Exhibit 10.2(22)
AMENDMENT NO. 26
TO THE
UPS RETIREMENT PLAN
WHEREAS, United Parcel Service of America, Inc. ("UPS") and its
affiliated corporations established the UPS Retirement Plan ("Plan") for the
benefit of their eligible employees, in order to provide benefits to those
employees upon their retirement, disability, or death, effective as of
September 1, 1961;
WHEREAS, the Plan, as adopted and amended from time to time, was
amended and restated in its entirety, effective as of January 1, 1976, to
comply with the Employee Retirement Income Security Act of 1974;
WHEREAS, the Plan has been amended on a number of occasions since
January 1, 1976, the most recent being Amendment No. 25; and
WHEREAS, it is desired to amend the Plan further to conform the Plan
to any additional changes required by the General Agreement on Tariffs and
Trade, the Uniformed Services Employment and Reemployment Rights Act of 1994,
the Small Business Job Protection Act of 1996, the Taxpayer Relief Act of 1997,
the Internal Revenue Service Restructuring and Reform Act of 1998, and the
Community Renewal Tax Relief Act of 2000 (collectively, "GUST"), and to make
certain other changes.
NOW THEREFORE, pursuant to the authority vested in the Board of
Directors by Section 7.1 of the Plan, the UPS Retirement Plan is hereby amended
as follows:
1. Section 1.1(j) is hereby amended effective as of July 1, 1988 to
substitute "except the Thrift Plan and any other cash or deferred plan
described in Section 401(k) of the Code or the UPS Qualified Stock
Ownership Plan" where "except the UPS Thrift Plan" appears in the
text.
2. Section 1.1(j) is hereby amended effective as of January 1, 1994 to
read as follows:
(j) "Employee" means (1) an individual who is employed by a
domestic Employer Company described in Section 1.1(o)(1), or
(2) a United States citizen transferred from employment with a
domestic Employer Company to employment with a foreign
Employer Company described in Section 1.1(o) hereof, neither
of whose terms and conditions of employment are governed by a
collective bargaining agreement to which the Employer Company
is a party, unless the collective bargaining agreement
expressly provides for coverage under this Plan (for periods
after January 1, 1992, changes to the Plan's benefit formula
shall not apply to employees subject to a collective
bargaining agreement and participating in this
-1-
Plan except to the extent so provided in the applicable
collective bargaining agreement), and neither of whom is an
active participant on whose behalf contributions are being
made by the Employer Company under any other qualified pension
or retirement plan, except the Thrift Plan and any other cash
or deferred plan described in Section 401(k) of the Code or
the UPS Qualified Stock Ownership Plan.
Notwithstanding the foregoing, any individual who becomes an
Employee for the first time as a result of employment with an
Employer Company which first elected to participate in this
Plan as of January 1, 1985, or later, shall not be considered
an Employee until such individual has completed one Year of
Service during or after the first Plan Year for which the
Employer has agreed to participate.
The term "Employee" shall not include an individual employed
as a leased employee as that term is defined in Code Section
414 (n) (2).
Under no circumstances will an individual who performs
services for a Employer Company, but who is not classified on
the payroll as an employee of the Employer Company, for
example, an individual performing services for a Employer
Company under a leasing arrangement, be treated as an
Eligible Employee even if such individual is treated as an
"employee" of a Employer Company as a result of common law
principals or the leased employee rules under Section 414(n)
of the Code. Further, if an individual performing services
for a Employer Company is retroactively reclassified as an
employee of a Employer Company for any reason, such
reclassified individual shall not be treated as an Eligible
Employee for any period prior to the actual date (and not the
effective date) of such reclassification unless the Employer
Company determines that retroactive reclassification is
necessary to correct a payroll classification error.
