UNISYS SUPPLEMENTAL UNEMPLOYMENT BENEFITS PLAN

Transcription

1 UNISYS SUPPLEMENTAL UNEMPLOYMENT BENEFITS PLAN

2 TABLE OF CONTENTS INTRODUCTION...1 WHO IS ELIGIBLE...2 WHO IS NOT ELIGIBLE...4 SPECIAL SITUATIONS THAT ARE NOT COVERED...6 Sale, Merger, Joint Venture, Divestiture or Loss of a Government Contract...6 Temporary Work Interruptions...6 Furloughs...6 DEFINITIONS...7 What date of notice means as to a workforce reduction or layoff...7 What notice period means as to a workforce reduction or layoff...7 What effective date of a workforce reduction or layoff means...7 Relationship of notice, notice period, and effective date as to a workforce reduction or layoff...7 What pay means...7 What service means...8 What same general geographic area means...9 CALCULATION OF SUB PAYMENTS...10 Basic Formula for SUB Payments...10 Offsets...10 Offsets for Prior Income Assistance Plan Benefits or Prior SUB Payments...12 Confirmation of Eligibility...13 Work Elsewhere...14 PAYMENT UNDER THE PLAN...15 Timing of SUB Payments...15 Source of SUB Payments...15 Tax Treatment of SUB Payments...15 Right to SUB Payments...15 WHEN SUB PAYMENTS END...16 COORDINATION OF SUB PAYMENTS AND INCOME ASSISTANCE PLAN BENEFITS...17 UNEMPLOYMENT COMPENSATION...17 i

3 CHANGE IN ADDRESS...18 OTHER BENEFITS...18 ADDITIONAL PLAN INFORMATION...19 OFFICIAL PLAN NAME AND PLAN NUMBER...19 PLAN SPONSOR...19 EMPLOYER IDENTIFICATION NUMBER OF THE PLAN SPONSOR...19 PLAN YEAR...19 TYPE OF PLAN...19 PLAN ADMINISTRATIVE INFORMATION...20 PLAN ADMINISTRATOR...20 PLAN AND SPD...20 HOW TO FILE A CLAIM OR AN APPEAL FOR SUB PAYMENTS...20 If You Want to File a Claim for SUB Payments If You Want to File an Appeal for SUB Payments...21 RIGHT TO RECOVER EXCESS PAYMENTS...22 CASE REVIEW...22 FUNDING OF SUB PAYMENTS...22 ADMINISTRATIVE COSTS...22 APPOINTMENT/REMOVAL OF PLAN MANAGER AND COMMITTEE MEMBERS...23 AGENT FOR LEGAL PROCESS...23 GOVERNING LAW...23 YOUR RIGHTS UNDER ERISA...23 Receive Information About Your Plan and Benefits...23 Prudent Actions by Plan Fiduciaries...24 Enforce Your Rights...24 Assistance with Your Questions...24 PLAN TERMINATION OR AMENDMENT...25 ii

4 INTRODUCTION The Unisys Supplemental Unemployment Benefits Plan (the "Plan") is designed to ease the transition for you and your family if your employment is terminated as a result of business conditions requiring an involuntary workforce reduction or layoff. The Plan supplements the state unemployment compensation benefits you may be entitled to receive in these circumstances. The Plan is effective for involuntary workforce reductions or layoffs for which notice is provided on or after May 30, Unisys Corporation ("Unisys") supports several different programs and procedures to ease the transition: Depending on your length of service with Unisys and its participating affiliates (collectively the "Company"), you are provided with two or four weeks' advance notice of the effective date of a workforce reduction or layoff. This notice period may be longer if business conditions allow a longer lead time, or if federal, state or local law dictates a longer period of notice. You receive regular pay and some benefits throughout the period between the date notice is given and the effective date of the workforce reduction or layoff. After the effective date of the workforce reduction or layoff, you may receive o payments under the Plan that are supplemental to state unemployment compensation benefits ("SUB Payments"), with the number of weeks of payments depending on your years of service with the Company; and o Company-sponsored benefit continuation under certain group health plans included in the Unisys Flexible Benefits Program. This booklet provides information on the Plan, as well as information on the Company's Notice of Workforce Reduction provisions, that will help you understand your benefits under the Plan. If you are eligible to receive SUB Payments under this Plan, in most cases, you will not be eligible to receive income assistance benefits under the Unisys Income Assistance Plan (the "Income Assistance Plan"). In some limited situations, however, if you begin to receive SUB Payments under the Plan, but later become ineligible to continue receiving SUB Payments, you may then be eligible to receive Income Assistance Plan benefits instead. Note that although there are some differences in the tax treatment of SUB Payments under the Plan and benefits under the Income Assistance Plan, whether you are eligible for the Income Assistance Plan or the Supplemental Unemployment Benefits Plan or both plans for different periods of time, generally, the total number of weeks of benefits you would be entitled to receive under either of the two plans is the same. 1

