committee and
the Nominating Committee.
[DUDERSTADT PHOTO]
JAMES J. DUDERSTADT
Dr. Duderstadt, 59, is President Emeritus and University
Professor of Science and Engineering at the University of
Michigan. 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.
[FLETCHER PHOTO]
DENISE K. FLETCHER
Ms. Fletcher, 53, is Executive Vice President and Chief
Financial Officer of MasterCard International, an
international payment solutions company. She has served as a
Director of Unisys since July 2001 and is a member of the
Audit Committee.
[MACKE PHOTO]
KENNETH A. MACKE
Mr. Macke, 63, 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. He has served as a Director of Unisys
since 1989 and is a member of the Corporate Governance and
Compensation Committee and the Nominating Committee.
3
MEMBERS OF THE BOARD CONTINUING IN OFFICE
TERM EXPIRING IN 2003
[FOSLER PHOTO]
GAIL D. FOSLER
Ms. Fosler, 54, is Senior Vice President and Chief Economist
of The Conference Board, a business-sponsored, nonprofit
research organization. She is a Director of Baxter
International Inc., H. B. Fuller Company and DBS Holdings
(Singapore) 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.
[GOODES PHOTO]
MELVIN R. GOODES
Mr. Goodes, 66, is a retired Chairman and Chief Executive
Officer of Warner-Lambert Company, a diversified worldwide
health care, pharmaceutical, and consumer products company. He
has served as a Director of Unisys since 1987 and is a member
of the Corporate Governance and Compensation Committee.
[HUSTON PHOTO]
EDWIN A. HUSTON
Mr. Huston, 63, is a retired Vice Chairman of Ryder System,
Inc., an international logistics and transportation solutions
company. He has also served as Senior Executive Vice
President -- Finance and Chief Financial Officer of that
company. He is a Director of Answerthink, Inc. and Enterasys
Networks, Inc. He has served as a Director of Unisys since
1993 and is a member of the Audit Committee and the Nominating
Committee.
MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING IN 2004
[DUQUES PHOTO]
HENRY C. DUQUES
Mr. Duques, 58, is a Director and Chairman of First Data
Corporation, an electronic commerce and payment services
company. He has also served as Chief Executive Officer of that
company. He is a Director of CheckFree Corporation and SunGard
Data Systems, Inc. He has served as a Director of Unisys since
1998 and is a member of the Corporate Governance and
Compensation Committee.
4
[MARTIN PHOTO]
THEODORE E. MARTIN
Mr. Martin, 62, is a retired 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 position of Executive Vice
President-Operations of that company. He is a Director of
Ingersoll-Rand Company and Applera Corporation. He has served
as a Director of Unisys since 1995 and is a member of the
Finance Committee.
[WEINBACH PHOTO]
LAWRENCE A. WEINBACH
Mr. Weinbach, 62, 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 is
a Director of Avon Products, Inc. and UBS AG. He has served as
a Director of Unisys since 1997.
BOARD MEETINGS
The Board of Directors held seven meetings in 2001. During 2001, 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, Corporate Governance
and Compensation Committee, Finance Committee, and Nominating Committee.
The Audit Committee assists the Board in its oversight of the integrity of
the Company's financial statements and its financial reporting and disclosure
practices, the soundness of its systems of internal financial and accounting
controls, the independence and performance of its internal and independent
auditors, and the soundness of its ethical and environmental compliance
programs. The Audit Committee held seven meetings in 2001. Its members are Dr.
Duderstadt, Ms. Fletcher and Mr. Huston.
The Corporate Governance and Compensation Committee oversees the Company's
corporate governance, the Company's executive management structure, the
compensation-related policies and programs involving the Company's executive
management, and the level of compensation and benefits of officers and key
employees. It also oversees the Company's diversity programs. The Corporate
Governance and Compensation Committee held five meetings in 2001. Its members
are Mr. Duques, Mr. Goodes, and Mr. Macke.
The Finance Committee reviews the Company's financial affairs, including
its capital structure, financial arrangements, capital spending, and acquisition
and disposition plans. It also oversees the management and investment of funds
in the pension, savings, and welfare plans sponsored by the Company. The Finance
Committee held five meetings in 2001. Its members are Mr. Bolduc, Ms. Fosler,
and Mr. Martin.
5
The Nominating Committee identifies and reviews candidates and recommends
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, Unisys
Way, Blue Bell, Pennsylvania 19424. The Nominating Committee held two meetings
in 2001. Its members are Mr. Bolduc, Mr. Huston, and Mr. Macke.
