• | Your initial base salary will be $50,000 per month ($600,000 annually). Merit increases are recommended on an annual basis and follow UPS merit guidance and take effect with April payroll. |
• | You will be eligible to participate in the UPS Management Incentive Program (MIP) in accordance with the terms of the MIP as in effect from time-to-time. The target value of your annual award will be 130% of your annualized base salary. The actual award will be determined by multiplying your target award value by a factor that is determined based upon company performance against annually defined measures. Currently, any earned MIP award is paid one-third in electable cash and two-thirds in restricted performance units ("RPUs") granted pursuant to the applicable UPS stock incentive plan. These RPUs vest pro-rata over five years and convert to UPS Class A stock (net of applicable tax withholdings) following vesting. However, your initial award will be prorated and paid in unrestricted Class A UPS stock in March 2019. Subsequent awards will follow the process outlined above. |
• | As a UPS MIP participant, you will be eligible to receive annually a UPS Ownership Incentive Award. |
• | You will be eligible to participate in the UPS Long-Term Incentive Performance award program (LTIP) in accordance with the terms of the LTIP as in effect from time-to-time. The LTIP provides for equity grants to senior UPS leaders and is focused on delivering long-term shareholder value. LTIP awards currently are paid in Performance Units that vest and convert to UPS Class A stock three years after grant. Your target LTIP award level will be 350% of your annualized base salary. The actual award values will be determined by company performance measured against the established targets for Revenue Growth, ROIC and RTSR metrics (with such metrics subject to change in future years). LTIP awards are normally granted annually in March. |
• | You will be eligible to receive an annual non-qualified stock option grant pursuant to the applicable UPS stock incentive plan. The target stock option award value for your position currently is 30% of annualized salary and is generally awarded in March of each year. The stock options vest pro-rata over five years, with a ten-year maximum term and are subject to the terms of the stock plan and an award agreement. The number of options will be determined by dividing the total grant value by the Black Scholes valuation of the options determined as of the date of grant. |
• | You will be eligible for participation in the UPS Deferred Compensation Plan. This plan allows deferral of your salary as well as the cash portion of UPS Management Incentive Program awards in accordance with the limitations set forth in the terms and conditions of the plan. |
• | You will be eligible to participate in UPS's defined contribution retirement program, subject to the terms and conditions thereof as in effect from time to time. As presently structured, the program provides: |
◦ | A 50% company match on your contributions up to 6% of eligible compensation; and |
◦ | A service-based UPS Retirement Contribution which begins as 5% of eligible compensation, |
• | You will be eligible for personal financial counseling services and tax return preparation reimbursement, within the limits established by UPS. The current annual limit for personal financial counseling and tax preparation services is $15,000. |
• | You will be eligible to participate in the UPS Flex Benefits Plan in accordance with the terms and conditions thereof, including the following benefits: |
◦ | Healthcare (multiple plan options) |
◦ | Dental |
◦ | Vision Care |
◦ | AD&D Coverage |
◦ | Life Insurance (self, spouse, children) |
◦ | Critical Illness Insurance |
◦ | Healthcare Spending Account |
◦ | Child/Elder Care Spending Account |
• | You will be eligible for 30 vacation days and 5 personal days per annum. |
• | The Senior Vice President and Chief Marketing Officer position requires you to be based in Atlanta. |