5 WHO IS ELIGIBLE Effective for involuntary workforce reductions or layoffs, for which notice is provided on or after May 30, 2006, you are eligible for SUB Payments under the Plan if, immediately before you receive notice of the involuntary workforce reduction or layoff, you are in an active employment status as a regular full-time employee of the Company covered by the Unisys Flexible Benefits Program for non-bargaining U.S. employees. You also are eligible for SUB Payments under the Plan if, immediately before you receive notice of an involuntary workforce reduction or layoff, you are in an active employment status as a regular part-time employee of the Company covered by the Unisys Flexible Benefits Program for non-bargaining U.S. employees: your normal work schedule is 20 or more hours per week (but not more than 32 hours per week) immediately before you receive notice of the workforce reduction or layoff; and you have been employed by the Company for more than 60 consecutive calendar days when notice of the workforce reduction or layoff is given. You also are eligible for SUB Payments under the Plan if: You are on an approved family/medical ("FMLA") or personal leave of absence of 90 days or less and are scheduled to return to work on or after May 30, 2006, but no work is available, and immediately prior to your leave of absence you were covered by the Unisys Flexible Benefits Program for non-bargaining U.S. employees; You are unable to work your normal work schedule due to a disability that was certified under the Unisys Short-Term Disability ("STD") Plan for 26 weeks or less, and on or after May 30, 2006, you are medically certified to return to your normal work schedule at the end of your approved short-term disability leave of absence, but no work is available, and immediately prior to your disability you were covered by the Unisys Flexible Benefits Program for nonbargaining U.S. employees; or You are on a short-term military leave of absence and on or after May 30, 2006 you return to work after your release from military service, but no work is available, and immediately prior to your military leave you were covered by the Unisys Flexible Benefits Program for nonbargaining U.S. employees. In each case, you will receive SUB Payments under the Plan only if you are given notice of an involuntary workforce reduction or layoff or there is no work available on your return from a leave of absence as described above and: The Plan Manager or his or her delegate (the "Plan Manager") determines that you are unemployed, available for work and eligible to receive state unemployment compensation benefits; or The Plan Manager would have made the same determination, except that you 2

6 o Do not have sufficient employment to be covered by your state's unemployment compensation benefit system; o Have exhausted your state's unemployment compensation benefits; or o Are serving a waiting week under your state's unemployment compensation benefit system. Total management Solutions, Inc. ("TmS") has been retained to assist the Plan Manager with making these determinations and periodically confirming the determinations for ongoing eligibility to receive SUB Payments. The procedures for you to provide TmS with the information necessary to make these determinations are described on pages of this booklet. Please review the procedures carefully and be sure to comply because your SUB Payments may be discontinued if you do not provide the necessary information to TmS at the required times. 3

7 WHO IS NOT ELIGIBLE You are not eligible for SUB Payments under the Plan if, before the effective date of the workforce reduction or layoff, you: voluntarily resign from the Company; die; are released due to unsatisfactory job performance or are discharged for cause (as defined in applicable Company policies, as in effect from time to time); volunteer for the workforce reduction or layoff; or already have set a date and applied for retirement (for example, under a Company-sponsored pension plan) before the date of notice of the workforce reduction or layoff. However, if you have not set a date for retirement prior to the date of notice, you may elect to retire as of or after the effective date of the workforce reduction or layoff, and you may be eligible to receive Income Assistance Plan benefits, rather than SUB Payments. Similarly, if you volunteer for a workforce reduction or layoff, you may be eligible to receive benefits under the Income Assistance Plan, instead of SUB Payments under the Plan. You also are not eligible for SUB Payments under the Plan if you: are classified as a part-time employee who is not eligible to participate in the Unisys Flexible Benefits Program, a temporary employee, a co-op, or an intern on the date of notice of the workforce reduction or layoff; are an employee of a United States ("U.S.") subsidiary or business group of Unisys that has not adopted the Plan on the date of notice of the workforce reduction or layoff; are a member of a collective bargaining unit (unless the agreement governing your employment provides for participation in the Plan) on the date of notice of the workforce reduction or layoff; are employed on the date of notice of the workforce reduction or layoff in an organization that is subject to an income assistance plan (other than the Income Assistance Plan) that has been approved by the Senior Vice President, Worldwide Human Resources; are on an approved personal leave of absence in excess of 90 days on the date of the notice of a workforce reduction or layoff; do not return on the scheduled return-to-work date from a short-term disability leave of absence, military leave of absence, or approved FMLA or personal leave of absence of 90 days or less; 4

