<PAGE>
FILED PURSUANT TO RULE 424(b)(2)
FILE NO. 333-08369-01
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH 22, 2000)
$50,012,000
[United Parcel Service, Inc. Logo Appears Here]
- --------------------------------------------------------------------------------
UNITED PARCEL SERVICE, INC.
Floating Rate Senior Notes Due 2050
----------------
We will pay interest on the Notes on March 27, June 27, September 27 and
December 27 of each year. The first interest payment date is June 27, 2000.
Interest on each Note will be reset on the 27th of every month of each year,
beginning on April 27, 2000, based on the 1 Month LIBOR Rate less 0.45% (or 45
basis points). We will issue the Notes only in denominations of $1,000 and
integral multiples of $1,000.
We have the option to redeem all or a portion of the Notes beginning on
March 27, 2030 at the redemption prices listed in this prospectus supplement,
plus accrued interest on the Notes to the date we redeem the Notes.
The holders of the Notes may require us to repurchase all or a portion of
the Notes on March 27 of every third year, beginning on March 27, 2010, at the
repurchase prices listed in this prospectus supplement, plus accrued interest
on the Notes to the date we repurchase the Notes.
If there is a "tax event," we have the right to shorten the maturity of the
Notes to the extent needed so that the interest we pay on the Notes will be
deductible for United States Federal income tax purposes. On the new maturity
date, we will pay 100% of the principal amount of the Notes, plus accrued
interest on the Notes to the new maturity date.
----------------
<TABLE>
<CAPTION>
Per Note Total
-------- -----------
<S> <C> <C>
Public Offering Price..................................... 100.00% $50,012,000
Underwriting Discount..................................... 1.00% $ 500,120
Proceeds (before expenses to the Company)................. 99.00% $49,511,880
</TABLE>
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the Notes will accrue from March 27, 2000 and
must be paid by the purchaser if the Notes are delivered after March 27, 2000.
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus supplement. Any representation to the contrary is a
criminal offense.
We expect the Notes will be ready for delivery in book-entry form only
through The Depository Trust Company on or about March 27, 2000.
----------------
PaineWebber Incorporated
----------------
The date of this Prospectus Supplement is March 22, 2000.
<PAGE>
TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Recent Developments........................................................ S-3
The Company................................................................ S-3
Summary Consolidated Financial Information................................. S-4
Ratio of Earnings to Fixed Charges......................................... S-4
Description of the Notes................................................... S-5
Book Entry System.......................................................... S-9
Same-Day Settlement and Payment............................................ S-12
Underwriting............................................................... S-12
Validity of the Notes...................................................... S-12
Where You Can Find More Information........................................ S-13
</TABLE>
Prospectus
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More Information........................................ 2
The Company................................................................ 4
Ratio of Earnings to Fixed Charges......................................... 4
Use of Proceeds............................................................ 4
Description of Debt Securities............................................. 5
Plan of Distribution....................................................... 19
Validity of Offered Debt Securities........................................ 21
Experts.................................................................... 21
</TABLE>
S-2
<PAGE>
RECENT DEVELOPMENTS
We reported in our press release on January 31, 2000 revenue for 1999 of
$27.05 billion, up 9.1% from 1998. Our net income for 1999 was $883 million or
$0.77 cents per share on a diluted basis, compared to $1.74 billion or
$1.57 per share on a diluted basis reported for 1998.
THE COMPANY
In this prospectus supplement and the accompanying prospectus, unless we
otherwise specify or the context otherwise requires, references to:
. ""United Parcel Service, Inc.," "UPS," "we," "us" and "our" are to
United Parcel Service, Inc., a Delaware corporation, and its
subsidiaries; and
. ""United Parcel Service of America, Inc." and "UPS of America" are to
United Parcel Service of America, Inc., a Delaware corporation and a
direct wholly-owned subsidiary of United Parcel Service, Inc.
. ""dollars," "$," and "U.S.$" are to United States dollars.
We are the world's largest express carrier, the world's largest package
delivery company and a leading global provider of specialized transportation
and logistics services. We deliver packages each business day for 1.7 million
shipping customers to six million consignees. In 1999, we delivered an average
of more than 12.92 million pieces per day worldwide, generating revenues of
over $27 billion.
Our primary business is the delivery of packages and documents throughout
the United States and in over 200 other countries and territories. In addition,
we provide logistics services, including comprehensive management of supply
chains, for major companies worldwide. We are the industry leader in the
delivery of goods purchased over the Internet. We seek to position ourselves as
an indispensable branded component of e-commerce and to focus on the movement
of goods, information and funds.
We consummated an initial public offering of our class B common stock in
November 1999. Immediately before the consummation of the initial public
offering, we consummated a merger whereby UPS of America became our direct
wholly owned subsidiary. The issuance of these debt securities is being made
utilizing a shelf registration statement originally filed with the Securities
and Exchange Commission by UPS of America. We have assumed and adopted that
registration statement and will be the issuer of any debt securities offered
pursuant to the shelf registration statement. Our class B common stock is
listed on the New York Stock Exchange.
The address and telephone number of our principal executive offices are 55
Glenlake Parkway, N.E., Atlanta, Georgia 30328, (404) 828-6000.
S-3
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
The following summary consolidated financial information for the years
ended December 31, 1998, December 31, 1997, December 31, 1996, December 31,
1995 and December 31, 1994 has been derived from our consolidated financial
statements contained in UPS of America's Annual Reports on Form 10-K for the
fiscal years then ended. The following summary consolidated financial
information for the nine months ended September 30, 1998 and 1999 has been
derived from our unaudited consolidated financial statements contained in UPS
of America's Quarterly Report on Form 10-Q for the periods then ended. We
succeeded to UPS of America following a statutory merger that became effective
on November 15, 1999.
<TABLE>
<CAPTION>
Nine Months Ended
Years Ended December 31, September 30,
--------------------------------------- -------------------
1994 1995 1996 1997(1) 1998 1998 1999(2)
------- ------- ------- ------- ------- -------- ----------
(Unaudited)
(in millions, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Income
Data:
Revenue................. $19,576 $21,045 $22,368 $22,458 $24,788 $ 18,124 $ 19,606
Operating expenses...... 18,020 19,251 20,339 20,760 21,698 15,902 16,748
Operating profit........ 1,556 1,794 2,029 1,698 3,090 2,222 2,858
Tax assessment.......... -- -- -- -- -- -- 1,786
Income before income
taxes.................. 1,575 1,708 1,910 1,553 2,902 2,106 987
Income taxes............ 632 665 764 644 1,161 847 765
Net income.............. 943 1,043 1,146 909 1,741 1,259 222
Basic earnings per
share(3)............... 0.84 0.93 1.03 0.82 1.59 1.16 0.20
Diluted earnings per
share(3)............... 0.82 0.92 1.01 0.81 1.57 1.14 0.20
Balance Sheet Data (at
period end):
Working capital......... $ 120 $ 261 $ 1,097 $ 1,079 $ 1,708 $ 2,065 $ 821
Long-term debt.......... 1,127 1,729 2,573 2,583 2,191 2,371 1,817
Total assets............ 11,182 12,645 14,954 15,912 17,067 17,040 18,717
Shareowners' equity..... 4,647 5,151 5,901 6,087 7,173 7,052 6,831
</TABLE>
- --------
(1) The financial information as of and for the year ended December 31, 1997
reflects the impact of the Teamsters strike. The strike resulted in a net
loss of $211 million and an operating loss of $349 million for the month
of August 1997, as compared to net income of $113 million and operating
profit of $187 million for August 1996.
(2) The financial information for the nine months ended September 30, 1999
reflects a tax assessment charge relating to a Tax Court decision.
(3) Per share amounts reflect the 2-for-1 exchange ratio in the merger
undertaken in connection with the initial public offering, which had the
effect of a 2-for-1 stock split.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratio of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
Nine Months Ended
Year Ended December 31, September 30,
------------------------ -----------------
1995 1996 1997 1998 1999 1998 1999
---- ---- ---- ---- ---- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges(1)........................ 7.6 8.2 4.9 8.9 6.7 8.7 4.7
</TABLE>
- --------
(1) For purposes of calculating the ratio of earnings to fixed charges,
earnings is defined as income before income taxes and fixed charges
(excluding capitalized interest). Fixed charges include interest (whether
capitalized or expensed), amortization of debt expense and any discount
or premium relating to any indebtedness (whether capitalized or expensed)
and the portion of rent expense considered to represent interest.
S-4
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes (referred to
in the accompanying Prospectus as the "offered debt securities") supplements
the more general description of the debt securities continued in the
accompanying prospectus. If there are any inconsistencies between the
information in this section and the information in the prospectus, the
information in this section controls.
General
The Notes:
. will be limited to $50,012,000 aggregate principal amount and will be
issued under the indenture;
. will mature on March 27, 2050;
. will not be entitled to any sinking fund;
. will be subject to defeasance and covenant defeasance;
. will be issued only in registered, book-entry form, in denominations of
$1,000 and any integral multiple thereof;
. will be repayable at the option of the holders and redeemable at our
option before maturity.
The indenture and the Notes do not limit the amount of indebtedness that we
(or our subsidiaries) may incur or issue, and does not contain any financial or
similar restriction on us, except as described in the prospectus under the
caption "Description of Debt Securities--Covenants."
