2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 108 PSEG S&P GLOBAL, INC. TERADATA UNISYS CORPORATION Base PSEG 2016 CD&AExecutiveSummary 42 PSEG2018ProxyStatement Executive Compensation Practices The table below highlights our 2017 executive compensation practices.The left column outlines the practiceswe believe are conducive to encouraging sound performance by our senior executives and good governance.The right column describes those practices thatwe have chosen not to implement becausewe do not believe they further our stockholders’ long-term interests. WHAT WE DO WHAT WE DON’T DO 9 Pay forPerformance. We closelyalign payand performance,as a significantportion of target totaldirect compensation ispayat- risk.TheO&CC validates thisalignmentannuallyandensures performance-based compensation comprisesa significantportion ofexecutive compensation. × NoExcessivePerks .We do notprovideperquisitesexcept in caseswhere there isa compellingbusiness reason nordowe provide gross-upsexcept in limited cases for relocation. 9 StretchPerformanceGoals. We establish clearand measureable goalsand targets in thebeginningof the performance period andhold ourexecutivesaccountable for achieving specified levels toearn a payoutunderour incentive plans.Performance goalsare linked to operating priorities designed to create long-term shareholdervalue.PSUs emphasize relativeperformances to linkabove-targetpayouts to whenweoutperformpeers. × NoGuaranteedAnnualSalary Increases/NoTarget Adjustments andLimitedGuaranteedBonuses. For senior executives,annual salary increasesare basedonevaluationsof individualperformance and the competitivemarket.We do not adjustannualor long-term incentive plan targets. In addition,we donotprovideguaranteeson bonuspayouts,onlyonanas- needed basis for recruitmentpurposes. 9 CompetitivePay. Weposition targetpay competitivelyaround marketmedianand require strongperformance to deliverpay above these levels. × NoAboveMarketPay. We do notpayabove-market target total direct compensation outsideofourbenchmarked competitive range. 9 DoubleTrigger in theEventofaChange-in-Control. We have double trigger vestingonequityand severance for change-in- control;executiveswillnot receive cash severance norwillequity vest in the eventofa change-in-controlunlessaccompaniedby qualifying terminationofemployment. × NoExciseTaxGrossUps. Wedonotprovidegross-ups for excise taxesupona change-in-control.Taxesare ourNEOs responsibility. 9 MaximumPayoutCaps for IncentivePlans. Annual cash incentiveandPSUpayoutsare capped. × No IncentingofShort-TermResults to theDetrimentofLong- TermGoalsandResults. NEOspaymix isheavilyweighted towards long-term incentives. 9 ClawbackPractice. Broad policy thatallows for recoupmentof all incentive compensation forany financial restatement,or incentivepay recalculation due tomisconductormaterial violationsofStandardsofConduct. × NoExcessiveRisks. Our compensationpracticesare appropriately structured andavoid incentingemployees to engage in excessive risk taking. 9 UniformRetirementFormulas. Ourqualified plan retirement formulasare the same for the executivesas forallothernon- unionemployees covered under the samequalifiedplans. × NoAdditionalServiceCredit. Weno longerofferanyadditional retirement service credit forpension calculation toexecutivesand havenot in several years. 9 RobustStockOwnershipRequirements. We require executives to holdmeaningfulamountsofstockand require them to hold 100%ofnet sharesuntilownership requirement ismet. × NoHedgingorPledging. We do notallow hedging orpledging ofour stockbyexecutives. 