8 are still unable, after 26 weeks, to work your normal work schedule due to a disability in this case, your status is changed to "inactive" at the later of the date you cease working a reduced work schedule or after 26 weeks of absence (Note that you are not eligible for pay during the notice period, benefits under the Income Assistance Plan or SUB Payments, even if you are not certified for Unisys Long-Term Disability ("LTD") Plan benefits at the end of this period.); transfer between business entities of the Company or decline an offer of alternate employment by Unisys or one of its U.S. subsidiaries within the same general geographic area (as defined on page 9) at a base rate of pay of at least 85 percent of your current pay (see definition of pay for purposes of the Plan on page 7) in this case, you are considered to have resigned; accept the terms of a voluntary retirement incentive program or similar program; are a "specified employee" as defined in section 409A of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code") (that is, one of the top 50 employees of the Company ranked by compensation) either on the date of the notice, or on the effective date, of a workforce reduction or layoff; are not an employee of the Company but provide services as a leased employee as described in section 414(n)(2) of the Internal Revenue Code on the date of notice of the workforce reduction or layoff; or are classified as an independent contractor by the Company or are not treated by the Company as an employee for purposes of withholding federal employment taxes on the date of notice of the workforce reduction or layoff, regardless of: o how you are classified by the Internal Revenue Service, other governmental agency, government or court, or o a contrary governmental or judicial determination relating to such employment status or tax withholding. 5

9 SPECIAL SITUATIONS THAT ARE NOT COVERED There are also some special situations in which you will not be eligible for SUB Payments under the Plan. These situations are described below. Sale, Merger, Joint Venture, Divestiture or Loss of a Government Contract Successor companies often offer ongoing employment in the following situations: the loss by the Company of a government contract; the sale or divestiture of a Company facility, function or unit; or the formation of a joint venture involving a Company facility, function or unit. You are not eligible for the Plan in such a situation if both of the following apply: you are offered employment with a successor company, person or entity; and the position is in the same general geographic area (as defined on page 9) and the base rate of pay offered is at least 85 percent of your current pay (see definition of pay on page 7). Temporary Work Interruptions The Plan does not apply to brief, temporary work interruptions caused by fire, flood, weather, etc., and you are not eligible to receive SUB Payments for these work interruptions. Furloughs Short-term shutdowns (usually up to two weeks in any 12-month period) may be authorized by the Company. You receive holiday pay for any Company-designated holidays celebrated during the furlough period. You may apply unused vacation or your employee-designated holiday(s), if any, to continue your pay during the furlough. Otherwise, no SUB Payments or other payments other than any holiday pay, as noted above, are payable during a furlough. Note: There is an exception if a Company furlough occurs during your notice period. In this situation, you are not considered on furlough, but rather you continue to receive notice pay for the furlough period, and unused vacation time is not charged. 6

10 DEFINITIONS Keep the following definitions in mind as you read this booklet. What date of notice means as to a workforce reduction or layoff Unisys provides advance notice prior to the effective date of a workforce reduction or layoff. The date the workforce reduction is announced in writing is considered to be the date of notice. What notice period means as to a workforce reduction or layoff The time between the date of the notice and the effective date of the workforce reduction or layoff is the notice period. The length of the notice period is based on your service (see the definition of service below), as follows: 2 weeks if you have less than four years of service; or 4 weeks if you have four or more years of service. The notice period could be longer, depending on business conditions, or when federal, state or local law requires a longer notice. What effective date of a workforce reduction or layoff means The date at the end of the notice period is the effective date of the workforce reduction or the effective date of the layoff. Relationship of notice, notice period, and effective date as to a workforce reduction or layoff The three terms defined above are key to understanding the Plan. An example is provided below to clarify the relationship of these terms in a hypothetical situation. For example: if a four-week notice of a workforce reduction or layoff is given on August 15, the following dates apply: Date of notice = August 15 Notice period = August 16 through September 12 Effective date of the workforce reduction or layoff = September 12 What pay means For purposes of the Plan, including calculating SUB Payments, pay means your weekly base rate of pay as of the effective date of the workforce reduction or layoff. Overtime, commissions, sales 7

11 incentives, Executive Variable Compensation ("EVC") Plan payments, Lump Sum Recognition Awards, leader premiums, shift differentials, and any other income are not included. If you are paid on a biweekly basis, your biweekly base rate of pay is multiplied by 26 to arrive at an annual base rate of pay. This annual base rate of pay is then divided by 52 to determine your weekly base rate of pay. If you are paid on a monthly basis, your monthly base rate of pay is multiplied by 12 to arrive at an annual base rate of pay. This annual base rate of pay is then divided by 52 to determine your weekly base rate of pay. What service means Whenever reference is made to service in this booklet, it means credited service as defined in the Unisys Pension Plan as of the effective date of the workforce reduction or layoff. Credited service is rounded down to the last whole number for purposes of calculating SUB Payments under the Plan. For example, if Phyllis has 15¾ years of credited service under the Unisys Pension Plan, her service for purposes of notice and SUB Payments under the Plan is 15 years. After December 31, 2006, even though the Unisys Pension Plan will be frozen and credited service will no longer be computed for purposes of earning additional benefits under the Unisys Pension Plan, service for purposes of the Plan will continue to be calculated in the same manner, using the rules in the Unisys Pension Plan. Vesting service, which provides you with a nonforfeitable right to receive benefits under the Unisys Pension Plan, can be different from credited service, and that term has no meaning for purposes of SUB Payments under the Plan. Service may be determined differently if: your service credit is established in accordance with a separate contract, such as an outsourcing opportunity your credited service for the Unisys Pension Plan and service for this Plan follow the service crediting provisions of that contract, if any, or a special amendment to the Unisys Pension Plan; you are a former Convergent employee because you did not have Unisys Pension Plan credited service prior to April 1, 1990, your service is the greater of the following o Convergent employment service from the date of Convergent hire to December 31, 1992; or o Unisys Pension Plan credited service from April 1, 1990 or your hire date, whichever is later, to the effective date of the workforce reduction or layoff; you joined Unisys as an employee of a predecessor organization acquired by Unisys your credited service for the Unisys Pension Plan and service for this Plan follow the service 8