AUDIT COMMITTEE REPORT
The Audit Committee's specific functions and responsibilities are set forth
in the Audit Committee Charter, which is attached as Appendix A to this Proxy
Statement. The Committee consists entirely of directors who meet the
independence and experience requirements of the New York Stock Exchange.
In performing its oversight responsibilities, the Committee reviewed and
discussed the audited financial statements with management. The Committee also
discussed with Ernst & Young LLP, the Company's independent auditors, the
matters required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees). In addition, the Committee has discussed
with Ernst & Young LLP their independence and has received from them the written
disclosures required by the Independence Standards Board. The Committee has also
considered the compatibility of the services discussed in All Other Fees below
with the auditors' independence.
Based on these reviews and discussions, the Committee recommended to the
Board of Directors that the audited financial statements be included in the
Annual Report on Form 10-K for the year ended December 31, 2001 for filing with
the SEC.
Ernst & Young LLP have billed the Company the following fees for
professional services rendered in respect of the year ended December 31, 2001:
Audit Fees. $1.9 million for the annual audit of the Company's financial
statements.
Financial Information Systems Design and Implementation Fees. None.
All Other Fees. $4.3 million, consisting of audit-related services of $2.3
million and non-audit services of $2.0 million. Audit-related services primarily
include fees for pension and statutory audits ($0.9 million), accounting advice
regarding specific transactions, and various attestation reports. Non-audit
services generally represent fees for tax advisory and compliance services.
Audit Committee
James J. Duderstadt
Denise K. Fletcher
Edwin A. Huston
6
CORPORATE GOVERNANCE GUIDELINES
The Board of Directors has adopted Guidelines on Significant Corporate
Governance Issues. Among other matters, these guidelines cover the following:
1. A majority of the Board of Directors should be independent
directors. Interlocking directorships should be avoided, and directors
should not, except in rare circumstances approved by the Board, draw any
consulting, legal, or other fees from the Company. The independence of
outside directors is reviewed annually by the Corporate Governance and
Compensation Committee.
2. Membership on the Audit, Corporate Governance and Compensation,
and Nominating Committees is limited to outside directors.
3. Directors may not stand for election after age 70 or continue to
serve beyond the annual stockholders' meeting following the attainment of
age 70.
4. Directors should volunteer to resign from the Board upon a change
in position, including retirement, from the position they held when they
were elected to the Board. The Board will then make a determination whether
continued Board membership is appropriate under the circumstances. In
addition, if the Company's chief executive officer resigns from that
position, he is expected to offer his resignation from the Board at the
same time.
5. The Nominating Committee is responsible for determining the
appropriate skills and characteristics required of Board members and will
consider issues of diversity, age, and skills in its assessment of the
needs of the Board. The Corporate Governance and Compensation Committee
maintains an orientation program for new directors.
6. The Corporate Governance and Compensation Committee is responsible
for giving annually an assessment of the Board's performance and of its
contribution as a whole.
7. The outside directors have the opportunity to meet in executive
session, without the chief executive officer and other members of
management, at any time. Either the outside director serving as the
chairman of the Corporate Governance and Compensation Committee or the
outside director serving as the chairman of the Finance Committee shall
assume the responsibility of chairing such meetings.
8. The outside directors meet annually in executive session to review
the performance of the chief executive officer. The evaluation is led by
the chairman of the Corporate Governance and Compensation Committee and is
based on objective criteria, including performance of the business,
accomplishment of long-term strategic objectives, and development of
management. The evaluation is used by the Corporate Governance and
Compensation Committee in its consideration of the compensation of the
chief executive officer.
9. The chief executive officer is expected to provide an annual
report on succession planning to the Corporate Governance and Compensation
Committee.
10. Board members have complete access to Unisys management. Members
of senior management who are not Board members regularly attend Board
meetings, and the Board encourages senior management, from time to time, to
bring into Board meetings other managers who can provide additional
insights into the matters under discussion.