Interest
The Notes will bear interest at the "1 Month LIBOR Rate" (as defined below)
less 0.45% (45 basis points). Interest will accrue from March 27, 2000 and is
payable quarterly in arrears on June 27, September 27, December 27 and March 27
of each year starting March 27, 2000 (these dates are called "interest payment
dates"). The 1 Month LIBOR Rate will be reset monthly on the 27th of every
month, commencing on April 27, 2000 (each of these is called an "interest reset
date"). Interest is payable from the date of issue of the Notes or from the
most recent date to which interest on such Note has been paid or duly provided
for, until the principal amount of the Note is paid or duly made available for
payment. We will pay interest to the person in whose name the Note (or one or
more predecessor Notes) is registered at the close of business fifteen calendar
days before the interest payment date.
"1 Month LIBOR Rate" means the rate for deposits in U.S. dollars for the 1-
month period that appears on "Telerate Page 3750" at approximately 11:00 A.M.,
London time, on the second business day prior to the applicable interest reset
date; provided that the interest rate in effect from the date of issue to the
first interest reset date will be the 1 Month LIBOR Rate as calculated on the
date of issue. If this rate does not appear on the Telerate Page 3750, the
calculation agent will determine the rate on the basis of the rates at which
deposits in U.S. dollars are offered by four major banks in the London
interbank market (selected by the calculation agent) at approximately 11:00
a.m., London time, on the second business day prior to the applicable interest
reset date to prime banks in the London interbank market for a period of one
month commencing on that interest reset date and in a principal amount equal to
an amount not less than $1,000,000 that is representative for a single
transaction in such market at such time. In such case, the calculation agent
will request the principal London office of each of the aforesaid major banks
to provide a quotation of such rate. If at least two such quotations are
provided, the rate for that interest reset date will be the arithmetic mean of
the quotations, and, if fewer than two quotations are provided as requested,
the rate for that interest reset date will be the arithmetic mean of the rates
quoted by major banks in the City of New York, selected by the calculation
agent, at approximately 11:00 A.M., New York City time, on the second business
day prior to the applicable interest reset date for loans in U.S. dollars to
leading European banks for a period of one month commencing on that
S-5
<PAGE>
interest reset date and in a principal amount equal to an amount not less than
$1,000,000 that is representative for a single transaction in such market at
such time. "Telerate Page 3750" means the display page so designated on the Dow
Jones Telerate Service (or such other page as may replace such page on that
service for the purpose of displaying London interbank offered rates of major
banks). The interest rate on the Notes will in no event be higher than the
maximum rate permitted by New York law as the same may be modified by United
States law of general application.
The calculation agent will, upon the request of the holder of any Note,
provide the interest rate then in effect. The calculation agent is Citibank,
N.A. until such time as we appoint a successor calculation agent. All
calculations made by the calculation agent in the absence of manifest error
shall be conclusive for all purposes and binding on us and the holders of the
Notes. We may appoint a successor calculation agent with the written consent of
the trustee.
Interest on the Notes will be computed and paid on the basis of a 360-day
year and the actual number of days in each monthly interest payment period.
Optional Redemption
The Notes may be redeemed at any time after March 27, 2030, at our option,
in whole or in part, in amounts of $1,000 or an integral multiple of $1,000 at
the following redemption prices (in each case expressed as a percentage of the
principal amount), if redeemed during the 12-month period beginning on March 27
of any of the following years:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2030.............................. 105.0%
2031.............................. 104.5%
2032.............................. 104.0%
2033.............................. 103.5%
2034.............................. 103.0%
2035.............................. 102.5%
2036.............................. 102.0%
2037.............................. 101.5%
2038.............................. 101.0%
2039.............................. 100.5%
</TABLE>
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to the redemption date (subject to the
rights of holders of record on relevant record dates to receive interest due on
an interest payment date).
We must mail notice of any redemption at least 30 days but not more than 60
days before the redemption date to each holder of the Notes to be redeemed.
Unless we default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the Notes or portions thereof
called for redemption.
In the event of any redemption of less than all the outstanding Notes, the
particular Notes (or portions thereof in integral multiples of $1,000) to be
redeemed shall be selected by the trustee by such method as the trustee
considers fair and appropriate.
S-6
<PAGE>
Repayment at Option of Holder
The Notes will be repayable at the option of the holder thereof, in whole or
in part, on the repayment dates and at the repayment prices (in each case
expressed as a percentage of the principal amount) set forth in the following
table:
<TABLE>
<CAPTION>
Repayment
Date Price
---- ---------
<S> <C>
March 27, 2010............................... 99.00%
March 27, 2013............................... 99.25%
March 27, 2016............................... 99.50%
March 27, 2019............................... 99.75%
</TABLE>
and on March 27 of every third year thereafter at 100% of the principal amount,
through and including March 27, 2049, in each case, together with accrued and
unpaid interest, if any, to the repayment date (subject to the rights of
holders of record on relevant record dates to receive interest due on an
interest payment date).
In order for a Note to be repaid, the paying agent must receive, at least 30
but not more than 60 calendar days prior to the optional repayment date, the
Note with the form entitled "Option to Elect Repayment" on the reverse of the
Note duly completed, or a telegram, facsimile transmission or a letter from a
member of a national securities exchange or a member of the National
Association of Securities Dealers, Inc. (the "NASD") or a commercial bank or
trust company in the United States, which must set forth:
. the name of the holder of the Note;
. the principal amount of the Note;
. the principal amount of the Note to be repaid;
. the certificate number or a description of the tenor and terms of the
Note;
. a statement that the option to elect repayment is being exercised
thereby; and
. a guarantee that the Note to be repaid will be transferred to the DTC
account of the paying agent not later than the fifth business day after
the date of such telegram, facsimile transmission or letter.
The repayment option may be exercised by the holder of a Note for less than
the entire principal amount of the Note, but in that event the principal amount
of the Note remaining outstanding after repayment must be in an authorized
denomination.
Conditional Right to Shorten Maturity
We intend to deduct interest paid on the Notes for United States Federal
income tax purposes. However, there have been proposed tax law changes over the
past several years that, among other things, would prohibit an issuer from
deducting interest payments on debt instruments with a maturity of more than 40
years. While none of these proposals has become law, there can be no assurance
that similar legislation affecting our ability to deduct interest paid on the
Notes will not be enacted in the future or that any such legislation would not
have a retroactive effective date. As a result, there can be no assurance that
a Tax Event (as defined below) will not occur.
Upon the occurrence of a Tax Event, we, without the consent of the holders
of the Notes, will have the right to shorten the maturity of the Notes to the
minimum extent required, in the opinion of nationally recognized independent
tax counsel, such that, after the shortening of the maturity, interest paid on
the Notes will be deductible for United States Federal income tax purposes or,
if such counsel is unable to opine definitively as to such a minimum period,
the minimum extent so required to maintain our interest deduction to the extent
deductible under current law as determined in good faith by our board of
directors,
S-7
<PAGE>
after receipt of an opinion of such counsel regarding the applicable legal
standards. In such case, the amount payable on such Notes on such new maturity
date will be equal to 100% of the principal amount of such Notes plus interest
accrued on such Notes to the date such Notes mature on such new maturity date.
There can be no assurance that we would not exercise our right to shorten the
maturity of the Notes on the occurrence of such a Tax Event or as to the period
by which such maturity would be shortened. In the event that we elect to
exercise our right to shorten the maturity of the Notes on the occurrence of a
Tax Event, we will mail a notice to each Holder of Notes by first-class mail
not more than 60 days after the occurrence of such Tax Event, stating the new
maturity date of the Notes. Such notice shall be effective immediately upon
mailing.
We believe that the Notes should constitute indebtedness for United States
Federal income tax purposes under current law and, in that case, an exercise of
our right to shorten the maturity of the Notes should not be a taxable event to
Holders for such purposes. Prospective investors should be aware, however, that
our exercise of our right to shorten the maturity of the Notes will be a
taxable event to Holders for United States Federal income tax purposes if the
Notes are treated as equity for United States federal income tax purposes
before the maturity is shortened, assuming that the Notes of shortened maturity
are treated as debt for such purposes.
"Tax Event" means that we shall have received an opinion of nationally
recognized independent tax counsel to the effect that, as a result of one of
the following events occurring on or after March 27, 2000, there is more than
an insubstantial increase in the risk that interest paid by us on the Notes is
not, or will not be, deductible, in whole or in part, by us for United States
Federal income tax purposes:
. any amendment to, clarification of, or change (including any announced
prospective amendment, clarification or change) in any law, or any
regulation thereunder, of the United States,
. any judicial decision, official administrative pronouncement, ruling,
regulatory procedure, regulation, notice or announcement, including any
notice or announcement of intent to adopt or promulgate any ruling,
regulatory procedure or regulation (any of the foregoing, an
"Administrative or Judicial Action"), or
. any amendment to, clarification of, or change in any official position
with respect to, or any interpretation of, an Administrative or Judicial
Action or a law or regulation of the United States that differs from the
theretofore generally accepted position or interpretation.
Notes Used as Qualified Replacement Property
Prospective investors seeking to treat the Notes as "qualified replacement
property" for purposes of section 1042 of the Internal Revenue Code, should be
aware that section 1042 requires the issuer to meet certain requirements in
order for the Notes to constitute qualified replacement property. In general,
qualified replacement property is a security issued by a domestic corporation
that did not, for the taxable year preceding the taxable year in which such
security was purchased, have "passive investment income" in excess of 25
percent of the gross receipts of such corporation for such preceding taxable
year. For purposes of this passive income test, where the issuing corporation
is in control of one or more corporations, all such corporations are treated as
one corporation for the purposes of computing the amount of passive investment
income for purposes of section 1042.
