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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
UNITED PARCEL SERVICE OF AMERICA, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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[LOGO] UNITED PARCEL SERVICE
55 Glenlake Parkway, NE, Atlanta, GA 30328
Notice of Annual Meeting of Shareowners
MAY 11, 1995
To our Shareowners:
The Annual Meeting of Shareowners of United Parcel Service of America,
Inc., a Delaware corporation ("UPS"), will be held at The Corporation Trust
Company, 1209 Orange Street, Wilmington, Delaware, on May 11, 1995, at 9:00
A.M., for the following purposes:
1. To elect a Board of Directors to serve until the next annual meeting of
shareowners;
2. To approve the UPS 1991 Stock Option Plan, as amended and restated;
3. To confirm the appointment of Deloitte & Touche LLP, independent
auditors, as auditors of UPS and its subsidiaries for the year ending
December 31, 1995; and
4. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 15, 1995
as the record date for determining holders of common stock of UPS entitled to
notice of and to vote at the meeting.
Joseph R. Moderow
Secretary
Atlanta, GA
March 31, 1995
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING, KINDLY SIGN
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED STAMPED
ENVELOPE.
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[LOGO] UNITED PARCEL SERVICE
55 Glenlake Parkway, NE, Atlanta, GA 30328
March 31, 1995
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors (the "Board")
of United Parcel Service of America, Inc. ("UPS") and is being mailed with this
Proxy Statement to all shareowners on or about March 31, 1995. The person giving
the proxy has the right to revoke it at any time before it is voted by giving
written notice of revocation to the Secretary of UPS, by submitting a subsequent
proxy or by voting in person at the meeting. The expense of proxy solicitation
will be paid by UPS. In addition to solicitation by mail, employees may
personally solicit proxies for which no additional compensation will be paid.
UPS had 564,942,395 shares of Common Stock outstanding and entitled to vote
at the close of business on March 15, 1995. These shares are the only securities
of UPS entitled to be voted at the meeting. Each share of Common Stock is
entitled to one vote except that the voting rights of any shareowner or
shareowners as a group who beneficially own more than 10 percent of the voting
stock, except the UPS Managers Stock Trust or any employee benefit plan of UPS,
would be scaled back so that such shareowner or group would be entitled to cast
only one one-hundredth of a vote with respect to each share in excess of 10
percent of the outstanding shares of Common Stock. Only shareowners of record at
the close of business on March 15, 1995 will be entitled to vote. Saul & Co.,
nominee for First Fidelity Bank, N.A., New Jersey, 765 Broad Street, Newark, NJ
07101 ("Fidelity"), as Trustee under the UPS Managers Stock Trust (the "Trust"),
is the record owner of 315,481,626 shares, constituting 55.84% of the Common
Stock of UPS outstanding and entitled to vote as of March 15, 1995.
Owners of Common Stock held by Fidelity under the Trust may direct the
voting of their shares by executing and returning to Fidelity voting
instructions that they receive along with this notice of meeting and proxy
statement. An owner of shares subject to the Trust who wishes to vote his or her
shares in person at the meeting may request Fidelity to issue a proxy to him or
her for the number of shares held for his or her account. Shares for which no
instructions or requests for proxies are received by Fidelity prior to May 4,
1995 will be voted by Fidelity. At the 1994 annual meeting of shareowners,
shares for which no instructions or requests were given amounted to 53.41% of
the total shares subject to the Trust. All such shares were voted by Fidelity in
favor of the Board's proposals.
UPS's By-Laws provide that at any meeting of shareowners, the holders of a
majority of the issued and outstanding Common Stock of UPS present in person or
by proxy constitute a quorum for the transaction of business at the meeting. The
election of directors will be decided by a plurality of the votes of the shares
present in person or by proxy and entitled to vote thereon. The approval of the
1991 Stock Option Plan, as amended and restated, and the ratification of the
appointment of Deloitte & Touche LLP as independent auditors requires a majority
of the votes of the shares present in person or by proxy and entitled to vote
thereon. A vote withheld in the election of directors will be counted as a vote
against a nominee. An abstention will be counted as a vote against the approval
of the 1991 Stock Option Plan, as amended and restated, and the ratification of
Deloitte & Touche LLP as independent auditors. Both votes withheld and
abstentions will be counted for quorum purposes.
ELECTION OF DIRECTORS
It is intended that all shares of stock represented by proxies in the
accompanying form, unless otherwise specified, will be voted for the election of
the following persons as directors who, if elected, will serve until the next
annual meeting and until the election and qualification of their successors. All
directors are elected annually.
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NOMINEES
A Board of 13 directors will be elected at the 1995 annual meeting. All of
the current directors have been nominated for reelection.
The Board has no reason to anticipate that any nominee will decline or be
unable to serve. In case any nominee does decline or is unable to serve, proxies
may be voted for the election of a substitute nominee or the Board may elect to
reduce the number of directors.
Set forth below is certain biographical information concerning each of the
nominees for election as a director.
- ---------------------- John W. Alden Age 53 Director since 1988
- ---------------------- UPS senior vice president and Business Development group manager
- ----------------------
- ---------------------- In 1986, John was elected senior vice president and named to succeed Kent C. (Oz)
- --------Photo--------- Nelson in heading the Business Development group. In 1989, he assumed additional
- ---------------------- responsibility for Public Relations. John, who majored in history while attending
- ---------------------- Boston University, started with UPS as an operations report clerk in Watertown,
- ---------------------- Massachusetts in 1965. Two years later, he was promoted into supervision. After
- ---------------------- several staff and hub assignments, he became the East New England district Customer
Service office manager in 1971. The following year, John was named to manage the
entire Customer Service function for the district. In 1976, John became an
assistant to the Midwest region Customer Service manager. He was promoted to
Midwest region Customer Service manager in January 1977. John joined the UPS
corporate office in 1978 as Customer Development manager.
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- ---------------------- William H. Brown, III Age 67 Director since 1983
- ---------------------- Partner in the law firm of Schnader, Harrison, Segal & Lewis in Philadelphia,
- ---------------------- Pennsylvania
- ----------------------
- --------Photo--------- Bill received a Bachelor's Degree from Temple University in 1952 and was graduated
- ---------------------- from the University of Pennsylvania School of Law in 1955. From 1955 to 1968, Bill
- ---------------------- practiced in a small law firm from which four of seven partners became Federal
- ---------------------- Judges, and three others became State Judges. In 1968, he became a Deputy District
- ---------------------- Attorney in Philadelphia. Bill was appointed to the U.S. Equal Employment
Opportunity Commission by President Johnson in 1968 and was selected as its
Chairman by President Nixon in 1969. While with the EEOC, he won nationwide
attention for his work in negotiating a consent decree in the EEOC complaint
against AT&T. Bill joined the Schnader firm after leaving his EEOC post in 1973.
Since then, his broad experience in litigation and other matters includes handling
a number of legal matters on behalf of UPS.
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- ---------------------- Carl Kaysen Age 75 Director since 1974
- ---------------------- David W. Skinner Professor of Political Economy Emeritus
- ---------------------- Massachusetts Institute of Technology
- ----------------------
- --------Photo--------- Carl became associated with UPS through his affiliation with the University of
- ---------------------- Pennsylvania where he is a trustee, and also serves on the Advisory Committee for
- ---------------------- the UPS Foundation Endowment Fund. Carl has served on the faculty of Harvard and as
- ---------------------- director of the Institute for Advanced Study in Princeton, NJ. He is Chairman of
- ---------------------- the Board of CRA, an economic consulting firm in Boston, and has been a director of
the Polaroid Corporation, and has also acted as economic consultant to national
leaders and institutions.
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- ---------------------- John J. Kelley Age 59 Director since 1992
- ---------------------- UPS senior vice president and Human Resources manager
- ----------------------
- --------Photo--------- Jack joined UPS in 1962 as a delivery driver in Massachusetts. He then entered
- ---------------------- supervision the following year, and became a hub manager in 1966. Jack was promoted
- ---------------------- to Operations manager in New Jersey in 1971. A year later, he was named Oregon
- ---------------------- district manager and later served as Upstate New York district manager and as the
- ---------------------- North Illinois district manager. In 1983, Jack was named West region manager and
- ---------------------- five years later became the North Central region manager. He became our Human
Resources manager in 1991. For nine years, he served as co-chairman of the
corporate steering committee on employee relations, called the People Steering
Committee.
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5
- ---------------------- James P. Kelly Age 51 Director since 1991
- ---------------------- UPS executive vice president and chief operating officer
- ----------------------
- --------Photo--------- Jim joined UPS in 1964 as a package car driver in the Metro Jersey district. He
- ---------------------- entered supervision two years later and was promoted to center manager in 1968.
- ---------------------- Subsequent assignments included Package division manager and Labor Relations
- ---------------------- manager in Metro Jersey. By attending night school during that period, he earned a
- ---------------------- degree in management from Rutgers University. Jim was named Atlantic district
- ---------------------- manager in 1979 and later served as Pacific region Labor Relations manager before
being promoted to North Central region manager in 1985. In 1988, he was assigned as
a corporate Labor Relations manager and became U.S.A. Operations Manager in 1990.
In June 1992 Jim became our chief operating officer. In February 1994 he became
executive vice president. Jim is also a director of AT&T Capital Corporation.
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Gary E. MacDougal Age 58 Director since 1973
Foundation Trustee, Investor, and former Chairman of the Board and CEO of Mark
Controls Corporation
- ----------------------
- ---------------------- From 1963 to 1968 Gary was with McKinsey & Co., an international management
- ---------------------- consulting firm, where he became a partner. From 1969 to 1987 Gary was Chairman and
- --------Photo--------- Chief Executive Officer of Mark Controls Corporation (flow control products
- ---------------------- manufacturer). In 1988 he became honorary Chairman. In 1988 Gary was assistant
- ---------------------- campaign manager in the Bush presidential campaign, and in 1989 was appointed by
- ---------------------- President Bush as delegate and alternate representative in the U.S. delegation to
- ---------------------- the United Nations. He is currently a trustee of the Bulgarian American Enterprise
- ---------------------- Fund, a trustee of the Annie E. Casey Foundation and a trustee of the W.T. Grant
Foundation. Gary received his B.S. degree from the University of California at Los
Angeles in engineering in 1958. After receiving his degree, he spent three years as
a U.S. Navy officer. Following service, Gary attended Harvard Business School where
he received his M.B.A. degree. He is a director and a member of the executive
committee of Union Camp Corporation, Wayne, New Jersey, a forest products producer.
He also serves as a director of CBI Industries, Oak Brook, Illinois, the world's
largest producer of carbon dioxide and an international fabricator of steel
structures for process plants, and is an advisory director of Saratoga Partners, a
New York-based venture capital fund.
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- ---------------------- Joseph R. Moderow Age 46 Director since 1988
- ---------------------- UPS senior vice president, secretary and Legal & Public Affairs group manager
- ----------------------
- --------Photo--------- In 1986, Joe was named as Legal & Regulatory group manager and elected a senior
- ---------------------- vice president and secretary. He assumed additional responsibility for Public
- ---------------------- Affairs in 1989. Joe began his UPS career in 1968 as a sorter and unloader in the
- ---------------------- South California district while an undergraduate student. He earned a bachelor's
- ---------------------- degree in economics from California State University and a law degree from Western
- ---------------------- State University. He is a member of the State Bar of California. Joe was promoted
into supervision in 1973 and later served as the Arizona District Industrial
Engineering manager. In 1977, he was assigned to the national Legal & Regulatory
group. In 1981, Joe participated in the President's Commission on Executive
Exchange in Washington, DC where he served in the U.S. Department of Labor. In
1982, Joe became the West Virginia district manager. He was then assigned to the
national Labor Relations group and later headed the operations team during the
start-up of international air service.
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- ---------------------- Kent C. Nelson Age 57 Director since 1983
- ---------------------- UPS chairman and chief executive officer
- ----------------------
- --------Photo--------- "Oz" graduated from Ball State University in 1959 with a B.S. degree in business
- ---------------------- administration. Two days later he began his UPS career as a Sales and Customer
- ---------------------- Service Representative in Kokomo, Indiana. He has served as Customer Service
- ---------------------- Manager in Indiana, North Illinois, Metro Chicago, and the Midwest Region. In 1973,
- ---------------------- Oz assumed national customer development responsibilities. He served first on the
- ---------------------- study team and then on the team that implemented our service in West Germany in
1976. In 1978, he was named national Customer Service manager and also assigned to
develop our marketing department. Oz was elected senior vice president in 1983 and
was our Finance group manager and chief financial officer from 1984 to 1987. He
became executive vice president in 1986 and vice chairman in February 1989. In
November 1989, Oz succeeded Jack Rogers as chairman. He is also a director of PHH
Corporation and Taylor & Mathis, Inc.
