Executive Compensation

Compensation Discussion and Analysis

The following provides information regarding the compensation and benefit programs in place during 2014 for the executive officers named in the Summary Compensation Table. These officers (collectively, the "Named Officers") are:

Mr. Coleman and Mr. Davies left the Company during 2014, but are included as Named Officers pursuant to SEC rules. Ms. Haugen, Mr. Frankenfield, Mr. Renzi and Mr. Loeser are sometimes referred to in this proxy statement as the "Continuing Named Officers."

Overview

The Company's executive compensation program is designed to attract, motivate and retain the executives who lead the Company's business, to reward them for achieving financial and strategic Company goals and to align their interests with the interests of stockholders. The program seeks to achieve these goals primarily through a combination of the following types of compensation: (a) base salary, (b) short-term, performance-based cash incentives (bonus) and (c) long-term incentives in the form of equity-based awards (stock options and performance-based and time-based RSUs in 2014). The following discussion of compensation focuses on these three types of compensation.

A Significant Portion of Executive Officer Target Compensation is At Risk and Performance Based

The Company's executive compensation program is strongly focused on pay-for-performance principles, with a significant portion of executive officer compensation at risk and dependent upon the Company's financial performance and/or an increase in the Company's stock price. Bonuses and the amount of performance-based RSUs that can be earned are dependent on the achievement of financial goals; the value of performance-based and time-based RSUs, once earned, increases and decreases based on the Company's stock price; and stock options have value only if and to the extent that the Company's stock price exceeds the exercise price of the option.

As shown in the following charts, for 2014, approximately 72% of the total target compensation of J. Edward Coleman, the Company's former Chairman and Chief Executive Officer, was at risk, with approximately 50% dependent on the achievement of performance metrics. In addition, approximately 70% of Mr. Coleman's total target compensation was in the form of equity-based awards.

Components of CEO Target Compensation

Components of CEO Target Compensation 

*Rounded to the nearest whole percent

For the other Named Officers, at-risk compensation averaged 62% of total target compensation, with approximately 46% dependent on the achievement of performance metrics. Approximately 50% of the total target compensation of the other Named Officers was in the form of equity-based awards.

While the actual amount of total compensation earned will vary based on the Company's performance and its stock price, the Company's goal is for total target compensation, as well as each element of total target compensation, to be at or around the median target compensation for executives with similar positions in the market.

CEO Transition

Mr. Coleman left the Company effective December 1, 2014. Pursuant to the terms of the letter agreement dated December 22, 2008 between the Company and Mr. Coleman, as a result of his departure Mr. Coleman became entitled to receive an amount equal to two times his base salary plus his annual bonus (in an amount equal to the average percentage of his target bonus paid for the preceding three years multiplied by his target bonus amount as of his departure date). This payment, which totals $3,458,620, will be paid in a lump sum six months following Mr. Coleman's departure date. In addition, the vesting of restricted stock units ("RSUs") in respect of 19,728 shares of Company common stock that previously had been granted was accelerated. Mr. Coleman and his eligible dependents will also be entitled to continued medical and dental coverage, at the same costs applicable to active employees, for up to two years following his departure date. Such coverage will cease if Mr. Coleman becomes employed during that two-year period.

Peter Altabef was named President and Chief Executive Officer of the Company effective January 1, 2015. Under a letter agreement entered into between Mr. Altabef and the Company covering the terms and conditions of Mr. Altabef's employment as President and Chief Executive Officer, Mr. Altabef is entitled to an annual base salary of not less than $972,000 per year (the same as the annual salary previously paid to Mr. Coleman) and is eligible to earn an annual bonus with a target bonus opportunity of not less than 125% of his annual base salary (the same as Mr. Coleman's target bonus opportunity). Mr. Altabef is also eligible to receive equity and other long-term incentive awards under the Company's long-term incentive plans in each year such awards are made to executive officers generally and to participate in the benefit programs generally made available to executive officers as in effect from time to time. During Mr. Altabef's employment, he will be provided with access to the use of a company-paid apartment in the Philadelphia metropolitan area for business purposes.

In accordance with the terms of his letter agreement, on January 5, 2015 Mr. Altabef received a grant of 30,000 time-based RSUs and a stock option grant to acquire 140,000 shares of Unisys common stock. The time-based RSUs and the stock options will vest one-third per year beginning on the first anniversary of the date of grant. The stock option has an exercise price equal to the fair market value of Unisys common stock on the date of grant and a five-year term. Mr. Altabef also received a grant of 70,000 performance-based RSUs, which will vest one-third per year beginning on the first anniversary of the date of grant if and to the extent that the performance criteria are met, and subject to his continued employment on such date.

Company Performance

Results for 2014 included:

  • Net income of $44 million (which included $73 million of pension expense), compared to net income of $92 million (which included $94 million of pension expense) in 2013;
  • Revenue of $3.36 billion, compared to revenue of $3.46 billion in 2013;
  • $121 million of cash generated from operations, which included $183 million of pension contributions. In 2013, cash generated from operations was $187 million including $147 million of pension contributions; and
  • A cash balance of $494 million at year end, compared to a cash balance of $640 million at December 31, 2013.

These results were considered when determining compensation paid for 2014, as discussed below.

Please see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for a more detailed description of the Company's financial results.

Compensation Actions for 2014

As in recent years, in 2014 the Company adopted a compensation strategy with the Company's goals which resulted in realizable compensation for the year reflecting the Company's financial performance. Key compensation decisions with respect to the Named Officers for 2014 included:

  • CEO Transition -- As described above, Mr. Coleman left the Company on December 1, 2014. In December 2014 the Company announced that Mr. Altabef was joining the Company as its new President and Chief Executive Officer as of January 1, 2015. Mr. Altabef's annual base salary and target bonus opportunity for 2015 are the same as Mr. Coleman's annual base salary and target bonus opportunity for 2014.
  • Base salaries -- The Named Officers did not receive base salary increases in 2014 given general economic conditions and the Company's on-going efforts to contain costs. The base salaries for the Named Officers were generally aligned with the median for persons holding comparable positions in the market.
  • Short-term cash incentive awards -- The Named Officers were eligible to receive bonuses in the form of short-term cash incentive awards based on performance. Each Named Officer was assigned a target annual bonus as a percentage of annual salary based on market median levels and the role of each Named Officer within the Company. The overall upside for maximum performance was increased from 130% to 160% in 2014 to better align with market practice and further incent outstanding performance. The extent to which these target amounts were actually earned depended entirely upon the performance of the Company against quarterly and annual performance targets set by the Compensation Committee. In 2014, three corporate metrics, pre-tax profit, revenue and free cash flow, were used to measure the Company's performance for all executive officers, including the leaders of the Company's business units, in order to promote cross-selling and a common focus across the organization. For 2014, the actual amount of short-term incentive compensation earned by the Continuing Named Officers was 65% of their target bonus amount.
  • Long-term incentive awards -- In 2014, the Company modified its long-term incentive program in order to increase the linkage of pay and performance, better support its current strategic direction and bring the program more in line with market. The Company changed its target long-term incentive mix to place greater weight on performance-based RSUs and introduced time-based RSUs in order to promote executive retention. Long-term incentive awards also included stock options, providing further alignment between compensation and shareholder value creation. Performance-based RSUs were designed to be earned to the extent the Company achieved technology revenue and services operating margin objectives, each weighted 50%. In 2014, the Company did not meet the threshold level for either metric. As a result, no performance-based RSUs were earned. Time-based RSUs vest one-third annually over a three-year period. Stock option grants in 2014 had an exercise price equal to the fair market value of Unisys common stock on the date of grant and will vest one-third annually over a three-year period.