We believe that less than 25 percent of our affiliated group's gross
receipts is passive investment income for the taxable year ending December 31,
1999. In making this determination, we have made certain assumptions and used
procedures which we believe are reasonable.
We cannot give any assurance as to whether we will continue to meet the
passive income test. It is, in addition, possible that the IRS may disagree
with the manner in which we have calculated our affiliated group's gross
receipts (including the characterization thereof) and passive investment income
and the conclusions reached herein. Prospective purchasers of the Notes should
consult with their own tax advisors with respect to these and other tax matters
relating to the Notes.
S-8
<PAGE>
The Notes are a new issue of securities with no established trading market.
No assurance can be given as to whether a trading market for the Notes will
develop or as to the liquidity of a trading market for the Notes. The
availability and liquidity of a trading market for the Notes will also be
affected by the degree to which purchasers treat the Notes as qualified
replacement property.
BOOK-ENTRY SYSTEM
We have obtained the information in this section concerning DTC and its
book-entry system and procedures from sources that we believe to be reliable,
but we take no responsibility for the accuracy of this information.
The Notes initially will be represented by one or more fully registered
global notes. Each global note will be deposited with, or on behalf of, The
Depository Trust Company or any successor thereto and registered in the name of
Cede & Co. (DTC's nominee).
You may hold your interests in the global notes in the United States through
DTC, either as a participant in such system or indirectly through organizations
which are participants in such system. So long as DTC or its nominee is the
registered owner of the global securities representing the Notes, DTC or such
nominee will be considered the sole owner and holder of the Notes for all
purposes of the Notes and the indenture. Except as provided below, owners of
beneficial interests in the Notes will not be entitled to have the Notes
registered in their names, will not receive or be entitled to receive physical
delivery of the Notes in definitive form and will not be considered the owners
or holders of the Notes under the indenture, including for purposes of
receiving any reports that we or the trustee deliver pursuant to the indenture.
Accordingly, each person owning a beneficial interest in a Note must rely on
the procedures of DTC or its nominee and, if such person is not a participant,
on the procedures of the participant through which such person owns its
interest, in order to exercise any rights of a holder of Notes.
Unless and until we issue the Notes in fully certificated form under the
limited circumstances described below under the heading "--Certificated Notes":
. you will not be entitled to receive a certificate representing your
interest in the Notes;
. all references in this prospectus supplement or in the accompanying
prospectus to actions by holders will refer to actions taken by DTC upon
instructions from its direct participants; and
. all references in this prospectus supplement or the accompanying
prospectus to payments and notices to holders will refer to payments and
notices to DTC or Cede & Co., as the registered holder of the Notes, for
distribution to you in accordance with DTC procedures.
The Depository Trust Company
DTC will act as securities depositary for the Notes. The Notes will be
issued as fully registered Notes registered in the name of Cede & Co. DTC is:
. a limited-purpose trust company organized under the New York Banking Law;
.a "banking organization" under the New York Banking Law;
.a member of the Federal Reserve System;
.a "clearing corporation" under the New York Uniform Commercial Code; and
. a "clearing agency" registered under the provision of Section 17A of the
Securities Exchange Act of 1934.
S-9
<PAGE>
DTC holds securities that its direct participants deposit with DTC. DTC also
facilitates the settlement among direct participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in direct participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct participants of DTC include securities brokers and dealers (including
underwriters), banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its direct participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Indirect participants of DTC,
such as securities brokers and dealers, banks and trust companies, can also
access the DTC system if they maintain a custodial relationship with a direct
participant.
If you are not a direct participant or an indirect participant and you wish
to purchase, sell or otherwise transfer ownership of, or other interests in,
Notes, you must do so through a direct participant or an indirect participant.
DTC agrees with and represents to DTC participants that it will administer its
book-entry system in accordance with its rules and by-laws and requirements of
law. The Securities and Exchange Commission has on file a set of the rules
applicable to DTC and its direct participants.
Purchases of Notes under DTC's system must be made by or through direct
participants, which will receive a credit for the Notes on DTC's records. The
ownership interest of each beneficial owner is in turn to be recorded on the
records of direct participants and indirect participants. Beneficial owners
will not receive written confirmation from DTC of their purchase, but
beneficial owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the participants or indirect participants through which such beneficial
owners entered into the transaction. Transfers of ownership interests in the
Notes are to be accomplished by entries made on the books of participants
acting on behalf of beneficial owners. Beneficial owners will not receive
certificates representing their ownership interests in Notes, except as
provided below in "--Certificated Notes."
To facilitate subsequent transfers, all Notes deposited with DTC are
registered in the name of DTC's nominee, Cede & Co. The deposit of Notes with
DTC and their registration in the name of Cede & Co. effect no change in
beneficial ownership. DTC has no knowledge of the actual beneficial owners of
the Notes. DTC's records reflect only the identity of the direct participants
to whose accounts such Notes are credited, which may
or may not be the beneficial owners. The participants will remain responsible
for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Book-Entry Format
Under the book-entry format, the trustee will pay interest or principal
payments to Cede & Co., as nominee of DTC. DTC will forward the payment to the
direct participants, who will then forward the payment to the indirect
participants or to you as the beneficial owner. You may experience some delay
in receiving your payments under this system.
DTC is required to make book-entry transfers on behalf of its direct
participants and is required to receive and transmit payments of principal,
premium, if any, and interest on the Notes. Any direct participant or indirect
participant with which you have an account is similarly required to make book-
entry transfers and to receive and transmit payments with respect to Notes on
your behalf. We and the trustee have no responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Notes or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
S-10
<PAGE>
The trustee will not recognize you as a holder under the indenture, and you
can only exercise the rights of a holder indirectly through DTC and its direct
participants. DTC has advised us that it will only take action regarding a Note
if one or more of the direct participants to whom the Note is credited direct
DTC to take such action. DTC can only act on behalf of its direct participants.
Your ability to pledge Notes to nondirect participants, and to take other
actions, may be limited because you will not possess a physical certificate
that represents your Notes.
Certificated Notes
Unless and until they are exchanged, in whole or in part, for Notes in
definitive form in accordance with the terms of the Notes, the Notes may not be
transferred except as a whole by DTC to a nominee of DTC, by a nominee of DTC
to DTC or another nominee of DTC or by DTC or any such nominee to a successor
of DTC or a nominee of such successor.
We will issue Notes to you or your nominees, in fully certificated
registered form, rather than to DTC or its nominees, only if:
. we advise the trustee in writing that DTC is no longer willing or able
to discharge its responsibilities properly or that DTC is no longer a
registered clearing agency under the Securities Exchange Act of 1934,
and the trustee or we are unable to locate a qualified successor within
90 days;
. an event of default has occurred and is continuing under the indenture;
or
. we, at our option, elect to terminate use of the book-entry system
through DTC.
If any of the three above events occurs, DTC is required to notify all
direct participants that Notes in fully certificated registered form are
available through DTC. DTC will then surrender the global Note representing the
Notes along with instructions for re-registration. The trustee will re-issue
the Notes in fully certificated registered form and will recognize the
registered holders of the certificated Notes as holders under the indenture.
S-11
<PAGE>
SAME-DAY SETTLEMENT AND PAYMENT
The underwriter will settle the Notes in immediately available funds. We
will make principal and interest payments on the Notes in immediately available
funds or the equivalent.
Secondary market trading between DTC direct participants will occur in
accordance with DTC rules and will be settled in immediately available funds
using DTC's Same-Day Funds Settlement System. No assurance can be given as to
the effect, if any, of settlement in immediately available funds on trading
activity (if any) in the Notes.
UNDERWRITING
We have entered into an underwriting agreement and pricing agreement with
respect to the Notes with the underwriter listed below. Subject to certain
conditions, the underwriter has agreed to purchase the principal amount of
Notes indicated in the following table:
<TABLE>
<CAPTION>
Underwriter Principal Amount of Notes
----------- -------------------------
<S> <C>
PaineWebber Incorporated....................... $50,012,000
</TABLE>
Notes sold by the underwriter to the public will initially be offered at the
initial public offering price set forth on the cover of this prospectus
supplement. If all the Notes are not sold at the initial offering price, the
underwriter may change the offering price and the other selling terms.
The Notes are a new issue of securities with no established trading market.
We have been advised by the underwriter that the underwriter intends to make a
market in the Notes, but it is not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the Notes.
In connection with the offering, the underwriter may purchase and sell the
Notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriter of a greater aggregate
principal amount of Notes than they are required to purchase in the offering.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the Notes
while the offering is in process.
These activities by the underwriter may stabilize, maintain or otherwise
affect the market price of the Notes. As a result, the price of the Notes may
be higher than the price that otherwise might exist in the open market. If
these activities are commenced, they may be discontinued by the underwriter at
any time. These transactions may be effected in the over-the-counter market or
otherwise.
We estimate that the total expenses of the offering, excluding underwriting
discounts and commissions, will be approximately $100,000. We have agreed to
indemnify the underwriter against certain liabilities, including liabilities
under the Securities Act of 1933.
VALIDITY OF THE NOTES
The validity of the Notes will be passed upon for us by Hunton & Williams,
New York, NY and for the underwriter by Brown & Wood LLP, New York, NY.
S-12
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy materials that we have filed
with the SEC, including the registration statement of which this prospectus is
a part, at the following SEC reference rooms:
<TABLE>
<S> <C> <C>
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street
Room 1024 Suite 1300 Suite 1400
Washington, DC 20549 New York, New York 10048 Chicago, Illinois 60661
</TABLE>
Please telephone the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. The SEC also maintains an internet site at
http://www.sec.gov that contains reports, proxy statements and other
information regarding issuers that file electronically with the SEC. You may
find our reports, proxy statements and other information at this SEC website.
