SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
/x/ Annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934
For the Fiscal Year Ended December 31, 1999
OR
/ / Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the transition period from to
Commission file number
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
UPS Qualified Stock Ownership Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
United Parcel Service, Inc.
55 Glenlake Parkway, N.E.
Atlanta, GA 30328
UPS Qualified Stock Ownership Plan
Financial Statements as of and for the Years Ended December 31, 1999 and 1998,
Supplemental Schedules as of and for the Year Ended December 31, 1999,
and Independent Auditors' Report
13468
UPS QUALIFIED STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT l
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for
Benefits 3
Notes to Financial Statements 4
SUPPLEMENTAL SCHEDULES AS OF AND FOR
THE YEAR ENDED DECEMBER 31, 1999:
Schedule of Assets Held for Investment Purposes at
End of Year 8
Schedule of Reportable Transactions 9
Schedule of Realized Gain on Sale of Investments and
Unrealized Appreciation in Fair Value of Investments 10
Schedules required under the Employee Retirement Income Security Act of 1974,
other than the schedules listed above, are omitted because of the absence of
conditions under which they are required.
INDEPENDENT AUDITORS' REPORT
Administrative Committee of UPS Qualified Stock Ownership Plan:
We have audited the accompanying statements of net assets available for benefits
of the UPS Qualified Stock Ownership Plan (the "Plan") as of December 31, 1999
and 1998, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan Administrative Committee. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1999 and 1998, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and are
not a required part of the basic financial statements, but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These schedules are the responsibility of the Plan Administrative
Committee. Such schedules have been subjected to the auditing procedures applied
in the audit of the basic 1999 financial statements and, in our opinion, are
fairly stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
/s/ Deloitte & Touche LLP
June 1, 2000
Atlanta, Georgia
UPS QUALIFIED STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
ASSETS 1999 1998
Investments $804,802,683 $69,998,801
Receivables:
Employer contributions 15,367,595 14,030,896
Dividends receivable 3,535,480 447,824
Due from UPS Savings Plan - net - 962,067
---------- ---------
Total receivables 18,903,075 15,440,787
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $823,705,758 $85,439,588
=========== ==========
See notes to financial statements
UPS QUALIFIED STOCK OWNERSHIP PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1999 AND 1998
NET ASSETS AVAILABLE FOR BENEFITS- 1999 1998
Beginning of year $85,439,588 $ -
----------- ----------
INCREASE IN PLAN ASSETS ATTRIBUTED TO:
Employee trasfers from UPS Savings Plan, net 110,452,753 31,186,233
Employer contributions 54,665,744 48,268,817
Dividend income 6,555,653 579,231
----------- ----------
Total increase 171,674,150 80,034,281
DECREASE IN PLAN ASSETS ATTRIBUTED TO-
Benefits to Plan participants 3,088,292 248,917
OTHER CHANGES IN NET ASSETS-
Net appreciation in fair value of investments 569,680,312 5,654,224
----------- ----------
NET INCREASE IN PLAN ASSETS 738,266,170 85,439,588
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS-
End of year $823,705,758 $85,439,588
============ ===========
See notes to financial statements
UPS QUALIFIED STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
- -----------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The UPS Qualified Stock Ownership Plan (the "Plan")is a voluntary defined
contribution plan established for employees of United Parcel Service, Inc.
("UPS")who are not members of a collective bargaining unit and who satisfy the
participation requirements of the Plan. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA").
The Plan became effective January 1, 1998. The Plan was established to provide a
matching contribution to those employees of UPS who make elective deferrals
under the UPS Savings Plan and to invest that matching contribution entirely in
UPS common stock ("UPS stock"). The Plan allows for UPS to match, through
employer contributions to the Plan, 100% of pre-tax contributions made to the
UPS Savings Plan up to a maximum of 3% of each participant's eligible
compensation. Effective November 23, 1998, the Plan also permits participants to
transfer after-tax and pre-tax amounts from the UPS Savings Plan to the Plan for
the purpose of investing such amounts in UPS stock. The Plan does not allow for
direct employee contributions.