In consideration of the Company's desire to achieve an appropriate balance between the goals of its long-term incentive program, its compensation expense and dilution to its stockholders, the grant date value of these long-term incentive awards to the Named Officers, as shown in the Summary Compensation Table, in the aggregate, was between the 25th percentile and the median for awards granted by the market.

  • Severance agreements -- During 2014, the Compensation Committee reviewed the competitiveness of its existing severance practices. The committee's independent compensation consultant, Pearl Meyer & Partners, provided an analysis that showed that the severance arrangements offered to the Company's executive officers were not competitive with the peer group, discussed below, against which the Company compares its executive compensation (the "Peer Group Companies"). In order to promote executive stability in light of the CEO transition and better align the Company's practices with the market, in December 2014 the Company entered into letter agreements with certain of its executive officers, including Ms. Haugen, Mr. Frankenfield, Mr. Renzi and Mr. Loeser, providing that, among other severance benefits, each such executive officer will be entitled to receive an amount equal to the sum of his or her annual base salary plus his or her annual target bonus if such executive officer's employment is terminated by the Company without "cause" or by such executive officer for "good reason".

Reflecting year-over-year increases in the expected value of long-term incentives, competitiveness of total target compensation for 2014 was generally in line with the market median. Due to the Company's performance and as discussed below, actual compensation was significantly below target.

Pay for Performance Alignment

As set forth above, the Company's executive compensation program is strongly focused on pay-for-performance principles and is designed to align the interests of executives with the interests of stockholders. Approximately 72% and 62% of the total target compensation of Mr. Coleman's and the other Named Officers, respectively, was at risk and approximately 50% and 46%, respectively, was dependent upon the achievement of performance metrics.

In 2014, the Company remained focused on increasing revenue and pre-tax profit while maintaining strong free cash flow. An important part of the Company's strategy to achieve these goals was to maintain or grow revenue in the Company's technology business and to increase the operating margins of the Company's services business. In order to strengthen the alignment between the compensation of the Named Officers and the Company's strategy, the Compensation Committee tied bonus payments under the Company's Executive Variable Compensation Plan (the "EVC Plan") to the achievement of targets relating to the Company's revenue, pre-tax profit and free cash flow, and the vesting of performance-based RSUs to the achievement of targets relating to the revenue of the Company's technology business and the operating margins of the Company's services business. Performance-based target compensation would only be earned to the extent that the Company met or exceeded the targets set for each metric and if the Company failed to meet a threshold, generally no compensation related to that metric would be earned for that measurement period. In addition, the Named Officers are only compensated through stock options to the extent that stock price at the time of exercise and sale exceeds the exercise price of the stock option, which is equal to the fair market value of the stock on the date of grant.

Because a large portion of the Named Officers' compensation is based on equity awards, there can be significant differences between "realizable" compensation and compensation as set forth in the Summary Compensation Table of this and prior years' proxy statements. Both realizable compensation and compensation set forth in the Summary Compensation Table show the actual amount of salary and bonus earned. Realizable compensation differs from compensation shown in the Summary Compensation Table in the way that equity-based awards are valued. As required by the SEC, the Summary Compensation Table shows the fair value of stock awards and option awards as of the date of grant, calculated in accordance with accounting rules. These amounts represent the Company's accounting expense for these grants. The amounts do not reflect the actual number of performance-based RSUs earned based on the Company's performance and, for both RSUs and stock options, do not take into account changes in the Company's stock price after the date of grant, both of which affect actual compensation earned. Realizable compensation takes both of these factors into account.

The following chart compares the Company's TSR percentile and Mr. Coleman's realizable compensation percentile for the three-year period 2011-2013 with those of the Peer Group Companies. Each point on the chart represents a CEO's percentile position for realizable compensation relative to his or her company's three-year TSR. A difference of fewer than 25 points between TSR percentile and realizable compensation percentile -- the alignment corridor banded by the diagonal bars below -- suggests reasonable alignment between TSR and realizable compensation. When compared to the Peer Group Companies, Mr. Coleman's realizable compensation was at the fifteenth percentile and the Company's TSR was at the sixty-ninth percentile, showing that during this time period Mr. Coleman's realizable compensation was below median realizable pay of the CEOs of the Peer Group Companies and the Company's TSR was above the median TSR of the Peer Group Companies.

Realizable Pay vs TSR Performance 

The chart above is based on the 2014 proxy filings of the Peer Group Companies and therefore covers only the period 2011-2013. For purposes of the chart, realizable compensation consists of (a) base salary paid over the period, (b) actual short-term cash incentive awards earned over the period, (c) the value of any "in-the-money" stock options granted during the period, (d) the value of all non-performance-based equity awards granted during the period, and (e) the value of all performance-based equity awards granted during the period (calculated using the actual number of earned shares for grants for which the performance period had been completed and using target values for grants for which the performance period had not been completed). The realizable value of stock options and other equity-based awards was calculated using each company's closing stock price on the last day of the three-year period.

Compensation Policies and Practices

The Compensation Committee continually evaluates the Company's compensation policies and practices to ensure that they are consistent with good governance practices. To that end, the Company:

  • Has stock ownership guidelines for both officers and directors;
  • Generally does not pay tax gross-ups on perquisites;
  • Has made changes to change in control employment agreements entered into with newly elected officers that (a) shorten the benefits continuation period from three years to two years, (b) reduce benefits from a multiple of three to a multiple of two times salary and bonus, (c) eliminate excise tax gross-ups and (d) eliminate the provision allowing the executive to receive benefits if he or she voluntarily terminates employment during the 13th month following a change in control, except that Mr. Altabef's change in control employment agreement provides for a multiple of two and one-half times salary and bonus;
  • Has in place a compensation risk assessment process to assess the risks of its compensation programs and policies;
  • Has an insider trading policy that prohibits employees, officers and directors from engaging in hedging transactions or pledging Unisys securities;
  • Has an executive officer clawback policy under which the Company will seek to recover incentive-based compensation from executive officers if the Company's financial statements are required to be restated as a result of the Company's material non-compliance with the financial reporting requirements under U.S. securities laws and if the executive officer engaged in fraud or intentional misconduct that caused or otherwise contributed to the need for the restatement;
  • Has an independent outside compensation consultant that is engaged by the Compensation Committee; and
  • Has set metrics for performance-based long-term equity incentive awards that differ from the performance metrics used for short-term incentive awards.

In evaluating its compensation program, the Company also considers the results of its most recent stockholder advisory vote on executive compensation. At the 2014 annual meeting, the Company's executive compensation program received a favorable vote of over 97% of the votes cast. The Company believes that this shows that its stockholders support the overall design of the Company's compensation program and its compensation decisions.

The Company believes that its executive compensation program is reasonable, competitive and strongly focused on pay-for-performance principles, with a significant portion of target compensation at risk and based on the Company's performance. The Company emphasizes compensation opportunities that appropriately reward executives for delivering financial results that meet or exceed pre-established goals, and the compensation of the Named Officers varies depending upon the achievement of these goals. Through stock ownership requirements and equity incentives, the Company also aligns the interests of its executive officers with those of stockholders and the long-term interests of the Company.

Compensation Philosophy

As described above, the Company's executive compensation program is designed to attract, retain and motivate executives who lead the Company's business, to reward them for achieving both financial and strategic Company goals and to align their interests with the interests of stockholders. The program seeks to achieve these goals primarily through a combination of the following types of compensation: (1) base salary, (2) short-term cash incentives tied to annual and quarterly performance and (3) long-term incentives in the form of RSUs, stock options and/or other stock-based awards.