12 crediting provisions of the acquisition agreement or a special amendment to the Unisys Pension Plan; your organization does not participate in the Unisys Pension Plan or any other pension plan sponsored by Unisys in this case, service is determined in the same manner as for a U.S. employee who is participating in the Unisys Pension Plan and has the same employment history as you; or you are a foreign national employee who has transferred to U.S. employment status from a foreign subsidiary of Unisys and your full service with the Company is not recognized as credited service under the Unisys Pension Plan in this case, service is determined in the same manner as that of a U.S. employee who is participating in the Unisys Pension Plan and has the same employment history as you. What same general geographic area means For purposes of the Plan, an offer of alternate employment is considered to be in the same general geographic area unless the distance between the new principal place of work and your residence is at least 50 miles greater than the distance between your former principal place of work and your residence, as determined under a methodology selected by the Plan Manager. 9

13 CALCULATION OF SUB PAYMENTS SUB Payments will be payable after the effective date of the involuntary workforce reduction or layoff if you meet all of the applicable conditions in the Plan. In other words, SUB Payments are payable for the period that begins the day after the last day of your notice period and that ends when you are no longer eligible to receive SUB Payments. The number of weeks of SUB Payments you will receive depend on three factors: your service as defined above; the last day you are scheduled to work; and whether any offsets apply. Generally, as noted in the following table, you are eligible for SUB Payments of one week for each full year of service. There are two exceptions: two weeks of SUB Payments is the minimum; and there are certain offsets, as described below. Also, your SUB Payments will generally end if you are no longer eligible to receive state unemployment compensation benefits or if you do not provide required information to TmS at the applicable times. Basic Formula for SUB Payments Full years of service (see definition beginning on page 8) Weeks of SUB Payments before offsets Less than one year 2 weeks 1 year, but less than 2 years 2 weeks 2 years, but less than 3 years 2 weeks 3 years, but less than 4 years 3 weeks 4 years or more 1 week for each full year of service Offsets If you are not scheduled to work all or part of the notice period, SUB Payments shown in the above table are offset by any portion of the notice period you do not work. This offset also applies if applicable law requires a longer notice period, and you do not work for that entire notice period. In each of these situations, the amount of the offset depends on the number of days or weeks during the notice period that you were paid but did not work. In other words, any SUB Payments to be made following the effective date of the workforce reduction or layoff are determined by reducing the number of weeks of SUB Payments for which 10

14 you are eligible under the table by the number of days or weeks you are not scheduled to work during the notice period. If you do not work all or part of the notice period because of a short-term disability leave of absence, approved FMLA or personal leave of absence or short-term military leave of absence, the offset to SUB Payments described above applies. In other words, the period of leave of absence is treated as if you were not scheduled to work. To illustrate how the offset to SUB Payments is calculated in specific cases, let's look at several different scenarios. (These scenarios assume the person is otherwise eligible for SUB Payments that is, he or she is unemployed, available for work and either eligible to receive state unemployment compensation benefits or meets an exception.) Example 1: Assume Dave's last day worked = workforce reduction effective date; Dave has 5 years of service; and he works the entire notice period. There is no offset to SUB Payments. Notice period = 4 weeks Dave is scheduled to work = 4 weeks Dave is not scheduled to work = 0 weeks Offset to table-derived SUB Payments SUB Payments payable after notice period Total weeks paid since date of notice = None = 5 weeks beyond the effective date of the workforce reduction or layoff = 9 weeks (4 weeks of notice plus 5 weeks of SUB Payments) Example 2: Assume Dave's last day worked = date of notice; Dave has 5 years of service; and he is not scheduled to work at all during the notice period. Dave is paid for the full notice period. However, his SUB Payments are offset by the notice period not worked. Notice period = 4 weeks Dave is scheduled to work = 0 weeks Dave is not scheduled to work = 4 weeks Offset to table-derived SUB Payments = 4 weeks offset from the 5 weeks derived from the table above for notice period not worked 11

