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EXHIBIT 10.10
UPS
DEFERRED COMPENSATION PLAN
The primary purpose of this Plan is to allow an Eligible
Manager to elect to defer the payment of a portion of his or her Base Monthly
Salary and Half-Month Bonus that is otherwise payable to him or her and to pay
the amounts deferred as adjusted for phantom investment performance results upon
the occurrence of a distribution event.
ARTICLE I - DEFINITIONS
Section 1.1. Account -- means the bookkeeping account maintained by or
at the direction of the Committee to show as of any date the benefit of each
Eligible Manager.
Section 1.2. Base Monthly Salary -- means an Eligible Manager's base
monthly salary.
Section 1.3. Beneficiary -- means the person or persons designated as
such in accordance with Section 5.4.
Section 1.4. Committee -- means a committee consisting of not less than
three (3) members, who shall be appointed by the Board of Directors of UPS to
manage and administer this Plan.
Section 1.5. Disability -- means "disability" as defined in the UPS
Retirement Plan.
Section 1.6. Employer Company -- means an Employer Company for purposes
of the UPS Savings Plan, as in effect from time to time.
Section 1.7. ERISA -- means the Employee Retirement Income Security Act
of
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1974, as amended.
Section 1.8. Eligible Manager -- means an employee of an Employer
Company who (a) is in a job classification of Region Department Manager or
above, (b) is eligible to participate in the UPS Savings Plan, as in effect from
time to time, and (c) is not domiciled in Puerto Rico.
Section 1.9. Half-Month Bonus -- means an Eligible Manager's half-month
bonus.
Section 1.10. 1934 Act -- means the Securities Exchange Act of 1934, as
amended.
Section 1.11. Plan -- means this UPS Deferred Compensation Plan.
Section 1.12. UPS -- means United Parcel Service of America, Inc. and
any successor to United Parcel Service of America, Inc.
ARTICLE II - PARTICIPATION
Section 2.1. April 1, 1999. Each person who qualifies as an Eligible
Manager on April 1, 1999 shall be eligible to participate in this Plan on April
1, 1999.
Section 2.2. Other. Each person who qualifies as an Eligible Manager
after April 1, 1999 shall be eligible to participate in this Plan sixty (60)
days after the date he or she first qualifies as an Eligible Manager.
ARTICLE III - DEFERRAL ELECTIONS
Section 3.1. Start-Up Deferral Elections.
(a) April 1, 1999 Elections. An Eligible Manager who will be eligible
to participate in this Plan on April 1, 1999 shall have the right from March 1,
1999 to March 31, 1999 to elect on the form provided for this purpose to defer
up to seventeen percent (17%) of his
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or her Base Monthly Salary less the amount of his or her pre-tax deferrals under
the UPS Savings Plan; and up to one hundred percent (100%) of his or her
Half-Month Bonus that is otherwise payable on or after April 1, 1999, and any
such election shall be irrevocable for the remainder of 1999.
(b) Other Elections. An Eligible Manager who is eligible to participate
in this Plan under Section 2.2 shall have the right prior to the end of the
sixty (60) day period starting on the date he or she becomes an Eligible Manager
to elect on the form provided for this purpose to defer up to seventeen percent
(17%) of his or her Base Monthly Salary less the amount of his or her pre-tax
deferrals under the UPS Savings Plan; and up to one hundred percent (100%) of
his or her Half-Month Bonus that is otherwise payable after the date he or she
first becomes eligible to participate in the Plan as described in Section 2.2,
and any such election shall be irrevocable for the remainder of the calendar
year in which it is made.
Section 3.2. Annual Deferral Elections. An Eligible Manager who is
eligible to participate in this Plan shall have the right before the beginning
of any calendar year to elect during the enrollment period established by the
Committee on the form provided for this purpose to defer up to seventeen percent
(17%) of his or her Base Monthly Salary less the amount of his or her pre-tax
deferrals under the UPS Savings Plan; and up to one hundred percent (100%) of
his or her Half-Month Bonus that is otherwise payable during such calendar year.