Each of the three principal elements of the Company's executive compensation program is essential to meeting the program's overall objectives, and most of the compensation components simultaneously fulfill one or more of these objectives. Base salaries are used primarily to attract and retain executives responsible for the Company's success. Cash incentive compensation is "at-risk" compensation designed both to reward executives for the achievement of short-term goals and to attract and retain executives. Long-term incentive compensation is intended to align executive and stockholder interests, to motivate and reward executives for long-term business success and to attract and retain executives responsible for this long-term success.

The Company has not adopted a formula to allocate total compensation among its various components. As a general matter, the Company's goal is for total target compensation, as well as each element of total target compensation, to be consistent with the median for the Peer Group Companies. However, the Company incorporates flexibility into its compensation programs and into the assessment process to respond to and adjust for the changing business environment, to emphasize, as needed, one or more of its compensation objectives and to take into consideration individual performance, as well as the relative complexity and strategic importance of any particular position held.

Market Analysis

The Company's executive compensation program takes into account the compensation practices of companies with which the Company competes or could compete for executive talent. In its review of the Company's executive compensation program for 2014, the Compensation Committee compared the Company's overall compensation practices (types of compensation paid, mix of variable and fixed compensation, mix of cash and equity-based compensation and the like) and compensation levels for the Chief Executive Officer, Chief Financial Officer and business unit leaders (total annual compensation, as well as each component of their total compensation) with the Peer Group Companies listed below. The list of Peer Group Companies was developed with input from the Compensation Committee's compensation consultant using a rules-based selection process that focused on companies that are similar to the Company with respect to business operations (product and services offerings, customer base, end markets, etc.) and size of revenue and employee population (generally from one-third to three times the size of the Company's revenue and employee population). Market capitalization was also considered as a secondary criterion. The Peer Group Companies for 2014 were:


The Compensation Committee regularly reviews the composition of the peer group and its selection criteria to ensure that they remain appropriate in light of the evolving competitive landscape. In September 2014, the committee's compensation consultant recommended, and the committee approved, revisions to the list of companies to be used to evaluate executive compensation in 2015. One company, Automatic Data Processing, Inc., was removed from the list of peer group companies for 2015, and two companies, CGI Group, Inc. and Pitney Bowes Inc., were added. The Compensation Committee believes that these revisions are in line with its objectives of developing a peer group comprising companies with a size, complexity and business mix comparable to that of Unisys.

When determining compensation for other executive officers, the committee considers information from the 2013 Towers Watson CDB High Tech Survey and the 2013 Equilar Compensation Report for technology companies. These surveys show compensation levels across a broad spectrum of companies and are used to inform the Compensation Committee regarding market executive compensation levels, particularly for positions other than chief executive officer, chief financial officer and business unit leaders.

Comparisons to "market" in the "Executive Compensation" section of this proxy statement generally are based on the market consisting of the Peer Group Companies when referring to the Chief Executive Officer, Chief Financial Officer, business unit leaders and compensation practices and are based on the companies included in the Towers Watson and Equilar surveys discussed above when referring to other executive officers.

Role of Compensation Consultants and Management

To assist in carrying out its responsibilities, the Compensation Committee regularly consults with the committee's outside compensation consultant. Under its charter, the Compensation Committee has sole authority to retain and terminate outside compensation consultants, including sole authority to approve the consultant's fees and other retention terms. In 2014, Pearl Meyer & Partners was the committee's outside compensation consultant. In this role, Pearl Meyer & Partners performed such duties as were requested by the committee. Those duties consisted primarily of providing market data and advice to the committee that were used to determine executive and director compensation, particularly analyses of the Company's executive and director compensation in comparison to the Peer Group Companies. Pearl Meyer & Partners spoke with the chairman of the Compensation Committee, as well as with management, in preparing for committee meetings, regularly attended committee meetings and met from time to time in executive session with the Compensation Committee without the presence of management.

The Compensation Committee also receives reports and recommendations from management. In particular, throughout 2014 the committee solicited input from Mr. Coleman regarding the compensation of those executives who reported directly to him. In connection with these recommendations, Mr. Coleman consulted with the Company's head of human resources and senior executive compensation staff and met periodically with the Compensation Committee's outside compensation consultant to review the benchmark data. In addition, Mr. Coleman provided recommendations, based on the Company's operating and strategic plans, to the Compensation Committee related to the performance measures used in the Company's bonus and long-term incentive plans, as well as the recommended threshold, target and maximum performance levels. In connection with these recommendations, Mr. Coleman consulted with the Company's Chief Financial Officer. Although Mr. Coleman regularly attended Compensation Committee meetings, his compensation package was considered by the committee in an executive session without him present, using data, analysis and advice provided by the outside compensation consultant, and then reviewed and approved by the independent members of the Board of Directors. The Compensation Committee also met from time to time in executive session with the outside compensation consultant, but without the presence of Mr. Coleman or any other members of management, to consider, among other things, the compensation recommendations proposed by Mr. Coleman.

President and Chief Executive Officer

As described above, Mr. Altabef was named President and Chief Executive Officer of the Company effective January 1, 2015. Under a letter agreement entered into between Mr. Altabef and the Company, he is entitled to an annual base salary of not less than $972,000 per year and is eligible to earn an annual bonus with a target bonus opportunity of not less than 125% of his annual base salary. Mr. Altabef is also eligible to receive equity and other long-term incentive awards under the Company's long-term incentive plans in each year such awards are made to executive officers generally and to participate in the benefit programs generally made available to executive officers as in effect from time to time. During Mr. Altabef's employment, he will be provided with access to the use of a Company-paid apartment in the Philadelphia metropolitan area for business purposes.

Principal Components of Executive Officer Compensation

As set forth above, the principal elements of the Company's executive compensation program consist of base salary, short-term variable cash incentives and long-term incentive compensation.

Base Salary

Elected officers' initial base salaries are determined by evaluating the responsibilities of the position held and the experience of the individual and comparing such salaries to the benchmark compensation data. Thereafter, increases in salary can be based on the Compensation Committee's evaluation of any number of factors, including the individual's level of responsibility, individual performance, pay levels of both the executive in question and other similarly situated executives and the benchmark compensation data. In February 2014, when it conducted its review of executive compensation, the Compensation Committee determined that no elected officers would receive salary increases in 2014 given economic conditions and the Company's ongoing efforts to contain costs and manage cash. In its review, the committee also considered the relationship of executive compensation at the Company to the benchmark compensation data and determined that salaries that had been in effect for 2013 for the Named Officers remained generally consistent with the median for the market.

Short-Term Variable Incentive Compensation

During 2014, all of the Company's elected officers were eligible to receive annual and quarterly bonuses in the form of cash incentive compensation through the EVC Plan. Compensation under the EVC Plan is "at-risk" compensation intended to motivate and reward executives for the attainment of short-term performance goals. Under the plan, the Compensation Committee has the discretion to determine the conditions (including performance objectives) applicable to bonus payments and the amounts of such bonuses. For 2014, the amount of incentive compensation awards paid to the Named Officers under the plan depended upon (a) the officer's target annual bonus amount and (b) the degree to which Company performance goals were met. As a result of his departure on December 1, 2014, Mr. Coleman was paid a pro rata portion of his fourth quarter and full year bonuses for which he would have been eligible under the EVC Plan had his employment with the Company not terminated based on his service time during the quarter (October 1 through December 1) and the year (January 1 through December 1).