15 SUB Payments payable after notice period Total weeks paid since date of notice = 1 week beyond the effective date of the workforce reduction or layoff = 5 weeks (4 weeks of notice plus [5 weeks of SUB Payments minus 4 weeks for pay while not working during notice period]) Example 3: Assume Dave's last day worked = 2 weeks after date of notice; Dave has 5 years of service; and he is scheduled to work part of the notice period. Dave is still paid for the full notice period. As was the case in example 2, however, his SUB Payments are offset by the notice period not worked. Notice period = 4 weeks Dave is scheduled to work = 2 weeks Dave is not scheduled to work = 2 weeks Offset to table-derived SUB Payments SUB Payments payable after notice period Total weeks paid since date of notice = 2 weeks offset from the 5 weeks derived from the table above for notice period not worked = 3 weeks beyond the effective date of the workforce reduction or layoff = 7 weeks (4 weeks of notice plus [5 weeks of SUB Payments minus 2 weeks for pay while not working during notice period]) If Dave had less than 3 years of service (instead of the 5 years assumed in this example), he would have received 2 weeks notice. In that case, since he worked the entire 2-week notice period, there would be no offset to his 2 weeks of SUB Payments. Offsets for Prior Income Assistance Plan Benefits or Prior SUB Payments If you received Income Assistance Plan benefits or SUB Payments due to an earlier workforce reduction or layoff, were reemployed by the Company and are again affected by a workforce reduction or layoff, your current SUB Payments are not offset by such benefits previously received, provided you have been back to work at least one year as of the end of the new notice period. Otherwise, SUB Payments for this workforce reduction are offset by the number of weeks 12

16 of Income Assistance Plan benefits or SUB Payments you received as a result of the previous workforce reduction or layoff. Regardless of how long you have been back to work after a prior workforce reduction or layoff, if you receive notice of a new workforce reduction or layoff, you are entitled to two or four weeks of paid notice, depending on your service. Confirmation of Eligibility Please Make Note of This Important Information In order for you to receive SUB Payments, you will need to periodically confirm with TmS, in a timely manner, that you meet the conditions for eligibility. Specifically, you will need to confirm to TmS in a timely manner, that: you are unemployed, available for work and eligible to receive state unemployment compensation benefits; or you would be eligible to receive state unemployment compensation benefits, except that you o Do not have sufficient employment to be covered by your state's unemployment compensation benefit system; o Have exhausted your state's unemployment compensation benefits; or o Are serving a waiting week under your state's unemployment compensation benefit system. In the personalized package you receive when notice is given, you will be given written directions on how and when to contact TmS to confirm your eligibility to receive SUB Payments and additional information on what actions you may need to take under the Plan and when to confirm your status and eligibility. You will be able to contact TmS 24 hours a day, seven days a week to update your status by: calling a toll-free phone number ; or going online via the TmS website at Generally, you will have a set number of calendar days to contact TmS and provide the required information. If you do not contact TmS within this period, TmS will send you a letter at your last address on file at Unisys notifying you that it has not received the necessary information from you (a "no-response letter"). You will have a set number of calendar days after the date of the noresponse letter to contact TmS and provide the required information. The number of days you will have in each of these two situations will be specified in the personalized package you receive when notice is given. If you do not contact TmS within the required time after the no-response letter, (1) your SUB Payments will stop and will not begin again, and (2) you will not be entitled to benefits under the Income Assistance Plan. 13

17 It is your obligation to provide accurate and complete information to TmS regarding your employment status at the required times. The proper payment of Plan benefits and tax treatment of Plan benefits is dependent on TmS receiving this information from you in a timely manner. Your periodic confirmations are subject to audit by TmS or Unisys. Failure to provide truthful and complete information could result in your loss of SUB Payments retroactive to the last verifiable date of eligibility. Work Elsewhere The provisions for receiving regular pay during the notice period and SUB Payments after the notice period are intended to provide you with a financial bridge to your next period of employment. In exchange, you agree to notify the Plan Manager (by contacting TmS) in a timely manner if you become employed during your notice period or while you are receiving SUB Payments. If you obtain employment elsewhere in a capacity that makes you ineligible to receive state unemployment compensation benefits, you are not entitled to receive further SUB Payments. Also, if you were a part-time employee of the Company before the workforce reduction or layoff and you obtain employment elsewhere in any capacity, including a capacity that may not cut off your eligibility for state unemployment compensation benefits, you are not entitled to further SUB Payments. TmS will assist the Plan Manager with updating records for individuals receiving SUB Payments who obtain new jobs. Therefore, whenever you obtain a new job, either during your notice period or while you are receiving SUB Payments, you must contact TmS immediately, but no later than three calendar days after the start date of your new job, to provide information on your new employment. You must contact TmS at the required time to provide this information even if you are aware or believe that the new employment will not cut off your eligibility for state unemployment compensation benefits. You will be able to provide the information to TmS in a timely manner via its website at or by calling its toll-free telephone number:

18 PAYMENT UNDER THE PLAN Timing of SUB Payments If you are entitled to SUB Payments under the Plan, you receive SUB Payments on your regular pay cycle date (that is, on a biweekly or monthly basis) in effect immediately prior to the workforce reduction or layoff. If your regular pay was paid via direct deposit to your bank, your SUB Payments will also be paid by direct deposit on your normal pay cycle, and your pay statements will be mailed to your home. If your regular pay was not paid via direct deposit, both checks for your SUB Payments and accompanying pay statements will be mailed to your latest home address on the Unisys records. Source of SUB Payments Your SUB Payments are paid from a trust fund that Unisys has established to fund the SUB Payments under the Plan. The Company will make all contributions to the trust necessary to fund the Sub Payments. The contributions the Company makes to the trust to fund SUB Payments are not wages for any purpose. Tax Treatment of SUB Payments The SUB Payments are intended to be exempt from withholding for federal Social Security and Medicare taxes (together, known as FICA taxes), and FICA taxes will not be withheld from SUB Payments. SUB Payments are also designed to be exempt from certain state and local taxes in those states or localities that have exemptions for supplemental unemployment compensation benefits. However, approval of the appropriate state or local authority is needed before these tax exemptions can be applied. For that reason, state and/or local taxes will be withheld from SUB Payments in each area until Unisys has obtained any necessary approval of a state or local authority to stop tax withholding from SUB Payments for a particular area. Note: Because Unisys cannot give tax or legal advice, you are strongly urged to consult your own personal tax or legal advisors to determine how to treat any SUB Payments for tax purposes. Right to SUB Payments Employees and former employees have no rights or interest in benefits under the Plan or under the trust fund associated with the Plan until the conditions for eligibility for SUB Payments are met, as described in the Plan. Also, SUB Payments will be discontinued if the requirements for continued payment, including providing status updates to TmS in a timely manner, are not met, as described in the Plan. 15

19 WHEN SUB PAYMENTS END Your SUB Payments end at the earliest of when you: receive the number of weeks due under the basic formula in the table above less offsets, if applicable; are reemployed by the Company; decline an offer of alternate employment with Unisys, one of its U.S. subsidiaries, or a successor employer within the same general geographic area, at a base rate of pay of at least 85 percent of your base pay at the effective date of the workforce reduction or layoff; become disabled to an extent that you become ineligible to receive state unemployment compensation benefits during the period SUB Payments would otherwise be made; die during the period SUB Payments would otherwise be made; obtain any other employment, if you were a part-time employee of the Company; or obtain other employment that makes you ineligible to receive state unemployment compensation benefits or become ineligible to receive state unemployment compensation benefits for any other reason, other than that you o Do not have sufficient employment to be covered by your state's unemployment compensation benefits system; o Have exhausted your state's unemployment compensation benefits; or o Are serving a waiting week under your state's unemployment compensation benefits system. Your SUB Payments will also stop if you do not contact TmS via its website or its toll-free phone number to update your status with the necessary information at the required time. 16

20 COORDINATION OF SUB PAYMENTS AND INCOME ASSISTANCE PLAN BENEFITS You may receive SUB Payments only if you are unemployed, available for work and eligible to receive state unemployment compensation benefits, or you have: insufficient wage credits to receive state unemployment compensation benefits; exhausted your state unemployment compensation benefits; or failed to satisfy a required waiting period, provided that your state unemployment compensation benefits will begin once the waiting period expires. As a result, there are some situations in which you may initially qualify for SUB Payments, but you cannot continue to receive them because you no longer qualify for state unemployment compensation benefits. For example, if you are laid off and are initially eligible for state unemployment compensation benefits, but you: die; retire; or become disabled to the extent that you are ineligible for state unemployment compensation benefits; during the period SUB Payments would otherwise be made, you will no longer be eligible to receive SUB Payments. In each of these situations, you (or your beneficiary in the case of your death) may be eligible to receive benefits under the Income Assistance Plan instead. The number of weeks of Income Assistance Plan benefits payable will generally be equal to the remaining number of weeks of SUB Payments that would have been paid if you had continued to be eligible for SUB Payments. Also, if you were a full-time employee with the Company before your workforce reduction or layoff and you obtain employment that makes you ineligible for state unemployment compensation benefits but is not full-time employment, you will no longer be eligible to receive SUB Payments. However, you may be eligible to receive Income Assistance Plan benefits instead. The number of weeks of Income Assistance Plan benefits payable will generally be equal to the remaining number of weeks of SUB Payments that would have been paid if you had continued to be eligible for SUB Payments. UNEMPLOYMENT COMPENSATION Your eligibility for state unemployment compensation benefits while you are collecting notice pay or SUB Payments is determined by the provisions of law of the state regulating these payments. Check with your local employment security commission or unemployment compensation benefits office promptly to determine if and when your state allows you to receive unemployment compensation benefits and when you should apply. 17