7
STOCK OWNERSHIP GUIDELINES
In 1998, the Board established stock ownership guidelines for both
directors and elected officers in order to more closely link their interests
with those of stockholders. Under the guidelines, directors and elected officers
are expected to own, within specified time periods, Unisys stock or stock units
having a value equal to a multiple of their annual retainer, in the case of
directors, or their base salary, in the case of elected officers. Stock options,
including vested stock options, do not count toward fulfillment of the ownership
guidelines.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the 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, 2002 and
recommends ratification of this selection by the stockholders. Ernst & Young LLP
has served as independent auditors for Unisys since 1986. 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 2002. PROXIES
SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS
OTHERWISE SPECIFY IN THEIR PROXIES.
SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Shown below is information with respect to persons or groups that
beneficially own more than five percent of Unisys common stock. This information
is derived from Schedules 13G filed by such persons or groups in February 2002.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENT
BENEFICIAL OWNER OF COMMON STOCK OF CLASS
------------------- ---------------- --------
Brandes Investment Partners, L.P. .......................... 41,369,152(1) 13.0
Brandes Investment Partners, Inc.
Brandes Holdings, L.P.
Charles H. Brandes
Glenn R. Carlson
Jeffrey A. Busby
11988 El Camino Real, Suite 500
San Diego, CA 92130
---------------
(1) Shared dispositive power has been reported for 41,369,152 shares. Shared
voting power has been reported for 31,539,195 shares.
8
Shown below are the number of shares of Unisys common stock (or stock
units) beneficially owned as of March 1, 2002, by all directors and nominees,
each of the executive officers named on page 10, and all directors and officers
of Unisys as a group. No individual named below beneficially owns more than one
percent of the outstanding shares of Unisys common stock. All directors and
officers as a group beneficially own 1.2% of the shares of Unisys common stock
deemed outstanding.
ADDITIONAL SHARES OF
NUMBER OF SHARES COMMON STOCK DEEMED
BENEFICIAL OWNER OF COMMON STOCK(1)(2) BENEFICIALLY OWNED(1)(3)
---------------- --------------------- ------------------------
Jack A. Blaine............................. 9,911 194,500
J. P. Bolduc............................... 31,474 7,500
James J. Duderstadt........................ 14,311 7,500
Henry C. Duques............................ 15,494 7,500
Denise K. Fletcher......................... 1,415 --
Gail D. Fosler............................. 27,980 7,500
George R. Gazerwitz........................ 59,281 350,000
Melvin R. Goodes........................... 26,336 7,500
Edwin A. Huston............................ 16,133 7,500
Kenneth A. Macke........................... 46,929 --
Theodore E. Martin......................... 46,643 7,500
Joseph W. McGrath.......................... 48,055 116,250
Janet B. Wallace........................... 4,391 52,500
Lawrence A. Weinbach....................... 255,006 1,847,250
All directors and officers as a group...... 739,979 3,403,400
---------------
(1) Includes shares reported by directors and officers as held directly or in
the names of spouses, children, or trusts as to which beneficial ownership
may have been disclaimed.
(2) Includes:
(a) Shares held under the Unisys Savings Plan, a qualified plan under
Sections 401(a) and 401(k) of the Internal Revenue Code, as follows:
Mr. Blaine, 1,138; Mr. Gazerwitz, 2,144; Mr. McGrath, 322; Ms. Wallace,
247; Mr. Weinbach, 363; officers as a group, 16,586. With respect to
such shares, plan participants have authority to direct voting.
(b) Stock units deferred under the Unisys Corporation Deferred Compensation
Plan as follows: Mr. Blaine, 5,700; Mr. Gazerwitz, 13,000; Mr. McGrath,
34,894; officers as a group, 87,884. Deferred stock units are payable
in shares of Unisys common stock upon termination of employment or any
date at least five years (two years for stock units deferred after
January 1, 2001) after the deferral. They may not be voted.
(c) Stock units, as described on page 14, for directors as follows: Mr.
Bolduc, 13,474; Dr. Duderstadt, 13,261; Mr. Duques, 10,494; Ms.
Fletcher, 1,415; Ms. Fosler, 11,830; Mr. Goodes, 19,396; Mr. Huston,
15,133; Mr. Macke, 45,729; and Mr. Martin, 26,643.
(3) Shares shown are shares subject to options exercisable within 60 days
following March 1, 2002.
9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the annual and
long-term compensation paid to the chief executive officer and the other four
most highly compensated executive officers of Unisys in 2001 (the "Named
Officers") for services rendered in all capacities to Unisys for 2001, 2000, and
1999.