The EVC Plan design for 2014 was modified from the prior year to increase the overall upside for maximum performance and to measure each executive officer's performance under the plan using only corporate metrics. The amount for which participants under the EVC Plan were eligible for maximum performance for the annual component was increased from 150% to 200%, which caused the overall upside for maximum performance to increase from 130% to 160%. This change was implemented to better align with market practice and further incent outstanding performance. In addition, in 2014 each executive officer's achievement under the EVC Plan was based on the Company's achievement with respect to three corporate metrics: pre-tax profit, revenue and free cash flow. In prior years, achievement under the EVC Plan for leaders of the Company's business units was measured in part on the achievement of corporate metrics and in part on the achievement of business unit-specific metrics. The business unit-specific metrics were eliminated in 2014 in order to promote cross-selling and a common focus across the organization.

Target annual bonus amounts for elected officers are approved by the committee and are intended to be competitive in the market in which the Company competes for talent. They are therefore set at or around the median for comparable positions in the market. For 2014, target bonus amounts, which are stated as a percentage of base salary, were as follows for the Named Officers: J. Edward Coleman -- 125%; Janet B. Haugen -- 90%; Ronald S. Frankenfield -- 95%; Jeffrey E. Renzi -- 95%; David A. Loeser -- 70%; and Edward C. Davies -- 95%.

For 2014, the extent to which the Named Officers received their target bonus amounts depended upon the degree to which the Company achieved financial performance targets approved by the Compensation Committee. Bonus payments were based 40% on quarterly performance and 60% on full-year performance. Bonuses with respect to quarterly results were payable after the end of each quarter.

Performance targets set for 2014 were based on pre-tax profit, revenue and free cash flow, with pre-tax profit weighted 40%, revenue weighted 35% and free cash flow weighted 25%. The committee also set threshold and, in the case of annual performance, additionally set maximum performance levels for each criterion, which would result in payment at 50% and 200% of target, respectively, if achieved. No bonus would be paid by the Company in respect of a criterion if performance was below the threshold level, except that the plan had a "catch-up" feature for quarterly periods that allowed participants to receive payments for quarters in which performance targets were not fully met if there was overachievement in later quarters. The performance targets were set to reward strong management performance, given the Company's strategic objectives and the economic conditions at the time the targets were set.

In October 2014, the Compensation Committee modified the full-year threshold metrics for pre-tax profit and revenue as a result of prevailing market conditions and the possible impact of the CEO transition on the Company's business during the fourth quarter.

The tables below summarize, for Company-wide performance in 2014, the threshold, target and maximum performance levels and the actual results for each performance metric and the percentage of target bonuses with respect to each metric (rounded to the nearest whole percent) paid based on these results.

For the full year, EVC bonuses were funded for the pre-tax profit and free cash flow goals based on actual results compared to the metrics. The Compensation Committee exercised its discretion to pay out EVC bonuses at the threshold amount with respect to the revenue metric because the shortfall between the Company's actual performance and the threshold was mostly attributable to foreign currency fluctuations. The aggregate percentage of target bonus amounts paid with respect to all three performance metrics for the full year, after taking into account the weightings of performance metrics discussed above, was 72%.

In the fourth quarter, the Compensation Committee exercised its discretion to pay out EVC bonuses at the threshold amount with respect to the revenue metric because the shortfall between the Company's actual performance and the threshold was mostly attributable to foreign currency fluctuations. The aggregate percentage of quarterly target bonus amounts paid with respect to all three performance metrics for all four quarters, after taking into account the weightings of performance metrics disclosed above, was 51%.

The above performance metrics include non-GAAP financial measures. The Company defines free cash flow as cash from operations less capital expenditures. Pre-tax profit excludes defined benefit pension expense and is calculated before the accrual for variable compensation. Free cash flow also excludes defined benefit pension contributions. These metrics therefore will differ from the amounts shown in the Company's financial statements.

The following table summarizes bonus amounts paid to the Named Officers for 2014 under the 2014 EVC Plan. Total target amounts for each individual represent the percentage of base salary referred to in the second paragraph of this section. The EVC Plan gives the Compensation Committee discretion to consider individual performance and to make awards accordingly. Except as noted in the following table, bonus awards to the Named Officers for 2014 were determined by formula based on the performance of the Company against its performance goals. Target amounts for each Named Officer were determined in February 2014 and assume that each Named Officer remained employed by the Company through December 31, 2014.

(1) Amounts shown include payments made to Mr. Coleman equal to a pro rata portion of Mr. Coleman's fourth quarter and full year bonuses for which he would have been eligible under the EVC Plan had his employment with the Company not terminated based on his service time during the quarter (October 1 through December 1) and the year (January 1 through December 1).

(2) Amounts shown for Ms. Haugen include a discretionary award of $25,000.

(3) The annual target amount shown for Mr. Renzi reflects an annualized bonus target; however, because Mr. Renzi's employment with Unisys began after January 1, 2014, the actual amount of annual bonus paid was paid on a pro rata basis based on his service time during the year.

Long-Term Incentive Awards

Long-term incentives in the form of equity-based compensation are intended to ensure that the Company's executives have a continuing stake in the long-term success of the Company and to align their interests with those of stockholders. They are also used as a vehicle to attract, retain and motivate executives responsible for the Company's long-term success. The Company makes an annual long-term incentive grant to its executives during the first quarter of the year and also may make grants to newly hired employees in connection with their employment.

In 2014, changes were made to the long-term incentive program in order to better reflect the Company's strategic direction in 2014 and to better align with the practices of the Peer Group Companies. Long-term incentives granted included non-qualified stock options and performance-based and time-based RSUs. The Compensation Committee believed that using three different types of awards would provide balance to the Company's long-term incentive program and mitigate risk associated with any single award type.

The Company changed its target long-term incentive mix to increase the weight of performance-based RSUs, which comprised approximately 45% of the target long-term incentive award in terms of grant date value. In addition, the Company changed the metrics used to determine the achievement performance-based RSUs to technology revenue and services operating margin. The Company also introduced time-based RSUs in order to promote executive retention and alignment with shareholders.

Stock options, which vest over three years, are intended to serve as a retention vehicle and to align the recipients' interests with stockholders' long-term interests because they have value after vesting only if and to the extent that the Company's stock price exceeds the exercise price of the stock option. Stock options granted in 2014 had an exercise price equal to the fair market value of Unisys common stock on the date of grant. Stock options comprised approximately 35% of the target long-term incentive grant date value.

Performance-based RSUs will be earned only to the extent that the Company's financial targets are met and, if earned, will vest one-third annually over a three year period. Performance-based and time-based RSUs, which also vest over a three year period, also serve as a retention vehicle and align the recipients' interests with those of stockholders because the value of the RSUs, once earned, increases and decreases directly based on the Company's stock price. Time-based RSUs comprised approximately 20% of the target long-term incentive grant date value.

The performance goals for the performance-based RSUs granted in 2014 were based on the revenue in the Company's technology business and the operating margin of its services business, each of which was weighted 50%. The Company chose a one-year performance period because of the importance of emphasizing these goals in 2014 and because of the difficulty of setting multi-year performance goals in the current economic environment. Threshold, target and maximum performance levels were set for each goal. The RSUs were convertible into shares of Unisys common stock at rates ranging from 0.5 shares per RSU (for performance at threshold level) to 1.0 share per RSU (for performance at target level) to 1.5 shares per RSU (for performance at or above maximum level). If the Company's performance with respect to a metric was below the threshold level, no shares were earned in respect of that performance measure, and the related RSUs were cancelled. The table below summarizes, for performance-based RSUs granted in 2014, the threshold, target and maximum performance levels and the actual results for each performance metric and the conversion rate applied to vesting RSUs based on these results:

Because we failed to achieve the threshold for both metrics, no performance-based RSUs granted in 2014 were earned, and no shares of Unisys common stock will be issued in respect of them.

Long-term incentive awards granted to each Named Officer in 2014 are set forth in "Grants of Plan-Based Awards". In 2014, the grant date value of the awards to each Named Officer was generally in line with the market median.