21 CHANGE IN ADDRESS While you are receiving SUB Payments, it is important for you to notify Unisys promptly of any change in your address to avoid any disruption to the benefit payment process. You should contact the Unisys Benefits Service Center (UBSC) at to report an address change. The UBSC is generally available Monday through Friday (excluding holidays), 9:00 a.m. to 5:00 p.m., Eastern time ("ET") As a side note, if you are a participant in the Unisys Savings Plan, you should also separately advise that plan of your address change by calling Fidelity Investments at The Unisys Savings Plan phone center is generally available Monday through Friday (excluding holidays), 8:30 a.m. to midnight, ET. OTHER BENEFITS Some of your other benefits may continue to be available for a period of time beyond the effective date of the workforce reduction or layoff. Some benefit coverages may end as of your last day worked, and some coverages may be extended if you continue to pay the cost of coverage. Details on how your benefit coverages are affected are provided in the personalized package you receive at the time notice of a workforce reduction or layoff is given. 18

22 ADDITIONAL PLAN INFORMATION The following are contacts for answers to questions about the Plan. On all correspondence, reference your name, Unisys employee ID number and current mailing address. If you are not the employee, include the name, current mailing address and Unisys employee ID number of the Unisys employee. Total management Solutions, Inc. 175 Mansfield Avenue P.O. Box 394 Norton, MA Phone: Fax: Unisys Corporation Unisys Way, M/S E6-123 Blue Bell, PA Phone: OFFICIAL PLAN NAME AND PLAN NUMBER Unisys Supplemental Unemployment Benefits Plan Plan Number 556 PLAN SPONSOR Unisys Corporation Unisys Way Blue Bell, PA EMPLOYER IDENTIFICATION NUMBER OF THE PLAN SPONSOR PLAN YEAR All fiscal records are kept on a calendar-year basis, beginning on January 1 and ending on December 31. TYPE OF PLAN The Plan is an employee welfare benefits plan that is considered a severance plan under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Plan is designed to be a supplemental unemployment benefits plan under section 501(c)(17) of the Internal Revenue Code. 19

23 PLAN ADMINISTRATIVE INFORMATION You can get information about the Plan by calling PLAN ADMINISTRATOR The plan administrator has authority to control and manage the operation and administration of the Plan. All final decisions regarding the administration and interpretation of the Plan are made by the plan administrator or its designee. The plan administrator has the discretionary authority to supply omissions, resolve ambiguities, make factual determinations, and to decide any dispute that may arise regarding the rights of participants, including the sole discretionary authority to grant or deny benefits under this Plan. All such decisions are binding and conclusive on all interested parties and will be subject to review only for abuse of discretion. The Plan Manager is the plan administrator for the Plan. The Plan Manager has delegated the responsibility for making certain determinations relating to Plan benefits and other administrative functions to TmS, as further described in this booklet. The name and address of the plan administrator for purposes of the Plan, including for purposes of processing benefits requests is: Plan Manager Unisys Corporation Unisys Way, M/S E6-123 Blue Bell, PA Phone: PLAN AND SPD This booklet serves as the plan document and summary plan description for the Unisys Supplemental Unemployment Benefits Plan. The adoption of the Plan and the provision of SUB Payments under the Plan by Unisys does not imply the creation of a contract of employment between the Company and any employee or an obligation on the part of the Company to continue the present or future level of SUB Payments. HOW TO FILE A CLAIM OR AN APPEAL FOR SUB PAYMENTS If you disagree with the determination made regarding a request for SUB Payments or continuation of SUB Payments, you may be able to satisfactorily resolve the disagreement by calling Unisys at If you are not successful in arriving at a satisfactory resolution, there is a formal way to file a written claim for benefits under the Plan. 20

24 If You Want to File a Claim for SUB Payments. If you or your beneficiary believe that the Plan has failed to provide you or your beneficiary with any benefit to which you are entitled, you, your beneficiary or your duly authorized representative may promptly file a written claim with the Plan Manager. In the case of a claim for benefits that is wholly or partially denied, the Plan Manager will provide you with notice of the decision on the claim within 90 days after the claim has been received (or within 180 days in the event of special circumstances if the Plan Manager furnishes notice of the extension before the end of the initial 90-day period, including the reason for the extension of time and the date by which a decision is expected). A notice of the denial of a claim, in whole or in part, will set forth: The specific reason or reasons for the denial; Reference to the specific Plan provisions upon which the denial is based; A description of any additional material or information needed for you to perfect your claim and an explanation of why such material or information is necessary; and An explanation of the Plan's appeal procedures (which are set forth below) and the time limits applicable to appeals, including a statement of your right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on appeal. If You Want to File an Appeal for SUB Payments. Within 60 days of the receipt of a notice denying a claim, you, your beneficiary, or your duly authorized representative may request, in writing, a full review of the claim denial by the Unisys Employee Benefits Administration Committee (the "Committee"). In connection with any such review, you, your beneficiary, or your duly authorized representative will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim for benefits, and may submit to the Committee written comments, documents, records or other information relating to your claim for benefits. The Committee's review will take into account all written comments, documents, records or other information submitted relating to your claim for benefits, without regard to whether such information was submitted or considered in the initial benefit claim determination. The Committee will make a decision within 60 days after your request for a review is received (or within 120 days in the event of special circumstances if the Committee furnishes notice of the extension before the end of the initial 60-day period, including the reason for the extension of time and the date by which a decision is expected). The Committee's decision will be final and binding on all parties. A final notice of the denial of the claim on appeal, in whole or in part, will set forth: The specific reason or reasons for the denial; Reference to the specific Plan provisions upon which the denial is based; Your right to, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim for benefits; and 21