Any amounts transferred from the UPS Savings Plan to the Plan may be transferred
back to the UPS Savings Plan at any time. Additionally, if a Plan participant is
at least 45 years of age and has 10 or more years of employment with UPS, the
participant may transfer all or any portion of the matching contribution made by
UPS to the UPS Savings Plan at any time. In the event a Plan participant
transfers amounts from the Plan to the UPS Savings Plan, the participant must
wait at least one year from the date of the last transfer to the UPS Savings
Plan before transferring such amounts back to the Plan.
The Plan does not permit withdrawals or distributions except in the case of
termination of employment or upon the death or total and permanent disability of
the participant. Any distribution from the Plan ordinarily will be made in the
form of whole shares of UPS stock, with any fractional shares paid in cash.
However, a participant may request that the entire distribution be made in cash.
A participant receiving UPS stock at a time when such stock is not readily
tradable on an established securities market may require UPS to purchase the
stock by giving written notice to UPS within 60 days after the stock was
distributed or within the first 60 days of the following calendar year.
Effective March 17, 1999, the Plan was amended to limit transfers into the Plan
such that immediately following the transfer, a participant's investment in the
Plan cannot exceed 20% of the participant's combined investment balances in the
UPS Savings Plan and the Plan. However, notwithstanding the foregoing, matching
contributions continue to be made in UPS common stock.
Effective July 20, 1999, the Plan was amended to suspend further transfers from
the UPS Savings Plan to the Plan until further notice from the Plan
Administrative Committee. Effective May 15, 2000, the Plan Administrative
Committee authorized transfers from the UPS Savings Plan to the Plan to resume.
On November 15, 1999, in connection with UPS's initial public offering, United
Parcel Service of America, Inc. completed a merger in which it became a wholly
owned subsidiary of UPS. In the merger, each share of United Parcel Service of
America, Inc. common stock was exchanged for two shares of UPS Class A common
stock. All shares and per share amounts in these financial statements have been
adjusted for the two-for-one merger exchange ratio. Each share of UPS Class A
common stock was equally allocated among Class A-1, A-2, and A-3 common stock.
The different types of Class A common stock are identical, except for the
applicable transfer restriction periods. Shares of Class A common stock may not
be transfered to anyone other than a permitted transferee, or converted into
Class B shares, until after the following dates: Class A-1 shares (May 8, 2000),
Class A-2 shares (November 4, 2000), and Class A-3 shares (May 3, 2001). The
primary differences between Class A common stock and Class B common stock are
the transfer restrictions discussed above and the voting rights. There are no
transfer restrictions on Class B common stock and Class A common stock
shareowners are entitled to ten votes per share while Class B common stock
shareowners are entitled to one vote per share.
In early February 2000, UPS announced an offer (the "tender offer") to purchase
up to 100,893,277 shares of Class A-1 common stock for $60 per share. The actual
number of shares of UPS Class A-1 common stock held by the plan that were
validly tendered and accepted for purchase by UPS was 396,192.
At December 31, 1999 and 1998, the number of participants in the Plan was
approximately 42,000 and 39,000, respectively. The provisions of the Plan
provide that a participant is 100% vested in both amounts transferred from the
UPS Savings Plan and employer-matching contributions at all times.
Although it has not expressed any intent to do so, UPS has the right under the
Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA.
All expenses incident to the operation of the Plan are paid by UPS.
Each participant's account is credited/debited with transfers of participant
contributions from/to the UPS Savings Plan, matching contributions from UPS,
Plan earnings (losses), and distributions.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The Plan's financial statements are prepared on the
accrual basis of accounting.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, and
changes therein, and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
3. INVESTMENTS
Investments consist of 11,663,807 shares of UPS Class A common stock at December
31, 1999 and 3,499,940 shares of United Parcel Service of America, Inc. common
stock at December 31, 1998. The investment in UPS stock is carried at fair value
of $69 and $20 per share at December 31, 1999 and 1998, respectively. At
December 31, 1998 the market value of UPS common stock reflects the price at
which UPS had published notice of its willingness to repurchase shares of its
stock, adjusted for the two-for-one merger exchange ratio discussed in Note 1.