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(1) BONUS(1) SATION(2) (3) SARS(4) (4) SATION(5)
PRINCIPAL POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
------------------ ---- --------- --------- --------- ---------- ---------- ------- ---------
Lawrence A. Weinbach.......... 2001 1,320,000 -- 136,815 -- 500,000 -- 332,213
Chairman, President and 2000 1,320,000 396,000 566,920 -- 400,000 -- 332,213
Chief Executive Officer 1999 1,300,000 1,320,000 2,012,936 -- 363,000 -- 330,413
Jack A. Blaine................ 2001 450,000 -- 7,724 -- 75,000 -- 93,677
Executive Vice President 2000 450,000 75,000 5,795 -- 75,000 -- 93,627
1999 375,000 200,000 9,445 -- 75,000 -- 91,827
George R. Gazerwitz........... 2001 491,679 -- -- -- 100,000 -- 114,894
Executive Vice President 2000 450,012 180,000 -- -- 100,000 -- 114,894
1999 441,678 300,000 36 -- 125,000 -- 113,094
Joseph W. McGrath............. 2001 450,000 -- -- -- 75,000 -- 73,861
Executive Vice President 2000 450,000 75,000 -- -- 75,000 -- 76,861
1999 321,675 310,000 217,989 2,011,875 80,000 -- 70,880
Janet B. Wallace(6)........... 2001 360,000 -- -- -- 60,000 -- 46,991
Senior Vice President 2000 360,000 120,000 13,457 -- 50,000 -- 47,841
1999 50,000 80,000 28,036 -- 25,000 -- 188
---------------
(1) Amounts shown include compensation deferred under the Unisys Savings Plan or
the Unisys Corporation Deferred Compensation Plan.
(2) Amounts shown for 2001 for Mr. Weinbach are tax reimbursements and personal
benefits, including $51,244 for supplemental long-term disability insurance.
Amounts shown for Mr. Blaine for 2001 are tax reimbursements.
(3) Amounts shown in this column are the dollar value of restricted stock awards
based on the closing market price of Unisys common stock on the date of
grant. Mr. McGrath was originally awarded 58,000 restricted share units on
January 6, 1999. The grant vests over three years, with one-third vesting
each year beginning January 6, 2000. Upon vesting, restricted share units
are payable in shares of Unisys common stock. At December 31, 2001, Mr.
McGrath held 19,333 restricted share units with a value of $242,436.
(4) Although the Company's long-term incentive 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 2001 for each Named Officer consist of Company matching
contributions under the Unisys Savings Plan and the full amount of premiums
paid by Unisys for life insurance as follows: Mr. Weinbach - $3,400,
$328,813; Mr. Blaine - $3,400, $90,277; Mr. Gazerwitz - $3,400, $111,494;
Mr. McGrath - $3,400, $70,461; Ms. Wallace - $2,550, $44,441.
(6) Ms. Wallace joined Unisys as a Vice President in November 1999. She was
elected a Senior Vice President effective January 1, 2000.
10
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information on grants of stock options
during 2001 to the Named Officers. No stock appreciation rights were granted
during 2001.
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERMS(1)
---------------------------------------------------------------------------------- ----------------------------
NUMBER OF % OF
SECURITIES TOTAL
UNDERLYING OPTIONS EXERCISE
OPTIONS GRANTED TO OR BASE
GRANTED(2) EMPLOYEES PRICE(3) EXPIRATION
NAME (#) IN 2001 ($/SH) DATE(4) 5%($) 10%($)
---- ---------- ---------- -------- ---------- ------------ -------------
Lawrence A. Weinbach............. 500,000 5.5 18.57 2/15/11 5,849,550 14,763,150
Jack A. Blaine................... 75,000 0.8 18.57 2/15/11 877,433 2,214,473
George R. Gazerwitz.............. 100,000 1.1 18.57 2/15/11 1,169,910 2,952,630
Joseph W. McGrath................ 75,000 0.8 18.57 2/15/11 877,433 2,214,473
Janet B. Wallace................. 60,000 0.7 18.57 2/15/11 701,946 1,771,578
---------------
(1) Illustrates value that might be realized upon exercise of options
immediately prior to the expiration of their term, assuming specified annual
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 were granted on February 15, 2001. 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 long-term incentive plan).