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- ---------------------- Vic Pelson Age 57 Director since 1990
- ---------------------- Executive Vice President and Chairman -- AT&T Global Operations Team
- ----------------------
- --------Photo--------- In his present capacity at AT&T of Executive Vice President and Chairman of AT&T's
- ---------------------- Global Operations Team, Vic is responsible for the effectiveness of AT&T's
- ---------------------- operations worldwide. He is a member of AT&T's Board of Directors and the
- ---------------------- Management Executive Committee. Vic started with AT&T in 1959 as an engineer and
- ---------------------- held a variety of assignments including engineering, operations, finance, marketing
- ---------------------- and sales. He has served in executive positions with virtually every part of AT&T.
He is also a member of the Board of Directors of Eaton Corp. Vic has a B.S. degree
in Mechanical Engineering from New Jersey Institute of Technology and an M.B.A.
from New York University. He is Chairman of the Board of Trustees for the New
Jersey Institute of Technology.
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John W. Rogers Age 61 Director since 1979
- ---------------------- Formerly UPS chairman and chief executive officer
- ----------------------
- ---------------------- Jack was elected a director and vice president in November 1979. In January of that
- --------Photo--------- year, he was given responsibility for our national Operations, succeeding George
- ---------------------- Lamb in that position. Jack was graduated from Miami University in Ohio with a
- ---------------------- degree in business administration in 1957. He began his career with our company
- ---------------------- that same year as a trainee in Cincinnati. His first UPS assignments involved night
- ---------------------- loading and delivering. He next worked in industrial engineering and personnel
- ---------------------- before entering hub and delivery operations. Jack was then promoted to division
manager in Chicago and later Operations manager in Wisconsin. He became the first
Georgia District manager in 1966. In 1972, he was appointed West Region manager.
Two years, later, he was named the Northeast Region manager. In 1976, Jack was
assigned to national Operations with coordinating responsibilities for four
regions. He was elected senior vice president and then vice chairman in 1983 and
became chairman and chief executive officer in May 1984. He stepped down as
chairman in November 1989 and retired from active employment at the end of the
year. He has agreed to continue as a director.
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- ---------------------- Charles L. Schaffer Age 49 Director since 1992
- ---------------------- UPS senior vice president and Engineering group manager
- ----------------------
- ---------------------- Chuck joined UPS in 1970 as a part-time loader/unloader in Metro Chicago. He was
- --------Photo--------- later promoted to hub supervisor, and became a full-time Personnel supervisor in
- ---------------------- 1973 after graduation from the University of Illinois where he earned a B.S. in
- ---------------------- quantitative methods. He was assigned to Industrial Engineering (I.E.) in 1974, and
- ---------------------- became a member of the West region I.E. staff in 1977. Chuck was promoted to
- ---------------------- Missouri district I.E. manager in 1978. Chuck then held a variety of package and
hub operations assignments before being named North Illinois I.E. manager in 1981.
He was promoted to Midwest region I.E. manager in 1984. In 1986, Chuck was named
Arizona district manager. In 1988, he became the Technology Task Group coordinator
in Strategic Planning, and was later promoted to corporate Plant Engineering
manager in 1989. Chuck became our Engineering Group manager in 1990.
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- ---------------------- Robert M. Teeter Age 56 Director since 1990
- ---------------------- President of Coldwater Corporation, Ann Arbor, Michigan (a consulting and research
- ---------------------- firm)
- --------Photo---------
- ---------------------- Bob is a graduate of Albion College and holds a Master's degree from Michigan State
- ---------------------- University. He is president of Coldwater Corporation, a Michigan consulting and
- ---------------------- research firm that specializes in the areas of strategic planning, policy
- ---------------------- development and public opinion analysis. For more than 20 years he held several
- ---------------------- management positions, including President, with Market Opinion Research Company,
one of the nation's largest research firms. Bob is also a director of
Browning-Ferris Industries, Inc., Detroit and Canada Tunnel Corporation and Durakon
Industries.
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- ---------------------- Calvin E. Tyler, Jr. Age 52 Director since
- ---------------------- 1991
- ---------------------- UPS senior vice president and U.S.A. Operations Manager
- --------Photo---------
- ---------------------- After studying business administration at Morgan State College, Cal began his UPS
- ---------------------- career in 1964 as a package car driver in Baltimore. He was promoted into
- ---------------------- supervision two years later and became a center manager in 1968. After assisting
- ---------------------- with the opening of two Texas districts, Cal was assigned as a package division
- ---------------------- manager in the Houston area in 1971. He received his first district manager
assignment in 1973 in Nebraska. After later serving as district manager in North
Jersey for four years and South Florida for three years, Cal was named Northwest
region manager in 1982. He served as South Central region manager for two years
before becoming corporate Human Resources manager in 1988. He assumed his current
assignment in 1991.
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STOCK OWNERSHIP
Set forth below is information relating to the beneficial ownership of
Common Stock by (i) each person known by UPS to own beneficially more than five
percent of the outstanding Common Stock, (ii) each nominee and director, (iii)
the Chief Executive Officer and each of the four highest paid executive officers
and (iv) all directors and executive officers as a group:
COMMON STOCK HELD AS OF MARCH 15, 1995
------------------------------------------------------------------------------
ADDITIONAL SHARES
IN WHICH THE
NOMINEE HAS OR
SHARES OWNED BY PARTICIPATES IN
THE NOMINEE OR THE VOTING
MEMBERS OF HIS OR INVESTMENT TOTAL SHARES AND PERCENT OF
NAME OF NOMINEE FAMILY(1) POWER(2) CLASS(5)
- ----------------------------- --------------- ----------------- ------------------------------
Annie E. Casey Foundation, Inc... 29,199,162 0 29,199,162 5.17 %
701 St. Paul Street
Baltimore, MD 21202
John W. Alden................ 123,071(4) 29,199,162(a) 29,322,233 5.19 %
William H. Brown, III(3)..... 23,300 0 23,300 0.00 %
Carl Kaysen.................. 11,700 0 11,700 0.00 %
John J. Kelley............... 114,841(4) 30,619,178(c)(d)(e) 30,734,019 5.44 %
James P. Kelly............... 157,141(4) 29,199,162(a) 29,356,303 5.20 %
Gary E. MacDougal............ 54,256 29,199,162(a) 29,253,418 5.18 %
Joseph R. Moderow............ 122,889(4) 40,525,087(a)(b)(e) 40,647,976 7.20 %
Kent C. Nelson............... 365,039(4) 40,670,897(a)(b)(d) 41,035,936 7.26 %
Victor A. Pelson............. 2,000 0 2,000 0.00 %
John W. Rogers............... 521,397 0 521,397 0.09 %
Charles L. Schaffer.......... 121,273(4) 0 121,273 0.02 %
Robert M. Teeter............. 14,000 0 14,000 0.00 %
Calvin E. Tyler.............. 249,580(4) 30,702,972(a)(d) 30,952,552 5.48 %
Shares held by all nominees
and executive officers as a
group (including the
above)..................... 2,729,800(6) 70,374,165(7) 73,103,965 12.94 %
- ---------------
(1) The amounts shown in this column include an aggregate of 410,931 shares
owned by or held in trust for members of the families of Messrs. Alden,
Kelly, Nelson, Rogers, Schaffer, Tyler and five other executive officers,
as to which they disclaim all beneficial ownership.
(2) Neither the nominee nor other officers, nor members of their families, have
any ownership rights in the shares listed in this column. Of the shares (a)
29,199,162 shares are owned by the Annie E. Casey Foundation, Inc., of
which Messrs. Alden, Kelly, MacDougal, Moderow, Nelson, Tyler and other
persons constitute the corporate Board of Trustees, (b) 9,967,925 shares
are held by various trusts of which Messrs. Moderow and Nelson are
co-fiduciaries, (c) 27,757,368 shares are held by the trustees of certain
employee benefit plans as to which Mr. Kelley and other persons are
co-fiduciaries, (d) 1,503,810 shares are held by the UPS Foundation, Inc.,
a Company-sponsored charitable foundation of which Messrs. Kelley, Nelson,
Tyler and other persons are trustees, and (e) 1,358,000 shares are held by
two Voluntary Employee Beneficiary Associations ("VEBAs") of which Messrs.
Kelley, Moderow and one other person are co-fiduciaries.
(3) Mr. Brown is a Partner in the law firm of Schnader, Harrison, Segal & Lewis,
which renders legal services to UPS (see "Certain Business Relationships").
(4) Includes shares which may be acquired within 60 days upon the exercise of
outstanding stock options granted under the UPS 1986 Stock Option Plan, as
amended (the "1986 Plan"), as follows: Alden -- 4,661; Kelley -- 3,982;
Kelly -- 4,520; Moderow -- 4,520; Nelson -- 8,189; Schaffer -- 2,655; and
Tyler -- 4,520.
(5) The percentages are calculated on the basis of the amount of outstanding
shares plus the shares which may be acquired by the named individual and
the group, as applicable, within 60 days upon exercise of outstanding stock
options.
(6) Shares owned by nominees and executive officers as a group includes 51,210
shares which may be acquired within 60 days upon the exercise of
outstanding stock options granted under the UPS 1986 Plan.
(7) This number reflects the actual number of shares held by the foundations,
VEBAs, employee benefit plans and trusts of which directors and executive
officers listed above are trustees or fiduciaries, after adjustment to
eliminate duplications in the reported number of shares arising from the
fact that several nominees and officers and others share in the voting
power with respect to shares described in this column.
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8
These holdings are reported in accordance with regulations of the
Securities and Exchange Commission (the "SEC") requiring disclosure of shares as
to which directors and executive officers hold voting or dispositive power,
notwithstanding that they are held in a fiduciary, rather than a personal
capacity, and that such power is shared among a number of fiduciaries including,
in several cases, corporate trustees, directors or other persons who are neither
executive officers nor directors of UPS.
MEETINGS OF THE BOARD OF DIRECTORS
The UPS Board of Directors held four meetings during 1994. During 1994 each
director of UPS attended at least 75% of the total number of meetings of the
Board and any committees of which he was a member.
COMMITTEES OF THE BOARD OF DIRECTORS
The UPS Board of Directors has an Executive Committee, an Audit Committee,
an Officer Compensation Committee, a Salary Committee and a Nominating
Committee.
Messrs. Alden, Kelley, Kelly, Moderow, Nelson, Schaffer and Tyler are the
present members of the Executive Committee. This Committee may exercise all
powers of the Board of Directors in the management of the business and affairs
of UPS except for those powers expressly reserved to the Board under Delaware
law (such as amendment of the Certificate of Incorporation or By-Laws,
declaration of dividends, issuance of stock, mergers, consolidations, a sale of
substantially all of the assets of UPS and a dissolution). It is also
responsible for the administration of the 1986 Plan. This Committee held 26
meetings during 1994.
Messrs. Brown and Kaysen are the present members of the Audit Committee.
The primary responsibilities of the Audit Committee are to recommend annually
the independent public auditors for appointment by the Board as auditors for UPS
and its subsidiaries; review the scope of the audit made by the accountants;
review the audit reports submitted by the accountants; review the annual program
for the internal audit of records and procedures; review audit reports submitted
by the internal auditing staff; conduct such other reviews as the Committee
deems appropriate and make reports and recommendations to the Board within the
scope of its functions. In 1994, this Committee held two meetings.
Messrs. Pelson, MacDougal and Rogers are the present members of the Officer
Compensation Committee. The primary responsibility of this Committee is to make
recommendations to the Board from time to time, as it may elect or the Board may
request, as to the proper and appropriate compensation of the Chairman and Chief
Executive Officer ("CEO"), and approve the proper and appropriate compensation
of executive officers after recommendation of the CEO. The Committee is also
responsible for making awards to certain eligible employees under the UPS 1991
Stock Option Plan, as amended and restated (the "1991 Plan") and the UPS
Managers Incentive Plan. In 1994, this Committee held one meeting.
Messrs. Nelson and Kelley are the present members of the Salary Committee.
This Committee determines the compensation for all management employees other
than executive officers, and is responsible for the administration of the 1991
Plan and the UPS Managers Incentive Plan for such employees. It held 12 meetings
in 1994.
Messrs. Kaysen, Rogers and Teeter are the present members of the Nominating
Committee. This Committee recommends nominees for election to the Board of
Directors of UPS. It will consider recommendations of shareowners for nominees
for the 1996 annual meeting if they are received by the Secretary of UPS not
later than December 2, 1995. In 1994, this Committee held one meeting.