3. Section 1.1(l) is hereby amended effective as of January 1, 2001 to
read as follows:
(l) "Benefit Service" under the Plan means, subject to the
special rules described below, the number of a Participant's
years (including fractions of a year) of (i) employment as an
Employee, within the meaning of Section 1.1(j), with one or
more Employer Companies, and (ii) employment with one or more
Employer Companies, but not as an Employee, provided that
such employment precedes the Participant's period of
employment as an Employee. No Benefit Service credit will be
given with respect to service with an Employer Company which
follows a Participant's period of employment as an Employee,
unless the Participant subsequently becomes an Employee and
earns at least one month of Benefit Service in such capacity.
-2-
(1) Years and months of Benefit Service shall be
determined based on Hours of Service earned by a
Participant in the capacities described above in
accordance with the following charts:
(A) For any Participant without at least one
Hour of Service as an Employee on or after
January 1, 1992:
Hours of Service in Months of
Each Calendar Year Benefit Service
Less than 1000 0 months
1000 - 1050 6 months
1051 - 1200 7 months
1201 - 1350 8 months
1351 - 1500 9 months
1501 - 1650 10 months
1651 - 1800 11 months
1801 or over 12 months
(B) For a Participant with at least one Hour of
Service as an Employee on or after January
1, 1992:
Hours of Service in Months of
Each Calendar Year Benefit Service
Less Than 125 0 months
125 - 249 1 month
250 - 374 2 months
375 - 499 3 months
500 - 624 4 months
625 - 749 5 months
750 - 874 6 months
875 - 999 7 months
1000 - 1124 8 months
1125 - 1249 9 months
1250 - 1374 10 months
1375 - 1499 11 months
1500 - over 12 months
-3-
Participants eligible for Benefit Service
credit in accordance with this subparagraph
(B) shall receive such credit with respect
to Hours of Service both preceding and
following January 1, 1992.
(2) If a Participant with no vested interest, as
determined under Section 6.1, incurs one or more
consecutive Breaks in Service:
(A) Service credit before such Break in Service
shall not be taken into account for
purposes of calculating years of Benefit
Service in accordance with this subsection
1.1(l) until the Participant completes one
Year of Service after the Break in Service;
and
(B) Service credit prior to the Break in
Service shall not be taken into account for
purposes of calculating years of Benefit
Service in accordance with this subsection
1.1(l) if the number of consecutive Breaks
in Service equals or exceeds the greater of
(i) the aggregate number of the
Participant's Years of Service (excluding
Years of Service not required to be taken
into account by reason of any prior Breaks
in Service), or (ii) five.
(3) Benefit Service with respect to a Participant
without at least one Hour of Service (whether or not
as an Employee) after December 31, 1992 shall be
calculated in accordance with the applicable table
at subparagraph (1) above, but there shall be
included as Benefit Service for such purpose all
years and months of the Participant's Continuous
Employment as determined by the Administrative
Committee in accordance with this subsection 1.1(l)
prior to the adoption of Amendment No. 15 to this
Plan.
(4) Benefit Service with respect to a Disabled
Participant whose retirement benefits commence after
December 31, 2000 shall be calculated in accordance
with the applicable table in subparagraph (1) above,
but there shall be included as Benefit Service all
years and months while the Participant is a Disabled
Participant and while the Participant continues to
be "totally disabled" for purposes of the UPS Income
Protection Plan (or a successor long term disability
plan), as amended from time to time, determined as
if such Disabled Participant had worked at least
1500 Hours of Service in each calendar year and at
least 216 Hours of Service in each month in excess
of a calendar year. For the purpose of this
paragraph (4), a "Disabled Participant" means a
Participant who, as of the time of his or her
termination of employment with all Employer
Companies, has (A) five Years of Service, (B) is a
full-time Employee and (C) is and continues to be
-4-
"totally disabled" for purposes of the UPS Income
Protection Plan (or a successor long term disability
plan), as amended from time to time.