• | You will receive a special one-time grant of Restricted Stock Units (RSUs) valued at $3 million as consideration for equity forfeited from your previous employer. The RSUs will be awarded pursuant to (and subject to the terms of) the UPS 2015 Omnibus Incentive Compensation Plan and a Restricted Stock Unit Award Agreement, and the number of RSUs awarded will be calculated by dividing $3 million by the closing price of UPS stock on the grant date. The grant date for your award will be August 2018. This award will vest as follows: 33.3% in January 2019, 33.3% in January 2020, 33.3% in January 2021 subject to your continued employment through each applicable vesting date (however, if your employment is terminated by UPS without "Cause"1 you will continue vesting in the RSUs; similarly, if your employment is terminated by death or disability, vesting will occur in accordance with the terms of the award). Promptly following each vesting date, UPS Class A Shares will be issued to you (net of tax withholdings). The grant award agreement includes a more detailed description of the vesting and other terms of the RSUs. |
• | You will receive Transition Payments in the total amount of $2,450,000 (less tax withholdings), paid to you as follows subject to your continued employment through each applicable payment date: $950,000 on June 30, 2018, $750,000 on June 30, 2019, $750,000 on June 30, 2020 (however, if your employment is terminated by UPS without "Cause" or your employment is terminated by death or disability you will receive the June 30, 2019 and June 30, 2020 payments, if not already received.) |
1. | You will be an "at-will" employee, which means either you or UPS may terminate your employment at any time and for any reason. |
1. | For purposes of this offer letter, "Cause" means termination of your employment by UPS due to one or more of the following: the indictment of any felony or indictment of a misdemeanor involving theft or moral turpitude; and/or commission of any act or omission that constitutes neglect or misconduct with respect to your employment duties that results in economic harm to the Company; and/or violation of any of the Company's substance abuse, compliance or any other policies that may be applicable to you and that may be in effect at the time of the occurrence; and/or a breach of any material provision of any other agreements or understanding in effect at the time of the breach, between you and the Company. |
• | A prohibition on disclosure of the company's confidential information; |
• | A non-compete provision covering all domestic and worldwide geographic areas in which UPS does |
• | A prohibition on recruiting or soliciting Company employees and customers. |
Core Compensation Package. | Amount. |
Base Salary | $50,000 / month ($600,000 /year) - Merit increases are recommended and applied in April each year |
Management Incentive Program (MIP) Performance Incentive | Target of 130% of annualized salary ($780,000) - Awards generally granted in March each year - Initial award will be prorated and paid in unrestricted Class A UPS stock (March 2019) - Subsequent awards payable 1/3 electable cash and 2/3 RPUs with five-year graded vesting |
Management Incentive Program (MIP) Ownership Incentive | 1.50% of the value of eligible UPS holdings (up to $50,000) - Eligible holdings include Class A UPS stock and any outstanding or unvested RSUs & RPUs (except LTIP RPUs) - Same delivery as MIP Performance Incentive |
Long-Term Incentive Performance Award (LTIP) Program | Target of 350% of annualized salary ($2,100,000) - Awards generally granted in March each year - Delivered in RPUs and payable at completion of 3-year performance period |
Stock Options | 30% of annualized salary ($180,000) - Awards generally granted in March each year - Non-qualified options, 5-year graded vesting, 10-year term |
TOTAL TARGET COMPENSATION | $3,710,000 |
Benefits ·... | Detail. |
UPS Retirement Program | Currently 50% company match on contributions up to 6% of eligible compensation +Service-based UPS Retirement Contribution - Company contribution increases over time |
UPS Flex Benefits Plan | Healthcare (multiple plan options), Dental, Vision Care, AD&D Coverage, Life Insurance, Critical Illness Insurance, Healthcare Spending Account, Child/Elder Care Spending Account. |
Financial Services and Tax Preparation Benefit | $15,000 I year |
UPS New Hire Homeowner Relocation Program | Pre-move house-hunting expenses, temporary living expenses, home purchase expenses (e.g. fees), household goods moving expenses, and final moving expenses. |
Buy-Out /Retention Awards | Amount |
Special One-Time RSU Grant as consideration for forfeited compensation | $3,000,000 - Vests in equal installments of $1,000,000 in January 2019, January 2020, & January 2021 - Conversion to Class A UPS stock upon vesting |
Transition Payments | $2,450,000 - Payable in three installments of $950,000 on June 30, 2018, $750,000 on June 30, 2019, & $750,000 on June 30, 2020 |