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9
COMPENSATION OF EXECUTIVE OFFICERS AND OTHER INFORMATION
The following table shows the cash compensation paid or to be paid by UPS
or any of its subsidiaries, as well as certain other compensation paid or
accrued, during the fiscal years indicated to the Chairman and Chief Executive
Officer and the other four highest paid executive officers of UPS for such
period (the "Named Executive Officers"), in all capacities in which they served:
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
AWARDS
------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING
--------------------- STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) OPTIONS(2) COMPENSATION(3)
- --------------------------------- ---- -------- -------- ------------ ---------------
Kent C. Nelson 1994 $692,500 $166,992 33,483 $ 2,663
Chairman and Chief 1993 $634,000 $141,915 35,047 $ 2,521
Executive 1992 $580,000 $130,048 35,675 $ 2,488
James P. Kelly 1994 $455,000 $115,384 21,249 $ 2,943
Executive Vice President 1993 $396,500 $ 94,965 21,175 $ 2,787
Chief Operating Officer 1992 $334,500 $ 84,270 18,253 $ 2,750
John W. Alden 1994 $365,000 $ 94,213 17,707 $ 2,220
Sr. Vice President 1993 $333,750 $ 80,139 18,254 $ 2,100
Business Development 1992 $300,500 $ 72,852 18,253 $ 2,071
Calvin E. Tyler, Jr. 1994 $354,500 $ 98,600 17,385 $ 3,267
Sr. Vice President 1993 $325,500 $ 86,400 17,524 $ 3,094
U.S. Operations 1992 $284,000 $ 76,800 16,593 $ 3,054
Joseph R. Moderow 1994 $335,750 $ 92,609 16,420 $ 1,244
Sr. Vice President 1993 $310,750 $ 79,535 17,159 $ 1,174
General Counsel and 1992 $281,750 $ 73,201 17,008 $ 1,154
Secretary
- ---------------
(1) Reflects the value of awards accrued and paid under the UPS Managers
Incentive Plan for the respective fiscal years.
(2) Options granted under the 1991 Plan.
(3) Represents Company contributions to the UPS Thrift Plan on behalf of the
Named Executive Officers.
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10
STOCK OPTION GRANTS
The following table sets forth information concerning option grants to the
Named Executive Officers in 1994:
STOCK OPTION GRANTS DURING 1994
POTENTIAL REALIZED
VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION -----------------------
GRANTED 1994 SHARE(1) DATE(2) 5% 10%
----------- ------------- ---------- ---------- -------- --------
Kent C. Nelson................. 33,483 0.83% $21.25 1999 $196,578 $434,386
James P. Kelly................. 21,249 0.52% $21.25 1999 $124,753 $275,670
John W. Alden.................. 17,707 0.44% $21.25 1999 $103,957 $229,719
Calvin E. Tyler, Jr............ 17,385 0.43% $21.25 1999 $102,067 $225,541
Joseph R. Moderow.............. 16,420 0.40% $21.25 1999 $ 96,402 $213,022
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(1) Represents the Current Price on the date of grant. The exercise price may be
paid by the delivery of already owned shares, subject to certain
conditions.
(2) Generally, options may not be exercised until the expiration of five years
from the date of grant, and then only during the 30-day period following
the mailing date of UPS's Annual Report to Shareowners for the prior year,
and further, an option may be exercised only in its entirety.
STOCK OPTION EXERCISES AND HOLDINGS IN 1994
The following table sets forth information on stock option exercises in
1994 by the Named Executive Officers and the value of such officers' unexercised
options on December 31, 1994:
AGGREGATED OPTION EXERCISES IN 1994 AND YEAR END OPTION VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES END OF 1994(1) END OF 1994
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ------------------------------ ----------- -------- -------------- --------------
Kent C. Nelson................ 7,385 $ 58,120 None/ N/A
121,829 $643,075
James P. Kelly................ 4,155 $ 32,700 None/ N/A
70,470 $360,344
John W. Alden................. 4,618 $ 36,344 None/ N/A
63,870 $337,477
Calvin E. Tyler, Jr........... 4,155 $ 32,700 None/ N/A
60,741 $318,118
Joseph R. Moderow............. 4,308 $ 33,904 None/ N/A
59,965 $318,265
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(1) Includes options granted under the 1986 Plan and the 1991 Plan. All
outstanding options under the 1986 Plan have been modified pursuant to an
amendment to that Plan approved by the shareowners on October 30, 1992. The
amendment eliminated the Book Value Share concept. As modified, the options
are exercisable to acquire a number of shares of Common Stock equal to 60%
of the number of Book Value Shares that would have been received under the
options as originally granted, at exercise prices
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equal to the Current Price of Common Stock on the December 31 preceding the
date of the original option grant.
RETIREMENT PLANS
The following table shows the estimated annual retirement benefit payable
on a single life only annuity basis to participating employees, including the
Named Executive Officers, under the UPS Retirement Plan and Coordinating Benefit
Plan (the "Plans") at age 65 who are also entitled to receive $14,388 per year
(maximum currently payable) in primary Social Security benefits:
ESTIMATED ANNUAL RETIREMENT BENEFITS (AS OF 12/31/94)
FOR YEARS OF SERVICE INDICATED(1)(2)(3)
FINAL -----------------------------------------------------------
AVERAGE EARNINGS 15 YEARS 20 YEARS 25 YEARS 30 YEARS
- -------------- ----------- ----------- ----------- -----------
$100,000............................ $ 21,559.00 $ 28,742.46 $ 35,934.54 $ 43,118.00
$125,000............................ $ 27,809.00 $ 37,074.96 $ 46,352.04 $ 55,618.00
$150,000............................ $ 34,059.00 $ 45,407.46 $ 56,769.54 $ 68,118.00
$175,000............................ $ 40,309.00 $ 53,739.96 $ 67,187.04 $ 80,618.00
$200,000............................ $ 46,559.00 $ 62,072.46 $ 77,604.54 $ 93,118.00
$250,000............................ $ 59,059.00 $ 78,737.46 $ 98,439.54 $118,118.00
$300,000............................ $ 71,559.00 $ 95,402.46 $119,274.54 $143,118.00
$350,000............................ $ 84,059.00 $112,067.46 $140,109.54 $168,118.00
$400,000............................ $ 96,559.00 $128,732.46 $160,944.54 $193,118.00
$450,000............................ $109,059.00 $145,397.47 $181,779.54 $218,118.00
$500,000............................ $121,559.00 $162,062.46 $202,614.54 $243,118.00
$700,000............................ $171,559.00 $228,722.46 $285,954.54 $343,118.00
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(1) Amount exceeding $120,000 would be paid pursuant to the Coordinating Benefit
Plan.
(2) For 1994, no more than $150,000 (which is adjusted from time to time by the
Internal Revenue Service) of cash compensation could be taken into account
in calculating benefits payable under the UPS Retirement Plan.
(3) Participants who elect payment forms with survivor options will receive
lesser amounts than those shown in the above table.
The compensation covered by the Plans whose benefits are summarized in the
table above includes salary plus bonus, which consists of awards under the UPS
Managers Incentive Plan (the "Covered Compensation"). The Covered Compensation
for each participant in the Plans is the average Covered Compensation of the
participant during the five highest consecutive years out of the last ten full
calendar years of service.
Estimated or actual credited years of service under the plans to the Named
Executive Officers was as follows: Nelson -- 30, Kelly -- 30, Alden -- 30,
Tyler -- 30 and Moderow -- 24.
The Plans permit participants with 25 or more years of benefit service to
retire as early as age 55 with no or only a limited reduction in the amount of
their monthly benefits.
REPORT OF THE OFFICER COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Officer Compensation Committee of the Board of Directors has furnished
the following report on Executive Compensation:
The Officer Compensation Committee of the Board of Directors has
responsibility for determining the salary of the Chief Executive Officer
("CEO"), and for approving the salaries of all other executive officers,
including those named above, after recommendation of the CEO. The Committee also
determines the eligibility of executive officers to participate in awards under
the UPS Managers Incentive Plan ("Managers Incentive Plan"), and the eligibility
and levels of participation of executive officers in stock options granted under
the UPS 1991 Stock Option Plan, as amended and restated ("Stock Option Plan").
The Committee is
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assisted in the conduct of its responsibilities by the Compensation department
of the Company's Human Resources group and by independent compensation
consultants.
One of the most important of UPS's compensation policies is its historical
focus on its "manager-owner" concept, which has played a central role in the
Company's development and success. Throughout its history, UPS has endeavored to
be owned by its managers, and managed by its owners. To achieve this objective,
UPS has for many years maintained compensation plans intended to facilitate
stock ownership by its management employees. The current Managers Incentive and
Stock Option Plans are examples of such plans.
UPS also has a longstanding policy of promotion from within, wherever
possible, which has significantly reduced, relative to other companies, its need
to hire managers and executive officers from outside the company. UPS's overall
management organization is comprised, to a high degree, of employees who have
spent virtually their entire careers with the company.
UPS's executive compensation has been strongly influenced by these
policies. The CEO and the other executive officers named above are all long-term
employees of UPS, each having more than 25 years of service. Because of UPS's
plans designed to foster stock ownership by its managers, each has accumulated
an individually-significant number of shares of Common Stock. As a result, the
interests of shareowners and the Company's executive officers are closely
aligned, and the executive officers have strong incentives to provide for the
effective management of UPS. In the case of each of the executive officers named
above, earnings derived from stock appreciation, dividends and from awards under
the Managers Incentive and Stock Option Plans exceed direct cash compensation.
Of the forms of compensation used by the Company, the awards granted under the
Managers Incentive Plan are most directly keyed to corporate performance because
the aggregate amount available for distribution under the Managers Incentive
Plan is based on Company profits.
With respect to cash compensation, the Committee reviews data received
directly from consultants concerning compensation for comparable positions at
companies having similar revenues, irrespective of the financial performance of
those companies, and also at other companies in the transportation industry. The
1994 salaries of UPS's executive officers including that of its CEO, were less
than median compensation levels at similarly sized companies. The Committee has
generally found data concerning transportation companies to be less helpful
since executive compensation in the industry tends to be high relative to
revenues. Company comparisons for executive compensation purposes are not
necessarily appropriate with the same companies that would be included in a peer
group established to compare shareowner returns. Thus, the companies used for
executive compensation comparisons are not limited to the companies comprising
the S&P 500 Index and the Dow Jones Transport Average used in the performance
charts following this report.
In approving the appropriate compensation of each executive officer,
including the CEO, the Committee does not employ formulas but instead exercises
its judgment based on considerations including overall responsibilities and the
importance of these responsibilities to the Company's success, experience and
ability, past short-term and long-term job performance and salary history. A
significant factor in determining annual salary increases is the strong desire
of executive officers to keep their salaries in a closer relationship to those
of the Company's other managers. The Committee places a strong emphasis on
teamwork and annual salaries are not dependent on objective, corporate
performance standards for any executive officers, including the CEO.
Awards under the Managers Incentive Plan are determined by a formula that
takes into consideration Company profits, monthly salary, the number of
participants and the level of participation. The level of participation for
executive officers is the same as for more than 10,000 participating employees
at or above the center manager level.
Options granted under the Stock Option Plan are long-term options intended
to promote continuity of employment and to provide an additional opportunity for
stock ownership. Generally, eligible employees include division managers,
district department managers and others having equivalent or greater
responsibilities. The value of options on the date of the grant is based on
salary and level of participation. The level of participation for 1994 options
granted to the executive officers named above was the same as for all Management
Committee members and Region managers.
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Graphs depicting five-year and ten-year returns to shareowners are set
forth following this report. The five-year graph is required under the proxy
rules of the SEC. The ten-year graph was included to provide a perspective on
share performance that the Company considers to be more meaningful to
shareowners.
The Compensation Committee
Victor A. Pelson, Chairman
Gary E. MacDougal
John W. Rogers
SHAREOWNER RETURN PERFORMANCE GRAPH
The following graph shows a five year comparison, prepared in accordance
with the rules of the SEC, of cumulative total shareowners' returns for UPS, the
S&P 500 Index and the Dow Jones Transport Average (the "DJ Transport"). The
comparison of the total cumulative return on investment (change in the quarterly
stock price plus reinvested dividends) for each of the quarterly periods assumes
that $100 was invested on December 31, 1989 in each of UPS, the S&P 500 Index
and DJ Transport.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
(UPS, S&P 500 INDEX, DJ TRANSPORT)
5 Year Growth of $100
UPS Stock vs. S&P 500 and DJ Transports.
Measurement Period
(Fiscal Year Covered) UPS S&P 500 DJ Trans
- --------------------- --- ------- --------
Measurement point 12/31/1989 $100 $100 $100
$102 $ 97 $101
$105 $103 $ 98
$107 $ 89 $ 72
FYE 12/31/90 $109 $ 97 $ 79
$110 $111 $ 96
$112 $111 $100
$114 $117 $105
FYE 12/31/91 $117 $126 $119
$121 $123 $122
$128 $126 $117
$134 $130 $114
FYE 12/31/92 $139 $136 $129
$141 $142 $141
$147 $143 $139
$151 $146 $147
FYE 12/31/93 $160 $150 $159
$164 $144 $148
$172 $145 $145
$180 $152 $136
FYE 12/31/94 $186 $152 $133
Because shares of UPS Common Stock are not traded on any exchange or in the
organized over-the-counter market, share prices are not affected by some of the
factors that influence the value of publicly traded securities, such as
short-term market trends, supply and demand and the like. The current price of
UPS Common Stock is set quarterly by the Board of Directors based on a variety
of factors, including past and current earnings, future earnings estimates, the
ratio of UPS Common Stock to debt of UPS, other factors affecting the business
and long-range prospects of UPS and general economic conditions, as well as
opinions furnished from time to time by investment counselors acting as
independent appraisers. The Board's decision
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as to prices considers factors affecting generally the market prices of publicly
traded securities, and prolonged changes in those prices could have an effect on
the prices offered by UPS. The Board generally does not give substantial weight
to short-term variations in average price-earnings ratios of publicly traded
securities which at times have been considerably higher, and at other times,
considerably lower than those for UPS's securities. Because the value of UPS
Common Stock is not subject to the market fluctuations of publicly traded
securities, UPS believes that a longer term perspective on share performance
would be more meaningful to shareowners.