(3) The exercise price per share is the fair market value (calculated as the
average of the high and low quoted sales prices through the official close
of the New York Stock Exchange at 4:00 p.m.) of a share of Unisys common
stock on the date of grant. Options may be exercised with cash or with any
other form of consideration permitted by the Corporate Governance and
Compensation 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 2001 and unexercised stock options held by the Named Officers at December
31, 2001.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 2001 DECEMBER 31, 2001(1)
ACQUIRED VALUE (#) ($)
ON EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Lawrence A. Weinbach....... -- -- 1,469,000 1,044,000 758,700 --
Jack A. Blaine............. 16,000 158,019 123,250 183,750 113,771 --
George R. Gazerwitz........ -- -- 243,750 262,500 475,906 --
Joseph W. McGrath.......... -- -- 58,750 171,250 -- --
Janet B. Wallace........... -- -- 25,000 110,000 -- --
---------------
(1) Difference between the closing price for Unisys common stock on December 31,
2001 and the exercise price.
PENSION PLANS
The table below shows the aggregate annual amounts at age 62 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").
11
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.
YEARS OF SERVICE
ASSUMED FINAL -----------------------------------------------------------------
AVERAGE COMPENSATION 5 10 15 20 25 30 OR MORE
-------------------- -------- -------- -------- -------- -------- ----------
$ 200,000 $ 40,000 $ 80,000 $ 90,000 $100,000 $110,000 $120,000
300,000 60,000 120,000 135,000 150,000 165,000 180,000
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
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 Named Officers as of March 1, 2002 is
as follows: J. A. Blaine -- $563,452; G. R. Gazerwitz -- $680,010; J. W.
McGrath -- $585,503; J. B. Wallace -- $420,000. Full years of credited service
under the pension plans for the Named Officers as of March 1, 2002 are as
follows: J. A. Blaine -- 21 years; G. R. Gazerwitz -- 20 years; J. W.
McGrath -- three years; J. B. Wallace -- two years.
Jack A. Blaine has elected to retire from the Company by September 1, 2002
under the terms of an early retirement incentive program made available to
eligible employees in the United States. Under the early retirement program,
retiring employees are credited with an additional three years of service and
age for purposes of calculating their pension benefit. Full years of credited
service cited above for Mr. Blaine reflect this. Unisys will continue to pay Mr.
Blaine his salary through August 31, 2002.
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 Corporate Governance and Compensation
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 Corporate Governance and Compensation Committee in its sole
discretion.
12
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 Company's long-term incentive plan. 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 long-term
incentive 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
receives 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
below. He is not entitled to receive duplicate payments under the change in
control agreement and his employment agreement.
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 the extent the executive has a separate employment agreement
with the Company with conflicting rights, the executive is allowed the greater
entitlement.
13
TRANSACTIONS WITH MANAGEMENT
During 2001, the law firm Pepper Hamilton LLP provided legal services to
Unisys for fees of approximately $877,000. The husband of Nancy Straus Sundheim
is a partner in that firm. Ms. Sundheim is Senior Vice President, General
Counsel and Secretary of Unisys.
COMPENSATION OF DIRECTORS
The Company's non-employee directors receive an annual retainer ($35,000 in
2001; $50,000 for 2002), 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 other than a regularly scheduled
meeting. Chairmen of committees other than the nominating committee also receive
an annual $5,000 retainer. During 2001, each non-employee director also received
an option to purchase 10,000 shares of Unisys common stock. Stock options vest
in four equal annual installments beginning one year after the date of grant.
The annual retainers and annual attendance fee are paid in monthly installments,
with 50% of each installment paid in cash and 50% in the form of common stock
equivalent 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 in Unisys common stock, either upon termination of service or on any
date at least five years (two years for stock units awarded after January 1,
2001) after the stock units are awarded, at the director's option. 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 two 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 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, stock units, or stock options for their services as directors.
REPORT OF THE CORPORATE GOVERNANCE AND COMPENSATION COMMITTEE
COMPENSATION PROGRAM AND POLICIES
The Corporate Governance and Compensation Committee oversees the Company's
executive compensation program. In this capacity, 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 Unisys Long-Term Incentive Plan (the "LTIP").
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 portion of each
executive's total compensation is intended to be variable and to be tied closely
to the achievement of specific business objectives and corporate financial
goals, as well as the attainment of the executive's individual performance
objectives. The Company's executive compensation program also takes into account
the compensation practices of companies with
14
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 17 of this proxy statement and additional
companies in various industries.
The three key components of the Company's executive compensation program
are base salary, variable incentive compensation, 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.
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.
VARIABLE INCENTIVE COMPENSATION
For 2001, 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 corporate and/or individual
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. For 2001, the EVC Plan operated as
follows.