4. Section 1.1(y) is hereby amended effective as of January 1, 1998 to
read as follows:
(y) "Compensation" means, generally, remuneration currently earned and
actually paid by an Employer Company or a domestic Related Employer to
an employee who is a Participant in the Plan, and reported on such
employee's Form W-2 for the applicable calendar year, including basic
salary or wages (without reducing wages to account for the
Participant's elective deferral of a portion of his or her salary or
wages, if any, pursuant to a cash or deferred arrangement described in
Section 401(k) of the Code, a plan described in Section 125 of the
Code, the UPS Deferred Compensation Plan and /or the UPS Deferred
Compensation Plan 2000), overtime pay, incentive and bonus pay, and
including the value of awards made pursuant to the UPS Managers'
Incentive Plan or management incentive awards under the United Parcel
Service, Inc. Incentive Compensation Plan. Compensation shall not
include any other payments received by the Participant, including, but
not limited to, the following, notwithstanding that such payments may
be included in the Participant's Form W-2 for the applicable year:
(1) Payments in the nature of compensation from an
insurance carrier, from a state unemployment or
worker's compensation fund, or from any health and
welfare or other benefit program or plan maintained
by an Employer Company or a Related Employer other
than the United Parcel Service, Inc. Incentive
Compensation Plan for management incentive awards
thereunder.
(2) Disability payments from an insurance carrier, a
state disability insurance fund, this Plan or any
other disability plan maintained by an Employer
Company or a Related Employer.
(3) 'Foreign service differentials' or other
supplemental payments made by an Employer Company or
a Related Employer to a Participant working outside
his or her country of citizenship on account of such
foreign service.
(4) Payment or reimbursement by an Employer Company or a
Related Employer of relocation expenses incurred by
a Participant or his or her family.
(5) The value of employee fringe benefits provided by an
Employer Company or a Related Employer, including
but not limited to the payment of life insurance
premiums, whether or not the value of such fringe
benefits is includable in an employee's taxable
income.
(6) Payments made under deferred compensation plans or
programs.
-5-
(7) Employer contributions to any pension,
profit-sharing or stock bonus plan to which the
Employer Company or a Related Employer contributes.
(8) Employer contributions to any welfare benefit plan
to which an Employer Company or a Related Employer
contributes.
(9) Income attributable to awards under the UPS Stock
Option Plan or the United Parcel Service, Inc.
Incentive Compensation Plan other than management
incentive awards.
In no event shall the Compensation of any
participant taken into account under the Plan for any Plan
Year exceed the applicable dollar amounts for such Plan Year:
Plan Year Compensation Limit
1989 $200,000
1990 $209,200
1991 $222,220
1992 $228,860
1993 $235,840
1994 $150,000
1995 $150,000
1996 $150,000
1997 $160,000
1998 $160,000
1999 $160,000
2000 $170,000
2001 $170,000
2002 $200,000
increased by the applicable cost-of-living adjustment, if
any, for the calendar year sanctioned by Section 401(a)(17)
of the Code.
For Plan Years commencing before January 1, 1997, in
determining the Compensation of a Participant, the rules of
Section 414(q)(6) of the Code (as in effect immediately prior
to January 1, 1997) shall apply, except that in applying such
rules, the term "family" shall include only the Participant's
spouse and any lineal descendants of the Participants who
have not attained age 19 before the close of the Plan Year.
If, as a result of the application of such rules the
applicable Compensation limitation is exceeded, then such
limitation shall be prorated among the affected individuals
in proportion to each such individual's Compensation as
determined under this subsection 1.1(j) prior to the
application of this limitation.