In addition, you can obtain our reports and proxy statements and other
information about us at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" into this document the
information that we file with it. This means that we can disclose important
information by referring you to those documents. The information incorporated
by reference is an important part of this prospectus supplement and the
accompanying prospectus, and information in documents that we file after the
date of this prospectus supplement and before the termination of the offering
will automatically update information in this prospectus supplement and the
accompanying prospectus. We succeeded to UPS of America following a statutory
merger that became effective on November 15, 1999.
We incorporate by reference into this prospectus supplement:
. our current report on Form 8-K filed with the SEC on February 23, 2000;
and
. any future filings we make with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, until we sell all of
the securities offered by this prospectus supplement and the
accompanying prospectus.
We also incorporate by reference into this prospectus supplement and adopt
as our own the following:
. UPS of America's annual report on Form 10-K for the year ended December
31, 1998; and
. UPS of America's quarterly reports on Form 10-Q for the fiscal quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999.
We will provide, without charge, to each person to whom a copy of this
prospectus supplement is delivered, upon written or oral request, a copy of
any and all of the documents incorporated by reference in this prospectus
supplement, other than the exhibits to such documents, unless such exhibits
are specifically incorporated by reference into the documents that this
prospectus supplement incorporates. Requests for copies of such documents
should be directed to United Parcel Service, Inc., 55 Glenlake Parkway, N.E.,
Atlanta, Georgia, 30328, attn: Corporate Secretary, telephone number (404)
828-6000.
S-13
<PAGE>
PROSPECTUS
- --------------------------------------------------------------------------------
UNITED PARCEL SERVICE, INC.
$2,000,000,000
DEBT SECURITIES
----------------
This prospectus relates to the issuance of senior unsecured debt securities
by United Parcel Service, Inc. pursuant to our debt shelf registration
statement. Under this shelf registration statement, we may issue debt
securities from time to time as described in this prospectus.
Issuance of debt securities:
. may be offered from time to time;
. may be denominated in U.S. dollars or other currencies or currency units;
. prices and terms will be determined at the time of sale; and
. the total aggregate principal amount (or, in the case of debt securities
issued at a discount, the initial offering price) will not exceed US
$2,000,000,000 (or the equivalent in foreign currencies or currency units).
Forms that debt securities may take:
. registered form; or
. global form.
This prospectus is accompanied by a prospectus supplement that includes
additional information regarding an issuance of our debt securities. Sales of
our debt securities may not be consummated without both this prospectus and a
prospectus supplement.
The prospectus supplement relating to any issuance of debt securities will
describe the terms of the securities being issued, typically including the
following:
. aggregate principal amount of the . any listing on a national
series of debt securities; securities exchange;
. denominations; . initial public offering price;
. maturity; . names of any underwriters or
agents;
. interest rate; . terms of any underwriting
arrangements;
. time of interest payments;
. any terms for redemption; . amounts to be purchased by
underwriters or agents; and
. any terms for sinking fund . commissions or discounts of or to
payments; underwriters or agents.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these debt securities or determined
if this prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
The date of this prospectus is March 22, 2000.
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this prospectus or
any prospectus supplement and, if given or made, such information or
representation must not be relied upon as having been authorized by us or any
underwriter or agent. This prospectus and any prospectus supplement do not
constitute an offer to sell or a solicitation of any offer to buy any of the
securities offered hereby and thereby in any jurisdiction to any person to whom
it is unlawful to make such offer in such jurisdiction. Neither the delivery of
this prospectus or any prospectus supplement nor any sale made hereunder and
thereunder shall, under any circumstances, create any implication that the
information herein or therein is correct as of any time subsequent to their
respective dates.
----------------
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy materials that we have filed
with the SEC, including the registration statement of which this prospectus is
a part, at the following SEC reference rooms:
<TABLE>
<S> <C> <C>
450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street
Room 1024 Suite 1300 Suite 1400
Washington, DC 20549 New York, New York 10048 Chicago, Illinois 60661
</TABLE>
Please telephone the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. The SEC also maintains an internet site at
http://www.sec.gov that contains reports, proxy statements and other
information regarding issuers that file electronically with the SEC. You may
find our reports, proxy statements and other information at this SEC website.
In addition, you can obtain our reports and proxy statements and other
information about us at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" into this document the
information that we file with it. This means that we can disclose important
information by referring you to those documents. The information incorporated
by reference is an important part of this prospectus and the accompanying
prospectus supplement, and information in documents that we file after the date
of this prospectus and before the termination of the offering will
automatically update information in this prospectus and the accompanying
prospectus supplement. We succeeded to UPS of America following a statutory
merger that became effective on November 15, 1999.
We incorporate by reference into this prospectus:
. our current report on Form 8-K filed with the SEC on February 23, 2000;
and
. any future filings we make with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, until we sell all of
the securities offered by this prospectus and the accompanying
prospectus supplement.
We also incorporate by reference into this prospectus and adopt as our own
the following:
. UPS of America's annual report on Form 10-K for the year ended December
31, 1998; and
. UPS of America's quarterly reports on Form 10-Q for the fiscal quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999.
We will provide, without charge, to each person to whom a copy of this
prospectus is delivered, upon written or oral request, a copy of any and all of
the documents incorporated by reference in this prospectus, other than the
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into
2
<PAGE>
the documents that this prospectus incorporates. Requests for copies of such
documents should be directed to United Parcel Service, Inc., 55 Glenlake
Parkway, N.E., Atlanta, Georgia, 30328, attn: Corporate Secretary, telephone
number (404) 828-6000.
----------------
Unless otherwise indicated, currency amounts in this prospectus and any
prospectus supplement are stated in United States dollars ("$," "dollars,"
"U.S. dollars," or "U.S. $1").
----------------
3
<PAGE>
THE COMPANY
We are the world's largest express carrier, the world's largest package
delivery company and a leading global provider of specialized transportation
and logistics services. We deliver packages each business day for 1.7 million
shipping customers to six million consignees. In 1999, we delivered an average
of more than 12.92 million pieces per day worldwide, generating revenues of
over $27 billion.
Our primary business is the delivery of packages and documents throughout
the United States and in over 200 other countries and territories. In addition,
we provide logistics services, including comprehensive management of supply
chains, for major companies worldwide. We are the industry leader in the
delivery of goods purchased over the Internet. We seek to position ourselves as
an indispensable branded component of e-commerce and to focus on the movement
of goods, information and funds.
We consummated an initial public offering of our class B common stock in
November 1999. Immediately before the consummation of the initial public
offering, we consummated a merger whereby UPS of America became our direct
wholly owned subsidiary. The issuance of these debt securities is being made
utilizing a shelf registration statement originally filed with the Securities
and Exchange Commission by UPS of America. We have assumed and adopted that
registration statement and will be the issuer of any debt securities offered
pursuant to the shelf registration statement. Our class B common stock is
listed on the New York Stock Exchange.
When used in this prospectus, unless the context requires otherwise, the
terms "United Parcel Service, Inc.", "UPS", "we", "us", and "our" refer to
United Parcel Service, Inc., a Delaware corporation, and "United Parcel Service
of America, Inc." and "UPS of America" refer to United Parcel Service of
America, Inc., a Delaware corporation and direct wholly owned subsidiary of
United Parcel Service, Inc.
The address and telephone number of our principal executive offices are 55
Glenlake Parkway, N.E., Atlanta, Georgia 30328, (404) 828-6000.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Nine Months
Ended
Year Ended December 31, September 30,
------------------------ -------------
1995 1996 1997 1998 1999 1998 1999
---- ---- ---- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges (1)....................... 7.6 8.2 4.9 8.9 6.7 8.7 4.7
</TABLE>
- --------
(1) For purposes of calculating the ratio of earnings to fixed charges,
earnings is defined as income before income taxes and fixed charges
(excluding capitalized interest). Fixed charges include interest (whether
capitalized or expensed), amortization of debt expense and any discount or
premium relating to any indebtedness (whether capitalized or expensed) and
the portion of rent expense considered to represent interest.
USE OF PROCEEDS
Unless otherwise stated in a prospectus supplement, the net proceeds from
the sale of the debt securities offered under this prospectus and a related
prospectus supplement will be used for general corporate purposes, including
UPS's working capital needs, the funding of investments in, or extensions of
credit to, our operating subsidiaries, possible acquisitions and investments in
joint ventures and the possible reduction of outstanding indebtedness. Pending
any of these uses, we may temporarily invest the net proceeds in investment
grade securities.
4
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The debt securities are to be issued under an indenture dated as of January
26, 1999, between UPS of America and Citibank, N.A., which acts as trustee,
which indenture we assumed pursuant to a supplemental indenture. In this
prospectus "indenture" will refer to the indenture and the supplemental
indenture. A copy of the indenture is filed as an exhibit to the registration
statement of which this prospectus is a part. The indenture and its associated
documents contain the full legal text of the matters described in this section.
The indenture and the debt securities are governed by New York law. A copy of
the indenture may be obtained from us as described under "Where You Can Find
More Information" on page 2.
This section summarizes the material terms of the debt securities that may
be issued under this debt program. Because this section is a summary, it does
not describe every aspect of the debt securities. This summary is subject to
and qualified in its entirety by reference to all the provisions of the
indenture, including definitions of terms used in the indenture. In this
summary, we describe the meaning for only the more important terms. We also
include references in parentheses to sections of the indenture. Whenever we
refer to particular sections or defined terms of the indenture in this
prospectus or in a prospectus supplement, the sections or defined terms are
incorporated by reference in this prospectus or in the prospectus supplement.