In line with the Company's financial goals, the performance metrics for performance-based RSUs granted in 2015 will be operating profit, which will be measured over a three-year period.

Stock Ownership Guidelines

Since 1998, the Company has had stock ownership guidelines in place for elected officers in order to more closely link their interests with those of stockholders. Under revised guidelines put into effect in February 2011, elected officers are expected to own Unisys stock or stock units (including vested "in the money" stock options, unvested time-based RSUs and earned performance-based RSUs that have not yet vested) having a value equal to a multiple of their annual base salary, as follows: Chief Executive Officer -- 3 times; Chief Financial Officer and senior vice presidents with responsibility for a business unit -- 1.5 times; other senior vice presidents -- 1 times; vice presidents -- 0.5 times. Unvested stock options, vested "under water" stock options and performance-based RSUs that have not yet met the performance criteria will not count toward fulfillment of the ownership guidelines. Officers will be expected to meet the ownership guidelines by February 2016, or within five years of election for officers elected after February 2011. The Compensation Committee reviews the adequacy of and compliance with the guidelines on an annual basis. The number of shares owned by each of the Named Officers is set forth in the stock ownership table in "Security Ownership by Certain Beneficial Owners and Management".

Stock Option/RSU Granting Practices

As set forth above, in 2014 long-term incentives generally took the form of stock options and RSUs. Most awards are granted in the annual grant made to executives, although awards may also be granted as part of the hiring process. Annual grants are approved at a specified, regularly scheduled meeting of the Compensation Committee early each year, at the time the Compensation Committee approves the type and number of awards to be granted and finalizes the performance criteria for performance-based awards. For grants in the United States, the grant date is no earlier than the date of the meeting, and the exercise price of stock options is at least 100% of the fair market value of Unisys common stock on the date of grant. The dates of regularly scheduled Board and committee meetings are generally determined many months in advance as part of the normal Board calendaring process.

Stock options granted as part of the hiring process have a grant date no earlier than the date of approval, have an exercise price at least equal to fair market value on the date of grant and, except as noted below, are approved by the Compensation Committee or the Board of Directors. New hire stock option grants that require the approval of the Compensation Committee are typically reviewed and approved by the Compensation Committee at its regularly scheduled meetings. For these grants, the date of grant is the date of the meeting, if the individual receiving the grant has already commenced employment at Unisys. If the individual has not yet commenced employment, the date of grant is the business day following the individual's first day of employment. The Compensation Committee has also delegated to the Company's Chief Executive Officer the authority to grant a limited number of stock options during the year to eligible individuals (other than the Chief Executive Officer, his direct reports and employees subject to Section 16 of the Securities Exchange Act of 1934). The committee's delegation of authority specifies that for these stock options the grant date will be either (a) the first business day of the month following the date of the Chief Executive Officer's approval, if the individual has commenced employment at Unisys, or (b) if the individual has not yet commenced employment, the first business day of the month following the individual's date of hire. The Chief Executive Officer has no discretion with respect to choosing the grant date, and in all cases, the date of grant occurs after the date the grantee commences employment with Unisys.

As with stock options, RSUs may also be granted as part of the hiring process. The same procedures regarding the Chief Executive Officer's authority with respect to, and the timing of, stock option grants to new employees also apply to RSUs granted to new hires.

Other Benefits

Elected officers participate in the retirement programs discussed below under "Pension Benefits" and "Non-Qualified Deferred Compensation". In addition, subject to underwriting approvals and applicable corporate governance requirements, officers elected prior to February 2015 are eligible for supplemental death benefits under the Unisys Corporation Executive Death Benefit Only Program, which provides a death benefit equal to four times an elected officer's base salary plus target bonus during active employment and a death benefit equal to two and one-half times an elected officer's base salary immediately prior to retirement for retired elected officers who remain eligible for the benefit. The Company increases the benefit payable to the elected officer's beneficiary to cover any income and employment taxes due. This benefit was eliminated and is no longer available to newly elected officers. Perquisites available to executive officers include financial counseling/tax preparation services and an annual physical examination.

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code imposes a $1,000,000 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 2010 Plan permits the Compensation Committee to design compensation awards to Named Officers that will meet the requirements of Section 162(m) of the Internal Revenue Code. The committee may grant awards under the 2010 Plan that meet the requirements of Section 162(m) of the Internal Revenue Code at such times as the committee believes that such awards are in the best interests of the Company. 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.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with management. Based on such review and discussion, the committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

Compensation Committee
Jared L. Cohon
Alison Davis
Leslie F. Kenne
Lee D. Roberts (Chair)

Summary Compensation Table

The following table sets forth information concerning the compensation of the Named Officers for services rendered in all capacities to Unisys.

(1) Amounts shown for 2014 include accrued vacation payouts made upon termination of employment in the following amounts: Mr. Coleman -- $74,766 and Mr. Davies -- $17,661.

(2) Amounts shown include compensation deferred under the Unisys Savings Plan or a Unisys deferred compensation plan.

(3) Amounts shown for 2014 include payments of $526,773 made to Mr. Coleman equal to a pro rata portion of the fourth quarter and full year bonuses for which he would have been eligible under the EVC Plan had his employment with the Company not terminated based on his service time during the quarter (October 1 through December 1) and the year (January 1 through December 1).

(4) Amounts shown are the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For a discussion of the assumptions made in such valuation, see note 16 to the Company's 2014 financial statements. For more details on grants in 2014, see "Grants of Plan-Based Awards" below.

(5) Amounts shown for 2014 represent the aggregate grant date fair value of the performance-based RSUs, assuming that target performance levels are met, and the time-based RSUs granted to each Named Officer on February 12, 2014. Assuming that maximum performance levels are achieved, the value of the awards at date of grant would be as follows: Mr. Coleman -- $4,515,218; Ms. Haugen -- $887,425; Mr. Frankenfield -- $998,272; Mr. Renzi -- $844,060; Mr. Loeser -- $480,500; and Mr. Davies -- $998,272.

(6) Amounts shown are the increase in pension value only. Effective December 31, 2006, the Company’s U.S. defined benefit pension plans were frozen, and benefits thereunder ceased to accrue. The changes in pension value shown in the table are principally due to the changes in the discount rate used to determine the present value of the accumulated benefit.

(7) Amounts shown are Company matching contributions under the Unisys Savings Plan, perquisites (unless the aggregate amount of perquisites for an individual is less than $10,000) and severance payments that accrued upon termination. For 2014, amounts consist of the following: Mr. Coleman -- matching contributions of $7,342, perquisites of $48,022, which include $40,080 for a company-paid apartment, and termination payments of $3,458,620; Ms. Haugen -- matching contributions of $7,800; Mr. Frankenfield -- matching contributions of $7,800; Mr. Renzi -- matching contributions of $2,897, perquisites of $8,251 and a gross-up for state and local taxes of $10,517; Mr. Loeser -- matching contributions of $7,800 and perquisites of $53,649, which include $46,053 for commuting costs; and Mr. Davies -- matching contributions of $6,500, perquisites of $1,725 and a gross-up of the Medicaid and Medicare surcharge tax $42 that became payable after Mr. Davies left the company.

Grants of Plan-Based Awards

The following table sets forth information on grants of plan-based awards during 2014 to the Named Officers.

Awards shown under "Estimated Future Payouts Under Non-Equity Incentive Plan Awards" are annual and quarterly bonuses in the form of cash incentive compensation through the Company's EVC Plan. As discussed more fully in "Compensation Discussion and Analysis" above, amount of incentive compensation awards paid to the Named Officers under the EVC Plan generally depended upon (a) the officer's target annual bonus amount and (b) the degree to which Company performance goals were met.