The value of each Class A common stock held by the Plan at December 31, 1999 is
equal to the price of a share of Class B common stock as reported by the New
York Stock Exchange. Total fair value of UPS Class A common stock held by the
Plan at December 31, 1999 and 1998 is $804,802,683 and $69,998,801,
respectively.
4. PLAN ADMINISTRATION
The Plan Administrator is an Administrative Committee, which is appointed by and
serves at the pleasure of the Board of Directors of UPS. The Administrative
Committee is currently comprised of three members who are responsible for the
Plan's operations. The members are Michael Connell, Corporate Compensation
Manager, UPS; Thomas W. Delbrook, Corporate Treasury Manager, UPS; and Clifford
L. Hinds, Corporate Financial Reports, Plans and Accounting Manager, UPS. State
Street Bank & Trust Company (Boston) provides recordkeeping and administrative
services to the Plan. First Union National Bank of Georgia acts as the Trustee
for the assets of the Plan.
5. TAX STATUS
The Plan has not received a letter of determination from the Internal Revenue
Service which states that the Plan is in compliance with the applicable sections
of the Internal Revenue Code ("IRC"). However, the Plan Administrator and the
Plan's tax counsel believe that the Plan is designed and is currently being
operated in compliance with the applicable provisions of the IRC.
6. TRANSFER OF PLAN ASSETS TO AND FROM THE UPS SAVINGS
PLAN
During 1999 and 1998, participants transferred account balances from and to the
UPS Savings Plan. Transfers from the UPS Savings Plan for the years ended
December 31, 1999 and 1998 were $124,593,692 and $31,398,758, respectively.
Transfers to the UPS Savings Plan for the year ended December 31, 1999 and 1998
were $14,140,939 and $212,525, respectively.
SUPPLEMENTAL SCHEDULES
(See Independent Auditors' Report)
UPS QUALIFIED STOCK OWNERSHIP PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 1999
Description of
Investment
Including
Maturity Date,
Rate of Interest,
Identity of Issue, Collateral,
Borrower, Lessor, Par, or Maturity Current
or Similar Party Value Cost Value
- ------------------------------------------------------------------------
* United Parcel 3,887,935 shares
Service, Inc. Class A-1 common stock $79,132,092 $268,267,515
* United Parcel 3,887,935 shares
Service, Inc. Class A-2 common stock 79,132,092 268,267,515
* United Parcel 3,887,937 shares
Service, Inc. Class A-3 common stock 79,132,133 268,267,653
----------- -----------
Total Investments $237,396,317 $804,802,683
=========== ===========
* Party-in-interest to the Plan
-8-
UPS QUALIFIED STOCK OWNERSHIP PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1999
Current
Value of
Asset on
Identity of Purchase Selling Cost of Transaction Net Gain
Party Involved Description of Asset Price Price Asset Date or (Loss)
Single Transactions:
First Union National Bank of Georgia UPS Class A common stock $14,014,554 $14,014,554 $14,014,554
First Union National Bank of Georgia UPS Class A common stock 12.390.189 12,390,189 12,390,189
First Union National Bank of Georgia UPS Class A common stock 13.356.927 13,356,927 13,356,927
First Union National Bank of Georgia UPS Class A common stock 13,537,355 13,537,355 13,537,355
Series of Transactions:
First Union National Bank of Georgia UPS Class A common stock 53,299,025 53,299,025 53,299,025
-9-
UPS QUALIFIED STOCK OWNERSHIP PLAN
SCHEDULE OF REALIZED GAIN ON SALE OF INVESTMENTS AND
UNREALIZED APPRECIATION IN FAIR VALUE OF INVESTMENTS
YEAR ENDED DECEMBER 31, 1999
- ----------------------------------------------------------------------------
Realized gain on sale of investments:
Aggregate proceeds $25,900,917
Aggregate carrying amount 17,995,408
-----------
Total 7,905,509
Unrealized appreciation in fair
value of investments $561,774,803
Total -----------
$569,680,312
1 Measurement criteria for this schedule conforms with the requirements of
the annual report Form 5500. The amount of realized gain and unrealized
appreciation are determined by using the fair value at January 1, 1999 and
fair value at sale date for realized gain or December 31, 1999 for
unrealized appreciation.