You must look to the indenture for the most complete description of what we
describe in summary form in this prospectus.
This summary also is subject to and qualified by reference to the
description of the particular terms of the debt securities described in the
prospectus supplement. The prospectus supplement relating to each series of
debt securities will be attached to the front of this prospectus. There also
may be a further prospectus supplement, know as a pricing supplement, which
contains the precise terms of debt securities you are offered.
The term "Securities," as used under this caption, refers to all Securities
issued under the indenture, including the debt securities.
General
The indenture provides that Securities in separate series may be issued from
time to time, without limitation as to aggregate principal amount. We may
specify a maximum aggregate principal amount for the Securities of any series.
(Section 3.01) The Securities are to have terms and provisions that are not
inconsistent with the indenture, including terms as to maturity, principal and
interest as we may determine. The Securities will be unsecured obligations and
will rank on a parity with all of our other unsecured and unsubordinated
indebtedness. The provisions of the indenture described below provide us with
the ability, in addition to the ability to issue Securities with terms
different from those of Securities previously issued, to "reopen" a previous
issue of a series of Securities and issue additional Securities of that series.
The applicable prospectus supplement will set forth the price or prices at
which the Securities to be offered will be issued and will describe the
following terms, as applicable, of the Securities:
(a) the title of the Securities of the series;
(b) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under the indenture;
(c) the person or entity to whom any interest on the Securities of the
series will be payable;
5
<PAGE>
(d) the date or dates on which the principal, premium, if any, or other
form or type of consideration to be paid upon maturity on any Securities of
the series will be payable;
(e) the rate or rates at which any Securities of the series will bear
interest, if any, or any method by which the rate or rates will be
determined, the date or dates from which any interest will accrue, the
interest payment dates on which any interest will be payable and the record
date for any interest payable on any interest payment date;
(f) the place or places where the principal, premium, if any, interest
or other form or type of consideration to be paid upon maturity on any
Securities of the series will be payable;
(g) the period or periods within which, the price or prices at which and
the terms and conditions upon which any Securities of the series may be
redeemed, in whole or in part, at our option and, if other than by a
resolution by our Board of Directors or its Executive Committee, the manner
in which any election by us to redeem the Securities will be evidenced;
(h) our obligation, if any, to redeem or purchase any Securities of the
series pursuant to any sinking fund or analogous provisions or at the
option of the Holder of the Securities, and the period or periods within
which, the price or prices at which and the terms and conditions upon which
any Securities of the series will be redeemed or purchased, in whole or in
part, pursuant to any obligation and any provisions for the remarketing of
any Securities;
(i) if other than denominations of $1,000 and any integral multiple of
$1,000, the denominations in which any Securities of the series will be
issuable;
(j) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index,
formula or other method, the manner in which these amounts will be
determined;
(k) if other than the currency of the United States of America, the
currency, currencies or composite currencies in which the principal of or
any premium or interest on any Securities of the series will be payable and
the manner of determining the equivalent in the currency of the United
States of America for any purpose;
(l) if the principal of or any premium or interest on any Securities of
the series is to be payable, at our election or the election of the Holder
of the Securities, in one or more currencies or composite currencies other
than that or those in which Securities are stated to be payable, the
currency, currencies or composite currencies in which the principal of or
interest on Securities as to which an election is made will be payable, the
periods within which and the terms and conditions upon which an election is
to be made and the amount so payable, or the manner in which the amount
will be determined;
(m) if other than the entire principal amount of any Securities, the
portion of the principal amount of the Securities of the series that will
be payable upon declaration of acceleration of the maturity of the
Securities;
(n) if the principal amount payable at the stated maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the stated maturity, the amount that will be deemed to be
the principal amount of the Securities as of any such date for any purpose
under the Securities or under this prospectus, including the principal
amount of the Securities that will be due and payable upon any maturity
other than the stated maturity or that will be deemed to be outstanding as
of any date prior to the stated maturity;
(o) if applicable, that the Securities of the series, in whole or any
specified part, will be defeasible and that some of our covenants will be
defeasible and, if other than by a resolution of our Board of Directors or
Executive Committee, the manner in which any election by us to defease any
Securities or covenants will be evidenced;
(p) if applicable, that any Securities of the series will be issuable in
whole or in part in the form of one or more global securities and, in that
case, the respective depositories for the global securities, the form of
any legend or legends that will be borne by any global security and any
circumstances in which
6
<PAGE>
any global security may be exchanged in whole or in part for Securities
registered, and any transfer of a global security in whole or in part may
be registered, in the name or names of persons or entities other than a
depository for a global security;
(q) whether, and the terms and conditions relating to when, we may
satisfy some of our obligations with respect to the Securities with regard
to payment upon maturity, or any redemption or required repurchase or in
connection with any exchange provisions by delivering to the holders
principal, premium, if any, interest or other form or type of consideration
to be paid upon maturity on any Securities;
(r) any addition to or change in the events of default that apply to any
Securities of the series and any change in the right of the trustee or the
requisite holders of the Securities to declare the principal amount due and
payable;
(s) any addition to or change in the covenants that apply to Securities
of the series;
(t) the terms and conditions pursuant to which the Securities may be
converted into or exchanged for other of our debt securities;
(u) terms with respect to book-entry procedures; and
(v) any other terms of the Securities of the series, which terms will
not otherwise be inconsistent with the indenture and as authorized and
approved by us.
Securities, including original issue discount securities, may be sold at a
substantial discount below their principal amount. We may describe special
United States federal income tax considerations, if any, applicable to
Securities sold at an original issue discount in the applicable prospectus
supplement. In addition, we may describe special United States federal income
tax or other considerations, if any, applicable to any Securities that are
denominated in a currency or currency unit other than United States dollars in
the applicable prospectus supplement.
Form, Exchange and Transfer
The Securities of each series will be issuable only in registered form,
without coupons and, unless we specify otherwise in the applicable prospectus
supplement, only in denominations of $1,000 and integral multiples of $1,000.
(Section 3.02)
At the option of the Holder, subject to the terms of the indenture and the
limitations applicable to Global Securities, Securities of each series will be
exchangeable for other Securities of the same series of any authorized
denomination and of a like tenor and aggregate principal amount. (Section 3.05)
Subject to the terms of the indenture and the limitations applicable to
Global Securities, Securities may be presented for exchange as provided above
or for registration of transfer (duly endorsed or with the form of transfer
endorsed thereon duly executed) at the office of the Security Registrar or at
the office of any transfer agent we designate for such purpose. No service
charge will be made for any registration of transfer or exchange of Securities,
but we may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Transfer or exchange will
be effected by the Security Registrar or the transfer agent, as the case may
be, being satisfied with the documents of title and identity of the person
making the request. We have appointed the trustee as Security Registrar.
(Section 3.05) We may at any time designate additional transfer agents or
rescind the designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that we will be required to
maintain a transfer agent in each Place of Payment for the Securities of each
series. (Section 10.02)
If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, we will not be required to:
. issue, register the transfer of or exchange any Security of that series
(or of that series and specified tenor, as the case may be) during a
period beginning at the opening of business 15 days before the
7
<PAGE>
day of mailing of a notice of redemption of any Security that may be
selected for redemption and ending at the close of business on the day
of such mailing or
. register the transfer of or exchange any Security so selected for
redemption, in whole or in part, except the unredeemed portion of any
Security being redeemed in part. (Section 3.05)
Global Securities
Some or all of the Securities of any series may be represented, in whole or
in part, by one or more Global Securities that have an aggregate principal
amount equal to that of the Securities represented thereby. Each Global
Security will be registered in the name of The Depository Trust Company, New
York, New York or its nominee identified in the applicable prospectus
supplement, will be deposited with DTC or its nominee or a custodian and will
bear a legend regarding the restrictions on exchanges and registration of
transfer thereof referred to below and any other matters as may be provided for
pursuant to the indenture. Unless otherwise described in the prospectus
supplement relating to each series, the Securities of each series offered, sold
or delivered in the United States will be issued in the form of one or more
fully registered global notes that will be deposited with, or on behalf of, DTC
and registered in the name of the DTC nominee.
DTC has advised us as follows:
. it is a limited-purpose trust company which was created to hold
securities for its participating organizations and to facilitate the
clearance and settlement of securities transactions between
DTC participants in securities through electronic book-entry changes in
accounts of DTC participants;
. DTC participants include securities brokers and dealers (including the
underwriters for the Securities), banks and trust companies, clearing
corporations and certain other organizations;
. access to DTC's system is also available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly
("indirect participants"); and
. persons who are not DTC participants may beneficially own securities
held by DTC only through DTC participants or indirect participants.
Unless otherwise provided in the applicable prospectus supplement, payments
of principal, any premium or interest on or related to the Securities of each
series registered in the name of DTC's nominee will be made by the trustee to
DTC's nominee as the registered owner of the Global Security. Under the terms
of the indenture, UPS and the trustee will treat the persons in whose names the
Securities of each series are registered as the owners of the Securities for
the purpose of receiving payment of principal, any premium or interest on the
Securities and for all other purposes. Therefore, neither we, the trustee nor
the Paying Agent has any direct responsibility or liability for the payment of
the principal, any premium or interest on the Securities to owners of
beneficial interests in a Global Security. DTC has advised us and the trustee
that its present practice is, upon receipt of any payment of principal, any
premium, or interest, to immediately credit the accounts of the
DTC participants with the payment in amounts proportionate to their respective
holdings in principal amount of beneficial interests in such Global Security as
shown on DTC's records.
