Exhibit
10.16
EMPLOYMENT
AGREEMENT
AGREEMENT by
and between Unisys Corporation, a Delaware corporation (the
“Company”) and J. Edward Coleman (the
“Executive”), dated as of December 22, 2008.
The Board of
Directors of the Company (the “Board”), previously
determined that it was in the best interests of the Company and its
stockholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believed it was imperative to diminish the
inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
of Control and to encourage the Executive’s full attention
and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change
of Control which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which are
competitive with those of other corporations. Therefore, in order
to accomplish these objectives, the Board caused the Company to
enter into the Employment Agreement with Executive, dated as of
October 7, 2008 (the “Prior Agreement”). The Board
subsequently determined that certain changes should be made to the
Prior Agreement to comply with the requirements of section 409A of
the Internal Revenue Code of 1986, as amended (the
“Code”) and the final regulations issued thereunder.
This Agreement serves as an amendment and restatement of the Prior
Agreement to incorporate the changes deemed necessary to comply
with such requirements.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.
Certain Definitions. (a) The “Effective Date”
shall mean the first date during the Change of Control Period (as
defined in Section 1(b)) on which a Change of Control (as
defined in Section 2) occurs. Anything in this Agreement to
the contrary notwithstanding, if a Change of Control occurs and if
the Executive’s employment with the Company is terminated
within the twelve (12) month period prior to the date on which
the Change of Control occurs, and if it is reasonably demonstrated
by the Executive that such termination of employment (i) was
at the request of a third party who has taken steps reasonably
calculated to effect a Change of Control or (ii) otherwise
arose in connection with or anticipation of a Change of Control,
then for all purposes of this Agreement the “Effective
Date” shall mean the date immediately prior to the date of
such termination of employment.
(b) The
“Change of Control Period” shall mean the period
commencing on the date hereof and ending on the third anniversary
of the date hereof; provided, however, that commencing on the date
one year after the date hereof, and on each annual anniversary of
such date (such date and each annual anniversary thereof shall be
hereinafter referred to as the “Renewal Date”), unless
previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such
Renewal Date, unless at least 60 days prior to the Renewal Date the
Company shall give notice to the Executive that the Change of
Control Period shall not be so extended.
2.
Change of Control. For the purpose of this Agreement, a
“Change of Control” shall mean:
(a) The
acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or
(ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (c) of this
Section 2; or
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(b) Individuals who, as of the date
hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were
a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(c) Consummation of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a “Business Combination”), in each case,
unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (ii) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business
Combination and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
(d) Approval by the stockholders of
the Company of a complete liquidation or dissolution of the
Company.
3. Employment Period. The Company
hereby agrees to continue the Executive in its employ, and the
Executive hereby agrees to remain in the employ of the Company
subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the third
anniversary of such date (the “Employment
Period”).
4. Terms of Employment.
(a) Position and Duties. (i) During the Employment
Period, (A) the Executive’s position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and
assigned at any time during the 120-day period immediately
preceding the Effective Date and (B) the Executive’s
services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date or any office or
location less than 35 miles from such location.
(ii) During the Employment Period,
and excluding any periods of vacation and sick leave to which the
Executive is entitled, the Executive agrees to devote reasonable
attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use
the Executive’s reasonable best efforts to perform faithfully
and efficiently such responsibilities. During the Employment Period
it shall not be a violation of this Agreement for the Executive to
(A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements
or teach at educational institutions and (C) manage personal
investments, so long as such activities do not significantly
interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the
extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive’s responsibilities to the Company.
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(b) Compensation. (i) Base
Salary. During the Employment Period, the Executive shall receive
an annual base salary (“Annual Base Salary”), which
shall be paid at a monthly rate, at least equal to twelve times the
highest monthly base salary paid or payable, including any base
salary which has been earned but deferred, to the Executive by the
Company and its affiliated companies in respect of the twelve-month
period immediately preceding the month in which the Effective Date
occurs. During the Employment Period, the Annual Base Salary shall
be reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter
at least annually. Any increase in Annual Base Salary shall not
serve to limit or reduce any other obligation to the Executive
under this Agreement. Annual Base Salary shall not be reduced after
any such increase and the term Annual Base Salary as utilized in
this Agreement shall refer to Annual Base Salary as so increased.
As used in this Agreement, the term “affiliated
companies” shall include any company controlled by,
controlling or under common control with the Company.