Awards shown under "Estimated Future Payouts Under Equity Incentive Plan Awards" are performance-based RSUs granted under the 2010 Plan. These RSUs, which are discussed more fully in "Compensation Discussion and Analysis" above, were scheduled to vest one-third per year beginning on the first anniversary of the date of grant if and to the extent that the performance goals established for 2014 by the Compensation Committee of the Board were achieved and if the Named Officer were then employed by the Company. Because the performance goals for 2014 were not achieved, none of these performance-based RSUs will vest.

Awards shown under "All Other Stock Awards" are time-based RSUs granted under the 2003 Plan or the 2010 Plan. These RSUs will vest one-third per year beginning on the first anniversary of the date of grant if the individual is then employed by the Company or, if not, has met certain age and service criteria.

Awards shown under "All Other Option Awards" are non-qualified stock options granted under the 2003 Plan or the 2010 Plan. These options will vest one-third per year beginning on the first anniversary of the date of grant if the individual is then employed by the Company or, if not, has met certain age and service criteria.

Outstanding Equity Awards at Fiscal Year-End

The following table shows equity awards to the Named Officers that were outstanding as of December 31, 2014.

(1) Awards shown are non-qualified stock options scheduled to vest as follows if the individual is then employed by the Company or, if not, has met certain age and service criteria.

(2) Awards shown are time-based RSUs and performance-based RSUs for which the performance period has ended and the number of shares earned has been determined. These awards are scheduled to vest as follows if the individual is then employed by the Company:

(3) Market value reflects the $29.48 closing price of Unisys common stock on December 31, 2014.

(4) Awards shown are performance-based RSUs for which the number of shares earned has not yet been determined. If earned, these awards are scheduled to vest as follows if the individual is then employed by the Company.

Option Exercises and Stock Vested

The following table gives information on stock option exercises and the vesting of stock awards during 2014 for each of the Named Officers.

Pension Benefits

Certain of the Company's officers participate in the following three pension plans sponsored by Unisys in the United States. Effective December 31, 2006, each of these plans was frozen and benefits thereunder ceased to accrue. No new participants are now allowed.

  • Unisys Pension Plan (the "Pension Plan") -- a qualified defined benefit pension plan available to all U.S. employees who met eligibility requirements by December 31, 2006.
  • Unisys Corporation Supplemental Executive Retirement Income Plan (the "Supplemental Plan") -- a non-qualified excess defined benefit plan available to all U.S. employees who met eligibility requirements by December 31, 2006 and whose qualified plan benefits are limited by the Internal Revenue Code or limited because they have deferred compensation under non-qualified plans. The plan is designed to make up for the benefit shortfall created by the Internal Revenue Code limits and the non-qualified deferrals of compensation.
  • Unisys Corporation Elected Officer Pension Plan (the "Officer Plan") -- a non-qualified defined benefit plan available to all elected officers who met eligibility requirements by December 31, 2006. The plan is designed to provide a minimum target of retirement income for executives.

The table below presents pension plan information as of December 31, 2014 for certain of the Named Officers. Mr. Coleman, Mr. Renzi and Mr. Loeser are not participants in any of the three pension plans because they were not employed by the Company prior to when the plans were frozen.

The present value of the accumulated benefit has been determined assuming benefits commence as of the earliest date at which each executive is entitled to unreduced benefits. This is generally the later of age 62 and achievement of vesting requirements. However, for executives who are not eligible for unreduced benefits prior to age 65, benefits are assumed to commence at age 65. The calculations use the same actuarial assumptions used for financial disclosure requirements for the pension plans, except that the calculations assume that each of the above individuals will remain with the Company until such retirement date and therefore do not apply any decrements in respect of termination, disability and the like. Assumptions as to life expectancy are based on the MRP-2007 base table (sex distinct) projected with Scale MMP-2007. The discount rate used is 4.09% per annum. Where benefits are payable as a 50% contingent annuity without actuarial reduction, which is the case for Officer Plan participants who are married, benefits have been valued using actuarial factors assuming 80% of plan participants are married and assuming wives are three years younger than husbands.

The following summarizes the benefits under the specific plans:

Unisys Pension Plan

On or before December 31, 2006, all employees of Unisys were eligible to participate in the Pension Plan on the January 1 or July 1 first following attainment of both age 21 and one year of service with Unisys.

The Pension Plan provides benefits under two benefit formulas:

1. For service beginning on or after January 1, 2003, benefits accrue each year under a cash balance formula under which a participant's bookkeeping account is credited with an amount equal to 4% of plan compensation. In addition, the account balance is credited with interest on a monthly basis using the annual interest rates on 5-Year Constant Maturity Treasury Notes, plus 0.25%. Generally, participants vest in the benefit after completion of three years of service with Unisys. The vested cash balance benefit is available for payment following termination of employment, and the normal form of payment is a life annuity for single participants (the participant receives the periodic amount during his or her lifetime, with no survivor benefit payable after his or her death), or an actuarially reduced 50% contingent annuity for married participants (the participant receives a reduced periodic benefit during his or her lifetime to reflect the survivor payments, and the participant's surviving beneficiary receives 50% of the periodic amount the participant received). Other annuity forms are also available on an actuarially equivalent basis. The benefit is also available in the form of a lump sum distribution. All Named Officers who met plan eligibility requirements are eligible for the cash balance benefit.

2. For employees hired prior to January 1, 2003, benefits are also based on a career pay formula. Each year, the annual accrued benefit payable to a participant at normal retirement date (age 65) is increased by 1% of plan compensation, plus 0.35% of plan compensation in excess of one-half of the average Social Security taxable wage base for the five preceding years. Participants ultimately are eligible for the larger of: (a) the career pay formula through the date of termination of employment; or (b) the career pay formula accrued through December 31, 2002 plus the cash balance benefit described above. Generally, participants vest in the benefit after completion of three years of service with Unisys. The vested benefit is available for payment following termination of employment and attainment of early retirement eligibility (age 55). The benefit is reduced by 0.5% for each month that the benefit commences prior to age 65. Should the employee terminate employment after attainment of both age 55 and 20 years of service with Unisys, the benefit is reduced by 0.5% for each month that the benefit commences prior to age 62. The normal form of payment of the vested career pay benefit is a life annuity for single participants, or an actuarially reduced 50% contingent annuity for married participants. Other annuity forms are also available on an actuarially equivalent basis. Ms. Haugen and Mr. Frankenfield are eligible for the career pay benefit.

For both formulas, plan compensation is salary, commissions, overtime pay, paid bonus and paid accrued and unused vacation. Compensation includes amounts deferred on a before-tax basis under the Unisys Savings Plan. Excluded from compensation are severance payments, supplements, compensation deferred under a non-qualified plan and other forms of extraordinary compensation. Plan compensation is limited by Section 401(a)(17) of the Internal Revenue Code.

As of December 31, 2014, Ms. Haugen and Mr. Frankenfield were vested in their Pension Plan benefit and would have been eligible to immediately receive the cash balance portion of their benefit upon termination of employment. Ms. Haugen and Mr. Frankenfield are eligible to receive an early retirement benefit under the career pay formula. Mr. Davies' employment with the Company terminated in July 2014 and is vested in his Pension Plan benefit. He is eligible to commence his benefit immediately.

Although benefits ceased to accrue under the Pension Plan effective December 31, 2006, the cash balance bookkeeping accounts continue to grow with interest credits until paid.

Unisys Corporation Supplemental Executive Retirement Income Plan

On or before December 31, 2006, all employees of Unisys were eligible to participate in the Supplemental Plan on the January 1 or July 1 first following attainment of both age 21 and one year of service with Unisys.