9 IndependentCompensationConsultant. TheO&CCengages an independent compensation consultant to review the executive compensation programsand practices. × NoCompensationConsultantConflicts. The consultantdoes nootherwork forusandhasno conflicts of interestandworks directly for theBoard. 9 StockholderEngagement. We solicit feedback from investorson our compensationprogram. × NoUnearnedDividendPaid. We do notpayaccrueddividend equivalentsonperformance shareunitsorunvested restricted stockunitsuntil the underlyingawardsaredistributed. 9 SeveranceProvisions. Provide reasonable,market-competitive post-employmentand change-in-controlprovisions. × NoRepricingorExchangeofUnderwaterStockOptions. We donot reprice orbuyoutoptions,withoutstockholderapproval. COMPENSATIONDISCUSSIONANDANALYSIS(continued) OverviewofKeyBestPractices:WhatWeDoandDon’tDo TheCompensationCommitteeregularlyreviewsbestpracticesinexecutivecompensationandgovernanceand hasrevisedourpoliciesandpracticesovertime.Todaythesepracticesinclude: AlignmentwithShareholders(WhatWeDo) COMPENSATION PRACTICE COMPANYPOLICY MORE DETAIL ✔ Pay-for- Performance& Shareholder Alignment Approximately89%ofCEOand77%ofotherNEOstotalcompensationopportunity isvariable,incentive-basedpaycontingentonmeetingchallenging,top-lineand bottom-lineshort-termandlong-termperformanceobjectives.Wealsoincludecaps onindividualpayoutsunderourshort-andlong-termincentiveplans. Long-termincentivecompensationopportunitiesforNEOsareequity-basedand tiedtobusinessplanperformancemetrics. Pgs.41 &42 ✔ RobustStock Ownership Guidelines WehavemeaningfulstockownershipguidelinesforourDirectorsandexecutiveoffi- cers.Theexecutiveguidelinesalsorequire100%retentionuntiltheguidelinesare metandasix-monthholdingpolicyforstockoptionsafterexercise. Pgs.65 &87 ✔ Annual Shareholder Say-on-Pay Wevalueourshareholders’inputandseekanannualnon-bindingadvisoryvote fromshareholdersonourexecutivecompensationprogramforourNEOs. Pg.38 ✔ Shareholder Outreachand Input Ouroutreachprogramgivesinstitutionalshareholderstheopportunitytoprovide ongoinginputonourprogramsandpolicies.Wecarefullyreviewsay-on-payresults andallshareholderfeedbackwhenstructuringexecutivecompensation. Pgs.38 &43 ✔ Clawback Policy Ourclawbackpolicygivesustherighttorecoupandcancelcashincentiveandlong- termincentiveawardpaymentsreceivedbycoveredactiveandformeremployees undervariouscircumstances,includingmisconductandfinancialrestatements. Pg.66 ✔ Anti-Hedgingand Anti-Pledging Policy Ouranti-hedgingandanti-pledgingpolicyprohibitsDirectors,officersandotherdes- ignatedemployeesfromengaginginhedgingandpledgingtransactionsrelatedto Companystock. Pg.67 SoundGovernancePractices(WhatWeDon’tDo) COMPENSATION PRACTICE COMPANYPOLICY MORE DETAIL ✘ NoSingleTrigger Change-in-Control OurLong-TermIncentivePlanawardsaresubjectto“double-trigger”treatmentin thecaseofachange-in-control(i.e.,unvestedawardsareacceleratedonlyifthereis bothachange-in-controlandaninvoluntaryterminationofemployment). Pg.64 ✘ NoExcessive Perquisites WedonotprovideexcessiveexecutiveperquisitestoourNEOsandwebelieveour limitedperquisitesarereasonableandcompetitive. Pgs.62 &63 ✘ NoTax Gross-Ups Wedonotprovidetaxgross-upsinconnectionwithanyperquisitesorintheevent ofany“goldenparachutepayment”inconnectionwithachange-in-control. Pgs.63 &65 ✘ NoDividendson UnearnedAwards WedonotpaydividendsonunearnedPSUsorRSUs. Pg.42 ✘ NoEmployment Contracts NoneofourNEOshasaformalemploymentcontract. Pg.67 ✘ Pension BenefitsFrozen Wefrozebothourdefinedbenefitpensionplanstonewparticipantsandfutureac- cruals,effectiveasofApril1,2012. Pg.63 40 2018ProxyStatement Good Governance Practices The Compensation Committee continually evaluates the Company’s compensation policies and practices to ensure that they are consistent with good governance principles. The Committee receives regular updates on governance matters from its