-10-
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the Plan) have duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
UPS Qualified Stock Ownership Plan
/s/ Clifford L. Hinds
----------------------------------
Clifford L. Hinds
Administrative Committee Member
Exhibit Index
Consent of Deloitte & Touche LLP
Amendment No.1 to the UPS Qualified Stock Ownership Plan and Trust Agreement
Amendment No.2 to the UPS Qualified Stock Ownership Plan and Trust Agreement
Amendment No.3 to the UPS Qualified Stock Ownership Plan and Trust Agreement
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-72127 of United Parcel Service of America, Inc. (predecessor to United
Parcel Service, Inc.) on Form S-8 of our report dated June 1, 2000, appearing in
this Annual Report on Form 11-K of UPS Qualified Stock Ownership Plan for the
year ended December 31, 1999.
/s/ Deloitte & Touche LLP
June 28, 2000
Atlanta, Georgia
AMENDMENT NO. 1
TO THE
UPS QUALIFIED STOCK OWNERSHIP PLAN
AND TRUST AGREEMENT
(Effective as of January 1, 1998)
WHEREAS, United Parcel Service of America, Inc. and certain of its
affiliated companies established the UPS Qualified Stock Ownership Plan and
Trust ("Plan") effective as of January 1, 1998 to provide their eligible
employees with a matching contribution invested in the common stock of UPS ("UPS
Stock") and to permit eligible employees to transfer amounts from the UPS
Savings Plan to the Plan for the purpose of investing in UPS Stock; and
WHEREAS, it is desired to amend the Plan to correct a scrivener's error and
to limit transfers from the UPS Savings Plan to the Plan in the case where an
eligible employee's investment in the Plan would exceed twenty percent of the
aggregate amount in such eligible employee's combined accounts under the Plan
and the UPS Savings Plan.
NOW THEREFORE, pursuant to the authority vested in the Board of Directors
by Section 12.1 of the Plan, the UPS Qualified Stock Ownership Plan is hereby
amended as follows:
1. Section 3.1 hereby is amended in its entirety to read as follows effective
as of March 17, 1999:
Section 3.1 Transfers From Savings Plan. A participant in the Savings Plan
may transfer an amount from his or her individual accounts under the
Savings Plan to this Plan in accordance with transfer procedures
established by the Committee and subject to the limitations set forth in
Section 8.12.
Any amounts transferred to this Plan pursuant to this Section 3.1 will be
credited to the Participant's Savings Plan Account that corresponds to the
subaccount under the Savings Plan from which the amount was transferred.
2. The last sentence of Section 8.12 hereby is amended effective as of January
1, 1998 to read as follows in order to correct a scrivener's error:
A Participant may not make a Transfer from the Savings Plan to this Plan
during the one year period beginning on the date of the most recent cash
withdrawal under Section 8.7 or transfer from this Plan to the Savings
Plan; provided, however, that the one year restriction will not apply if
the Participant requests a distribution following a Separation from
Service.
3. Section 8.12 hereby is amended in its entirety effective as of March 15,
1999 to read as follows:
Section 8.12 Transfers to this Plan.
(a) General Rule. Except as provided in Section 8.12(b), a Participant may
not make a Transfer from the Savings Plan to this Plan (1) during the one
year period beginning on the date of the most recent cash withdrawal under
Section 8.7 or transfer from this Plan to the Savings Plan ("one year
restriction") or (2) to the extent that the amount transferred from the
Savings Plan would cause the balance credited to his or her Account to
exceed twenty percent of the aggregate balance credited to his or her
Account and to his or her accounts under the Savings Plan ("Twenty Percent
Limitation"). For purposes of determining the Twenty Percent Limitation,
the balance credited to an Account and to the accounts under the Savings
Plan will be determined immediately following the transfer as if the
transfer to this Plan were allocated then instead of at the end of the
Accounting Period.