-6-
In determining a Participant's Final Average
Compensation, the $200,000 Compensation limitation shall
apply retroactively with respect to Compensation earned prior
to 2002 by a Participant with at least one Hour of Service on
or after January 1, 2002. Similarly, the $150,000
Compensation limitation shall apply retroactively with
respect to Compensation earned prior to 1994 by a Participant
with at least one Hour of Service on or after January 1, 1994
(but without an Hour of Service on or after January 1, 2002)
and the $200,000 Compensation limitation in effect for 1989
shall be applied retroactively with respect to Compensation
earned prior to 1989 by a Participant with at least one Hour
of Service on or after January 1, 1989 (but without any Hours
of Service on or after January 1, 1994). However, a
Participant's Benefit shall not be less than that which he or
she had accrued or earned as of December 31, 2001 (December
31, 1993 in the case of a Participant without at least one
Hour of Service on or after January 1, 2002 or December 31,
1988 in the case of a Participant without at least one Hour
of Service on or after January 1, 1994), based on his or her
Benefit Service and Final Average Compensation determined as
of such date.
Solely for the purpose of avoiding a double
proration, within the meaning of Department of Labor
Regulations, Section 2530.204-2(d), in calculating a
Participant's benefit under Section 5.2A; to the extent that
a Participant is credited with less than a full year's
Benefit Service for a calendar year, then the Participant's
Compensation taken into account for such year shall be
annualized by dividing such Compensation by the number of
months of Benefit Service earned by the Participant for such
calendar year and multiplying the result by 12.
5. Section 2.1 is hereby amended effective as of July 1, 1988 to
substitute the parenthetical reference "(except the Thrift Plan and
any other cash or deferred plan described in Section 401(k) of the
Code or the UPS Qualified Stock Ownership Plan)" where the
parenthetical reference "(except the UPS Thrift Plan)" appears in the
text.
6. Section 5.6 is hereby amended effective as of July 1, 1988 to
substitute "except the Thrift Plan and any other cash or deferred plan
described in Section 401(k) of the Code or the UPS Qualified Stock
Ownership Plan" where "except the UPS Thrift Plan" appears in the text
of the first paragraph.
7. Section 5.7(b)(1) is hereby amended effective for limitation years
beginning on or after January 1, 1995 to read as follows:
(b) Maximum Benefits.
(1) General Limitation. For limitation years commencing after
December 31, 1982, the maximum annual benefit payable under
this Plan shall not exceed the lesser of: (i) $90,000 (the
"dollar limitation") or (ii) 100% of the Participant's
average compensation (as defined in Treasury Regulation
Section 1.415-2(d)) and
-7-
reduced, if necessary, to reflect the applicable annual
compensation limitation set forth in Section 1.1(y) of this
Plan paid for the three consecutive calendar years during
which he was an active Participant in the Plan, and in which
he received the greatest aggregate compensation (as defined
above)from the Employer Company, subject to the following:
(A) If the benefit is payable in any form other than a
straight life annuity, a Qualified Joint and
Survivor (Husband and Wife) Benefit, or a joint and
survivor annuity with the spouse as the beneficiary,
then the limitations of this subsection (1) shall be
applied to the straight life annuity which is the
equivalent of such benefit. The actuarially
equivalent straight life annuity is equal to the
greater of the annuity benefit computed using the
interest rate and mortality table (or other tabular
factor) specified in the Plan for adjusting benefits
in the same form, and the annuity benefit computed
using a 5 percent interest rate assumption and the
Applicable Mortality Table. In determining the
actuarially equivalent straight life annuity for a
lump sum benefit, the Applicable Interest Rate will
be substituted for 5 percent. No actuarial
adjustment is required for the value of a qualified
joint and survivor annuity, benefits that are not
directly related to retirement benefits and the
value of post-retirement cost-of-living increases
made in accordance with Section 415(d) of the Code
and the regulations thereunder.
(B) If the retirement benefit of the Participant
commences before the Participant's Social Security
Retirement Age, such dollar limitation shall be
adjusted as described below so that it is the
actuarial equivalent of an annual benefit of $90,000
beginning at the Social Security Retirement Age,
multiplied by the Inflation Factor.
(i) If the retirement benefit commences before
the Participant's Social Security
Retirement Age, but on or after age 62, the
defined benefit dollar limitation shall be
determined as follows:
(I) If a Participant's Social Security
Retirement Age is 65, the dollar
limitation for benefits commencing
on or after age 62 is determined
by reducing the defined benefit
dollar limitation by 5/9 of one
percent for each month by which
benefits commence before the month
in which the Participant attains
age 65.
