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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
January 9, 2006
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United Parcel Service, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 001-15451 58-2480149
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification Number)
of incorporation)
55 Glenlake Parkway, N.E.
Atlanta, Georgia 30328
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 828-6000
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Not applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On January 9, 2006, the Compensation Committee (the "Committee") of the Board of
Directors of United Parcel Service, Inc. (the "Company") approved the award of
restricted stock units ("RSUs") to be granted as UPS 2006 Long-Term Incentive
Performance Awards. The awards are expected to be granted on or about March 1,
2006. The Committee also approved certain performance and earnings criteria for
the awards. The awards are authorized under the UPS Incentive Compensation Plan
(the "Plan") that has been approved by Company's shareowners and filed with the
SEC.
Under the Plan, restricted stock units ("RSUs") representing shares of class A
common stock will be awarded to executive officers, officers and certain other
eligible managers pursuant to a RSU award agreement. Target RSU award grants
will range in size from 50%-250% of annual salary. The target RSU awards to be
granted will be based upon the closing price of UPS class B common stock on or
about February 28, 2006.
Of the total target award, 90% of the target award will be divided into three
substantially equal tranches, one for each calendar year in the three-year award
cycle from 2006 - 2008. The specific performance measures and targets for each
such tranche will be determined by the Committee either before or within the
first quarter of the calendar year in which the performance is measured. The
number of RSUs earned each year will be the target number adjusted for the
percentage achievement of performance criteria targets for the year based on a
matrix developed by the Committee that will provide for 100% payment of the
target RSUs for the tranche upon 100% achievement of the performance criteria
targets for the year and that also may provide for payment of a percentage less
than or more than 100% of target RSUs for the tranche based on achievement of
performance criteria targets (as determined by the Committee) at a percentage
less than or more than 100%. The performance criteria approved by the Committee
for 2006 include consolidated operating return on invested capital and growth in
consolidated revenue. The performance criteria will be determined by the
Committee in its discretion. The Committee will retain the discretion to adjust
the Company's results during the award cycle to exclude the effects of certain
transactions and accounting changes for purposes of determining achievement of
the performance criteria. The award, if earned, will vest on December 31, 2008,
provided the participant has been continuously employed through the vesting
date. Special vesting rules apply to terminations by reason of death, disability
or retirement.
Of the total target award, 10% of the target award will be based upon the
Company's achievement of adjusted earnings for the three-year award cycle
compared to a target designated by the Committee at the start of the award
cycle. The Committee will retain the discretion to adjust the Company's results
during the award cycle to exclude the effects of certain transactions and
accounting changes for purposes of determining achievement of this earnings
target. If the target is met (as determined by the Committee) the award will
vest on December 31, 2008, provided the participant has been continuously
employed through the vesting date.
A participant's earned RSU account will be adjusted quarterly for dividends paid
on UPS class A common stock. The RSU awards that vest will be paid in the form
of UPS class A shares on March 13, 2009 (or earlier in the event of death).
The Company will file the form of Restricted Stock Unit Award Agreement when it
is finalized.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNITED PARCEL SERVICE, INC.
Date: January 13, 2006 By: /s/ D. Scott Davis
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Name: D. Scott Davis
Title: Senior Vice President, Treasurer
and Chief Financial Officer