The following graph shows a ten year comparison of cumulative returns for
UPS, the S&P 500 Index and the DJ Transport. The comparison of the total
cumulative return on investment (change in the quarterly stock price plus
reinvested dividends) for each of the quarterly periods assumes that $100 was
invested on December 31, 1984 in each of UPS, the S&P 500 Index, and the DJ
Transport.
COMPARISON OF TEN YEAR CUMULATIVE TOTAL RETURN
(UPS, S&P 500 INDEX, DJ TRANSPORT)
10 Year Growth of $100
UPS Stock vs. S&P 500 and DJ Transports.
Measurement Period
(Fiscal Year Covered) UPS S&P 500 DJ Trans
- --------------------- --- ------- --------
Measurement point 12/31/84 $100 $100 $100
$107 $109 $109
$123 $117 $120
$129 $112 $117
FYE 12/31/85 $138 $132 $130
$142 $150 $153
$155 $159 $145
$167 $148 $149
FYE 12/31/86 $179 $156 $151
$185 $189 $173
$198 $199 $194
$206 $212 $198
FYE 12/31/87 $217 $164 $143
$221 $174 $165
$233 $185 $175
$241 $186 $175
FYE 12/31/88 $250 $192 $188
$255 $205 $207
$266 $223 $225
$271 $247 $285
FYE 12/31/89 $280 $252 $232
$285 $245 $234
$295 $260 $227
$299 $224 $168
FYE 12/31/90 $304 $244 $183
$309 $280 $224
$314 $279 $233
$319 $294 $243
FYE 12/31/91 $329 $319 $277
$339 $311 $284
$360 $317 $271
$375 $327 $264
FYE 12/31/92 $391 $343 $301
$396 $358 $327
$412 $360 $323
$423 $369 $341
FYE 12/31/93 $450 $378 $370
$460 $363 $344
$482 $365 $337
$504 $383 $316
FYE 12/31/94 $521 $383 $309
COMPENSATION OF DIRECTORS
Directors who are employees or former employees of UPS receive no
additional compensation for their service as directors or as members of
committees appointed by the Board of Directors. Directors who are not employees
or former employees receive an annual director's fee of $45,000. Members of the
Audit, Officer Compensation and Nominating Committees who are not employees or
former employees receive an additional annual fee of $2,500 for each committee
on which they serve, except that Committee chairmen receive an annual fee of
$4,000.
UPS established a Retirement Plan for outside directors in February 1991,
which provides retirement and disability benefits for directors who are neither
present nor former officers or employees of UPS. In order to be eligible for
benefits, a director must complete at least five years of service. Annual
benefits are equal to the
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amount of the director's annual retainer in effect on the date of his or her
retirement or disability. Benefits continue for the number of calendar quarters
equal to the director's years of service as a director multiplied by four.
Retirement benefits commence on the later of retirement or age 65. Disability
benefits commence on the later of disability (as defined) or age 60. In 1994,
neither retirement nor disability benefits were paid under the Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following non-employee directors serve on the Officer Compensation
Committee (the "Committee") of the Board of Directors: Victor A. Pelson, Gary E.
MacDougal and John W. Rogers. None of the members of the Committee has any
direct or indirect material interest in or relationship with UPS outside of his
position as director. Mr. Rogers is a former Chairman of the Board and Chief
Executive Officer of UPS. He retired from active employment with UPS in 1989. To
UPS's knowledge, there were no other interrelationships involving members of the
Committee or other directors of UPS requiring disclosure in this Proxy
Statement.
CERTAIN BUSINESS RELATIONSHIPS
Legal fees amounting to $8,825,719 were paid to Schnader, Harrison, Segal &
Lewis, of which Mr. Brown is a member, for legal services rendered to UPS and
its subsidiaries during 1994. These services included the work of a substantial
number of members and associates of the firm in postal rate proceedings, court
litigation, labor relations, corporate and financial matters, and other types of
legal matters incident to the representation of the Company.
The UPS Thrift Plan and the UPS Retirement Plan, through wholly-owned
corporations, own real property that is leased to UPS subsidiaries for operating
purposes at rentals determined by independent firms of real estate appraisers.
The rentals charged UPS subsidiaries for the leased real estate during 1994 by
these Plans aggregated $5,967,429. The UPS Thrift and Retirement Plans have also
purchased and leased back to UPS certain aircraft. See "Common Relationships
with Overseas Partners Ltd." In 1994, the UPS Thrift Plan purchased 15 million
shares from UPS for $330 million.
COMMON RELATIONSHIPS WITH OVERSEAS PARTNERS LTD.
Overseas Partners Ltd. ("Overseas") was incorporated under Bermuda law in
June 1983, as a wholly-owned subsidiary of UPS. On December 31, 1983, prior to
commencing operations, Overseas was spun off when UPS paid a special dividend to
UPS shareowners of one share of Overseas Common Stock for each share of UPS
Common Stock then outstanding, resulting in the distribution of approximately
97% of the outstanding Common Stock of Overseas.
Overseas was organized to reinsure shippers' risks relating to packages
carried by UPS as a common carrier as well as to underwrite life and property
and casualty reinsurance for insureds unaffiliated with UPS. Since commencing
operations on January 1, 1984, Overseas' reinsurance business has related
primarily to reinsuring insurance issued by United States-based insurance
companies unaffiliated with UPS or Overseas covering the risk of loss or damage
to shippers' packages carried by UPS's subsidiaries and unaffiliated foreign
common carriers whose declared value exceeds $100 or equivalent in foreign
currency. The reinsurance of excess value insurance does not involve
transactions conducted between UPS and Overseas. National Union Fire Insurance
Company of Pittsburgh, PA, New Hampshire Insurance Company, Abeille General
Insurance Company and Nichido Fire & Marine Insurance Company, subsidiaries of
American International Group, Inc., insure customer packages in return for
premiums paid by the customers. Overseas reinsures these primary insurers, whose
premium payments constitute Overseas' largest source of revenues and profits.
Reinsurance premiums earned by Overseas for reinsuring risks from January 1,
1994 to December 31, 1994 were approximately $337.2 million. Overseas'
reinsurance business had also included reinsurance of workers compensation
insurance issued by another United States-based insurance company covering risks
of a UPS subsidiary in the state of California.
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Certain officers and directors of Overseas are also directors, officers or
employees of UPS and shareowners of both companies. The chief executive officer
and chief operating officer of Overseas are not executive officers of UPS. In
considering which risks related to UPS's business to reinsure, or which leasing
or other arrangements to enter into with UPS, directors and officers of Overseas
and its subsidiaries who are also directors, officers and shareowners of UPS
must consider the impact of their business decisions on each of the two
companies. Although prevailing market conditions are among the factors
considered by them in making such decisions, there can be no assurance that
transactions relating to the two companies will be on the most favorable terms
that could be obtained by either party in the open market.
UPS does not have any formal conflict resolution procedures. Nevertheless,
in connection with the insurance by Overseas of risks related to the business of
UPS, UPS believes the rates charged by the primary insurers reinsured by
Overseas are competitive with those charged to shippers utilizing other
carriers. Additionally, in connection with major transactions in which UPS and
Overseas have been involved, primarily leasing transactions, UPS has generally
obtained fairness or valuation opinions from one or more leading investment
banking firms or other organizations with significant expertise in the
evaluation of the interests involved.
Overseas' business has included leasing certain aircraft and real property
to subsidiaries of UPS through Overseas Partners Capital Corporation ("OPCC")
(formerly known as Overseas Partners Leasing, Inc.). As previously reported, in
December 1989, OPCC acquired from UPS the partially constructed Ramapo Ridge
Facility (the "Facility") which has been completed and is used by UPS as a data
processing, telecommunications and operations facility. The Facility has been
leased to UPS for an initial term ending in 2019. Lease payments have fixed and
variable components. The fixed component provides for aggregate lease payments
of approximately $212.3 million over the initial term of the lease. The variable
component is based on the number of customer accounts maintained by UPS. Rentals
began in July 1990.
Also as previously reported, in December 1989 (the Closing Date), OPCC also
acquired from UPS for approximately $67.9 million (the "Assignment Payment") its
rights to purchase from the Boeing Company five 757 aircraft which were then
being manufactured. The aircraft were delivered in 1990 and are leased to UPS
for a term ending in 2012. Lease payments have fixed and variable components.
The fixed component provides for minimum aggregate lease payments of
approximately $376.5 million over the term of the lease. The variable component
is based on the number of flight hours recorded for the aircraft. Rentals began
in the fourth quarter of 1990.
The Assignment Payment made in December 1989 was the difference between the
fair market value of the aircraft at that time and an estimate of the payments
OPCC would make to Boeing after December 1989 for the aircraft. The payments
OPCC actually made after December 1989 were substantially in excess of the
estimate and UPS has paid OPCC approximately $23.9 million as an adjustment to
the Assignment Payment to cause the total payments made by OPCC to UPS and
Boeing to equal the aircraft's approximate fair market value at the time of
delivery. Fair market value of the aircraft was determined by an independent
aircraft appraiser.
Overseas guaranteed OPCC's performance of the construction agreement, the
aircraft purchase agreements and the lease agreements in connection with the
real property and the five Boeing 757 aircraft.
OPCC has irrevocably assigned the right to receive the fixed component of
rentals on the Boeing 757 aircraft and Facility leases to its subsidiary, OPL
Funding Corp. ("OPL Funding"), a Delaware corporation. OPL Funding pledged its
interest in these payments to secure bonds issued to finance the acquisition of
the leased assets. UPS's obligation to pay the fixed rentals to OPL Funding is
absolute and unconditional during the intended term of each lease, and continues
after an early lease termination unless UPS pays to OPL Funding an amount
sufficient to defease the remaining interest payments on the bonds (a
"termination payment"). In the event that OPCC fails to pay certain income
taxes, UPS is obligated to pay additional rentals to provide for such taxes
("tax payments"). OPCC is required to reimburse UPS the amount of any such
termination or tax payments.
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At the conclusion of each of the leases, UPS may purchase the aircraft and
the Facility at fair market value. UPS has an option to purchase the land on
which the Facility is located, but not the buildings, from OPCC in 2050 for
approximately $63.7 million, subject to certain adjustments for increases in the
fair market value of the land.
OPCC also has leased four Boeing 727 aircraft to UPS. The leases provided
for fixed quarterly rentals equaling approximately $2.4 million annually. Two
leases had terms expiring 1999 and the other two expiring 2001. In March 1994,
UPS exercised its option to purchase such aircraft at fair market value of $16.9
million. Three of these aircraft had been purchased from UPS in 1990 for $14.4
million, their then fair market value as determined by an independent appraiser.
In 1994, OPCC and its subsidiary received rental payments of approximately
$42.6 million in the aggregate from UPS pursuant to the leases described above.
In November 1986, UPS sold six Boeing 747 aircraft to a trust for the
benefit of the UPS Thrift Plan and the UPS Retirement Plan (the "Plans"), and
the trust leased the aircraft back to UPS for a term of 15 years. The net
purchase price of approximately $149 million was the fair market value of the
aircraft at the time of sale, as determined by an independent aircraft
appraiser. Payment of the purchase price was financed through investment by the
Plans of approximately $50 million of their own funds and the issuance by the
trust to Overseas of a total of approximately $101.7 million of 11% Secured
Equipment Certificates ("Certificates") of which Overseas sold approximately
$42.2 million to Citibank, N.A.
UPS has the option, on the tenth anniversary of the lease, either (i) to
terminate the lease without any further obligation, or (ii) to terminate the
lease through repurchase of the aircraft at a price equal to the lesser of the
then fair market value of the aircraft or the agreed upon termination price.
The Certificates bear interest at the rate of 11% per year, and are subject
to quarterly principal payments through the operation of a sinking fund, over
the full 15 year period. The Certificates are collateralized by, and recourse is
limited to, rental payments under the lease, the aircraft, the lease itself and
other related assets. Thus, if the lease is terminated by UPS at the end of 10
years, the sole recourse of the remaining Certificate holders will be to the
proceeds from sale of the aircraft.