(ii) Annual Bonus. In addition to
Annual Base Salary, the Executive shall be awarded, for each fiscal
year ending during the Employment Period, an annual bonus (the
“Annual Bonus”) in cash at least equal to the
Executive’s highest bonus under the Company’s Executive
Variable Compensation Plan, or any comparable bonus or retention
amount under any predecessor or successor plan or retention
agreement, for the last three full fiscal years prior to the
Effective Date (annualized in the event that the Executive was not
employed by the Company for the whole of such fiscal year) (the
“Recent Annual Bonus”). Each such Annual Bonus shall be
paid on or after January 1 of the fiscal year next following
the fiscal year for which the Annual Bonus is awarded, but not
later than March 15 of such fiscal year, unless the Executive
shall elect to defer the receipt of such Annual Bonus in accordance
with the terms of the applicable deferred compensation
plan.
(iii) Incentive, Savings and
Retirement Plans. During the Employment Period, the Executive shall
be entitled to participate in all incentive, savings and retirement
plans, practices, policies and programs applicable generally to
other peer executives of the Company and its affiliated companies,
but in no event shall such plans, practices, policies and programs
provide the Executive with incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the
extent, if any, that such distinction is applicable), savings
opportunities and retirement benefit opportunities, in each case,
less favorable, in the aggregate, than the most favorable of those
provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in
effect at any time during the 120-day period immediately preceding
the Effective Date or if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company and its affiliated
companies.
(iv) Welfare Benefit Plans. During
the Employment Period, the Executive and/or the Executive’s
family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical,
prescription, dental, disability, employee life, group life,
accidental death and travel accident insurance plans and programs)
to the extent applicable generally to other peer executives of the
Company and its affiliated companies, but in no event shall such
plans, practices, policies and programs provide the Executive with
benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective
Date to other peer executives of the Company and its affiliated
companies.
(v) Expenses. During the Employment
Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive
in accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
(vi) Fringe Benefits. During the
Employment Period, the Executive shall be entitled to fringe
benefits, including, without limitation, tax and financial planning
services, payment of club dues, and, if applicable, use of an
automobile and payment of related expenses, in accordance with the
most favorable plans, practices, programs and policies of the
Company and its affiliated companies in effect for the Executive at
any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
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(vii) Office and Support Staff.
During the Employment Period, the Executive shall be entitled to an
office or offices of a size and with furnishings and other
appointments, and to exclusive personal secretarial and other
assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated
companies at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
(viii) Vacation. During the
Employment Period, the Executive shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated
companies.
5. Termination of Employment.
(a) Death or Disability. The Executive’s employment
shall terminate automatically upon the Executive’s death
during the Employment Period. If the Company determines in good
faith that the Disability of the Executive has occurred during the
Employment Period (pursuant to the definition of Disability set
forth below), it may give to the Executive written notice in
accordance with Section 12(b) of this Agreement of its
intention to terminate the Executive’s employment. In such
event, the Executive’s employment with the Company shall
terminate effective on the 30th day after receipt of such notice by
the Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the
Executive’s duties. For purposes of this Agreement,
“Disability” shall mean the absence of the Executive
from the Executive’s duties with the Company on a full-time
basis for 180 consecutive business days as a result of incapacity
due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Company or its
insurers and acceptable to the Executive or the Executive’s
legal representative.
(b) Cause. The Company may terminate
the Executive’s employment during the Employment Period for
Cause. For purposes of this Agreement, “Cause” shall
mean:
(i) the willful and continued
failure of the Executive to perform substantially the
Executive’s duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board or the Chief
Executive Officer of the Company which specifically identifies the
manner in which the Board or Chief Executive Officer believes that
the Executive has not substantially performed the Executive’s
duties, or
(ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is
materially and demonstrably injurious to the Company.
For purposes of this provision, no
act or failure to act, on the part of the Executive, shall be
considered “willful” unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief
that the Executive’s action or omission was in the best
interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board
or upon the instructions of the Chief Executive Officer or a senior
officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be
done, by the Executive in good faith and in the best interests of
the Company. The cessation of employment of the Executive shall not
be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by
the affirmative vote of not less than three- quarters of the entire
membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.
(c) Good Reason. The
Executive’s employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, “Good
Reason” shall mean:
(i) the assignment to the Executive
of any duties inconsistent in any respect
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with the Executive’s position (including
status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 4(a) of
this Agreement, or any other action by the Company which results in
a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to
comply with any of the provisions of Section 4(b) of this
Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the
Executive;
(iii) the Company’s requiring
the Executive to be based at any office or location other than as
provided in Section 4(a)(i)(B) hereof or the Company’s
requiring the Executive to travel on Company business to a
substantially greater extent than required immediately prior to the
Effective Date;
(iv) any purported termination by
the Company of the Executive’s employment otherwise than as
expressly permitted by this Agreement; or
(v) any failure by the Company to
comply with and satisfy Section 11(c) of this
Agreement.
For purposes of this
Section 5(c), any good faith determination of “Good
Reason” made by the Executive shal