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 Unisys
(generally, achievement of pre-established objectives for revenue, earnings per
share, cash flow, and orders). Actual award amounts could range from zero to
150% of target, depending upon the attainment of financial goals and the
Committee's assessment of the individual's performance. For 2001, because the
Company did not meet the financial objectives established for the year, the
Committee made no EVC awards to executive officers.
LONG-TERM INCENTIVE AWARDS
Under the LTIP, 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 individual performance, level of responsibilities with Unisys, and
the competitive marketplace. 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.
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
average 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.
15
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 12. Under the
employment agreement, Mr. Weinbach is entitled to a base salary at the rate of
$1,200,000 per year, subject to annual review by the Committee. He is also
eligible for an annual bonus at a target of 100% of base salary, with the actual
amount of bonus paid to be determined by the Committee in its sole discretion,
based upon such factors as the Committee deems appropriate. In March 1999, the
Committee increased Mr. Weinbach's base salary to its current level of
$1,320,000 per year. In 2001, Mr. Weinbach was granted the stock options
described on page 11. He did not receive a bonus for the year.
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.
Corporate Governance and Compensation Committee
Henry C. Duques
Melvin R. Goodes
Kenneth A. Macke
16
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, 2001 with the cumulative total return on the Standard &
Poor's 500 Stock Index, the Standard & Poor's Computers (Hardware) Index, the
Standard & Poor's Computers (Software and Services) Index and the Standard &
Poor's 500 IT Consulting and Services Index.* The comparison assumes $100 was
invested on December 31, 1996 in Unisys common stock and in each of such indices
and assumes reinvestment of dividends.
[Line Graph]
------------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
------------------------------------------------------------------------------------------------------------------
Unisys Corporation 100 206 510 473 217 186
S & P 500 100 133 171 208 189 166
S & P Computers (Hardware) 100 146 256 370 235 231
S & P Computers (Software & Services) 100 139 252 467 221 222
S & P 500 IT Consulting & Services 100 141 238 280 200 211
---------------
* In 2001, Standard & Poor's announced that it had reclassified all of its U.S.
indices to reflect the Global Industry Classification Standard introduced in
1999. Under the new system, Unisys has been reclassified to the IT Consulting
& Services industry from the Computers (Software and Services) industry.
17
GENERAL MATTERS
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company's directors and officers are required to file reports with the
SEC relating to their ownership of Unisys equity securities. For 2001, Melvin A.
Goodes had one late report covering one transaction.
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 AND NOMINATIONS
Stockholder proposals submitted to the Company for inclusion in the proxy
materials for the 2003 annual meeting of stockholders must be received by the
Company by November 16, 2002.
Any stockholder who intends to present a proposal at the 2003 annual
meeting and has not sought to include the proposal in the Company's proxy
materials must deliver notice of the proposal to the Company no later than
January 25, 2003.
Any stockholder who intends to make a nomination for the Board of Directors
at the 2003 annual meeting must deliver a notice to the Company no later than
January 24, 2003 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) any other information concerning each nominee that would be required by
the SEC in a proxy statement soliciting proxies for the election of the nominee.
ELECTRONIC ACCESS TO PROXY MATERIALS AND ANNUAL REPORT
This proxy statement and the 2001 annual report are available on the
Company's Internet site at WWW.UNISYS.COM/INVESTOR/PROXY2002 and
WWW.UNISYS.COM/ANNUAL/ANNUAL2001. Most stockholders can elect to view future
proxy statements and annual reports over the Internet instead of receiving paper
copies in the mail and thus can save the Company the cost of producing and
mailing these documents. If you vote your shares over the Internet this year,
you will be given the opportunity to choose electronic access at the time you
vote. You can also choose electronic access by following the instructions that
you will receive in connection with next year's annual meeting. Most
stockholders who choose electronic access will receive an e-mail next year
18
containing the Internet address to access the proxy statement and annual report.
Your choice will remain in effect until you cancel it. You do not have to elect
Internet access each year.
HOUSEHOLDING OF PROXY STATEMENT AND ANNUAL REPORT
This year, a number of brokers with accountholders who are owners of Unisys
common stock will be "householding" our proxy materials. This means that only
one copy of this proxy statement and the 2001 annual report may have been sent
to you and the other Unisys stockholders who share your address. Householding is
designed to reduce the volume of duplicate information that stockholders receive
and the Company's printing and mailing expenses.