Citibank purchased approximately $42.2 million of the Certificates from
Overseas for $43.5 million, and, for a fee of $2.5 million paid by UPS, it
agreed that sinking fund payments prior to the tenth anniversary of the lease
would be applied solely to retire Overseas' Certificates so that as of the tenth
anniversary, all of Overseas' Certificates would be retired and Citibank's
Certificates would be retired out of sinking fund payments after that date. As a
result, if UPS terminates the lease on the tenth anniversary, as described
above, the risk that the fair market value of the aircraft will be insufficient
to repay the remaining Certificates is solely Citibank's.
Mr. Kelley became a member of the administrative committees of the Plans
effective April 1, 1994. After giving effect to the sinking fund payments,
Overseas owned Certificates aggregating $15.6 million on January 1, 1995 and
$23.2 million on January 1, 1994.
In February 1994 and February 1995, Overseas purchased four million and
three million shares of Common Stock from UPS for approximately $35.2 million
and $29.6 million, respectively. Each of these purchases was effected at the
prices at which at the time of the transaction UPS had the right to purchase
such shares from Overseas shareholders.
Messrs. Nelson and Moderow are presently members of the Board of Directors
of Overseas. Mr. Robert J. Clanin, an executive officer of UPS, is a Director of
Overseas. As of March 15, 1995, UPS owned approximately 1.2 million shares of
Overseas Common Stock. Because Messrs. Nelson and Moderow are directors and
officers of UPS, they can be deemed under the rules of the SEC to participate in
the voting and investment power with respect to shares beneficially owned by
UPS.
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APPROVAL OF THE UPS 1991 STOCK
OPTION PLAN, AS AMENDED AND RESTATED
The UPS 1991 Stock Option Plan (the "Plan") was initially adopted by the
Board of Directors in 1991, and was approved by the shareowners at the Annual
Meeting of Shareowners held on May 10, 1991. The Plan was amended and restated
by the Board of Directors on February 20, 1992, and the Plan, as amended and
restated, was approved by the shareowners at the Annual Meeting of Shareowners
held on May 11, 1992.
At its regular meeting on February 15 and 16, 1995, the Board of Directors
amended and restated the Plan, subject to shareowner approval, a second time
(the "Second Amended and Restated Plan"). The amendments to the Plan resulting
in the Second Amended and Restated Plan were adopted by the Board to permit
options to be granted under the Second Amended and Restated Plan to UPS
directors who are not employees (the "Outside Directors"). The options will be
granted based upon a formula as described below. If the Second Amended and
Restated Plan is not approved by shareowners at the Annual Meeting, the 1991
Plan will remain in effect as currently adopted. Further, if the Second Amended
and Restated Plan is not approved by shareowners, all options granted thereunder
to Outside Directors will automatically terminate and be of no force or effect.
The affirmative vote of a majority of the shares of Common Stock entitled to
vote and present in person or by proxy is required for approval of the Second
Amended and Restated Plan. Abstentions will have the effect as votes against the
Second Amended and Restated Plan. The Board recommends that shareowners approve
the Second Amended and Restated Plan.
The Second Amended and Restated Plan is intended to promote continuity of
management and to provide incentives to key managerial employees of UPS and its
subsidiaries and UPS's Outside Directors by providing them with additional
opportunities for stock ownership. UPS believes that the grant of options will
induce the continued services of participating employees and Outside Directors
and encourage major contributions to effective management.
The Summary of the Second Amended and Restated Plan set forth below is
qualified in its entirety by reference to the full text of the Plan, a copy of
which is available, upon written request, from the Secretary of UPS.
Administration of the Second Amended and Restated Plan. The Second Amended
and Restated Plan is administered by the Salary Committee ("Salary Committee")
of the Board of Directors of UPS. The current Salary Committee members are
Messrs. Nelson and Kelley. Mr. Clanin is the Administrator of the Salary
Committee. Their addresses are 55 Glenlake Parkway, NE, Atlanta, Georgia 30328.
Eligibility. Under the Second Amended and Restated Plan, key managerial
employees and Outside Directors of UPS and its subsidiaries are eligible to
participate in the Plan. In general, the class of eligible employees includes
division managers, district department managers, other employees having
equivalent or greater responsibilities and the Outside Directors. The Salary
Committee may grant options to any eligible employee other than a member of the
Board, a 16a-1 Officer or a member of the Salary Committee. Employees are
selected on the basis of their having demonstrated an ability to contribute
substantially to the effective management or direction of UPS. Options having a
greater value may be granted to employees with greater responsibility.
Directors, 16a-1 Officers and members of the Salary Committee are eligible
to receive options if they are also employees of UPS or its subsidiaries, except
that all decisions regarding the grant of options to eligible 16a-1 Officers,
Directors and members of the Salary Committee shall be made by the Officer
Compensation Committee. Members of the Board and the Salary Committee may not
participate in any decision or action affecting them unless such decision or
action affects all optionees generally.
At the time the Salary Committee or Officer Compensation Committee grants
to any eligible employee an option to purchase shares, it will designate an
option as an incentive stock option (as defined by Section 422 of the Internal
Revenue Code) or a nonqualified option (see discussion of tax treatment below).
Additionally, the Salary Committee or Officer Compensation Committee, as
appropriate, at the time of option grant may also grant to an employee optionee
a right to receive money at the time of exercise in an amount equal to a
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designated percentage of the amount by which the Current Price (defined below)
of the shares subject to the option exceeds, at the time of exercise, the option
price.
On the first date of each year on which any option is granted, each Outside
Director shall be granted options to purchase a number of shares equal to 58.4%
of such Outside Director's annual director's fee as in effect on the date of
option grant divided by the Current Price of the UPS Common Stock on such date.
The "Current Price" of a share means, as of any given time, the price per share
which the Board of Directors shall have determined to be the fair market value
at which the Company may express its willingness to purchase shares of UPS
Common Stock from shareowners who offer them for sale to the Company at that
time. The foregoing formula may be amended by the Salary Committee but not more
than once every twelve months, and the formula may not be amended without
shareowner approval if such amendment materially increases the benefits to the
Outside Directors, or without the consent of the Outside Directors if the
amendment would affect rights under options already granted. Only nonqualified
options may be granted to the Outside Directors.
At the time the Second Amended and Restated Plan was adopted by the Board
of Directors, approximately 3,000 employees were eligible to participate in the
1991 Plan.
Exercise of Options and Duration. Generally, options may not be exercised
until the expiration of five years from the date of grant, and then only during
the 30-day period following the mailing date of UPS' Annual Report to
Shareowners for the prior year. Further, an option may only be exercised in its
entirety.
However, in the event an employee optionee's employment terminates by
reason of the optionee's retirement with the consent of UPS or in accordance
with an applicable retirement plan, or by reason of the optionee's disability
(within the meaning of Section 22(e)(3) of the Internal Revenue Code), then any
incentive stock option held by the employee optionee will, at the election of
the optionee: (a) become exercisable immediately but only for a period of three
months following the date of retirement, or one year following the date of
disability; or (b) unaffected by such retirement or disability. Nonqualified
options will not be subject to early exercise upon an employee's retirement or
disability.
In the event that an Outside Director ceases to be a member of the Board
for any reason other than resignation, removal for cause or death, any unexpired
option shall at the election of the Outside Director (a) be or immediately
become fully exercisable but only for a period ending on the date three months
following the date on which such Outside Director ceases to be a member of the
Board, or one year in the case of disability within the meaning of Section
22(e)(3) of the Internal Revenue Code; or (b) be unaffected. In the event that
an Outside Director resigns from the Board or is removed from office for cause,
any option held by the Outside Director which is not exercisable by the Outside
Director immediately prior to resignation or removal shall terminate as of the
date of resignation or removal, and any option held by the Outside Director
which is exercisable by the Outside Director immediately prior to such
resignation or removal shall be exercisable in accordance with its terms.
In the event of an optionee's death (including death while retired or
disabled), any option then held will immediately become exercisable at any time
prior to expiration.
The aggregate fair market value, as determined at the time the option is
granted, of the shares for which any employee may be granted incentive stock
options, which will become exercisable for the first time by any optionee during
any calendar year under the Second Amended and Restated Plan and any other stock
option plan of UPS, shall not exceed $100,000.
All options will expire five and one-half years after the date of grant and
will be subject to earlier termination in the event of termination of employment
for any reason other than death, disability or retirement.
Option Price. The exercise price of any option is equal to (i) the Current
Price of UPS Common Stock at the time the option is granted, (ii) multiplied by
the number of shares of UPS Common Stock subject to the option. Payment of the
exercise price may, as the optionee elects, be made (i) in cash, (ii) in UPS
Common Stock owned by the optionee for at least six months prior to the date of
exercise and valued at its then Current Price, or (iii) in any combination of
cash or such shares. Any payment made with shares of
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Common Stock shall be effected by delivery of the shares to the Secretary of
UPS, endorsed in blank or accompanied by stock powers executed in blank, and for
such purpose, the optionee may notify the Trustee under the UPS Managers Stock
Trust, in writing, to transmit to UPS, endorsed in blank, shares held by the
Trustee for the optionee's account under the UPS Managers Stock Trust.
Federal Income Tax Consequences. The description that follows outlines the
general tax treatment of both incentive stock options and nonqualified options
under the Second Amended and Restated Plan. However, because of the complexity
of the tax laws relating to stock options and the possible effect on each
optionee's particular situation, each optionee should also consult with his or
her tax adviser as to the tax consequences of the options.
TAX TREATMENT OF NONQUALIFIED OPTIONS
An optionee receives no income upon grant of a nonqualified stock option.
Upon exercise of a nonqualified option, the optionee will realize ordinary
income equal to the excess of the value of the shares on the date of exercise
over the option price. If cash is used to exercise the option, the optionee will
receive a tax basis in the shares equal to their value on the date of exercise.
On subsequent disposition of the shares, the optionee will realize capital gain
(or loss) equal to the excess (or deficiency) of the amount realized over such
tax basis. The gain or loss will be long- or short-term depending on the
optionee's holding period for the shares.
UPS will be required to satisfy withholding requirements with regard to the
tax liability of employee optionees upon exercise of a nonqualified option.
Under the Second Amended and Restated Plan, UPS is entitled to require the
optionee, as a condition of exercise, to remit an amount sufficient to satisfy
such withholding obligation. UPS will be entitled to a tax deduction equal to
the amount of income realized by the optionee as a result of the exercise.
If a nonqualified option is exercised and the optionee uses
previously-owned shares of UPS Common Stock to pay the option price, the
optionee will realize ordinary income as described above, but will realize no
gain or loss as a result of the disposition of the previously-owned shares. The
shares of UPS Common Stock received upon exercise whose value is equal to the
value of the previously-owned shares will take a tax basis equal to the basis of
the previously-owned shares. The remaining UPS Common Stock will take a tax
basis equal to their fair market value.
TAX TREATMENT OF INCENTIVE STOCK OPTIONS
An optionee receives no income upon grant or exercise of an incentive stock
option. If cash is used to exercise the option, the optionee receives a tax
basis in the shares equal to the option price and, upon subsequent sale or other
disposition of the shares, realizes capital gain (or loss) equal to the excess
(or deficiency) of the amount realized over such tax basis. The gain or loss
will be long- or short-term depending on the optionee's holding period for the
shares.
In order to receive such favorable tax treatment, however, an optionee must
satisfy the "Employment Condition" and must not make a "Disqualifying
Disposition" of the option shares. The Employment Condition refers to a
requirement that an optionee must exercise the incentive stock option while he
or she remains an employee of UPS or within three months after termination of
employment. The three-month period is extended to one year when employment
terminates as a result of total and permanent disability within the meaning of
Section 22(e)(3) of the Code and indefinitely when employment terminates as a
result of death. A Disqualifying Disposition occurs when an optionee disposes of
the shares purchased under the incentive stock option prior to a date at least
two years after the date on which the option was granted and at least one year
after it was exercised.
The Second Amended and Restated Plan provides that in the event an
optionee's employment terminates by reason of retirement or disability, the
optionee may elect to (a) exercise the incentive stock option within three
months after retirement or one year after disability; or (b) exercise the
incentive stock option after the expiration of five years form the date of grant
during a 30-day period following the mailing of UPS' Annual
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Report to Shareowners for the prior year. When an optionee who chooses the
second alternative eventually exercises the option, the Employment Condition
will probably not be satisfied. In such a case, the option will be treated as a
nonqualified option (see above).
As stated above, any transfer of shares purchased under an incentive stock
option within one- and two-year holding periods, including a transfer by gift,
will constitute a Disqualifying Disposition except (a) a transfer by a decedent
to an estate or a transfer by bequest or inheritance; (b) certain tax-free
transfers; or (c) a transfer into the name of the optionee and another
individual to be held jointly with the right of survivorship. An optionee who
makes a Disqualifying Disposition will realize, in the year of such disposition,
(a) ordinary income equal to the excess of the fair market value of the shares
on the date of exercise over the option price and (b) capital gain equal to the
excess, if any, of the amount realized upon disposition over the fair market
value of the share on the date of exercise. If the amount realized on the
disposition is less than the fair market value of the shares on the date of
exercise and the disposition occurs in a sale or exchange with respect to which
a loss (if sustained) would be recognized, then the ordinary income realized by
the optionee will be limited to the excess of the amount realized over the
option price. Upon such a Disqualifying Disposition, UPS would be entitled to
deduct an amount equal to the ordinary income realized by the optionee.