Any such election which is not revoked before January 1 of such calendar year
shall become irrevocable on January 1 of such calendar year and shall remain
irrevocable through December 31 of such calendar year.
ARTICLE IV - ACCOUNT ADJUSTMENTS
Section 4.1. General. An Eligible Manager's benefit under this Plan
shall be
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based entirely on the dollar value credited to his or her Account at any time,
which will depend on the amount deferred under Article III and the phantom
investment adjustments made in accordance with this Article IV.
Section 4.2. Deferrals. The Base Monthly Salary and Half-Month Bonus
deferred by an Eligible Manager shall be credited to his or to her Account as
soon as practicable after the date that such Base Monthly Salary and Half-Month
Bonus otherwise would have been payable to the Eligible Manager if no election
had been made under Article III.
Section 4.3. Phantom Investments. The Committee from time to time shall
select one or more investment funds, including a hypothetical fund based on the
value of the common stock of UPS, that will serve as hypothetical investment
options for the deferrals credited to an Account ("phantom investment funds").
The Committee may establish limits on the portion of an Account that may be
hypothetically invested in any phantom investment fund or in any combination of
phantom investment funds.
Section 4.4. Phantom Investment Election. Each Eligible Manager shall
elect pursuant to procedures established by the Committee to treat the deferrals
credited to his or her Account as if they were invested in one or more phantom
investment funds (a "phantom investment election"). An Eligible Manager may
change his or her phantom investment election
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at any time. Any phantom investment election shall be effective only if made in
accordance with the Committee's procedures.
Section 4.5. Phantom Investment Adjustments. The Committee shall cause
the Eligible Manager's Account to be adjusted for any earnings and losses as if
it were invested in accordance with the Eligible Manager's phantom investment
election in accordance with procedures established by the Committee. Such
adjustments shall be made until his or her Account is distributed in full under
Article V.
ARTICLE V - DISTRIBUTIONS
Section 5.1. General. The balance credited to an Eligible Manager's
Account shall (subject to Section 5.5 and Section 5.6) first become
distributable upon his or her death, Disability or termination of employment
with UPS and all of its affiliates, whichever comes first ("distribution
event"). The distribution shall be made (or shall begin) to the Eligible Manager
or in the event of the Eligible Manager's death, to the Eligible Manager's
Beneficiary in the form elected by the Eligible Manager as soon as practicable
after a distribution event. All distributions under this Plan shall be made in
cash.
Section 5.2. Distribution Forms. Distribution shall be made in the
following form as elected by the Eligible Manager:
(a) a lump sum,
(b) 60 monthly installments or
(c) 120 monthly installments.
Notwithstanding the foregoing, monthly installments are only available if the
value of the Eligible Manager's Account when distributions commence is at least
$20,000. The amount of any monthly installment distributable under this Plan
shall be computed by multiplying the
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Eligible Manager's Account by a fraction, the numerator of which shall be one
and the denominator of which shall be the number of installments remaining after
such installment has been paid plus one.
Section 5.3. Elections. An Eligible Manager shall elect at the same
time he or she makes an election under Article III that his or her Account be
distributed in one of the distribution forms described in Section 5.2 ("Initial
Distribution Form Election"). An Eligible Manager may revise his or her Initial
Distribution Form Election at any time; provided, however, that any such
revision shall be effective only if it is made at least one full year before the
Eligible Manager's Account first becomes distributable. If an Eligible Manager
fails to make an Initial Distribution Election, the distribution shall be made
in 120 monthly installments or, if the value of the Eligible Manager's Account
when distributions commence is less than $20,000, the distribution shall be made
in a lump sum. If a revised election is ineffective for any reason, for example,
because it was made less than one year before the distribution event, the
Eligible Manager's most recent distribution form election that has been in
effect for at least one year shall govern the distribution.
