EX-10.9 3 ups-12312018xexhibit109.htm EXHIBIT 10.9 - OFFER OF EMPLOYMENT
Exhibit 10.9
Nove mb e r 25, 2 0 1 7
Mr. Sco tt Price
D ear S c ott,
Since the ear li est days of UPS, ju st ove r 11 0 years ago, we've r ega rd ed our manageme n t team as partn ers. Our company's f ou nder, Jim Casey, es tabli s hed a c ultur e w h ere we share ow n e r s hip in the compa n y, a res p onsib ili ty to help one another a nd our communitie s, and a commi tm e n t t o in tegrity and t h e v alu es of UPS.
We are pr o ud to offe r yo u th e opp or tuni ty to join o ur partn e r s hip. On behalf of UPS, I am please d to fo rmall y extend t o yo u th e of fer to become Senior V ic e Pr es ident an d C hi ef Transformatio n Officer. Your t al e n ts and exper ienc e ar e a perfect fit for U PS, and I b e li eve that yo u w ill fi nd th e oppo rtuni ty r ewarding and challenging.
Th i s lett e r confirms the k ey terms of o ur offer of e mplo y m e nt.
Compensation

• | Your initial b ase sal a ry w ill b e $50,000 p e r m on th ($600,000 an nu ally). In April 20 1 8, you will be e ligible f or a n o n-prorated merit increa se. Thereaf ter, m e rit in c r eases w ill follow UPS a n nual m erit gui dan ce a nd take effect with Ap ril payro ll.

• | Yo u w ill be e li gi b l e to participate in the U PS Manag e m en t Inc en ti ve P rogr am (MI P) in acco r dance wi t h the t er m s of th e MIP as in eff ect from time-to-tim e. Th e ta r get value o f your an nual award will be 130% of your

annuali zed ba se salary. The actual awa rd will b e d e t e rmined b y multiplying yo ur ta r get award val u e by a factor that i s d e termin e d ba se d upo n co mpan y performance a gains t an nuall y defined m eas ur es. C urr e ntl y, a n y earne d MI P awa rd i s p aid o n e-third in elec t a b le cas h and two-thirds i n re stri ct ed performance unit s ("RP Us") g rant e d pur s uant t o t he a pplicable UPS stock in centive plan. These RPUs vest pro-rata ove r fi ve yea r s and convert to U P S C l ass A stoc k (ne t of applicab l e withholdings) fo ll ow in g vesting. Ho weve r, yo ur earned initial MIP awar d for 2018, delivere d in March 20 1 9, will be p aid e ntir e l y in f ull y ves t e d UPS C l ass A stoc k.

• | As a U P S MIP parti c ip a n t, yo u w ill b e e li gi b l e t o r eceive annuall y a U PS Ownership I ncentive Awar d. Under

curre n t program te rm s, yo ur U P S Owners hip Inc e nti ve Awar d is 1.5% of the val u e o f yo ur e li gi b l e UPS h oldings (including RP Us and RSUs) up to a m ax imum of one month's salary and is delivered in con j unction wi th MI P award s in March of e ach yea r. Lik e the MIP awar d, t he UPS Ownership In centive awar d i s paid one-third in el e c tab l e ca s h and two-thirds in RPUs, pursua n t t o t h e app lic ab l e stock in cen ti ve pl an. H oweve r, the d elivery of the UPS Ownership In ce n tive award for 20 18, t o b e d e li ve red in Marc h 20 1 9, w ill b e p ai d e ntirel y in full y veste d UPS Class A s tock.

• | You w ill b e e li gible to participat e in th e UPS L o n g-T e rm Inc e nti ve Performance award program (L TIP) in acco rd a nc e with th e terms of t h e LTIP as in e ffect from time-to-time. T h e LTIP pro v ide s f o r e qui ty grant s to se ni o r U P S l eader s and i s fo c u se d o n d e li ve ring lon g-term s hareh o l der val ue. L TIP awards currently ar e paid i n Perf o rmanc e U nit s th a t ves t and convert t o UPS C la ss A s t ock three yea rs after gra n t. Your target LTIP award l ev el w ill be 45 0% of yo ur a nnu alized b as e s alary. The actual award v alue s w ill be det e rmined b y compan y p e rform a nce m eas ur e d agains t the esta bli s h e d targets for R evenue Growth, R O I C a n d RT SR m etrics (with suc h metric s s ubj ect to change in future years). LTI P awards are normally gra nted annually in Mar c h and yo u will rec e i ve a full 20 18 gr ant with a target val u e of $2,700,000.