It should be noted that there is currently a differential between the
maximum rate of tax on ordinary income (39.6%) and the maximum rate of a tax on
capital gains (28%). As a result, income recognized by an optionee upon a
Disqualifying Disposition may be taxed at a higher rate than would be the case
if the amount realized were treated as capital gain.
The Second Amended and Restated Plan provides that optionees may apply the
value of currently owned shares of UPS Common Stock owned by the purchaser for
at least six months prior to the date of exercise to pay all or a portion of the
option price. In such a case, a number of shares of UPS Common Stock received
upon exercise of the incentive stock option having a value equal to the value of
the UPS Common Stock used for payment of the option price will be deemed to have
been exchanged for the latter shares in a tax-free stock-for-stock exchange
under Section 1036 of the Code. Such UPS Common Stock will acquire a tax basis
equal to the tax basis of the previously-owned shares. The remaining UPS Common
Stock received upon exercise of the option will receive a zero tax basis. The
optionee will realize no gain or loss as a result of the disposition of the
previously-owned shares.
Section 55 of the Code imposes an alternative minimum tax. Under Section
55, a taxpayer must pay the alternative minimum tax if such tax is greater than
the taxpayer's regular tax. Generally, the alternative minimum tax for
non-corporate taxpayers is 26% or 28% of the amount of alternative minimum
taxable income in excess of a statutory exemption amount. Alternative minimum
taxable income is computed by treating certain types of transactions in a
different way from the ordinary tax treatment and adding certain "items of tax
preference" to income. The amount by which the fair market value of a share of
stock purchased under an incentive stock option exceeds, at the time of
exercise, the option price of such stock (i.e., the bargain element in the
option) is generally included as alternative minimum taxable income.
If in connection with the grant of an incentive stock option or
nonqualified option, the Salary Committee or Officer Compensation Committee also
grants a right to receive cash at the time of exercise of the option, the amount
of cash received would be treated as ordinary compensation income and would be
deductible by UPS.
The Second Amended and Restated Plan is not subject to the Employee
Retirement Income Security Act of 1974 or to Section 401 of the Code, both of
which contain provisions pertaining to other types of employee benefit plans.
Non-transferability. Options are not transferable except by will or by the
laws of descent and distribution, and are exercisable during the lifetime of the
optionee only by the optionee or the optionee's guardian or legal
representative.
Limitations Regarding the Amount of UPS Common Stock Available Under the
Second Amended and Restated Plan. Options to purchase a maximum of 30,000,000
shares of UPS Common Stock (subject to
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certain adjustments) may be granted under the Second Amended and Restated Plan.
However, if an option shall expire or terminate for any reason without having
been exercised in full, options for such UPS Common Stock will be available for
grant in subsequent years.
No option may be granted to any individual who at the time of grant owns
shares which constitute more than 10 percent of the voting power of UPS or its
subsidiaries.
Delivery of Shares. All shares of UPS Common Stock issued by UPS under the
Second Amended and Restated Plan will be subject to the UPS Managers Stock
Trust. The operation of the Trust is discussed above under the description of
the UPS Managers Incentive Plan.
All shares of UPS Common Stock issued by UPS under the Second Amended and
Restated Plan to Outside Directors will be subject to such agreements as the
Salary Committee shall prescribe.
Adjustments Upon Changes in Capitalization, Etc. The number of options
that may be granted under the Second Amended and Restated Plan, the number of
shares subject to unexercised options and the option price may be adjusted, as
deemed equitable by the Committee, if: (i) there is a stock dividend, stock
split, or other subdivision, reclassification or combination of the UPS Common
Stock; or (ii) UPS Common Stock is changed or converted into, or exchanged or
exchangeable for, a different number or kind of security of UPS or of another
corporation in connection with a reorganization, merger, consolidation or
combination, provided that where a change of control of UPS is contemplated, the
Committee, with the approval of a majority of the members of the Board of
Directors who are not then holding options, may modify options so as to
accelerate optionees' rights to exercise their options.
Amendments and Termination. Options may not be granted under the Second
Amended and Restated Plan after March 31, 1996. The Second Amended and Restated
Plan may be amended at any time by either the Board of Directors, the Executive
Committee or shareowners of UPS, except that without shareowner approval, the
Board or Executive Committee may not materially increase the benefits accruing
to participants or the number of shares that may be issued under the Second
Amended and Restated Plan or materially modify the eligibility requirements of
the Second Amended and Restated Plan.
The termination or amendment of the Second Amended and Restated Plan will
not, without the consent of an optionee, affect the optionee's rights under an
option previously granted. With the consent of the optionee, the Board of
Directors, or the Executive Committee may amend the outstanding options in a
manner not inconsistent with the Second Amended and Restated Plan.
If the Second Amended and Restated Plan had been in effect last year, the
Outside Directors, as a group, would have received options to purchase 5,625
shares of Common Stock. As of March 15, 1995, the current price of UPS Common
Stock was $23.75.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP, independent
auditors, subject to ratification by the shareowners, to audit the consolidated
financial statements of UPS and its subsidiaries for the year ending December
31, 1995 and to prepare a report on such audit. A representative of Deloitte &
Touche LLP will not be present at the meeting, but officers of UPS will be
available to respond to appropriate questions by shareowners.
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OTHER BUSINESS
The Board is not aware of any business other than the proposals described
herein. However, should any other matter requiring a vote of the shareowners
arise, the agents named in the accompanying proxy will vote in accordance with
their own best judgment.
In order for proposals of shareowners to be considered for inclusion in the
proxy materials for the 1996 Annual Meeting, such proposals must be received by
the Secretary of UPS not later than December 2, 1995.
A COPY OF THE 1994 ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL
STATEMENTS, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, MAY BE
OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO: SECRETARY, UNITED PARCEL
SERVICE OF AMERICA, INC., 55 GLENLAKE PARKWAY, NE, ATLANTA, GA 30328.
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APPENDIX A
[LOGO] UNITED PARCEL SERVICE
1991 STOCK OPTION PLAN
(AMENDED AND RESTATED AS OF FEBRUARY 16, 1995)
1. Purpose.
The purpose of this Plan is to ensure continuity of management and increase
the incentive for key managerial employees and non-employee members of the Board
of the Company to make major contributions to effective management or direction
of the Company by providing them with an opportunity to acquire equity interests
in the Company in the manner contemplated by this Plan.
2. Definitions.
As used in this Plan, the following definitions shall apply:
"Board" means the Board of Directors of the Company or, when
appropriate, the Executive Committee of the Board of Directors, acting for
the Board.
"Company" means United Parcel Service of America, Inc.
"Current Price" of a Share at any time means the price per Share which
the Board shall have determined to be the fair market value at which the
Company may express its willingness to purchase Shares from shareowners who
offer them for sale to the Company at that time.
"Employee Optionee" means any Optionee other than an Outside Director
Optionee.
"Incentive Stock Option" means an Option that qualifies as an
incentive stock option within the meaning of Section 422 of the Internal
Revenue Code.
"Nonqualified Option" means an Option that is not an Incentive Stock
Option.
"Officer Compensation Committee" means the Officer Compensation
Committee of the Board.
"Option" means a right to purchase Shares under the terms and
conditions of the Plan, as evidenced by an option certificate or agreement
in such form, not inconsistent with the Plan, as the Committee may adopt
for general use or for specific cases from time to time.
"Optionee" means the person to whom an Option has been granted under
the Plan and, where the context permits, the estate, personal
representative or beneficiary to whom an Option has been transferred by
will or the laws of descent and distribution.
"Outside Director" means any member of the Board who is not, as of the
date of grant of an Option, an employee of the Company or any Subsidiary.
"Outside Director Formula" has the meaning set forth in subparagraph E
of paragraph 7 of this Plan.
"Outside Director Optionee" means any Optionee who is, as of the date
of grant of an Option, an Outside Director.
"Plan" means this United Parcel Service of America, Inc. 1991 Stock
Option Plan, as amended and restated.
"Salary Committee" means the Salary Committee of the Board.
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"Shares" means shares of the Company's common stock, presently having
a par value of $0.10 per share.
"Subsidiary" means any corporation more than 50% of whose outstanding
voting securities is owned by the Company or by one or more of the
Company's other Subsidiaries.
"UPS Managers Stock Trust" means a trust arrangement established by
agreements conforming to the trust agreement made as of April 15, 1958, as
heretofore or hereafter amended (the "UPS Managers Trust Agreement"), among
certain employees of the Company and Fidelity Union Trust Company, as
Trustee ("Fidelity"), or any successor trust arrangement.
An Option shall be deemed "granted" under the Plan on the date of the
action taken by the Salary Committee or Officer Compensation Committee approving
the grant of an Option hereunder.
3. Plan Adoption and Term.
A. This Plan, as amended and restated, shall become effective upon its
adoption by the Board, and Options may be issued from time to time thereafter,
provided however that if this amended and restated Plan shall not receive
shareowner approval at the 1995 Annual Meeting of Shareowners, then the
amendments to the United Parcel Service of America 1991 Stock Option Plan that
resulted in this amended and restated Plan shall be void and of no effect and
the Plan shall remain in effect as it existed before , 1995. In
addition, in such an event, all Options granted under the Plan to Outside
Director Optionees before the date of the 1995 Annual Meeting of Shareowners
shall forthwith automatically terminate and be of no force and effect.
B. No Option may be granted hereunder after March 31, 1996, but Options
granted on or before that date may extend beyond such date in accordance with
their terms.
4. Administration of the Plan.
A. Subject to the provisions of paragraph 7 regarding grant of options and
paragraph 16 regarding amendment of the Plan, this Plan shall be administered by
the Salary Committee or, if the Salary Committee shall consist of fewer than two
persons, by the Board. All actions taken by the Salary Committee with respect to
the Plan shall be reported to the Board at the next regular meeting of the
Board.
B. The Salary Committee shall have authority to interpret the provisions of
the Plan, to construe the terms of any Option, to prescribe, amend and rescind
rules and regulations relating to the Plan, and to make all other determinations
in the judgment of the Salary Committee necessary or desirable for the
administration of the Plan. The Salary Committee may correct any defect, supply
any omission or reconcile any inconsistency in the Plan or in any Option in the
manner and to the extent it shall deem expedient to effectuate the purposes and
intent of the Plan.
C. Any power granted to the Salary Committee, either in this Plan or by the
Board, may at any time be exercised by the Board. Any determination by the
Salary Committee shall be subject to review and reversal or modification by the
Board on its own motion, except that the Board may not impair the rights of
Optionees under Options previously granted.
D. Members of the Salary Committee, the Officer Compensation Committee, the
Executive Committee, and the Board shall not be liable for any action or
determination made by them in good faith.
5. Eligibility.
Key managerial employees of the Company and its Subsidiaries, and Outside
Directors, shall be eligible to participate in the Plan. All recipients of
Options shall be selected on the basis of their having demonstrated an ability
to contribute substantially to the effective management or direction of the
Company and its Subsidiaries. Members of the Board shall be eligible to receive
Options under the Plan, provided that: (i) a member shall not participate in any
decision or action affecting such member other than a decision or action
affecting all participants generally; and (ii) Outside Directors shall be
eligible to receive only Nonqualified
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Options. No Option shall be issued under this Plan to any individual who at the
time an Option might be granted hereunder owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company, or of
any parent or subsidiary of the Company.
6. Limitation on the Number of Shares.
Subject to adjustment as provided in paragraph 14, Options may be granted
pursuant to the Plan for the purchase of not more than 30,000,000 Shares. If
prior to its exercise in full by an Optionee, any Option is canceled or
terminates or lapses in whole or part for any reason other than the termination
of the Plan as a whole, the number of Shares not purchased thereunder shall
forthwith become available again for allocation under new Options, including new
Options to such Optionee, in accordance with the Plan.
7. Grant of Options.
A. At any time during the term of this Plan, the Salary Committee may grant
to any eligible employee who is (i) eligible under paragraph 5 hereof and (ii)
not a member of the Board, a member of the Salary Committee, or a person who is
an officer of the Company as defined in Rule 16a-1 under the Securities Exchange
Act of 1934, an Option to purchase any number of the Shares reserved for
issuance under the Plan, subject to prior allocation of Shares to the same or
other persons and to the limitation of paragraph 6.
B. At any time during the term of this Plan, the Officer Compensation
Committee may grant to any eligible employee who is a member of the Board, a
member of the Salary Committee, or an officer of the Company as defined in Rule
16a-1 under the Securities Exchange Act of 1934, an Option to purchase any
number of the Shares reserved for issuance under the Plan, subject to prior
allocation of Shares to the same or other persons and to the limitation of
paragraph 6.
