EXHIBIT 10.2
Form of
United Parcel Service, Inc.
Incentive Compensation Plan
Long-Term Incentive Awards
Restricted Performance Unit Award Agreement
(Not Transferable)
THIS AGREEMENT evidences the grant by UNITED PARCEL SERVICE, INC., a
Delaware corporation (the "Company") in accordance with the Company's Incentive
Compensation Plan (the "Plan"), to the employee named below ("Employee") of the
number of restricted performance units ("RPUs") specified below. Each RPU has a
value that equals the value of one share of the Company's class A Common Stock
("Share"). This Award is granted effective as of the date set forth below
("Grant Date ") and is subject to all of the terms and conditions set forth
below.
- - - - - - - -
Employee: ((Employee))
Number of RPUs: ((Number))
Grant Date: [insert date]
Target Earnings Per Share: $___________
ATTEST: UNITED PARCEL SERVICE, INC.
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Secretary Chairman and Chief Executive Officer
Terms and Conditions
1. Plan. This Award is subject to all of the terms and conditions set forth
herein and in the Plan, as the same may be amended from time to time, which
is herein incorporated by reference. Terms not defined in this agreement
are defined in the Plan. If any term or condition in this Award is
inconsistent with the Plan, the Plan shall control. By accepting this
Award, the Employee unconditionally agrees to be bound by the applicable
terms, conditions and provisions of the Plan and this Award. The grant of
an Award in any year does not entitle an individual to an Award in any
subsequent year.
2. Bookkeeping Account. A bookkeeping account will be maintained to keep track
of the RPUs you earn and any dividend equivalent units attributable to your
RPUs as described below.
3. Dividend Equivalent Units. The RPUs credited to your account will be
credited quarterly with dividend equivalent units ("DEUs") for cash or
stock dividends paid on a Share. DEUs attributable to cash dividends are
determined by
- multiplying the cash dividend paid per Share by the number of RPUs and
DEUs previously credited to your account, and
- dividing the product determined above by the New York Stock Exchange
closing price of the Company's class B common stock on the day before
the dividend is paid.
Each DEU has a value equal to one Share.
4. Vesting.
a. General Rule. The RPUs and DEUs credited to your account will vest on
the fifth anniversary of your Grant Date; provided that you are
employed by the Company or a Subsidiary on that date. The benefit
payable to you will be based entirely on the number of vested RPUs and
DEUs credited to your account at the time the award becomes payable,
generally, on [insert date approximately five years from grant date].
b. Death, Disability or Retirement. If your employment terminates by
reason of your death, disability (as defined in the Plan) or retirement
(as defined in the Plan) before the fifth anniversary of the Grant
Date, you immediately will vest in any RPUs and DEUs credited to your
account.
c. Termination for Reasons Other than Death, Disability or Retirement. You
will forfeit any right to the RPUs and DEUs credited to your account if
you terminate employment before the fifth anniversary of the Grant Date
other than by reason of your death, disability or retirement. The
forfeited RPUs and DEUs will not be restored even if you return to
employment with the Company or a Subsidiary before the fifth
anniversary of the Grant Date.
5. Additional RPUs. You also may receive additional RPUs if you vest in your
Award (other than as a result of your death) and the Company's diluted
earnings per Share for the fiscal year ending December 31, ______ exceeds
the Target Earnings Per Share set forth above. If this occurs, the number
of RPUs and DEUs credited to your account determined as of the fifth
anniversary of the Grant Date will be increased by 10 percent. For this
purpose, diluted earnings per share is determined based on diluted earnings
per share as reported in the Form 10-K filed by UPS with the Securities and
Exchange Commission for calendar year ____, as adjusted in the Committee's
discretion, to reflect the exclusion of certain items.
6. Shares. A number of Shares equal to the number of vested RPUs and DEUs
credited to your account (less Shares withheld to pay taxes) will be
transferred to you on [insert date approximately five years from grant
date], except that if your employment terminates by reason of your death,
the Shares will be transferred to your estate no later than March 15 after
the end of the calendar year of your death.
7. Nontransferable. This Award and your RSUs and DEUs are not transferable
except by will or the laws of descent and distribution.