Notwithstanding any provision of the indenture or any Security described in
this prospectus, no Global Security may be exchanged in whole or in part for
Securities registered, and no transfer of a Global Security in whole or in part
may be registered, in the name of any Person other than DTC or any nominee of
DTC unless:
. DTC has notified us that it is unwilling or unable to continue as
depositary for a Global Security or has ceased to be qualified to act as
depositary as required by the indenture;
. there shall have occurred and be continuing an Event of Default with
respect to the Securities represented by a Global Security; or
. there shall exist circumstances, if any, in addition to or in lieu of
those described above as may be described in the applicable prospectus
supplement.
All securities issued in exchange for a Global Security or any portion of a
Global Security will be registered in the names as DTC may direct. (Sections
2.04 and 3.05)
8
<PAGE>
As long as DTC, or its nominee, is the registered Holder of a Global
Security, DTC or its nominee, as the case may be, will be considered the sole
owner and Holder of the Global Security and the Securities represented thereby
for all purposes under the Securities and the indenture. Except in the limited
circumstances referred to above, owners of beneficial interests in a Global
Security will not be entitled to have such Global Security or any Securities
represented thereby registered in their names, will not receive or be entitled
to receive physical delivery of certificated Securities in exchange therefor
and will not be considered to be the owners or Holders of such Global Security
or any Securities represented thereby for any purpose under the Securities or
the indenture. All payments and deliveries of principal of and any premium,
Maturity Consideration and interest on a Global Security will be made to DTC or
its nominee, as the case may be, as the Holder thereof. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. These laws may impair the
ability to transfer beneficial interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
DTC participants and to persons that may hold beneficial interests through
DTC participants. In connection with the issuance of any Global Security, DTC
will credit, on its book entry registration and transfer system, the respective
principal amounts of Securities represented by the Global Security to the
accounts of its DTC participants. Ownership of beneficial interests in a Global
Security will be shown only on, and the transfer of those ownership interests
will be effected only through, records maintained by DTC, with respect to
DTC participants' interests, or any DTC participant, with respect to interests
of persons held by DTC participants on their behalf. Payments, transfers,
exchanges and other matters relating to beneficial interests in a Global
Security may be subject to various policies and procedures adopted by DTC from
time to time. None of us, the trustee or any agent of us or the trustee will
have any responsibility or liability for any aspect of DTC's or any
DTC participant's records relating to, or for payments made on account of,
beneficial interests in a Global Security, or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearinghouse or next-day funds. In contrast, beneficial interests
in a Global Security will trade in DTC's same-day funds settlement system, in
which secondary market trading activity in those beneficial interests would be
required by DTC to settle in immediately available funds. There is no assurance
as to the effect, if any, that settlement in immediately available funds would
have on trading activity in such beneficial interests. Also, settlement for
purchases of beneficial interests in a Global Security upon the original
issuance thereof may be required to be made in immediately available funds.
Payment and Paying Agents
Unless otherwise indicated in the applicable prospectus supplement, payment
of interest on a Security on any Interest Payment Date will be made to the
Person in whose name the Security, or one or more Predecessor Securities, is
registered at the close of business on the Regular Record Date for payment of
interest. (Section 3.07)
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Unless otherwise indicated in the applicable prospectus supplement,
principal of and any premium, Maturity Consideration and interest on the
Securities of a particular series (other than a Global Security) will be
payable or deliverable at the office of the Paying Agent or Paying Agents as we
may designate for that purpose from time to time, except that at our option
payment of any interest may be made by check mailed to the address of the
Person entitled to the payment as that address appears in the Security
Register. Unless otherwise indicated in the applicable prospectus supplement,
the corporate trust office of the trustee in The City of New York will be
designated as our sole Paying Agent for payments and deliveries with respect to
Securities of each series. Any other Paying Agents initially designated for the
Securities of a particular series will be named in the applicable prospectus
supplement. We may at any time designate additional Paying Agents or rescind
the designation of any Paying Agent or approve a change in the office through
which any Paying Agent acts, except that we will be required to maintain a
Paying Agent in each Place of Payment for the Securities of a particular
series. (Section 10.02)
All consideration paid or delivered to a Paying Agent for the payment or
delivery of the principal of or any premium, Maturity Consideration or interest
on any Security that remain unclaimed at the end of two years after such
principal, premium, Maturity Consideration or interest has become due and
payable or deliverable will be repaid to us, and the Holder of the Security
thereafter, as an unsecured general creditor, may look only to us for payment
or delivery thereof. (Section 10.03)
Covenants
Limitation on Secured Indebtedness
We will not create, assume, incur or guarantee, and will not permit any
Restricted Subsidiary to create, assume, incur or guarantee, any Secured
Indebtedness without making provision whereby all the Securities shall be
secured equally and ratably with, or prior to, any Secured Indebtedness,
together with, if we shall so determine, any other Indebtedness of us or any
Restricted Subsidiary then existing or thereafter created that is not
subordinate to the Securities, so long as the Secured Indebtedness shall be
outstanding unless the Secured Indebtedness, when added to:
. the aggregate amount of all Secured Indebtedness then outstanding (not
including in this computation Secured Indebtedness if the Securities are
secured equally and ratably with (or prior to) any Secured Indebtedness
and further not including in this computation any Secured Indebtedness
that is concurrently being retired) and
. the aggregate amount of all Attributable Debt then outstanding pursuant
to Sale and Leaseback Transactions entered into by us after January 26,
1999, or entered into by a Restricted Subsidiary after January 26, 1999
or, if later, the date on which it became a Restricted Subsidiary (not
including in this computation any Attributable Debt that is concurrently
being retired)
would not exceed 10% of Consolidated Net Tangible Assets. (Section 10.06)
Limitation on Sale and Lease Back Transactions
We will not, and will not permit any Restricted Subsidiary to, enter into
any Sale and Leaseback Transaction unless the sum of:
. the Attributable Debt to be outstanding pursuant to any Sale and
Leaseback Transaction;
. all Attributable Debt then outstanding pursuant to all other Sale and
Leaseback Transactions entered into by us after January 26, 1999, or
entered into by a Restricted Subsidiary after January 26, 1999 or, if
later, the date on which it became a Restricted Subsidiary; and
. the aggregate of all Secured Indebtedness then outstanding (not
including in this computation Secured Indebtedness if the Securities are
secured equally and ratably with (or prior to) such Secured
Indebtedness)
would not exceed 10% of Consolidated Net Tangible Assets, or
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an amount equal to the greater of:
. the net proceeds to us or the Restricted Subsidiary of the sale of the
Principal Property sold and leased back pursuant to any Sale and
Leaseback Transaction; and
. the amount of Attributable Debt to be outstanding pursuant to any Sale
and Leaseback Transaction
is applied to the retirement of Funded Debt of us or any Restricted
Subsidiaries (other than Funded Debt that is subordinate to the Securities or
is owing to us or any Restricted Subsidiaries) within 180 days after the
consummation of any Sale and Leaseback Transaction. (Section 10.07)
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge with or into any other Person or
convey, transfer or lease all or substantially all of our properties and assets
substantially as an entirety to any Person unless:
(a) either we are the continuing corporation or the Person, if other
than us, formed by any consolidation or into which we are merged or the
Person that acquires by conveyance, transfer, or lease, the properties and
assets of us substantially as an entirety shall be a corporation,
partnership or trust, shall be organized and validly existing under the
laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, in form satisfactory to the trustee,
the due and punctual payment or delivery of the Maturity Consideration and
interest on all the Securities and the performance of every covenant in the
indenture on the part of us to be performed or observed;
(b) immediately after giving effect to such transaction, and treating
any Indebtedness that becomes an obligation of us or any Subsidiary in
connection with or as a result of such transaction as having been incurred
at the time of such transaction, no Event of Default, and no event that,
after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing; and
(c) we or such Person has delivered to the trustee an Officer's
Certificate and an opinion of counsel, as to which opinion, counsel may
rely on the Officer's Certificate as to factual matters, each stating that
such consolidation, merger, conveyance, transfer or lease comply with the
foregoing and that all conditions precedent provided for in the indenture
or relating to the transaction have been complied with.
Upon any consolidation or merger or any conveyance, transfer or lease of the
properties and assets of us substantially as an entirety, the successor Person
formed by a consolidation, or into which we are merged or the successor Person
to which any conveyance, transfer or lease is made, shall succeed to, and be
substituted for, and may exercise every right and power of us under the
Securities and the indenture with the same effect as if that successor had been
named as us therein; and thereafter, except in the case of a lease, we shall be
discharged from all obligations and covenants under the indenture and the
Securities. (Sections 8.01 and 8.02)
Definitions
"Attributable Debt" means, as of the date of its determination, the present
value (discounted semiannually at an interest rate of 7.0% per annum) of the
obligation of a lessee for rental payments pursuant to any Sale and Leaseback
Transaction (reduced by the amount of the rental obligations of any sublessee
of all or part of the same property) during the remaining term of such Sale and
Leaseback Transaction (including any period for which the lease relating
thereto has been extended), such rental payments not to include amounts payable
by the lessee for maintenance and repairs, insurance, taxes, assessments and
similar charges and for contingent rents (such as those based on sales). In the
case of any Sale and Leaseback Transaction in which the lease is terminable by
the lessee upon the payment of a penalty, the rental payments shall be
considered for purposes of this definition to be the lesser of:
(1) the rental payments to be paid under such Sale and Leaseback
Transaction until the first date (after the date of such determination)
upon which it may be so terminated plus the then applicable penalty upon
such termination and
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(2) the rental payments required to be paid during the remaining term
of any Sale and Leaseback Transaction (assuming such termination provision
is not exercised).