If your household has received only one copy of our proxy statement and
annual report, and you would prefer to receive separate copies of these
documents, either now or in the future, please call us at 215-986-5777, or write
us at Investor Relations, A2-15, Unisys Corporation, Unisys Way, Blue Bell, PA
19424-0001. We will deliver separate copies promptly. If you are now receiving
multiple copies of our proxy materials and would like to have only one copy of
these documents delivered to your household in the future, please contact us in
the same manner.
OTHER MATTERS
At the date of this proxy statement, the Board of Directors knows of no
matter that will be presented for consideration at the annual meeting other than
those described in this proxy statement. If any other matter properly comes
before the annual meeting, the persons appointed as proxies will vote thereon in
their discretion.
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 Innisfree M&A Incorporated
to assist in the solicitation of proxies for a fee of approximately $15,000,
plus expenses.
By Order of the Board of Directors,
/S/ Nancy Straus Sundheim
Nancy Straus Sundheim
Senior Vice President, General Counsel
and Secretary
Dated: March 16, 2002
19
APPENDIX A
UNISYS CORPORATION
AUDIT COMMITTEE CHARTER
ORIGINALLY ADOPTED BY THE BOARD OF DIRECTORS APRIL 27, 2000
PURPOSE
The Audit Committee shall assist the Board of Directors in its oversight of
(1) the integrity of the Corporation's financial statements and its financial
reporting and disclosure practices, (2) the soundness of the Corporation's
systems of internal controls regarding finance and accounting compliance, (3)
the independence and performance of the Corporation's internal audit staff and
its independent auditors, and (4) the soundness of the Corporation's ethical and
environmental compliance programs.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it shall have direct access
to the independent auditors as well as anyone in the Corporation. The Board and
the Audit Committee are to represent the Corporation's stockholders.
Accordingly, the independent auditors are accountable to the Board and the Audit
Committee.
MEMBERSHIP
The Audit Committee shall consist of at least three Directors. The members
of the Audit Committee shall meet the independence and experience requirements
of the New York Stock Exchange. The members of the Audit Committee shall be
appointed at least annually by the Board, with one of the members appointed as
Committee Chair.
MEETINGS AND REPORTS
The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Audit Committee is to meet in separate
executive sessions with the Corporation's Chief Financial Officer, its
independent auditors and its internal auditor at least once each year and at
other times when considered appropriate. The Audit Committee shall provide
regular reports to the Board.
RESPONSIBILITIES AND PROCESS
In performing its oversight responsibilities, the Audit Committee shall:
1. Review and assess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval.
2. Make recommendations to the Board regarding the appointment or
termination of the independent auditors. The Audit Committee and the Board
have the ultimate authority and responsibility to select, evaluate and,
where appropriate, replace the independent auditors.
3. Review the scope of the independent auditors' audit examination and
the related fees.
4. Review the independent audit results, including any material
comments and recommendations on internal controls or accounting matters by
the Corporation's independent auditors and the Corporation's responses
thereto.
A-1
5. Review the scope and effectiveness of internal auditing activities.
6. Establish regular reporting to the Audit Committee by the
independent auditors and the internal auditors regarding any significant
difficulties encountered during the course of their review or audit,
including any restrictions on the scope of work or access to required
information.
7. Review with management, the internal auditors and the independent
auditors the adequacy and effectiveness of the Corporation's accounting and
financial controls and the integrity of its financial reporting processes.
8. Review interim financial statements with management and the
independent auditors prior to the filing of the Corporation's quarterly
report on Form 10-Q, including a discussion with the independent auditors
of the matters required to be discussed by Statement of Auditing Standards
No. 61 ("SAS No. 61"), as amended. This review may be conducted by the
Chair of the Committee, or in his or her absence, any other Committee
member.
9. Review with management and the independent auditors the
Corporation's annual financial statements prior to the filing of the
Corporation's annual report on Form 10-K, including a discussion with the
independent auditors of the matters required to be discussed by SAS No. 61,
as amended.
10. Establish regular reporting to the Audit Committee by management
regarding significant judgments made in management's preparation of the
financial statements.
11. Review and approve, in advance, significant non-audit services to
be performed by the independent auditors and the related fees.
12. Oversee the independence of the independent auditors by (1)
receiving from the independent auditors, at least annually, a formal
written statement delineating all relationships between the independent
auditors and the Corporation, (2) discussing with the independent auditors
any disclosed relationships or services that may impact the objectivity and
independence of the independent auditors and (3) recommending that the
Board take appropriate action to satisfy itself of the independence of the
independent auditors.