If a participant in the Savings Plan attempts to transfer an amount from
the Savings Plan that would cause the balance credited to the Participant's
Account to exceed the Twenty Percent Limitation, the Trustee only will
accept the transfer of such amount that once transferred would not cause
the Account to exceed the Twenty Percent Limitation. The Trustee will
reject the transfer of any amount that would, if transferred, cause the
Account to exceed the Twenty Percent Limitation and send the excess amount
back to the Savings Plan.
(b) Transfer in Connection with a Distribution upon a Separation from
Service. In no event shall the one year limitation or the Twenty Percent
Limitation on transfers set forth in Section 8.12(a) apply if the
Participant requests a distribution following a Separation from Service.
IN WITNESS WHEREOF, United Parcel Service of America, Inc. based upon
action by its Board of Directors has caused this Amendment No. 1 to be executed.
ATTEST: UNITED PARCEL SERVICE OF
AMERICA, INC.
- ---------------------------- ------------------------------
Joseph R. Moderow James P. Kelly
Secretary Chairman
AMENDMENT NO. 2
TO THE
UPS QUALIFIED STOCK OWNERSHIP PLAN
AND TRUST AGREEMENT
(Effective as of January 1, 1998)
WHEREAS, United Parcel Service of America, Inc. and certain of its
affiliated companies established the UPS Qualified Stock Ownership Plan and
Trust ("Plan") effective as of January 1, 1998 to provide their eligible
employees with a matching contribution invested in the common stock of UPS ("UPS
Stock") and to permit eligible employees to transfer amounts from the UPS
Savings Plan to the Plan for the purpose of investing in UPS Stock; and
WHEREAS, it is desired to amend the Plan to reflect the suspension of all
transfers from the Savings Plan to the Plan until further notice pending the
completion of the company's proposed merger and public offering announced July
21, 1999.
NOW THEREFORE, pursuant to the authority vested in the Board of Directors
by Section 12.1 of the Plan, the UPS Qualified Stock Ownership Plan is hereby
amended as follows:
1. Section 3.1 hereby is amended in its entirety effective as of July 20, 1999
to read as follows:
Section 3.1 Transfers From Savings Plan. In accordance with the authority
granted to the Committee in Sections 3.1 and 8.22 to establish transfer
procedures, transfers from participants' individual accounts in the Savings
Plan to this Plan are suspended as of July 20, 1999 in connection with the
proposed public offering of common stock of a subsidiary of UPS following a
merger of UPS with that subsidiary. The Committee shall continue to have
the absolute authority and full discretion to establish transfer procedures
(including initiating, suspending or terminating transfers from the Savings
Plan) and to amend those transfer procedures at any time without the
necessity of a Plan amendment; provided, to the extent transfers are
permitted, such transfer procedures are consistent with the timing and
percentage limitations described in Section 8.12.
Any amounts transferred to this Plan pursuant to this Section 3.1
will be credited to the Participant's Savings Plan Account that corres-
ponds to the subaccount under the Savings Plan from which the amount was
transferred.
2. Section 8.12 hereby is amended effective as of July 20, 1999 to add a new
subparagraph 8.12 (c) that reads as follows:
Section 8.12 Transfers to this Plan.
(c) Committee Procedures. Subsections 8.12 (a) and (b) shall be
operative only to the extent that the Committee permits transfers
from the Savings Plan to this Plan in accordance with Section 3.1.
IN WITNESS WHEREOF, United Parcel Service of America, Inc. based upon
action by its Board of Directors has caused this Amendment No. 2 to be executed.
ATTEST: UNITED PARCEL SERVICE OF
AMERICA, INC.