"Board of Directors" means either our board of directors or a committee of
that board duly authorized to act for it in respect of the indenture.
"Board Resolution" means a copy of a resolution certified by our Secretary
or an Assistant Secretary to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of the certification.
"Capitalized Lease Obligation" means any obligation to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) real
or personal property that is required to be classified and accounted for as a
capital lease obligation under generally accepted accounting principles, and,
for the purposes of the indenture, the amount of such obligation at any date
shall be the capitalized amount thereof at the applicable date, determined in
accordance with such principles.
"Consolidated Net Tangible Assets" means at any date, the total assets
appearing on the most recently prepared consolidated balance sheet of us and
the Subsidiaries as of the end of our fiscal quarter, prepared in accordance
with generally accepted accounting principles, less all current liabilities as
shown on the balance sheet and Intangible Assets.
"Funded Debt" means any indebtedness maturing by its terms more than one
year from its date of issue, including any indebtedness renewable or extendable
at the option of the obligor to a date later than one year from its original
date of issue.
"Indebtedness" means
(a) any liability of any Person:
(1) for borrowed money, or under any reimbursement obligation relating
to a letter of credit; or
(2) evidenced by a bond, note, debenture or similar instrument,
including a purchase money obligation, given in connection with the
acquisition of any businesses, properties or assets of any kind or with
services incurred in connection with capital expenditures, other than a
trade payable or a current liability arising in the ordinary course of
business; or
(3) for the payment of money relating to a Capitalized Lease
Obligation; or
(4) for Interest Rate Protection Obligations;
(b) any liability of others described in the preceding clause (a) that the
Person has guaranteed or that is otherwise its legal liability; and
(c) any amendment, supplement, modification, deferral, renewal, extension
or refunding of any liability of the types referred to in clauses (a) and (b)
above.
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"Intangible Assets" means at any date the value (net of any applicable
reserves), as shown on or reflected in our most recently prepared consolidated
balance sheet, prepared in accordance with generally accepted accounting
principles, of:
(1) all trade names, trademarks, licenses, patents, copyrights and
goodwill;
(2) organizational and development costs;
(3) deferred charges (other than prepaid items such as insurance,
taxes, interest, commissions, rents and similar items and tangible assets
being amortized); and
(4) unamortized debt discount and expense, less unamortized premium.
"Interest Rate Protection Obligations" of any Person means the obligations
of that Person pursuant to any arrangement with any other Person whereby,
directly or indirectly, that Person is entitled to receive from time to time
periodic payments calculated by applying a fixed rate of interest on a stated
notional amount in exchange for periodic payments made by such Person
calculated by applying a floating rate of interest on the same notional
amount.
"Liens" means any mortgage, lien, pledge, security interest, charge or
encumbrance.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof or any other entity.
"Principal Property" means any land, land improvements, buildings and
associated factory, distribution, laboratory and office equipment (excluding
any products marketed by us or any Subsidiary) constituting a distribution
facility, operating facility, manufacturing facility, development facility,
warehouse facility, service facility or office facility (including any portion
thereof), which facility
(a) is owned by or leased to us or any Restricted Subsidiary,
(b) is located within the United States and
(c) has an acquisition cost plus capitalized improvements in excess of
0.50% of Consolidated Net Tangible Assets as of the date of that
determination, other than:
(1) any facility, or portion thereof, which has been financed by
obligations issued by or on behalf of a State, a Territory or a possession
of the United States, or any political subdivision of any of the foregoing,
or the District of Columbia, the interest on which is excludable from gross
income of the holders thereof (other than a "substantial user" of the
related facility or a "related Person" as those terms are used in Section
103 of the Internal Revenue Code pursuant to the provisions of Section 103
of the Internal Revenue Code (or any similar provision hereafter enacted)
as in effect at the time of issuance of the obligations;
(2) any facility that the Board of Directors may by Board Resolution
declare is not of material importance to us and the Restricted Subsidiaries
taken as a whole; and
(3) any facility, or portion thereof, owned or leased jointly or in
common with one or more Persons other than us and any Subsidiary and in
which the interest of us and all Subsidiaries does not exceed 50%.
"Restricted Securities" means any shares of the capital stock or
Indebtedness of any Restricted Subsidiary.
"Restricted Subsidiary" means (a) any Subsidiary:
(1) which has substantially all its property within the United States
of America;
(2) which owns or is a lessee of any Principal Property; and
(3) in which the investment of us and all other Subsidiaries exceeds
0.50% of Consolidated Net Tangible Assets as of the date of the
determination; provided, however, that the term "Restricted Subsidiary"
shall not include:
(A) any Subsidiary (x) primarily engaged in the business of
purchasing, holding, collecting, servicing or otherwise dealing in and
with installment sales contracts, leases, trust receipts, mortgages,
commercial paper or other financing instruments, and any collateral or
agreements relating
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thereto, including in the business, individually or through
partnerships, of financing, whether through long- or short-term
borrowings, pledges, discounts or otherwise, the sales, leasing or other
operations of us and the Subsidiaries or any of them, or (y) engaged in
the business of financing the assets and operations of third parties,
and (z) in any case, not, except as incidental to such financing
business, engaged in owning, leasing or operating any property which,
but for this proviso, would qualify as Principal Property; or
(B) any Subsidiary acquired or organized after January 26, 1999, for
the purpose of acquiring the stock or business or assets of any Person
other than us or any Restricted Subsidiary, whether by merger,
consolidation, acquisition of stock or assets or similar transaction
analogous in purpose or effect, so long as such Subsidiary does not
acquire by merger, consolidation, acquisition of stock or assets or
similar transaction analogous in purpose or effect all or any
substantial part of the business or assets of us or any Restricted
Subsidiary; and
(b) any other Subsidiary that is hereafter designated by the Board of
Directors as a Restricted Subsidiary.
"Sale and Leaseback Transaction" means any arrangement with any Person
providing for the leasing by UPS or any Restricted Subsidiary of any Principal
Property (whether the Principal Property is now owned or hereafter acquired)
that has been or is to be sold or transferred by us or a Restricted Subsidiary
to any Person, other than
(a) temporary leases for a term, including renewals at the option of
the lessee, of not more than three years;
(b) leases between us and a Restricted Subsidiary or between Restricted
Subsidiaries; and
(c) leases of Principal Property executed by the time of, or within 180
days after the latest of, the acquisition, the completion of construction
or improvement (including any improvements on property that will result in
the property becoming Principal Property), or the commencement of
commercial operation of the Principal Property.
"Secured Indebtedness" means Indebtedness of us or a Restricted Subsidiary
that is secured by any Lien upon any Principal Property or Restricted
Securities, and Indebtedness of us or a Restricted Subsidiary in respect of any
conditional sale or other title retention agreement covering Principal Property
or Restricted Securities; but "Secured Indebtedness" shall not include any of
the following:
(1) Indebtedness of us and the Restricted Subsidiaries outstanding on
January 26, 1999, secured by then-existing Liens upon, or incurred in
connection with conditional sales agreements or other title retention
agreements with respect to Principal Property or Restricted Securities;
(2) Indebtedness that is secured by:
(A) purchase money Liens upon Principal Property acquired after
January 26, 1999 or
(B) Liens placed on Principal Property after January 26, 1999, during
construction or improvement thereof (including any improvements on
property which will result in the property becoming Principal Property)
or placed thereon within 180 days after the later of acquisition,
completion of construction or improvement or the commencement of
commercial operation of the Principal Property or improvement, or placed
on Restricted Securities acquired after January 26, 1999, or
(C) conditional sale agreements or other title retention agreements
with respect to any Principal Property or Restricted Securities acquired
after January 26, 1999, if (in each case referred to in this
subparagraph (2)) (x) the related Lien or agreement secures all or any
part of the Indebtedness incurred for the purpose of financing all or
any part of the purchase price or cost of construction of the Principal
Property or improvement or Restricted Securities and (y) the related
Lien or agreement does not extend to any Principal Property or
Restricted Securities other than the Principal Property so acquired or
the Principal Property, or portion thereof, on which the property so
constructed or any improvement is located; provided, however, that the
amount by which the aggregate principal amount
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of Indebtedness secured by any Lien or agreement exceeds the cost to us
or the Restricted Subsidiary of the related acquisition, construction
or improvement will be considered to be "Secured Indebtedness;"
(3) Indebtedness that is secured by Liens on Principal Property or
Restricted Securities, which Liens exist at the time of acquisition (by any
manner whatsoever) of the Principal Property or Restricted Securities by
UPS or a Restricted Subsidiary;
(4) Indebtedness of Restricted Subsidiaries owing to us or any other
Restricted Subsidiary and Indebtedness of us owing to any Restricted
Subsidiary;
(5) In the case of any corporation that becomes (by any manner
whatsoever) a Restricted Subsidiary after January 26, 1999, Indebtedness
that is secured by Liens upon, or conditional sale agreements or other
title retention agreements with respect to, its property that constitutes
Principal Property or Restricted Securities, which Liens exist at the time
the related corporation becomes a Restricted Subsidiary;
(6) Guarantees by us of Secured Indebtedness and Attributable Debt of
any Restricted Subsidiaries and guarantees by a Restricted Subsidiary of
Secured Indebtedness and Attributable Debt of us and any other Restricted
Subsidiaries;
(7) Indebtedness arising from any Sale and Leaseback Transaction;
(8) Indebtedness secured by Liens on property of us or a Restricted
Subsidiary in favor of the United States of America, any State, Territory
or possession thereof, or the District of Columbia, or any department,
agency or instrumentality or political subdivision of the United States of
America or any State, Territory or possession thereof, or the District of
Columbia, or in favor of any other country or any political subdivision
thereof, if the related Indebtedness was incurred for the purpose of
financing all or any part of the purchase price or the cost of construction
of the property subject to the Lien; provided, however, that the amount by
which the aggregate principal amount of Indebtedness secured by any Lien
exceeds the cost to UPS or the Restricted Subsidiary of the related
acquisition or construction will be considered to be "Secured
Indebtedness";
(9) Indebtedness secured by Liens on aircraft, airframes or aircraft
engines, aeronautic equipment or computers and electronic data processing
equipment; and
(10) The replacement, extension or renewal, or successive replacements,
extensions or renewals, of any Indebtedness, in whole or in part, excluded
from the definition of "Secured Indebtedness" by subparagraphs (1) through
(9) above; provided, however, that no Lien securing, or conditional sale or
title retention agreement with respect to, the Indebtedness will extend to
or cover any Principal Property or any Restricted Securities, other than
the property that secured the Indebtedness so replaced, extended or
renewed, plus improvements on or to any such Principal Property, provided
further, however, that to the extent that replacement, extension or renewal
increases the principal amount of Indebtedness secured by the Lien or is in
a principal amount in excess of the principal amount of Indebtedness
excluded from the definition of "Secured Indebtedness" by subparagraphs (1)
through (9) above, the amount of the increase or excess will be considered
to be "Secured Indebtedness."