Section 5.4. Beneficiary.
(a) Designation. An Eligible Manager shall designate (on a form
provided for this purpose) a person, or more than one person, as his or her
Beneficiary to receive the balance credited to his or her Account in the event
of his or her death. An Eligible Manager may change his or her Beneficiary
designation at any time. If no Beneficiary designation is in effect on the date
an Eligible Manager dies or if no designated Beneficiary survives the Eligible
Manager, the Eligible Manager's estate automatically shall be treated as his or
her Beneficiary under this Plan.
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(b) Distribution Form. The Eligible Manager's Account shall be
distributed in accordance with the distribution election in effect for the
Eligible Manager on the date of his or her death.
Section 5.5. Early Withdrawal Right and Penalty. An Eligible Manager
may elect to receive the balance credited to his or her Account in a lump sum at
any time; provided, however, that the Eligible Manager shall forfeit the right
to receive an amount equal to ten percent (10%) of the balance credited to his
or her Account as of such date. The lump sum distribution of the balance
credited to an Eligible Manager's Account shall be made as soon as practicable
after an election is made under this Section 5.5.
Section 5.6. Hardship Withdrawals. An Eligible Manager shall have the
right to request that the Committee distribute all, or a part of, his or her
Account to him or to her in a lump sum in the event that he or she experiences
severe financial hardship resulting from a sudden and unexpected illness or
accident of the Eligible Manager or of a dependent (as defined in Section 152(a)
of the Internal Revenue Code of 1986, as amended) of the Eligible Manager, loss
of the Eligible Manager's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Eligible Manager (an "unforeseeable emergency"). The
Committee shall have the sole discretion to determine whether to grant an
Eligible Manager's withdrawal request under this Section 5.6, the amount to
distribute to the Eligible Manager, and the date as of which any such
distribution shall be made to the Eligible Manager; provided, however, that no
distribution shall be made to Eligible Manager under this Section 5.6 to the
extent that such hardship is or may be relieved (a) through reimbursement or
compensation by insurance or otherwise, (b) by liquidation of the Eligible
Manager's assets, to the extent the liquidation of the Eligible Manager's assets
would
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not itself cause severe financial hardship, or (c) by cessation of deferral
elections under this Plan. The amount of any distributions from an Eligible
Manager's Account pursuant to this Section 5.6 shall be limited to the amount
necessary to meet the unforeseeable emergency.
ARTICLE VI - NO FUNDING OBLIGATION
The obligation of UPS to make any distributions under this Plan shall
be unfunded and unsecured; all distributions to, or on behalf of, an Eligible
Manager under this Plan shall be made from the general assets of UPS, and any
claim by an Eligible Manager or Beneficiary against UPS for any distribution
under this Plan shall be treated the same as a claim of any general and
unsecured creditor of UPS. Notwithstanding the foregoing, UPS may, in its
discretion, establish an irrevocable grantor trust for the purpose of funding
all or part of its obligations under this Plan; provided, however, that the
terms of such trust require that the assets thereof remain subject to the claims
of UPS's judgment creditors and are non-assignable and non-alienable by any
Eligible Manager or Beneficiary prior to distribution thereof.
ARTICLE VII - MISCELLANEOUS
Section 7.1. Making and Revoking Elections and Designations. Any
election or designation or revised election or designation under this Plan shall
be effective only when the properly completed election or designation form is
received by the Committee or its delegate before the Eligible Manager's death,
subject to the rules set forth in Articles III, IV and V.
Section 7.2. Statements. UPS or its agent shall provide periodic
statements to the Eligible Manager to show his or her Account balance.
Section 7.3. Claims Procedure. Any claim for a benefit under this Plan
shall be filed and resolved in accordance with the claims procedure provided
under the UPS Savings Plan which is hereby incorporated in this Plan by
reference, except that the Committee of this Plan
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shall be the entity with whom a claim for review should be filed under this
Plan, and the Committee has absolute discretion to resolve any claims under this
Plan.
