DESCRIPTION OF CHANGES TO THE UNISYS INCOME ASSISTANCE PLAN
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1 DESCRIPTION OF CHANGES TO THE UNISYS INCOME ASSISTANCE PLAN Unisys Corporation ("Unisys") and its participating affiliates (collectively the "Company") support several different programs to ease the transition for employees whose employment is terminated as a result of business conditions requiring a workforce reduction or layoff. The programs include the notice of workforce reduction provisions, the Unisys Income Assistance Plan (the "Plan") and, effective for involuntary workforce reductions or layoffs for which notice is provided on or after May 30, 2006, the Unisys Supplemental Unemployment Benefits Plan (the "Supplemental Unemployment Benefits Plan"). CHANGE IN ELIGIBILITY RULES FOR THE PLAN General Rule Not Eligible for Plan if Eligible for SUB Payments The Supplemental Unemployment Benefits Plan provides benefits, which are referred to as "SUB Payments," in many of the same circumstances in which the Plan previously provided income assistance benefits. As a result, the eligibility rules for receiving income assistance benefits under the Plan have been changed so as not to duplicate the benefits provided by the Supplemental Unemployment Benefits Plan. If your employment with the Company is terminated in connection with an involuntary workforce reduction or layoff for which notice is provided on or after May 30, 2006, and you are eligible to receive SUB Payments under the Supplemental Unemployment Benefits Plan, generally you are not eligible to receive income assistance benefits under the Plan. In some limited situations, however, if you begin to receive SUB Payments under the Supplemental Unemployment Benefits Plan and then become ineligible to continue receiving SUB Payments, you may be eligible to receive income assistance benefits under the Plan, as described below. Although there are some differences in the tax treatment of SUB Payments and income assistance benefits under the 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. Eligibility for SUB Payments Because you will not be eligible for income assistance benefits under the Plan if you are eligible for SUB Payments, it is helpful to understand the eligibility rules for SUB Payments. 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 Supplemental Unemployment Benefits Plan if, immediately before you receive notice of the 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; or
2 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, and o 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 involuntary workforce reduction or layoff; and o you have been employed by the Company for more than 60 consecutive calendar days when notice of the involuntary workforce reduction or layoff is given. You also are eligible for SUB Payments 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 Supplemental Unemployment Benefits 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 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. 2
3 Eligibility for Income Assistance Benefits under the Plan You are eligible for income assistance benefits under the Plan, and are not eligible for SUB Payments, if: you volunteer for a workforce reduction or layoff; you elect to retire as of the effective date of the workforce reduction or layoff, provided that have not already set a date for retirement (for example, under a Company-sponsored pension plan) before the date of notice of the workforce reduction or layoff; or you 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. Coordination of SUB Payments and Income Assistance Benefits If you are initially eligible for SUB Payments, 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 for SUB Payments. At that time, you (or your beneficiary in the case of your death) will be eligible to receive income assistance benefits under the Plan if you meet the other requirements for eligibility for the Plan. The maximum number of weeks of income assistance benefits payable under the Plan 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, assuming you meet the other requirements for eligibility for the Plan. Also, if you were a regular 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 will be eligible to receive income assistance benefits under the Plan instead if you otherwise meet the eligibility rules for the Plan. The maximum number of weeks of income assistance benefits payable under the Plan 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, assuming you meet the other requirements for eligibility for the Plan. In any of these circumstances, if you cease to be eligible for Plan benefits, your benefits will stop. For example, if you take a part-time job that makes you ineligible for state unemployment compensation benefits and you later take a full-time job, your income assistance benefits under the Plan will stop. 3
4 Note: As described in detail in the Supplemental Unemployment Benefits Plan, participants must periodically confirm their status with Total management Solutions, Inc. ("TmS") to be eligible to continue to receive SUB Payments. If you begin to receive SUB Payments and you fail to confirm your eligibility status with TmS at the required times, your SUB Payments will stop; in addition, you will not be eligible to receive income assistance benefits under the Plan. You are not required to confirm your eligibility status with TmS while you are receiving income assistance benefits under the Plan. You are, however, required to report to Unisys any new employment you obtain while you are receiving Plan benefits. A "Notification of Other Employment" form for reporting a new job is contained in the Workforce Reduction Information Employee Booklet that you will receive when notice is given. CHANGES IN OTHER RULES FOR THE PLAN Definitions Two definitions under the Plan have been updated. What service means As described in the Plan, whenever reference is made to service in the Plan, it means credited service as defined in the Unisys Pension Plan as of the effective date of the workforce reduction or layoff. After December 31, 2006, even though the Unisys Pension Plan will be frozen and credited service will no longer be computed under the Unisys Pension Plan 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. What same general geographic area means The Plan provides that if the Company, a related business entity or a successor offers you a job within the same general geographic area and the job meets certain other conditions, you are not eligible to receive or to continue to receive income assistance benefits under the Plan. 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. Offsets for Prior Income Assistance Plan Benefits or Prior SUB Payments If you received income assistance benefits under the Plan 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 income assistance benefits under the Plan 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, income assistance benefits under the Plan for this workforce reduction are offset by the number of weeks of income assistance benefits under the Plan or SUB Payments you received as a result of the previous workforce reduction or layoff. 4
5 Right To Recover Excess Payments As stated in the Plan, if payments are made in excess of the benefits due under the Plan, Unisys has the right to recover these excess payments from any person to whom the excess payments are made. If the excess payments include any excess SUB Payments, the excess SUB Payments must be returned to the trustee for the Supplemental Unemployment Benefits Plan. If excess payments are made to you, and upon request to do so you fail to return the excess payments to the trustee or Unisys, as applicable, further payments under the Plan and/or under the Supplemental Unemployment Benefits Plan are withheld until the full excess payment amount is recovered by the trustee and/or Unisys, as applicable. ADDITIONAL INFORMATION Except as described above, all other rules for the Plan (as amended), including other eligibility rules, rules for determining the amount of income assistance benefits, when those benefits are payable and when they end, remain the same. This is an amendment to the Plan, as well as a Summary of Material Modifications ("SMM") to the Plan that revises the Summary Plan Description for the Plan and any prior SMMs. Except as described in this amendment and SMM, the Plan, as amended, the Summary Plan Description and the prior SMMs remain in effect. You can get information about the Plan by calling CHANGE IN ADDRESS While you are receiving benefits under the Plan, 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. Issued: May 30,
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