Offer of Employment With UPS for Scott Price
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• | Y ou will b e e ligibl e to r eceive an ann ual n o n-q ualified s tock optio n gra nt pursuant t o t h e app licab le U P S s t oc k incentive pl a n. Th e targe t stock optio n awa r d v alu e f or yo ur po s i tion cur r e ntl y is 50% of annualized salary. The stock options vest p ro-r ata over five yea r s, wi th a ten-year maximum te rm and are s ubject to the t e rms of the s t oc k p l an and an awa rd agree m e nt. The nu mbe r of op ti o n s w ill be determined b y di vi ding the total gra nt val u e b y the Bl ack-Sc h o l es valuatio n of the op tion s determined as of th e d ate of grant.

• | You w ill b e e li g ibl e for p a rticipation in the UPS Def e rred Compe n satio n Pl a n. Thi s p lan all ows d e f e r ral of yo ur salary as we ll a s th e cas h p or ti o n of UPS Managemen t In centive Pr ogram awards in accordance w i th the limit a tion s set forth in the term s a nd co nditi o n s of the plan.

• | You w ill be e li g ibl e to particip ate in UPS's d efined co ntributi o n retireme n t p rogram, s ubj ec t to the t erms and co nditi o n s thereof as in ef f ec t f r om time to tim e. As pr ese ntl y str uctured, th e p rogram pr ovides:

◦ | A 50% company m a tch on yo ur con tri b uti ons up to 6% of e ligible compensation; and

◦ | A serv ic e-ba se d UPS R etire men t Co n tribu ti on which begin s as 5% of eligible compensatio n, incr eas in g after fiv e years of serv i ce, and i s full y vested after three years of service.

• | Yo u w ill b e e li gib l e for p e r s o n al fina n cial counse lin g se rvices and tax return p r eparation reimbursement, wit hin t h e limi ts esta bli s h e d b y UPS. The current annual limit for per sonal finan c ial coun s e lin g and ta x preparation servic e s i s $1 5,000.

Benefits

• | You will b e e li g ibl e to partic ipa te in th e UPS Fl ex Benefits Pl a n in accorda n ce with t he terms and conditio n s thereof, including the following ben e fit s:

◦ | H e althcar e (m ultipl e plan op ti o n s)

◦ | D en tal

◦ | V i s i o n Care

◦ | AD&D Cove r ag e

◦ | Lif e In s ur a n ce (s el f, s p ouse, c hil dren)

◦ | Cri ti ca l Illn ess In su ran ce

◦ | Healt hc are Spending Account

◦ | C hil d/Elder Care S p e ndin g Acco u nt

In formation o n th e UPS Fle x Benefit s Plan a nd e nr o llmen t w ill be provided se para tely to you.

• | Yo u will be e li gib l e for 30 v acati o n day s and 5 personal d ays p e r an num.

• | The Senior Vice President and Chief Transformation Officer position requires you to be based in Atlanta. You will be eligible to participate in the UPS New Hire Homeowner Relocation Program (''Relocation Assistance"), including pre-move house-hunting expenses, temporary living expenses, home purchase expenses (e.g. fees), household goods moving expenses, and final moving expenses. The terms and conditions of the Relocation Assistance program will be separately provided to you.

Consideration for Forfeited Compensation from Previous Employer
The following benefits will be provided to you in consideration of the compensation you are forfeiting due to your termination of employment from your prior employer. The information below is intended to provide you a summary of each of these specific, one-time awards. The vesting schedule for the RSU grant described below will be as specified in the grant award agreement that you will be required to accept in connection with the grant of the award.
Offer of Employment With UPS for Scott Price
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• | You will receive a special one-time grant of Restricted Stock Units (RSUs) valued at $4 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 $4 million by the closing price of UPS stock on the grant date. The grant date for your award will be January 2, 2018. This award will vest as follows: 20% in January 2018, 20% in January 2019, 20% in January 2020, 20% in January 2021, and 20% January 2022, 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 a cash payment of $2,500,000 in December 2017 (less tax withholdings) as consideration for the 2017 cash and equity awards you are forfeiting from your prior employer.

• | You will receive Transition Payments in the total amount of $4,500,000 (less tax withholdings), paid to you as follows subject to your continued employment through each applicable payment date: $500,000 in March 2018, $2,000,000 in March 2019, $2,000,000 in March 2020.

Additional Terms

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.