(II) If a Participant's Social Security
Retirement Age is greater than 65,
the dollar limitation for benefits
commencing on or after age 62 is
determined by
-8-
reducing the defined benefit
dollar limitation by 5/9 of one
percent for each of the first 36
months and 5/12 of one percent for
each of the additional months (up
to 24 months) by which benefit
commence before the month in which
the Participant reaches Social
Security Retirement Age.
(ii) If the retirement benefit of a Participant
commences prior to age 62, the defined
benefit dollar limitation shall be a
retirement benefit that is the actuarial
equivalent of the defined benefit dollar
limitation for age 62, as determined above,
reduced for each month by which benefits
commence before the month in which the
Participant attains age 62. The retirement
benefit beginning prior to age 62 shall be
determined as the lesser of the equivalent
retirement benefit computed using the
interest rate and mortality table (or other
tabular factor) equivalence for early
retirement benefits specified in the Plan,
and the equivalent retirement benefit
computed using a 5 percent interest rate
and the Applicable Mortality Table. Any
decrease in the adjusted defined benefit
dollar limitation determined in accordance
with this provision (ii) shall not reflect
any mortality decrement to the extent that
benefits will not be forfeited upon the
death of the Participant.
(iii) If the retirement benefit of a Participant
commences after the Participant's Social
Security Retirement Age, the defined
benefit dollar limitation shall be adjusted
so that it is the actuarial equivalent of a
retirement benefit of such dollar
limitation beginning at the Participant's
Social Security Retirement Age, multiplied
by the Inflation Factor. The equivalent
retirement benefit beginning after Social
Security Retirement Age shall be determined
as the lesser of the equivalent retirement
benefit computed using the interest rate
and mortality table (or other tabular
factor) specified in the Plan for purposes
of determining actuarial equivalence for
delayed retirement benefits, and the
equivalent retirement benefit computed
using a 5 percent interest rate assumption
and the Applicable Mortality Table.
(iv) For the purpose of this subparagraph
(b)(1)(B), the following definitions shall
apply:
-9-
(I) "Inflation Factor" shall mean the
cost of living adjustment factor
prescribed by the Secretary of the
Treasury under Section 415(d) of
the Code for years beginning after
December 31, 1987, applied to such
items and in such manner as the
Secretary shall prescribe.
(II) "Social Security Retirement Age"
shall mean the age used as the
retirement age for the Participant
under Section 216(l) of the Social
Security Act, except that such
section shall be applied without
regard to the age increase factor,
and as if the early retirement age
under Section 216(l)(2) of such
Act were 62.
(C) Subject to limitations imposed elsewhere in this
Plan, an annual benefit of $10,000 or less may be
paid regardless of the limitations set forth in this
subsection (b)(1) if the benefit paid the
Participant from all defined benefit plans of the
Employer Company does not exceed $10,000 for the
Plan Year or any prior Plan Year, and the Employer
Company has not at any time maintained a defined
contribution plan in which the Participant
participated.
(D) If a Participant has less than 10 Years of service
with the Employer Company at the time the
Participant begins to receive retirement benefits
under the Plan, the average compensation limitation,
as well as the $10,000 benefit exception described
in subparagraph (b)(1)(C) above, shall be reduced by
multiplying such limitation by a fraction, the
numerator of which is the number of Years of Service
with the Employer Company as of and including the
current limitation year, and the denominator of
which is 10. In the case of the dollar limitation
where the Participant has less than 10 years of
participation in the Plan, such limitation shall be
reduced by a fraction, the numerator of which is the
number of years of participation in the Plan as of
and including the current limitation year, and the
denominator of which is 10.
