Exhibit 10.1
Form of 2009-2011 Long-Term Incentive Award Certificate
United Parcel Service, Inc.
Restricted Stock Unit Award Agreement
2009 Long-Term Incentive Performance (LTIP) Awards
(Not Transferable)
THIS CERTIFIES THAT ____________ has been granted a target award of ______ Restricted
Stock Units (“RSUs”). Each RSU has a value that equals the value of one share of the class A
common stock of UNITED PARCEL SERVICE, INC., a Delaware corporation (the “Company”). A RSU is
sometimes referred to as a “long-term incentive performance award” or “LTIP.”
Terms and Conditions
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Plan. This target award is granted pursuant to the United Parcel
Service, Inc. Incentive Compensation Plan (the “Plan”), and is subject to the
conditions and limitations set forth in the Plan document, as the same may be amended
from time to time. All of the terms and provisions of the Plan are incorporated herein
by reference. Terms not defined in this award agreement are defined in the Plan. |
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Measurement Tranches. |
(a) General Rule. Ninety percent (90%) of your target award is divided into 3
substantially equal annual performance measurement tranches (one for each calendar year during the
3-year award cycle running from January 1, 2009 through December 31, 2011 (the “LTIP cycle”)) and
ten percent (10%) of your target award is based on satisfaction of an earnings per share target for
calendar year 2010 (the “earnings measurement tranche”):
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Target RSUs |
Performance Measurement — 2009 |
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[_______] |
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Performance Measurement — 2010 |
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[_______] |
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Performance Measurement — 2011 |
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[_______] |
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Earnings Measurement — 2010 |
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[_______] |
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(b) Performance Measurement Tranches. The number of RSUs to be credited to your
account for each performance measurement tranche will be determined after the end of the relevant
calendar year based on the achievement of specific performance targets established for that year
and the applicable performance target matrix (discussed below). The performance criteria for 2009
- - 2011 are growth in consolidated revenue (i.e., total company revenue as reported in the Company’s
quarterly and annual financial statements) and consolidated operating return on invested capital.
The Committee retains the discretion to adjust the Company’s results during the LTIP cycle to
exclude the effects of certain transactions and accounting changes for purposes of determining
achievement of the performance targets.
For each RSU performance measurement tranche, the Committee will develop a performance target
matrix that will provide for 100% payment of the target RSUs for the tranche upon 100% achievement
of the performance targets for the year. The performance target matrix also may provide for
payment of a percentage less than or more than 100% of the target RSUs for the tranche based on
achievement of performance targets at a percentage less than or more than, respectively, 100%.
Your performance target matrix for 2009 is attached as Exhibit A. Performance target
matrices for 2010 and 2011 will be provided to you in the first quarter of the applicable year.
After the end of each year, the Committee will certify the extent to which the performance targets
have been achieved and the resulting RSUs to be credited to your account. Once the payment
percentage for a particular tranche has been
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applied to a performance measurement tranche, the number of RSUs in that tranche is fixed. After
the number of RSUs in a performance measurement tranche becomes fixed, the RSUs in that tranche
will be credited to your RSU account.
(c) Earnings Per Share Measurement Tranche. The earnings per share target for
calendar year 2011 is set forth on the attached Exhibit A. You will receive this portion
of your award only if the Company meets the earnings per share target for the 2011 calendar year
and you are employed in an eligible job classification by the Company or a Subsidiary on January
31, 2012. If the earnings per share target is not met or you are not employed in an eligible job
classification with the Company or a Subsidiary on January 31, 2012, you will not receive this
portion of your award. For this purpose, earnings per share is as reported in the Form 10-K filed
by the Company with the Securities and Exchange Commission for the year ending December 31, 2011,
as adjusted in the Committee’s discretion to exclude the effects of certain transactions and
accounting changes for purposes of determining achievement of the earnings per share target. After
the Form 10-K for the year ending December 31, 2011 is filed, the Committee will certify if the
earnings per share target has been met and the RSUs credited to your account, if any, for the
earnings per share measurement tranche.
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Bookkeeping Account. A bookkeeping account will be maintained to keep
track of the RSUs and any dividend equivalents attributable to your RSUs as described
below. |
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Dividend Equivalents. The RSUs credited to your account that are
attributable to a particular performance measurement tranche will be credited quarterly
with dividend equivalent units for dividends paid on a share of the Company’s class A
common stock, by |
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multiplying the cash (or stock) dividend paid per share of the Company’s class A common stock by
the number of RSUs (and previously credited dividend equivalent units) attributable to that tranche
prior to adjustment for dividends, and |
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dividing the product determined above by the New York Stock Exchange closing price of the
Company’s class B common stock on the day the dividend is declared. |
Each dividend equivalent unit has a value equal to one share of the Company’s class A common stock.
The Committee will authorize the crediting of the dividend equivalent units for each quarter.
Dividend equivalent units will vest at the same time as the underlying RSU tranche (discussed
below).
(a) General Rule. The RSUs and dividend equivalent units credited to your account
during the LTIP cycle will vest on January 31, 2012; provided that you are employed by the Company
or a Subsidiary on that date. The benefit payable to you will be based entirely on the number of
vested RSUs and dividend equivalent units credited to your account at the time the award becomes
payable, generally, on March ___, 2012 following the completion of the LTIP cycle.
(b) Demotion. If you are demoted before January 31, 2012 to a position that would
have been ineligible to receive a LTIP award under the 2009 LTIP program, you will forfeit any
right to RSUs for the performance measurement tranche for the year in which your demotion occurs
and any performance measurement tranche commencing after your demotion. You also will forfeit any
right to RSUs for the earnings measurement tranche. You will retain any RSUs and dividend
equivalent units credited to your account prior to your demotion, subject to satisfaction of the
vesting requirements of Section 5(a) or (c) of this award agreement.
(c) Death, Disability or Retirement. If your employment terminates by reason of your
death, disability or retirement (as defined in the Plan) before January 31, 2012, you immediately
will vest in any RSUs and dividend equivalent units for a performance measurement tranche that was
completed prior to your termination. You will forfeit any right to RSUs for the performance
measurement tranche for the year in which your termination occurs and any performance measurement
tranche commencing after
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your termination. You also will forfeit any right to RSUs for the earnings measurement tranche.
Further, if you terminate employment before January 31, 2011 other than by reason of death,
disability or retirement, you will forfeit this award in its entirety.
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Shares. A number of shares of the Company’s class A common stock equal
to the number of vested RSUs and dividend equivalent units credited to your account
(less shares withheld to pay taxes) will be transferred to you on March ___, 2012,
except that if your employment terminates by reason of your death, the shares will be
transferred to your estate no later than the March 12 that follows the calendar year of
your death. |
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Nontransferable. This award and your RSUs and dividend equivalent
units are not transferable except by will or the laws of descent and distribution. |
IN WITNESS WHEREOF, UNITED PARCEL SERVICE, INC. has caused this Restricted Stock Unit Award to
be issued as of March ___, 2009.
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ATTEST:
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UNITED PARCEL SERVICE, INC.
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Secretary
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Chairman and Chief Executive Officer |
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