Section 7.4. No Liability. No Eligible Manager and no Beneficiary of an
Eligible Manager shall have the right to look to, or have any claim whatsoever
against, any officers, director, employee or agent of UPS or an Employer Company
in his or her individual capacity for the distribution of any Account.
Section 7.5. Nonalienation of Benefits. No benefit or payment under
this Plan shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, levy or charge, and any attempt so to
anticipate, alienate, sell, transfer, assign, pledge, encumber, levy upon or
charge the same shall be void. Notwithstanding this statement, if the Eligible
Manager is indebted to UPS at any time when payments are required to be made
under the provisions of this Plan, UPS shall have the right to reduce the amount
of payments remaining to be made to the Eligible Manager or his or her
Beneficiary under the Plan to the extent of such indebtedness. An election by
UPS not to reduce such payment shall not constitute a waiver of its claim for
such indebtedness.
Section 7.6. Plan Administration. The Committee shall be the
administrator of this Plan, and the Committee has the exclusive responsibility
and complete discretionary authority to control the operation, management and
administration of this Plan, with all powers necessary to enable it properly to
carry out those responsibilities, including (but not limited to) the power to
construe this Plan, to determine eligibility for benefits, to settle disputed
claims and to resolve all administrative, interpretive, operational, equitable
and other questions that arise under this Plan. The decisions of the Committee
on all matters within the scope of its authority shall be final and binding. To
the extent a discretionary power or responsibility under this Plan
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is expressly assigned to a person by the Committee, that person will have
complete discretionary authority to carry out that power or responsibility and
that person's decisions on all matters within the scope of that person's
authority will be final and binding.
Section 7.7. Construction. This Plan shall be construed in accordance
with the laws of the State of Georgia. Headings and subheadings have been added
only for convenience of reference and shall have no substantive effect
whatsoever. All references to the singular shall include the plural and all
references to the plural shall include the singular.
Section 7.8. No Contract of Employment. Nothing Contained in this Plan
shall be construed as a contract of employment between the Employer Company and
the Eligible Manager, as a right of any Eligible Manager to be continued in the
employment of the Employer Company, or as a limitation of the right of the
Employer Company to discharge the Eligible Manager with or without cause.
Section 7.9. ERISA. UPS intends that this Plan come within the various
exceptions and exemptions to ERISA for a plan maintained for a "select group of
management or highly compensated employees" as described in Sections 201(2),
301(a)(3), and 401(a)(1) of ERISA. Any ambiguities in this Plan shall be
construed to effect the intent as described in this Section 7.9.
Section 7.10. 1934 Act. With respect to persons subject to Section 16
of the 1934 Act, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the 1934 Act and any
regulations promulgated thereunder. To the extent any transaction could, in the
absolute discretion of the Committee, cause a participant to be subject to
liability under Section 16 of the Act, the Committee may refuse to permit such
transaction. In addition, the Committee may establish procedures to ensure that
transactions
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under this Plan will be executed in accordance with the requirements of Section
16(b) of the 1934 Act and any regulations promulgated thereunder.
Section 7.11. Amendment and Termination. UPS shall have the right to
amend this Plan from time to time and to terminate this Plan at any time;
provided, however, the balance credited to each Account immediately after any
such amendment or termination shall be no less than the balance credited to such
Account immediately before such amendment or termination and no amendment or
termination shall adversely affect an Eligible Manager's right to the
distribution of his or her Account or his or her Beneficiary's right to the
distribution of such Account.
IN WITNESS WHEREOF, United Parcel Service of America, Inc., based upon
action by its Board of Directors, has caused this Plan Document to be executed
this ___ day of March, 1999.
ATTEST: UNITED PARCEL SERVICE OF AMERICA, INC.
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Joseph R. Moderow James P. Kelly
Secretary Chairman
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