The Supplemental Plan provides benefits under the same provisions as the Pension Plan except as follows:

  • Plan compensation includes compensation deferred under non-qualified plans and is not limited by Internal Revenue Code Section 401(a)(17).
  • The benefit payable under the Pension Plan is applied as an offset to the benefits available under the Supplemental Plan.
  • Benefits accrued and vested prior to January 1, 2005 are payable at the same time and form as the Pension Plan benefit. Benefits accrued or vested on or after January 1, 2005 are payable following the later of (a) termination of employment (or six months thereafter if the individual is among the top 50 most highly compensated officers, as defined under Section 409A of the Internal Revenue Code ("Section 409A")) or (b) attainment of age 55. Such benefit is payable in the form of a life annuity for single participants, or an actuarially reduced 50% contingent annuity for married participants. No optional forms of benefit are currently available for benefits accrued or vested on or after January 1, 2005 under the Supplemental Plan.

As of December 31, 2014, Ms. Haugen and Mr. Frankenfield were vested in their Supplemental Plan benefit. Ms. Haugen and Mr. Frankenfield were vested as of December 31, 2004 and are eligible to immediately receive the pre-2005 cash balance portion of their benefit upon termination of employment. Ms. Haugen and Mr. Frankenfield are also eligible to receive an early retirement benefit. Mr. Davies, whose employment with the Company terminated in July 2014, commenced his Supplemental Plan benefit effective February 1, 2015.

Although benefits ceased to accrue under the Supplemental Plan effective December 31, 2006, the cash balance bookkeeping accounts continue to grow with interest credits until paid.

The Company has established a grantor trust relating to the Supplemental Plan. If a change in control of the Company occurs, the Company is required to fund the trust in an amount equal to the present value of the accrued pension benefits under the plan.

Unisys Corporation Elected Officer Pension Plan

Only elected officers of Unisys are eligible to participate in the Officer Plan. The Officer Plan was closed to entrants as of December 31, 2006. As a result, Ms. Haugen is the only Named Officer who is eligible for the plan.

The Officer Plan provides a gross annual accrued benefit equal to 4% of final average compensation for each of the first 10 years of credited service, plus 1% of final average compensation for each year of credited service in excess of 10 (but not in excess of 30), minus 50% of the participant's Social Security benefit. This benefit is reduced by 0.5% for each month that the benefit commences prior to age 62. The gross benefit is offset by the benefits payable under both the Pension Plan and the Supplemental Plan.

Final average compensation is the average of the highest consecutive 60 months of plan compensation out of the last 120 months of employment, but no compensation after December 31, 2006 is included. Plan compensation is identical to that used for the Supplemental Plan.

Benefits accrued and vested prior to January 1, 2005 are payable at the same time and form as the Pension Plan benefit. Benefits accrued or vested on or after January 1, 2005 are payable following the later of (a) termination of employment (or six months thereafter if the individual is among the top 50 most highly compensated officers, as defined under Section 409A) or (b) attainment of age 55. Such benefit is payable in the form of a life annuity for single participants, or a 50% contingent annuity, which is not actuarially reduced, for married participants. No optional forms of benefit are currently available for benefits accrued or vested on or after January 1, 2005 under the Officer Plan.

Generally, benefits under the Officer Plan vest upon the earliest to occur of (a) attainment of age 55 and 10 years of service with Unisys, (b) for executives who were participants on or after January 1, 1997 and before July 19, 2001, attainment of age 50 and five years of service with Unisys or (c) a change in control of Unisys. As of December 31, 2014, Ms. Haugen was vested in her Officer Plan benefits. Ms. Haugen is currently eligible to receive an early retirement benefit.

The Company has established a grantor trust relating to the Officer Plan. If a change in control of the Company occurs, the Company is required to fund the trust in an amount equal to the present value of the accrued pension benefits under the plan.

Unisys Savings Plan

The Named Officers are eligible to participate in the Unisys Savings Plan, which is a tax-qualified defined contribution plan with a matching contributions feature. In 2014, the Company made matching contributions under the plan of 50% of each 1% of eligible pay contributed by a participant on a before-tax basis, up to the first 6% of eligible pay contributed.

Non-Qualified Deferred Compensation

The table below shows unaudited information with respect to compensation of the Named Officers that has been deferred under a plan that is not tax-qualified. Under the Company's non-qualified deferred compensation plans, eligible employees may defer until a future date payment of all or any portion of their annual salary or bonus, as well as any vested share unit award under one of the Company's long-term incentive plans. Amounts deferred are recorded in a memorandum account for each participant and are credited or debited with earnings or losses as if such amounts had been invested in one or more of the professionally managed investment options available under the Unisys Savings Plan, as selected by the participant. Participants may change their investment options at any time. Account balances will be paid either in a single lump sum or in annual installments, as elected by the participant. The memorandum accounts are not funded, and the right to receive future payments of amounts recorded in these accounts is an unsecured claim against the Company's general assets. However, the Company has established a grantor trust relating to its pre-2005 non-qualified deferred compensation plan. If a change in control of the Company occurs, the Company is required to fund the trust in an amount equal to the aggregate account balances under that plan.

(1) No amounts shown in this column are reported in the Summary Compensation Table.

Potential Payments upon Termination or Change in Control

The payments to Mr. Coleman as a result of his departure in 2014 are described below. In addition, under the agreements and plans discussed below, the Continuing Named Officers and Mr. Altabef would be entitled to the following payments and benefits upon termination of employment and/or a change in control of the Company.

Termination Arrangements

Departure of Mr. Coleman

As described above in "Compensation Discussion and Analysis", Mr. Coleman left the Company effective December 1, 2014. Pursuant to the terms of the letter agreement dated December 22, 2008 between the Company and Mr. Coleman, as a result of his departure, Mr. Coleman became entitled to receive an amount equal to two times his base salary plus his annual bonus (in an amount equal to the average percentage of his target bonus paid for the preceding three years multiplied by his target bonus amount as of his departure date). This payment, which totals $3,458,620, will be paid in a lump sum six months following Mr. Coleman's departure date. In addition, the Board of Directors determined to accelerate the vesting of RSUs in respect of 19,728 shares of Company common stock that previously had been granted and was scheduled to vest in early February 2015 upon Mr. Coleman's departure. Mr. Coleman and his eligible dependents will also be entitled to receive medical and dental coverage, at the same premium rates charged to active employees, for up to two years following his departure. To receive health coverage, Mr. Coleman will be required to pay the full premium charged for the coverage. The Company will then reimburse him the amount of the premium that exceeds the amount he would have paid as an employee, plus a tax gross-up on that amount. Such coverage will cease if Mr. Coleman becomes employed during that two-year period. Total amounts payable to Mr. Coleman in respect of medical and dental coverage for two years are expected to be $47,110. The agreement includes non-compete, non-solicitation and non-disparagement provisions effective for 12 months from the date of departure. In the event Mr. Coleman breaches any of these provisions, the Company will have the right to terminate any termination payments due to him, and Mr. Coleman must repay any termination payments previously made to him upon termination of his employment.

Mr. Altabef's Letter Agreement

Under the letter agreement covering the terms and conditions of Mr. Altabef's employment as President and Chief Executive Officer, if Mr. Altabef's employment is terminated by the Company without cause or by Mr. Altabef for good reason (defined generally as a reduction in aggregate compensation target, a material reduction in duties or authority or removal as Chief Executive Officer) prior to a change of control of the Company, Mr. Altabef will be entitled to receive an amount equal to two times the sum of (1) his base salary (at its then current rate) plus (2) his target bonus amount (as in effect on the date of termination), and monthly payments for up to 24 months equal to the difference between the monthly COBRA rate and the monthly active employee contribution rate applicable to Mr. Altabef, subject to his execution of a release of claims in favor of the Company. The letter agreement includes non-compete, non-solicitation and non-disparagement provisions effective for 12 months from the date of termination of employment for any reason. If Mr. Altabef materially breaches any of these provisions, the Company has the right to terminate any payments described above that have not yet been made and to seek the recoupment of any such payments that were previously made.