25 A statement of your right to bring a civil action under section 502(a) of ERISA following a denial of your appeal. Appeals that are not filed in a timely manner will be barred. As stated above, the Committee's decision on appeal will be final and binding on all parties. If you or your beneficiary decide to challenge the appeal decision of the Committee, a review by a court of law shall be limited to the facts, evidence, and issues presented during the claim and appeal process described above. The claim and appeal process described above must be exhausted before you or your beneficiary can pursue the claim in federal court. Issues not raised by you or your beneficiary during the claim and appeal process described above shall be deemed waived. RIGHT TO RECOVER EXCESS PAYMENTS If payments are made in excess of the benefits due under the Plan, the trust fund for the Plan has the right to recover these excess payments from any person to whom the excess payments are made. If excess payments are made to you, and upon request to do so you fail to return the excess payments to the trustee, further payments under the Plan and/or under the Income Assistance Plan are withheld until the full excess payment amount is recovered. CASE REVIEW The Plan Manager and TmS and their delegates reserve the right to request copies of any documentation considered necessary to apply the provisions of the Plan in determining benefits payable. Further, for the determination of benefits payable under the Plan, the services of a thirdparty administrator, such as TmS, or another service provider may be retained to examine and provide advice regarding any facts, records or documentation relating to your claim for benefits. FUNDING OF SUB PAYMENTS SUB Payments are provided from a trust fund established by Unisys to pay these benefits. The name and address of the trustee are: The Bank of New York One Wall Street 12 th Floor New York, NY The Unisys Pension Investment Review Committee is responsible for all matters relating to the control and management of Plan assets to the extent not assigned to the trustee in the trust agreement or other instrument. The Unisys Pension Investment Review Committee is responsible for the selection of an investment manager and the trustee and the monitoring of the performance of the investment manager and trustee. ADMINISTRATIVE COSTS All reasonable expenses related to the administration and operation of the Plan (including, but not limited to, payment for outside legal, accounting, and other necessary services), to the extent not paid by Unisys, are payable from the trust fund. 22

26 APPOINTMENT/REMOVAL OF PLAN MANAGER AND COMMITTEE MEMBERS The Plan Manager, the Unisys Employee Benefits Administration Committee and the Unisys Pension Investment Review Committee are appointed and may be removed by the Board of Directors of Unisys (the "Board"). The Plan Manager and persons appointed to the Unisys Employee Benefits Adminsitration Committee or the Unisys Pension Investment Review Committee may be, but need not be, employees of the Company. The Plan Manager and any Unisys Employee Benefits Adminsitration Committee or Unisys Pension Investment Review Committee member may resign by giving written notice to the Board, which notice shall be effective 30 days after delivery. AGENT FOR LEGAL PROCESS Unisys hopes that any disagreement you have with the Plan can be resolved without resorting to legal process. If you wish to begin legal proceedings, however, service of legal process may be made on the Plan Manager or on the trustee at the relevant addresses listed above. GOVERNING LAW Except to the extent superseded by ERISA, all questions pertaining to the validity, construction and operation of the Plan are determined in accordance with the laws of the Commonwealth of Pennsylvania without regard to any choice of law provisions, and all questions pertaining to the validity, construction and operation of the trust are determined in accordance with the laws of the State of New York without regard to any choice of law provisions. YOUR RIGHTS UNDER ERISA As a participant in this Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants shall be entitled to: Receive Information About Your Plan and Benefits examine, without charge, at the plan administrator's office and at other specified locations, such as worksites, during normal working hours, all documents governing the Plan, including trust agreements, and a copy of the latest annual report (IRS Form 5500) filed with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration; obtain, upon written request to the plan administrator, copies of all documents governing the operation of the plan and copies of the latest annual report (IRS Form 5500) and updated summary plan description. The administrator may make a reasonable charge for the copies; and receive a summary of the plan's annual financial report. The plan administrator is required by law to furnish each participant with a copy of this summary annual report. 23

27 Prudent Actions by Plan Fiduciaries In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of an employee benefit plan. The people who operate the Plan, called "fiduciaries" of the Plan, have a duty to do so prudently, in your interest and that of all participants and beneficiaries. No one, including Unisys, may terminate your employment or otherwise discriminate against you in any way to prevent you from obtaining a Plan benefit to which you are entitled or exercising your rights under ERISA. Enforce Your Rights If your claim for a Plan benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. Under ERISA, there are steps you can take to enforce the preceding rights. For instance, if you request a copy of plan documents or the latest annual report from the Plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the plan administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless they were not sent or received because of reasons beyond the control of the administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. If it should happen that Plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. Assistance with Your Questions If you have questions about your Plan, you should contact the plan administrator or his delegate. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the plan administrator, you should contact the nearest 24