- ---------------------------- ------------------------------
Joseph R. Moderow James P. Kelly
Secretary Chairman
AMENDMENT NO. 3
TO THE
UPS QUALIFIED STOCK OWNERSHIP PLAN
AND TRUST AGREEMENT
(Effective as of November 15, 1999)
WHEREAS, United Parcel Service of America, Inc. and certain of its
affiliated companies established the UPS Qualified Stock Ownership Plan and
Trust ("Plan") effective as of January 1, 1998 to provide their eligible
employees with a matching contribution invested in the common stock of UPS ("UPS
Stock") and to permit eligible employees to transfer amounts from the UPS
Savings Plan to the Plan for the purpose of investing in UPS Stock;
WHEREAS, on November 15, 1999, United Parcel Service of America, Inc. ("Old
UPS") merged into one of its subsidiaries and, as a result, became a subsidiary
of United Parcel Service, Inc. ("New UPS");
WHEREAS, pursuant to the terms of the merger, each share of UPS Stock held
under the Plan was exchanged for two shares of the Class A common stock of New
UPS, and each shareholder's interest in Class A common stock was divided as
evenly as possible between Class A-1, Class A-2 and Class A-3 common stock of
New UPS;
WHEREAS, following the merger, New UPS has announced a cash tender offer to
buy Class A-1 common stock of New UPS; and
WHEREAS, it is desired to amend the Plan to reflect the merger and to
facilitate the tender offer.
NOW THEREFORE, pursuant to the authority vested in the Board by Section
12.1 of the Plan, the UPS Qualified Stock Ownership Plan is hereby amended as
follows effective as of November 15, 1999:
1. Section 1.28 is hereby amended to read as follows:
Section 1.28 Fair Market Value - means
(a) for any asset other than UPS Stock, the fair market value of that
asset as determined by the Trustee;
(b) for UPS Stock,
(1) the fair market value of a share of the Class B common stock of
United Parcel, Inc. ("Class B Stock"), as determined in accordance
with the following provisions:
(i) if shares of Class B Stock are listed on any established
stock exchange or a national market system, the reported
closing price for a share of Class B Stock as reported by such
stock exchange or national market system with respect to its
normal trading session or such other source as the Board deems
reliable; or
(ii) if shares of Class B Stock are not listed on any
established stock exchange or a national market system, the
fair market value of a share of Class B Stock as determined by
the Board in its sole and absolute discretion; and
(2) at any time after the ESOP feature is activated, the fair market
value as determined by an "independent appraiser" (as described in
Code ss. 401(a)(28)) appointed by the Committee for that purpose.
2. Section 1.57, UPS Stock, is hereby amended to read as follows:
Section 1.57 UPS Stock - means the Class A common stock of United Parcel
Service, Inc. (including Class A-1, Class A-2 and Class A-3) and other
securities of United Parcel Service, Inc. or an Affiliate that meet the
definition of "employer securities" under Code ss. 409(l) or ERISA ss. 407.
3. The Plan is hereby amended to delete all references to the UPS Stock Trust,
accordingly:
(a) Article I is hereby amended to delete the definition of UPS Stock Trust
set forth in Section 1.58 and to renumber the subsequent paragraph
(currently Section 1.59 Valuation Date) so that it is numbered Section
1.58 Valuation Date;
(b) Section 8.8, Distribution of UPS Stock or Cash; is hereby amended to
delete the last sentence thereof;
(c) Section 8.9(d), Continuation of Rights, is hereby amended to delete the
parenthetical in the last sentence thereof; and
(d) Section 8.13(b)(5)(c), regarding eligible rollover distributions, is
hereby amended to delete the phrase "the custodian or trustee of which
agrees to be bound by the terms of the UPS Stock Trust" from the last
sentence thereof.
4. Article VI is hereby amended to add a new Section 6.7 that reads as
follows:
Section 6.7 Account Adjustments to Reflect November 15, 1999 Merger. Each
Account shall be adjusted in an equitable manner as directed by the
Committee to reflect the stock received by the Plan in connection with the
merger described in the proxy statement/prospectus to the shareowners of
United Parcel Service of America, Inc. dated September 22, 1999.
5. Section 8.8 is hereby amended to add the following sentence to the end
thereof:
If there is more than one class of UPS Stock allocated to an Account, any
UPS Stock distributed from such Account and any UPS Stock sold to
distribute cash from such Account shall be taken equally from the shares of
each such class allocated to such Account in accordance with the procedures
developed by the Committee, which shall reflect appropriate adjustments for
shares of any class sold from such Account in any tender offer.