Executive Officer Severance Agreements

In December 2014, the Company entered into letter agreements with certain of its executive officers, including the Continuing Named Officers, providing that if any such executive officer's employment is terminated by the Company without cause or by such executive officer for good reason (defined generally as a reduction in duties or authority, a reduction in annual base salary or a requirement that an executive relocate from their principal residence or perform their principal duties in a new location), that executive officer will be entitled to receive an amount equal to the sum of his or her annual base salary plus his or her annual target bonus, payable in substantially equal installments during the twelve month period following the date of termination. Each such executive officer will also be entitled to continued medical, dental and vision coverage for up to one year at the same costs applicable to active employees. In addition, if such executive officer is a participant under the Unisys Corporation Executive Death Benefit Only Program at the time of termination, the executive officer will be deemed to have met the age and service requirements for retirement as set forth in the program and, upon the executive officer's death, his or her beneficiary shall be entitled to the post-retirement death benefits provided under the program. The amount of the termination payments to which the Continuing Named Officers would be entitled if their employment had terminated on the last business day of 2014 under circumstances entitling them to the payments above are set forth below, along with the total amounts that would have been payable to them in respect of medical, dental and vision coverage for one year.

The Continuing Named Officers are also each party to a change in control agreement with the Company, as described below. They are not entitled to receive duplicate payments under their change in control agreement and the above-described agreements. In the event of a conflict, they will be entitled to the benefits under their change in control agreement.

Change in Control Agreements

The Company has entered into change in control employment agreements with its executive officers, including the Continuing Named Officers and Mr. Altabef. 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. Beginning in 2010, the Company made changes to the change in control employment agreements that it enters into with newly elected officers that (a) shorten the benefits continuation period from three years to two years, (b) reduce benefits from a multiple of three to a multiple of two times salary and bonus, (c) eliminate excise tax gross-ups and (d) eliminate the provision allowing the executive to receive benefits if he or she voluntarily terminates employment during the 13th month following a change in control. Ms. Haugen and Mr. Frankenfield entered their change in control employment agreements before these changes were implemented, but the change in control employment agreements that Mr. Renzi and Mr. Loeser entered into do include these changes. Mr. Altabef's change in control employment agreement is substantially similar to the other post-2010 change in control employment agreements except that the lump sum payment relating to annual salary and bonus will be equal to two and a half times the sum of his annual base salary plus the higher of his target bonus prior to the change of control, the highest annual bonus paid in the three years prior to the change of control or the annual bonus paid after the change of control. The material terms of each of the change in control employment agreements with the Continuing Named Officers are summarized below.

Pre-2010 Change in Control Agreements

A change in control is generally defined as (1) the acquisition of 20% or more of Unisys common stock, (2) 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 (3) 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 and provides 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. For purposes of determining compensation levels, base salary must be at least equal to the highest salary paid or payable to the executive during the 12 months preceding the change in control, and bonus must be at least equal to the highest bonus paid or payable to the executive under the EVC Plan (or any comparable bonus or retention amount under any predecessor or successor plan or retention agreement) for the three fiscal years preceding the change in control (the "Recent Annual Bonus").

If, following a change in control, the Company terminates the executive without cause or the executive terminates employment for good reason (generally defined as a reduction in the executive's compensation or responsibilities or a change in the executive's job location) or if 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, the terminated executive will be entitled to receive special termination benefits. For Ms. Haugen and Mr. Frankenfield, these benefits are as follows: (1) a pro-rated bonus for the year in which the termination occurs (based on the higher of (a) the Recent Annual Bonus and (b) the annual bonus paid or payable for the most recent fiscal year during the term of the agreement (such higher amount, the "Highest Annual Bonus")), (2) a lump sum payment equal to three years base salary and bonus (based on the highest salary paid or payable during the term of the agreement and the Highest Annual Bonus), (3) a lump sum payment equal to the excess of the actuarial value of the pension benefit the executive would have accrued if the executive's employment had continued for three years after the termination date over the actuarial value of the actual pension benefit payable as of the termination date, (4) a lump sum payment equal to the amount of premiums the Company would have paid to continue the executive in the Company's welfare (other than health) plans for the three-year period, (5) for three years following the termination of employment, continued eligibility for coverage under the Company's health plans at the same premium rates applicable to active employees and (6) outplacement services. To receive health coverage, the executive will be required to pay the full premium charged for the coverage. The Company will then reimburse the executive the amount of the premium that exceeds the amount the executive would have paid as an employee, plus a tax gross-up on that amount. Except as described below, 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. However, if the gross-up payment in respect of the excise tax would not result in a net after-tax benefit to the executive of at least $50,000, then no gross-up payment will be made, and the termination payments will be reduced (a "Cutback") to an amount that will not give rise to the excise tax. The executive is under no obligation to mitigate amounts payable under these agreements.

Post-2010 Change in Control Agreements

Mr. Renzi and Mr. Loeser are entitled to the same special termination benefits enumerated above, except that (a) the lump sum payment referred to in (2) above will be equal to two years salary and bonus, (b) the lump sum payment referred to in (4) above will be for two years of welfare plan premiums and (c) the continued eligibility for health coverage referred to in (5) above will be for two years. In addition, neither Mr. Renzi nor Mr. Loeser's agreement provides for any gross-up for any excise tax imposed on any payment by the Company under Section 4999 of the Internal Revenue Code. The payments will be reduced to avoid the imposition of the excise tax if doing so would result in greater after-tax benefits to Mr. Renzi or Mr. Loeser.

Summary

If the Continuing Named Officers had become entitled to the special termination benefits described above on the last business day of 2014, they would have received the following:

(1) As set forth above, the Company's defined benefit plans were frozen as of December 31, 2006.

(2) The agreements provide for reasonable outplacement services directly related to the termination of the executive's employment. The executive may select the provider of outplacement services, and therefore, the costs actually incurred will vary by individual. The Company believes that the amounts shown in this column are a reasonable estimate of the potential costs of outplacement services.

(3) Change in control payments are assumed to consist of the amounts shown in the table, as well as the value of any accelerated vesting of equity awards pursuant to the terms of the Company's long-term incentive plans. The calculations use a Federal excise tax rate of 20%, a Federal income tax rate of 39.6%, a Medicare tax rate of 2.35% and the current income tax rates for the states of residence of the Named Officers.

(4) Amounts shown in this column do not include the value of the vested awards shown in the tables below under "Long-Term Incentive Plans".

Long-Term Incentive Plans

Under the Company's long-term incentive plans, if a change in control occurs, and, in the case of awards granted beginning in February 2010, a participant's employment terminates for "good reason" or other than for cause within 24 months of the change in control, all stock options and time-based RSUs will become fully vested and, depending on the applicable plan, either a pro-rata portion (based on the completed portion of the related performance cycle) or the full amount of the target amount of performance-based RSUs will vest. If a change in control and a termination of employment had occurred on the last business day of 2014, the Continuing Named Officers would have become vested in the following number of RSUs, having the following values:

(1) Based on the $29.48 closing price of Unisys common stock on December 31, 2014.

In addition, the following number of stock options would have become exercisable at the following exercise prices:

A discussion of amounts payable to the Named Officers under the pension plans sponsored by the Company begins in "Pension Benefits". As set forth in "Pension Benefits", benefits under the Elected Officer Pension Plan become immediately vested upon a change in control of the Company.