C. At the time of grant of each Option to an Employee Optionee, the Salary
Committee or the Officer Compensation Committee, as appropriate, shall designate
such Option as an Incentive Stock Option or as a Nonqualified Option. However,
the aggregate fair market value, as determined at the time the Option is
granted, of the Shares with respect to which incentive stock options may become
exercisable for the first time by an Optionee during any calendar year (under
the Plan and any other stock option plan of the Company or any corporation
which, at the time of the granting of such option, is a parent or subsidiary
corporation of the Company) shall not exceed $100,000. To the extent that an
Option designated as an Incentive Stock Option may be or become exercisable for
a number of Shares exceeding the limitation of the preceding sentence, such
Option shall be deemed to be an Incentive Stock Option with respect to the
maximum number of Shares permissible under the preceding sentence and a
Nonqualified Option with respect to any remaining Shares.
D. At such time as the Salary Committee or the Officer Compensation
Committee grants to any Employee Optionee an Option to purchase Shares pursuant
to subparagraphs A or B of paragraph 7, it may also grant to such Employee
Optionee a right to receive money at the time of exercise of the Option in an
amount equal to a designated percentage of the amount by which the Current Price
of the Shares subject to Option exceeds, at the time of exercise thereof, the
option price.
E. On the first day of each year, during the term of this Plan, on which
any Option is granted to an Employee Optionee, each Outside Director shall be
granted Options to purchase Shares, as provided in this subparagraph E of
paragraph 7. Each Outside Director shall be granted Options to purchase that
number of the Shares, equal to the Outside Director Formula, reserved for
issuance under the Plan, subject to prior allocation of Shares to the same or
other persons and to the limitation of paragraph 6. In the case of each Outside
Director, the Outside Director Formula shall be 58.4% of such Outside Director's
annual director's fee as in effect on the date such Option is granted, divided
by the Current Price of one Share on such date. The Salary Committee may at any
time and from time to time modify or amend the Outside Director Formula;
provided, however, that the Salary Committee may not: (i) modify or amend the
Outside Director Formula more often than once during any twelve month period;
(ii) without shareowner approval, modify or amend the Outside Director Formula
in any respect that would materially increase the benefits accruing to Outside
Directors under the Plan; and (iii) without the consent of an Outside Director
Optionee, make any modification or amendment of the Outside Director Formula
that would affect such Outside Director
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Optionee's rights under an Option previously granted. All Options granted to
Outside Director Optionees shall be designated as Nonqualified Options.
8. Purchase Price, Delivery of Shares, and Payment.
A. The purchase price for each Share represented by an Option shall be 100%
of the Current Price of a Share at the time the Option is granted.
Notwithstanding the foregoing, the purchase price per Share shall not be less
than the par value of one Share.
B. Payment of the purchase price for Shares purchased shall be made upon
exercise of an Option by payment, (i) in cash, (ii) in Shares owned by the
purchaser for at least six months prior to the date of exercise and valued at
their then Current Price, or (iii) in any combination of cash and such Shares.
Any payment in Shares shall be effected by the delivery thereof to the Secretary
of the Company, endorsed in blank or accompanied by stock powers executed in
blank. For such purpose, the Optionee may notify the Trustee under the UPS
Managers Stock Trust, in writing, to transmit to the Secretary of the Company,
endorsed in blank, Shares held by the Trustee for the Optionee's account under
the UPS Managers Stock Trust.
C. All Shares issued by the Company to Employee Optionees upon exercise of
Options shall be subject to the UPS Managers Stock Trust. As a condition to the
receipt of Shares upon exercise of an Option, the Employee Optionee shall
execute and deliver to the Trustee of the UPS Managers Stock Trust a trust
deposit agreement. The Company shall then deposit with or deliver to the Trustee
the Shares issued to the Employee Optionee to be held by the Trustee in trust
for such Employee Optionee's benefit pursuant and subject to the terms of the
UPS Managers Trust Agreement.
D. In the event that any Shares are issued or distributed by the Company to
an Employee Optionee upon exercise of an Option on a date that is later than the
date of termination of the Employee Optionee's employment with the Company and
Subsidiaries (the "Termination Date"), then, for purposes of the UPS Managers
Stock Trust, the Company's rights to repurchase the Shares so issued or
distributed shall commence on the December 15 or June 15 next following the
first anniversary of the Termination Date and such Shares shall be treated as
securities issued as a result of the distribution of rights appurtenant UPS
common stock owned by the Employee Optionee and subject to the UPS Managers
Stock Trust on the Termination Date.
E. All Shares issued by the Company to Outside Director Optionees shall be
subject to such agreements with respect to the repurchase of such Shares,
similar in purpose and effect to the provisions of the UPS Managers Stock Trust,
as the Salary Committee shall prescribe. As a condition to the receipt of Shares
upon exercise of an Option, the Outside Director Optionee shall execute and
deliver such agreements as the Salary Committee shall prescribe.
9. Duration of Options.
Each Option and all rights thereunder shall expire five and one-half years
from the date on which the Option is granted, and shall be subject to earlier
termination as provided herein.
10. Conditions Relating to Exercise.
A. Except as otherwise provided in Paragraph 11 hereof, no Option shall be
exercisable until the expiration of five years from the date the Option is
granted. Upon becoming exercisable, and subject to the provisions of Paragraph
11, an Option may be exercised only in its entirety and only during the 30-day
period after the mailing date of the Company's Annual Report to Shareowners for
the prior year.
B. No Option shall be transferable by an Optionee otherwise than by will or
by the laws of descent and distribution.
C. All Options granted hereunder shall be exercisable during the lifetime
of the Optionee only by the Optionee or the Optionee's guardian or legal
representative.
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D. An Option shall be exercised as follows:
(i) By delivering to the Company, at its principal office, to the
attention of its Secretary, written notice of the number of Shares with
respect to which the Option is being exercised; and
(ii) By paying the purchase price for the Shares in accordance with
paragraph 8 hereof and any withholding tax required to be paid pursuant to
paragraph 15 hereof.
E. Notwithstanding any other provision in this Plan, no Option shall be
exercisable unless and until (i) this amended and restated Plan has been
approved by the shareowners of the Company, (ii) the Shares may be legally
issued and sold to the Optionee, and (iii) the Optionee shall have executed such
documents and taken such action as the Salary Committee reasonably shall deem
advisable to assist the Company in complying with the requirements of any
applicable law.
11. Effect of Termination of Employment or Service.
A. In the event an Employee Optionee's employment with the Company and
Subsidiaries shall terminate by reason of such Employee Optionee's retirement
with the consent of the Company or in accordance with an applicable retirement
plan, any Incentive Stock Option then held by such Employee Optionee, which
shall not have lapsed or expired shall, at the election of the Employee
Optionee: (i) be or immediately become fully exercisable but only for a period
ending on the earlier of a date three months following the date of retirement or
the date of expiration of the Option in accordance with its terms; or (ii) be
unaffected by such retirement. Any Nonqualified Option held by such an Employee
Optionee shall be unaffected by such retirement.
B. In the event an Employee Optionee's employment with the Company and
Subsidiaries shall terminate by reason of such Employee Optionee's disability
(within the meaning of Section 22(e)(3) of the Internal Revenue Code), any
Incentive Stock Option then held by such Employee Optionee, which shall not have
lapsed or expired shall, at the election of the Employee Optionee: (i) be or
immediately become fully exercisable but only for a period ending on the earlier
of a date one year following the date of termination of employment or the date
of expiration of the Option in accordance with its terms; or (ii) be unaffected
by such termination of employment. Any Nonqualified Option held by such an
Employee Optionee shall be unaffected by such termination of employment.
C. In the event of an Employee Optionee's death (including death while
retired or disabled), any Option then held by such Employee Optionee which shall
not have lapsed or expired shall be or immediately become fully exercisable at
any time before the date of expiration of the Option in accordance with its
terms.
D. In the event an Employee Optionee shall cease to be employed by the
Company and Subsidiaries for any reason other than those specified in
subparagraphs A, B and C above, any Option then held by such Employee Optionee
shall immediately terminate.
E. Whether an authorized leave of absence or absence in government or
military service constitutes a termination of employment shall be determined by
the Salary Committee, and the Salary Committee's determination shall be final
and conclusive on all persons affected thereby; provided, however, that if such
leave of absence or other absence shall be deemed a termination of employment
for purposes of the UPS Managers Stock Trust, it will also constitute a
termination of employment for purposes of the Plan.
F. In the case of any Option granted to an Outside Director Optionee, if
such Outside Director Optionee ceases for any reason to be a member of the
Board, then such Option shall be exercisable according to the following
provisions, and shall terminate upon the expiration of the applicable exercise
period, if any, specified in this subparagraph F of paragraph 11:
(i) If an Outside Director Optionee ceases to be a member of the Board
for any reason other than resignation, removal for cause or death, any such
Option held by such Outside Director Optionee which shall not have lapsed
or expired shall, at the election of the Outside Director Optionee: (I) be
or immediately become fully exercisable but only for a period ending on the
earlier of a date three months following the date on which such Outside
Director Optionee ceases to be a member of the Board or the date of
expiration of the Option in accordance with its terms; or (II) be
unaffected.
5
29
(ii) Except as provided in clause (iii) of this subparagraph F of
paragraph 11, if during his term of office as a member of the Board an
Outside Director Optionee resigns from the Board or is removed from office
for cause, any Option held by the Outside Director Optionee which is not
exercisable by the Outside Director Optionee immediately prior to
resignation or removal shall terminate as of the date of resignation or
removal, and any Option held by the Outside Director Optionee which is
exercisable by the Outside Director Optionee immediately prior to
resignation or removal shall be exercisable in accordance with its terms.
(iii) If during his term of office as a member of the Board an Outside
Director Optionee's service on the Board shall terminate by reason of such
Outside Director Optionee's disability (within the meaning of Section
22(e)(3) of the Internal Revenue Code), any Option then held by such
Outside Director Optionee, which shall not have lapsed or expired shall, at
the election of the Outside Director Optionee: (I) be or immediately become
fully exercisable but only for a period ending on the earlier of a date one
year following the date on which such Outside Director Optionee ceases to
be a member of the Board or the date of expiration of the Option in
accordance with its terms; or (II) be unaffected.
(iv) Following the death of an Outside Director Optionee (including
death after ceasing, for any reason other than resignation or removal for
cause, to be a member of the Board) any Option held by the Outside Director
Optionee which shall not have lapsed or expired shall be or immediately
become fully exercisable at any time before the date of expiration of the
Option in accordance with its terms.
12. No Special Rights Respecting Employment or Rate of Compensation.
Nothing contained in the Plan or in any Option shall confer upon any
Employee Optionee any right with respect to the continuation of his or her
employment by the Company or any Subsidiary or interfere in any way with the
right of the Company or any Subsidiary at any time to terminate an Employee
Optionee's employment or to increase or decrease the compensation of any
Optionee from the rate in existence at the time of the grant of an Option.
13. Rights as a Shareowner.
The holder of an Option shall have no rights as a shareowner with respect
to any Shares covered by the Option until the date such Shares are issued as
provided in paragraph 8. Except as provided in paragraph 14 below, no adjustment
shall be made for rights for which the record date occurs prior to the date such
Shares are issued.
14. Antidilution Provisions.
A. In the event of a stock dividend, stock split, or other subdivision,
reclassification or combination of the common stock of the Company, the Salary
Committee may make such adjustments in the number of Shares for which Options
may be granted under the Plan, the number of Shares subject to unexercised
Options, and the option prices as it deems equitable.
B. In the event that the outstanding common stock of the Company is changed
or converted into, or exchanged or exchangeable for, a different number or kind
of shares or other securities of the Company or of another corporation, by
reason of reorganization, merger, consolidation or combination, the Salary
Committee may make such adjustments in the number and kind of Shares for which
Options may be or may have been awarded under the Plan as it deems equitable;
provided, however, that in the event of any contemplated transaction which may
constitute a change in control of the Company, the Salary Committee, with the
approval of a majority of the members of the Board who are not then holding
Options, may modify any and all outstanding Options so as to accelerate, as a
consequence of or in connection with such transaction, an Optionee's right to
exercise any such Option.
C. Each Optionee will be notified of any such adjustment and any such
adjustment, or the failure to make such adjustment, shall be binding on the
Optionee.
6
30
15. Withholding Taxes.
Whenever Shares are to be issued or cash paid to an Optionee upon exercise
of an Option, the Company shall have the right to require the Optionee to remit
to the Company, as a condition of exercise of the Option, an amount sufficient
to satisfy federal, state and local withholding tax requirements at the time of
exercise.
16. Amendment of the Plan.
The Plan may at any time or from time to time be modified or amended by the
affirmative votes of a majority of the Shares present, or represented, and
entitled to vote at a meeting of the Company's shareowners. The Board or the
Executive Committee of the Board may at any time and from time to time modify or
amend the Plan in any respect, or terminate the Plan, except that, without
shareowner approval the Board or the Executive Committee of the Board may not
(a) materially increase the benefits accruing to participants under the Plan,
(b) materially increase the number of Shares which may be issued under the Plan,
or (c) materially modify the requirements as to eligibility for participation in
the Plan. The termination, modification or amendment of the Plan shall not,
without the consent of an Optionee, affect the Optionee's rights under an Option
previously granted. With the consent of the Optionee, the Board or the Executive
Committee of the Board may amend outstanding Options in a manner not
inconsistent with the Plan.