6. Section 8.10 is hereby amended to add the following sentence to the end
thereof:
If there is more than one class of UPS Stock allocated to an Account, any
UPS Stock sold to effect such transfer shall be taken equally from the
shares of each such class allocated to such Account in accordance with
procedures developed by the Committee, which shall reflect appropriate
adjustments for shares of any class sold from such Account in any tender
offer.
7. Section 8.11 is hereby amended to add the following sentence to the end
thereof:
If there is more than one class of UPS Stock allocated to an Account, any
UPS Stock sold to effect such transfer shall be taken equally from the
shares of each such class allocated to such Account in accordance with
procedures developed by the Committee, which shall reflect appropriate
adjustments for shares of any class sold from such Account in any tender
offer.
8. Section 8.12 (a) is hereby amended to add the following sentence to the end
thereof:
In no event shall an automatic transfer of the proceeds of a tender offer
to the Savings Plan as described in Section 9.12 (a)(2) be treated as a
transfer from this Plan to the Savings Plan for the purpose of the one year
restriction described in this Section 8.12 (a).
9. Section 9.12(a) hereby is amended
(a) to add new paragraphs (3) and (4) as follows:
(3) February 4, 2000 Tender Offer. Notwithstanding any contrary
provision, paragraph (2) of this Section 9.12(a) will not apply and
this paragraph (3) will apply with respect to the tender offer by
United Parcel Service, Inc. for shares of Class A-1 common stock of
United Parcel Service, Inc. ("Class A-1 Shares") dated February 4,
2000 (the "February 2000 Tender"). For purposes of this paragraph
(3), a "Tender Participant" means each Participant or Beneficiary
who would be entitled to tender whole Class A-1 Shares allocated to
his or her Account in accordance with the terms of the February 2000
Tender if such Class A-1 Shares were owned directly by such
Participant or Beneficiary and the Class A-1 Shares allocated to his
or her Account were the only Class A-1 Shares owned by such
Participant or Beneficiary. Each Tender Participant will be entitled
to instruct the Trustee as to whether to tender whole Class A-1
Shares allocated to his or her Account and such whole shares will be
tendered or not tendered by the Trustee in accordance with such
instructions. The failure to give a timely direction to tender by
Tender Participant with respect to Class A-1 Shares allocated to his
or her Account is deemed to be a direction not to tender.
Accordingly, any whole Class A-1 Shares allocated to the Account of
a Tender Participant with respect to which no direction is received
by the Trustee in a timely manner will not be tendered. Fractional
shares allocated to an Account and shares allocated to the Account
of a Participant or Beneficiary other than a Tender Participant will
not be tendered.
(4) Proceeds of Tender Offer. Notwithstanding the requirements set
forth in Section 8.10, the proceeds of the tender of any shares of
UPS Stock allocated to the Account of a Participant or Beneficiary
shall be automatically transferred to an account for the benefit of
such Participant or Beneficiary under the Savings Plan.
and
(b) to renumber paragraph (3) (as in effect before this Amendment No. 3)
as paragraph (5) and amend such new paragraph (5) to read as follows:
(5) Communication. The Trustee will (in an appropriate and timely
manner) furnish, or cause to be furnished, to Participants and
Beneficiaries who are entitled to direct the Trustee whether to
tender the shares of UPS Stock allocated to his or her Account with
the same information and notices as are furnished to other
shareholders who are entitled to vote or entitled to tender
regarding the matters to be voted upon or the tender offer and will
provide them with adequate opportunity to deliver their instructions
to the Trustee. The Trustee in its discretion will determine the
manner in which instructions with respect to the voting or tender of
UPS Stock will be given and any such instructions will be
confidential.
IN WITNESS WHEREOF, the undersigned certify that United Parcel Service of
America, Inc. based upon action by its Board of Directors has caused this
Amendment No. 3 to be adopted.
ATTEST: UNITED PARCEL SERVICE OF
AMERICA, INC.
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Joseph R. Moderow James P. Kelly
Secretary Chairman