8. Section 5.7(b)(8) is hereby amended to read as follows:
(8) Employer Company. Solely for purposes of this Section 5.7(b),
"Employer Company" means the Employer Company and each entity
who would be determined to be a member of the Employer
Company's controlled group under Section 414(b) or (c) of the
Code if the standard of "more than fifty percent" was
substituted for the standard of "at least eighty percent."
-10-
9. Article 10 is hereby amended to add a new Section 10.11 effective as
of December 12, 1994 which reads as follows:
Section 10.11 USERRA. Notwithstanding anything in this Plan to the
contrary, contributions, benefits and service credit with respect to
qualified military service shall be provided in accordance with
Section 414(u) of the Code.
10. Section 11.6 is hereby amended effective for limitation years
beginning on or after January 1, 2000 to read as follows:
Section 11.6 Top-Heavy Adjustment to Section 415 . For each Plan Year
for which the Plan is a Top-Heavy Plan prior to January 1, 2000, the
limit imposed by Section 5.8(b)(2) shall be applied by substituting
"1.0" for "1.25" in each place where it appears, unless the Employer
Company elects to make, and does make, additional contributions
sufficient to meet the requirements specified in subsection (b)
hereof. Such election shall only be effective for those Plan Years in
which:
(a) the Plan would not be a Top-Heavy Plan as defined in
Section 11.2(a), above, if "ninety percent" were
substituted for "sixty percent" in Section
11.2(a)(2) and Section 11.2(d), and
(b) with respect to each plan described in Section
11.2(c)(1) or (2): (1) the minimum benefit described
in Section 416(c)(2) of the Code (as modified by
Section 416(h)(2)(A)(ii)(II)) is provided by each
such plan which is a defined contribution plan, and
(2) the minimum benefit described in Section
416(c)(1) of the Code (as modified by Section
416(h)(2)(A)(ii)(I)) is provided by each such plan
which is a defined benefit plan
11. Section 12.2 is hereby amended effective as of January 1, 2001 to add
a new paragraph (e) which read as follows:
(e) "Grandfathered Retired Participant" means a Retired
Participant within the meaning of Section 12.2(d) who is also
a Grandfathered Participant within the meaning of Section
1.1(ii).
12. Section 12.10(c)(2) is hereby amended effective as of January 1, 2001
to read as follows:
(2) A Retired Participant's DDB amount for any Year of Service
after December 31, 2000 with an Employer Company will be
equal to the DDB amount for the Employer Company for which
the Retired Participant performed service during that Plan
Year as set forth in Appendix F. If a Retired Participant
performs service under more than one schedule in any Plan
Year, the Retired Participant shall receive credit for his or
her Year of
-11-
Service, if any, completed in that Plan Year under the
schedule with the highest DDB amount under which he or she
has at least one Hour of Service. The DDB amount for each
Year of Service with an Employer Company completed prior
January 1, 2001 shall be equal to $250 for Pre-Medicare
Eligible Coverage and $42 for Medicare Eligible Coverage.
However, no DDB amount shall be earned for Years of Service
with an Employer Company that first becomes an Employer
Company on or after January 1, 2001 before that Employer
Company first began to offer Medical Benefits under this
Plan. Except as provided Section 12.10(d)(2), in no event
shall the Pre-Medicare Eligible Coverage DDB Balance exceed
$7500 or the Medicare Eligible Coverage DDB Balance exceed
$1260. Notwithstanding the foregoing, a Grandfathered Retired
Participant's DDB amount for any Year of Service (up to a
maximum of 30 years) with an Employer Company shall never be
less than $250 for Pre-Medicare Eligible Coverage and $42 for
Medicare Eligible Coverage.
IN WITNESS WHEREOF, the undersigned certify that United Parcel Service
of America, Inc., based upon action by its Board of Directors on
___________________, 2002, has caused this Amendment No. 26 to be adopted.
ATTEST: UNITED PARCEL SERVICE
OF AMERICA, INC.
- -------------------------- ----------------------------------
Joseph R. Moderow Michael L. Eskew
Secretary Chairman
-12-