2. | Your employment is contingent upon your relocation to the Atlanta metropolitan area no later than June 30, 2018.

__________________________________________________________________________________________________
1 For purposes of this offer letter, "Cause" means termination of your employment by UPS due to one or more of the following: the commission of any felony or commission 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.
Offer of Employment With UPS for Scott Price
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3. | If you are terminated for Cause or you resign from UPS within 36 months following your start date, you agree to repay the full amount of the paid Transition Payment (Excluding the December 2017 cash payment of $2.5 million) within 30 days of your last day of employment. Your signature below indicates your agreement to these repayment terms.

4. If you are terminated for Cause or you resign from UPS within 24 months following your start date, you agree to repay the full amount of any Relocation Assistance you received within 30 days of your last day of employment. You will be required to sign a separate repayment agreement before receiving these benefits.
5. Your employment is contingent upon your signing the attached UPS Protective Covenant Agreement. This agreement protects the company's intellectual property, talent and competitive advantages while also meeting stockholder expectations governing executive compensation. I urge you to read this agreement carefully and make sure that you understand its terms. In summary, the restrictions set forth in the Agreement include:
•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
business in the transportation and logistics industries; and
•A prohibition on recruiting or soliciting Company employees and customers.
6. We anticipate your start date with UPS to be December 11, 2017.
7. This offer letter supersedes any other offer letters signed by the parties.
Offer of Employment With UPS for Scott Price
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Summary

Core Compensation Package | Amount
Ba s e Salary | $50,000 / month ($600,000 /year). First merit increase in 2018 will not be prorated.
Managers Inc e nti ve Program (MIP) | Tar ge t o f 130% of a nnu alized s ala ry. Fir s t award p aid in March 20 1 9 in all U P S Clas s A stoc k.
Ownershi p In ce nti ve | 1.50% of th e v a lu e of eligibl e U P S h o ldin gs (up t o o n e month's s ala ry.
Lo n g-Ter m Incentive P erforma n ce Awa rd (LT IP) Program | Tar ge t of 45 0% of a nnu alized s al ary.
Stoc k Option s | 50% of annua li ze d sa l ary.
TOTAL TARGET COMPENSATION | $4,445,000

Benefits | Detail
UPS Retirement Program | Currently 50% company match on contributions up to 6% of eligible compensation + Service-based UPS Retirement Contribution.
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 / 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.

Retention Awards | Amount
Special One-Time RSU Grant as consideration for forfeited compensation | $4,000,000 (vests in equal installments of $800,000 in January 2018, January 2019, January 2020, January 2021, and January 2022).
Cash Payment | $2,500,000 in December 2017
Transition Payments | $500,000 in March 2018 $2,000,000 in March 2019 $2,000,000 in March 2020

I l ook forward t o wo rkin g with yo u and expect yo u w ill find yo ur partner s h ip with UPS t o be a r ewar din g an d exc itin g expe rien ce. If yo u h ave a n y que s tion s, p l e a se fee l f r ee t o contac t me.
S in cere l y,
/S/ TERI P MCCLURE
Ter i P. McClure
Chief Human Resources, Labor and Communications Officer, UPS
Offer of Employment With UPS for Scott Price
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Acceptance
I ha ve re ad the offe r o f a t-w ill emp l oymen t UPS has pre se nted to me in this l e tter. I under s tand a nd agree that if I c h oose t o acce pt UPS's of f er t h at my emp l oyme n t at U PS, b o th in t he po s ition o f Senior V ic e Pre s id e n t a nd Chief Tran s formation O ffi ce r a nd in any other p ositio n to which I ma y be transferred o r p ro m ote d i n the future, m y emp l oy m e nt i s a n d will remain "a t-will" and th a t both U P S a nd I will have th e rig h t to t erminate t h e e mp l oyme nt rel atio n s hip at a n y time and for any re aso n w ithout pri or n o ti ce. I al so under sta nd and agree that n e ith er company poli cy, practice nor em plo yee s tat eme nt s to me ca n alter th e at-w ill stat u s o f my e mpl oy m e nt. My status as an at-will emp l oyee m ay be modified o nl y b y a wr itt e n e mpl oy m e nt agree m ent so spec i fy in g a nd sig n e d b y a n offic er of U P S.
ACCE PT E D B Y:
/S/ SCOTT A PRICE
(S ignature, Scott Pri ce)
11/28/2017
Date
Scott A. Price
(Print Name)
Offer of Employment With UPS for Scott Price
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