independent consultant. Below are highlights of our governance practices: What We Do ✓ Provide the majority of compensation in performance-based pay ✓ Measure performance over a three-year period for performance-based LTI in support of our current turnaround strategy ✓ Grant LTI awards which vest ratably over 3 years to promote retention ✓ Set a funding gate , which requires a pre-defined level of profitability prior to any EVC payout ✓ No payouts below threshold and cap payouts at 2x target on the long-term and short-term incentive plans ✓ Maintain stock ownership guidelines for both officers and Directors; ✓ Have change in control employment agreements with double-trigger severance provisions for Named Officers ✓ Conduct annual risk assessment of our compensation programs and policies ✓ Adhere to an insider trading policy ✓ Maintain a clawback policy , which applies to all executive officers of the Company and covers cash and equity awards ✓ Receive advice from a compensation consulting firm that satisfies stringent independence criteria and is engaged by the Compensation Committee ✓ Limit discretionary bonuses; incentives are linked to performance relative to pre-established objectives What We Don’t Do × No excise tax gross-ups on a change in control for Named Officers × No excessive severance in a change in control or termination × No excessive perquisites × No hedging transactions or pledging Unisys securities × No automatic vesting of equity upon a change in control × No liberal share counting × No stock option repricing, reloads, or cash buyouts × No discounted stock options or SARs × No liberal change in control definition 32 Total of 02 pages in section SECTION 2: COMPENSATION PHILOSOPHY AND GOVERNANCE Ourexecutivecompensationprogramisdesignedtoattract,retainandalignourbusinessleaderswithourgoalsto drivefinancialandstrategicgrowth,whilealsodeliveringlong-termstockholdervalue.Likeourbusiness,these programsmustbedynamicandadjustedregularlytoalignwithourintenselycompetitiveandchangingbusiness, particularlyastheCompanyisundergoingastrategictransformation.Underlyingthisevolvingstructure,allofour compensationprogramspromotesoundgovernanceandbalance,drivingresultswithmitigatingrisks.Tothatend, theCommitteehasimplementedgovernancebestpracticestoreducecompensationrisksandtoaligncompensation withindustrynormsandstockholderinterests.SeeSection6ofthisCD&Aformoredetailsregardingsomeofthese keypoliciesandpractices. What We Do ESTABLISH COMPETITIVE COMPENSATION LEVELS forournamedexecutive officerswithinthe technologyindustry MAINTAINA “DOUBLETRIGGER” forchangeincontrol severancebenefitsand equityawardvesting MINIMIZE COMPENSATION RISKS byperiodicallyreviewing ourcompensation programtoconfirmthat ourcompensation policiesandpracticesare notencouraging excessiveor inappropriaterisk-taking IMPOSESTOCK OWNERSHIP GUIDELINES inlinewithstockholder interestsrequiringrobust ownershiplevelsfor executiveofficers MAINTAINA CLAWBACKAND HARMFULACTIVITY POLICIES sothatwecanrecover cashorequityincentive compensationbasedon financialresultsthatwere laterrestatedandcan canceloutstanding equityawardsand recoverrealizedgainsif executivesare terminatedforcauseor engageincertainother harmfulactivity RETAINAN INDEPENDENT COMPENSATION CONSULTANT toprovideexpert objective,third-party adviceregarding executivepayprograms andcompetitivemarket practices ANNUALADVISORY VOTEONEXECUTIVE COMPENSATION togiveinvestorsthe opportunitytoexpress theirviewsonpayona regularbasis REVIEWOVERHANG LEVELSANDBURN RATES toconfirmthattheyare consistentwithindustry norms What We Don’t Do NoExciseTax Gross-Ups NoHedging orPledgingof CompanyStock No“Repricing”of StockOptionsWithout StockholderApproval 34 2018PROXYSTATEMENT