7
31
APPENDIX B
765 BROAD STREET
NEWARK, N.J. 07101
FIRST FIDELITY BANK, N.A., NEW JERSEY TELEPHONE 1-800-458-0924
March 31, 1995
TO MEMBERS OF THE UPS MANAGERS STOCK TRUST:
We have been advised that the annual meeting of shareowners of United
Parcel Service of America, Inc. (the "Corporation") will be held at 1209 Orange
Street, Wilmington, Delaware, on May 11, 1995, at 9:00 A.M. A copy of the notice
of meeting and proxy statement, and a Letter of Instructions to execute the
proxy, which is being solicited on behalf of the Board of Directors of the
Corporation, are enclosed.
Under the trust agreement dated April 15, 1958, we are to notify you of
the time and place of the meeting and offer to furnish you, and furnish if
requested, a proxy permitting you to vote at the meeting the number of shares of
capital stock of the Corporation held by us under the trust for you. If you want
such a proxy, please advise us.
If you wish your stock voted as indicated in the enclosed Letter of
Instructions, please date, sign and return the letter to us in the addressed
envelope which requires no postage.
If we do not hear from you prior to May 4, 1995, we will execute and
deliver to Joseph R. Moderow, the Secretary of the Corporation, a proxy to vote
all shares for which no proxy has been requested and for which we have not
received a Letter of Instructions.
Very truly yours,
FIRST FIDELITY BANK, N.A., NEW JERSEY
TRUSTEE, UPS MANAGERS STOCK TRUST
32
UPS MANAGERS STOCK TRUST
LETTER OF INSTRUCTIONS TO EXECUTE PROXY FOR ANNUAL MEETING OF SHAREOWNERS OF
UNITED PARCEL SERVICE OF AMERICA, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FIRST FIDELITY BANK, N.A., New Jersey
756 Broad Street
Newark, New Jersey 07101
Gentlemen:
In connection with the annual meeting of shareowners of UNITED PARCEL
SERVICE OF AMERICA, INC. to be held in Wilmington, Delaware, on May 11, 1995,
you are hereby instructed and directed to deliver a proxy to Kent C. Nelson and
Joseph R. Moderow, or either of them, with power of substitution, instructing
and authorizing them to vote all shares which you are holding for the benefit of
the undersigned in the UPS MANAGERS STOCK TRUST as of March 15, 1995.
1. ELECTION OF DIRECTORS FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed
/ / below / /
John W. Alden, William H. Brown, III, Carl Kaysen, John J. Kelley, James P.
Kelly, Gary E. MacDougal, Joseph R. Moderow, Kent C. Nelson, Victor A.
Pelson, John W. Rogers, Charles L. Schaffer, Robert M. Teeter and Calvin E.
Tyler, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
(CONTINUED ON OTHER SIDE)
(CONTINUED FROM OTHER SIDE)
2. FOR / / AGAINST / / ABSTAIN / / approval of the UPS 1991 Stock Option
Plan, as amended and restated.
3. FOR / / AGAINST / / ABSTAIN / / the appointment of Deloitte & Touche, as
auditors for UPS and its subsidiaries for
the year ending December 31, 1995.
4. In their discretion upon such other matters as may properly come before the
meeting or any adjournment thereof.
- ---------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREOWNER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
Dated this day
of , 1995
------------------------------------------------
SIGNATURE (sign exactly as name appears hereon)
------------------------------------------------
SIGNATURE OF CO-OWNER IF ANY
FOR JOINT ACCOUNTS, ALL CO-OWNERS MUST SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD
SO INDICATE WHEN SIGNING.
- ---------------------------------------------------------------
33
APPENDIX C
UNITED PARCEL SERVICE OF AMERICA, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING OF SHAREOWNERS -- MAY 11, 1995
The undersigned hereby appoints KENT C. NELSON and JOSEPH R. MODEROW, or
either of them, with power of substitution, as attorneys and proxies to vote all
of the shares of stock outstanding in the name of the undersigned as of March
15, 1995 at the annual meeting of shareowners of United Parcel Service of
America, Inc. ("UPS") to be held at the Corporation Trust Company, 1209 Orange
Street, Wilmington, Delaware, on May 11, 1995, and at any or all adjournments
thereof; and the undersigned hereby instructs and authorizes said attorneys to
vote:
1. ELECTION OF DIRECTORS FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed
/ / below / /
John W. Alden, William H. Brown, III, Carl Kaysen, John J. Kelley, James P.
Kelly, Gary E. MacDougal, Joseph R. Moderow, Kent C. Nelson, Victor A.
Pelson, John W. Rogers, Charles L. Schaffer, Robert M. Teeter and Calvin E.
Tyler, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. FOR / / AGAINST / / ABSTAIN / / approval of the UPS 1991 Stock Option
Plan, as amended and restated.
(CONTINUED ON OTHER SIDE)
(CONTINUED FROM OTHER SIDE)
3. FOR / / AGAINST / / ABSTAIN / / the appointment of Deloitte & Touche, as
auditors for UPS and its subsidiaries for
the year ending December 31, 1995.
4. In their discretion upon such other matters as may properly come before the
meeting or any adjournment thereof.
- ------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED
SHAREOWNER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE
VOTED FOR PROPOSALS 1, 2, 3 AND 4.
Dated this day
of , 1995
-----------------------------------------------
SIGNATURE (sign exactly as name appears hereon)
-----------------------------------------------
SIGNATURE OF CO-OWNER IF ANY
FOR JOINT ACCOUNTS, ALL CO-OWNERS MUST SIGN.
EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC. SHOULD SO
INDICATE WHEN SIGNING.
- ------------------------------------------------------------
34
APPENDIX D
765 BROAD STREET
NEWARK, N.J. 07101
FIRST FIDELITY BANK, N.A., NEW JERSEY TELEPHONE 1-800-458-0924
March 31, 1995
TO MEMBERS OF THE UPS STOCK TRUST:
We have been advised that the annual meeting of shareowners of United
Parcel Service of America, Inc. (the "Corporation") will be held at 1209 Orange
Street, Wilmington, Delaware, on May 11, 1995, at 9:00 A.M. A copy of the notice
of meeting and proxy statement, and a Letter of Instructions to execute the
proxy, which is being solicited on behalf of the Board of Directors of the
Corporation, are enclosed.
Under the applicable trust agreement, we are to notify you of the time
and place of the meeting and offer to furnish to you, and furnish if requested,
a proxy permitting you to vote at the meeting the number of shares of capital
stock of the Corporation held by us under the trust for you. If you want such a
proxy, please advise us.
If you wish your stock voted as indicated in the enclosed Letter of
Instructions, please date, sign and return the letter to us in the addressed
envelope which requires no postage.
If we do not hear from you prior to May 4, 1995, we will execute and
deliver to Joseph R. Moderow, the Secretary of the Corporation, a proxy to vote
all shares for which no proxy has been requested and for which we have not
received a Letter of Instructions.
Very truly yours,
FIRST FIDELITY BANK, N.A., NEW JERSEY
TRUSTEE, UPS STOCK TRUST
35
UPS STOCK TRUST
LETTER OF INSTRUCTIONS TO EXECUTE PROXY FOR ANNUAL MEETING OF SHAREOWNERS OF
UNITED PARCEL SERVICE OF AMERICA, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FIRST FIDELITY BANK, N.A., New Jersey
756 Broad Street
Newark, New Jersey 07101
Gentlemen:
In connection with the annual meeting of shareowners of UNITED PARCEL
SERVICE OF AMERICA, INC. to be held in Wilmington, Delaware, on May 11, 1995,
you are hereby instructed and directed to deliver a proxy to Kent C. Nelson and
Joseph R. Moderow, or either of them, with power of substitution, instructing
and authorizing them to vote all shares which you are holding for the benefit of
the undersigned in the UPS STOCK TRUST as of March 15, 1995.
1. ELECTION OF DIRECTORS FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed
/ / below / /
John W. Alden, William H. Brown, III, Carl Kaysen, John J. Kelley, James P.
Kelly, Gary E. MacDougal, Joseph R. Moderow, Kent C. Nelson, Victor A.
Pelson, John W. Rogers, Charles L. Schaffer, Robert M. Teeter and Calvin E.
Tyler, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
(CONTINUED ON OTHER SIDE)
(CONTINUED FROM OTHER SIDE)
2. FOR / / AGAINST / / ABSTAIN / / approval of the UPS 1991 Stock Option
Plan, as amended and restated.
3. FOR / / AGAINST / / ABSTAIN / / the appointment of Deloitte & Touche, as
auditors for UPS and its subsidiaries for
the year ending December 31, 1995.
4. In their discretion upon such other matters as may properly come before the
meeting or any adjournment thereof.
- ---------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREOWNER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
Dated this day
of , 1995
------------------------------------------------
SIGNATURE (sign exactly as name appears hereon)
------------------------------------------------
SIGNATURE OF CO-OWNER IF ANY
FOR JOINT ACCOUNTS, ALL CO-OWNERS MUST SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD
SO INDICATE WHEN SIGNING.
- ---------------------------------------------------------------
36
APPENDIX E
765 BROAD STREET
NEWARK, N.J. 07101
FIRST FIDELITY BANK, N.A., NEW JERSEY TELEPHONE 1-800-458-0924
March 31, 1995
TO PARTICIPANTS IN THE ANNIE E. CASEY
FOUNDATION STOCK COMPENSATION PLAN:
We have been advised that the annual meeting of shareowners of United
Parcel Service of America, Inc. (the "Corporation") will be held at 1209 Orange
Street, Wilmington, Delaware, on May 11, 1995, at 9:00 A.M. A copy of this
notice of meeting and proxy statement, and a Letter of Instructions to execute
the proxy, which is being solicited on behalf of the Board of Directors of the
Corporation, are enclosed.
Under the applicable agreement, we are to notify you of the time and
place of the meeting and offer to furnish you, and furnish if requested, a proxy
permitting you to vote at the meeting the number of shares of capital stock of
the Corporation held by us under the trust for you. If you want such a proxy,
please advise us.
If you wish your stock voted as indicated in the enclosed Letter of
Instructions, please date, sign and return the letter to us in the addressed
envelope which requires no postage.
If we do not hear from you prior to May 4, 1995, we will execute and
deliver to Joseph R. Moderow, the Secretary of the Corporation, a proxy to vote
all shares for which no proxy has been requested and for which we have not
received a Letter of Instructions.
Very truly yours,
FIRST FIDELITY BANK, N.A., NEW JERSEY
37
ANNIE E. CASEY FOUNDATION
LETTER OF INSTRUCTIONS TO EXECUTE PROXY FOR ANNUAL MEETING OF SHAREOWNERS OF
UNITED PARCEL SERVICE OF AMERICA, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FIRST FIDELITY BANK, N.A., New Jersey
756 Broad Street
Newark, New Jersey 07101
Gentlemen:
In connection with the annual meeting of shareowners of UNITED PARCEL
SERVICE OF AMERICA, INC. to be held in Wilmington, Delaware, on May 11, 1995,
you are hereby instructed and directed to deliver a proxy to Kent C. Nelson and
Joseph R. Moderow, or either of them, with power of substitution, instructing
and authorizing them to vote all shares which you are holding for the benefit of
the undersigned as of March 15, 1995.
1. ELECTION OF DIRECTORS FOR ALL NOMINEES LISTED BELOW WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees listed
/ / below / /
John W. Alden, William H. Brown, III, Carl Kaysen, John J. Kelley, James P.
Kelly, Gary E. MacDougal, Joseph R. Moderow, Kent C. Nelson, Victor A.
Pelson, John W. Rogers, Charles L. Schaffer, Robert M. Teeter and Calvin E.
Tyler, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. FOR / / AGAINST / / ABSTAIN / / approval of the UPS 1991 Stock Option
Plan, as amended and restated.
(CONTINUED ON OTHER SIDE)
(CONTINUED FROM OTHER SIDE)
3. FOR / / AGAINST / / ABSTAIN / / the appointment of Deloitte & Touche, as
auditors for UPS and its subsidiaries for
the year ending December 31, 1995.
4. In their discretion upon such other matters as may properly come before the
meeting or any adjournment thereof.
- ---------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREOWNER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4.
Dated this day
of , 1995
------------------------------------------------
SIGNATURE (sign exactly as name appears hereon)
------------------------------------------------
SIGNATURE OF CO-OWNER IF ANY
FOR JOINT ACCOUNTS, ALL CO-OWNERS MUST SIGN.
EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD
SO INDICATE WHEN SIGNING.
- ---------------------------------------------------------------