13. Annually review the Corporation's compliance program for its Code
of Ethical Conduct and the results of internal audit's review of the
expense accounts of the Corporation's elected officers.
14. Annually review the status of the Corporation's environmental
compliance program.
15. Review, with the Corporation's general counsel, any legal matter
that could have a significant impact on the Corporation's financial
statements.
The Audit Committee's role is one of oversight. Management is responsible
for preparing the Corporation's financial statements, and the independent
auditors are responsible for auditing those financial statements. Management is
responsible for the fair presentation of the information set forth in the
financial statements in conformity with generally accepted accounting principles
("GAAP"). The independent auditors' responsibility is to provide its opinion,
based on their audits, that the financial statements fairly present, in all
material respects, the financial position, results of operations and cash flows
of the Corporation in
A-2
conformity with GAAP. However, it is not the duty of the Audit Committee to plan
or conduct audits or to determine that the Corporation's financial statements
are in conformity with GAAP. Further, it is not the duty of the Audit Committee
to conduct investigations, to resolve disagreements, if any, between management
and the independent auditors, or to assure compliance with applicable laws and
regulations, the Corporation's Code of Ethical Conduct or its environmental
compliance program.
A-3
PROXY
UNISYS CORPORATION
PROXY FOR ANNUAL MEETING TO BE HELD APRIL 25, 2002
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 2002
Annual Meeting of Stockholders of Unisys Corporation, and at any adjournments
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 on page 2 of the proxy statement.
IF YOU ARE VOTING BY MAIL, PLEASE MARK, DATE, SIGN AND RETURN THIS
PROXY/VOTING INSTRUCTION CARD IN THE ENCLOSED ENVELOPE
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
[SEE REVERSE SIDE]
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
UNISYS
ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2002
9:30 A.M.
THE INN AT PENN
3600 SANSOM STREET
PHILADELPHIA, PENNSYLVANIA
YOUR VOTE IS IMPORTANT
THANK YOU FOR VOTING
[X] PLEASE MARK YOUR [5351
VOTES AS IN THIS
EXAMPLE.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
DIRECTORS AND FOR THE SELECTION OF AUDITORS, AND THE TRUSTEE FOR THE SAVINGS
PLAN WILL VOTE AS DESCRIBED ON PAGE 2 OF THE PROXY STATEMENT.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2
1. ELECTION OF DIRECTORS
FOR ALL WITHHELD FROM ALL FOR ALL EXCEPT AS NOTED
| | | | | |
NOMINEES:
01 J.P. Bolduc
02 James J. Duderstadt
03 Denise K. Fletcher
04 Kenneth A. Macke
---------------------------------
(except nominee(s) written above)
2. RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
FOR AGAINST ABSTAIN
| | | | | |
MARK HERE TO HAVE | |
YOUR VOTE REMAIN
CONFIDENTIAL
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.
--------------------------------------------------
--------------------------------------------------
SIGNATURE(S) DATE
--------------------------------------------------------------------------------
-FOLD AND DETACH HERE ONLY IF YOU ARE RETURNING YOUR VOTED PROXY CARD BY MAIL-
VOTE BY TELEPHONE OR INTERNET
Unisys Corporation encourages you to take advantage of the convenient ways to
vote your shares on proposals covered in this year's Proxy Statement. You may
vote by mail, through the Internet or by telephone.
If you vote through the Internet or by telephone, please have your social
security number and proxy card available. The control number printed in the box
above, just below the perforation, and your social security number are necessary
to verify your vote. Your electronic vote authorizes the named proxies to vote
your shares in the same manner as if you marked, signed, dated and returned the
proxy card.
1. VOTE BY MAIL. Mark, date, sign and return your proxy card in the enclosed
envelope.
2. VOTE BY TELEPHONE. Using a touch-tone telephone, call toll-free
1-877-779-8683, 24 hours a day, 7 days a week from the U.S. and Canada.
Follow the instructions that are provided.
3. VOTE THROUGH THE INTERNET. Log onto the Internet at
http://www.eproxyvote.com/uis, 24 hours a day, 7 days a week. Follow the
instructions that are provided.
If you vote through the Internet or by telephone, do not return the proxy card.
THANK YOU FOR VOTING
[UNISYS LOGO]