In no event shall the foregoing provisions be interpreted to mean or their
operation to cause the same Indebtedness to be included more than once in the
calculation of "Secured Indebtedness" as that term is used in the indenture.
"Subsidiary" means any corporation of which, at the time of determination,
we and/or one or more Subsidiaries owns or controls directly or indirectly more
than 50% of the shares of voting stock.
"Wholly owned," when used with reference to a Subsidiary, means a Subsidiary
of which all of the outstanding capital stock is owned by us or by one or more
wholly owned Subsidiaries.
"Voting Stock," when used with reference to a Subsidiary, means stock of the
class or classes having general voting power under ordinary circumstances to
elect at least a majority of the board of directors,
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managers or trustees of the Subsidiary provided that, for the purposes of the
indenture, stock that carries only the right to vote conditionally on the
happening of an event shall not be considered voting stock whether or not such
event shall have happened.
Events of Default
The indenture defines an Event of Default with respect to any series of
Securities as being any one of the following events:
(a) default in the payment of any interest on the Securities of that
series when due, and the continuance of that default for a period of 30
days;
(b) default in the delivery or payment of the Maturity Consideration on
the Securities of that series at the date on which the principal becomes
due and payable as provided in the Security or in the indenture, whether at
the Stated Maturity or by declaration of acceleration, call for redemption
or otherwise;
(c) default in the deposit of any sinking fund payment, when and as due
on the Securities of that series;
(d) default in the performance or breach of any of our covenants or
warranties under the indenture (other than a covenant or warranty a default
in performance or breach of which is specifically dealt with in the
indenture) and the continuance of the default or breach for a period of 60
days after written notice as provided in the indenture; or
(e) certain events involving our bankruptcy, insolvency or
reorganization. (Section 5.01)
The indenture provides that if an Event of Default specified therein shall
occur and be continuing with respect to the Securities of any series, other
than an Event of Default involving bankruptcy, insolvency or reorganization,
either the trustee or the Holders of 25% in principal amount, or if the
Securities are not payable at Maturity for a fixed principal amount, 25% of the
aggregate issue price, of the Outstanding Securities of that series, each
series acting as a separate class, may declare the principal of the Securities
of that series, or an other amount or property, as may be provided for in the
Securities of that series, to be due and payable. If an Event of Default
described in clause (e) above with respect to the Securities of any series at
the time outstanding shall occur, the principal amount of all the Securities of
that series, or such other amount or property, as may be provided for in the
Securities of that series, (or, in the case of any Original Issue Discount
Security, such specified amount) will automatically, and without any action by
the trustee or any Holder, become immediately due and payable. (Section 5.02).
The Holders of not less than a majority in aggregate principal amount of the
Securities of a series may, on behalf of all Holders of Securities of the
series, waive any past default under the indenture with respect to the
Securities of the series, except a default in the delivery or payment of the
Maturity Consideration or interest on any Security of the series, and default
in respect of a covenant or provision of the indenture that cannot be modified
or amended without the consent of the Holder of each Outstanding Security of
the affected series. (Section 5.13)
Subject to the provisions of the indenture relating to the duties of the
trustee in case an Event of Default shall occur and be continuing, the trustee
will be under no obligation to exercise any of its rights or powers under the
indenture at the request or discretion of any of the Holders, unless the
Holders shall have offered to the trustee reasonable indemnity. (Section 6.03)
Subject to such provisions for the indemnification of the trustee, the Holders
of a majority in aggregate principal amount of the Outstanding Securities of
any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee, or
exercising any trust or power conferred on the trustee, with respect to the
Securities of that series. (Section 5.12)
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No Holder of a Security of any series will have any right to institute any
proceeding with respect to the indenture, or for the appointment of a receiver
or a trustee, or for any other remedy under the indenture, unless
(1) the Holder has previously given to the trustee written notice of a
continuing Event of Default with respect to the Securities of that series,
(2) the Holders of at least 25% in aggregate principal amount, or if
the Securities are not payable at Maturity for a fixed principal amount,
the aggregate issue price of the Outstanding Securities of that series,
have made written request to the trustee to institute a proceeding as
trustee,
(3) the Holder or Holders have offered to the trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request, and
(4) the trustee has failed to institute such proceeding, and has not
received from the Holders of a majority in aggregate principal amount or,
if the Securities are not payable at Maturity for a fixed principal amount,
the aggregate issue price of the Outstanding Securities of that series, a
direction inconsistent with the request, within 60 days after the notice,
request and offer. (Section 5.07) However, these limitations do not apply
to a suit instituted by a Holder of a Security for the enforcement of
delivery or payment of the Maturity Consideration relating to, or interest
on, the Security on or after the applicable due date specified in the
Security. (Section 5.08)
We will be required to furnish to the trustee annually a statement by
certain of our officers as to whether or not we, to our knowledge, are in
default in the performance or observance of any of the terms, provisions and
conditions of the indenture and, if so, specifying all known defaults. (Section
10.04)
Defeasance and Covenant Defeasance
If and to the extent indicated in the applicable prospectus supplement, we
may elect, at our option at any time, to have the provisions of Section 13.02
of the indenture, relating to defeasance and discharge of indebtedness, or
Section 13.03 of the indenture, relating to defeasance of certain restrictive
covenants in the indenture, applied to the Securities of any series, or to any
specified part of a series. (Section 13.01)
Defeasance and Discharge
The indenture provides that, upon our exercise of our option to have Section
13.02 of the indenture apply to any Securities, UPS will be deemed to have been
discharged from all obligations with respect to the Securities (except for
certain obligations to exchange or register the transfer of Securities, to
replace stolen, lost or mutilated Securities, to maintain paying agencies and
to hold moneys for payment in trust) upon the deposit in trust for the benefit
of the Holders of the Securities of money or U.S. Government Obligations, or
both, which, through the payment of principal and interest in respect thereof
in accordance with their terms, will provide money in an amount sufficient to
pay the principal of and any premium and interest on the Securities on the
respective Stated Maturities in accordance with the terms of the indenture and
the Securities. Defeasance or discharge may occur only if, among other things,
we have delivered to the trustee an Opinion of Counsel to the effect that, we
have received from, or there has been published by, the United States Internal
Revenue Service a ruling, or there has been a change in tax law, in any case to
the effect that Holders of the Securities will not recognize gain or loss for
federal income tax purposes as a result of the deposit, defeasance and
discharge and will be subject to federal income tax on the same amount, in the
same manner and at the same times as would have been the case if the deposit,
defeasance and discharge were not to occur. (Sections 13.02 and 13.04)
Defeasance of Covenants
The indenture provides that, upon our exercise of our option to have Section
13.03 of the indenture apply to any Securities, we may omit to comply with
certain restrictive covenants, including those described under "Covenants," any
that may be described in the applicable prospectus supplement, and the
occurrence of certain Events of Default, which are described above in clause
(d) (with respect to restrictive covenants) and
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under "Events of Default" and any that may be described in the applicable
prospectus supplement, will be deemed not to be or result in an Event of
Default, in each case with respect to the Securities. In order to exercise its
option, we will be required to deposit, in trust for the benefit of the Holders
of the Securities, money or U.S. Government Obligations, or both, which,
through the payment of principal and interest in respect thereof in accordance
with their terms, will provide money in an amount sufficient to pay the
principal of and any premium and interest on the Securities on the respective
Stated Maturities in accordance with the terms of the indenture and the
Securities. We will also be required, among other things, to deliver to the
trustee an Opinion of Counsel to the effect that Holders of the Securities will
not recognize gain or loss for federal income tax purposes as a result of
deposit and defeasance of certain obligations and will be subject to federal
income tax on the same amount, in the same manner and at the same times as
would have been the case if the deposit and defeasance were not to occur. In
the event we exercised this option with respect to any Securities and the
Securities were declared due and payable because of the occurrence of any Event
of Default, the amount of money and U.S. Government Obligations so deposited in
trust would be sufficient to pay amounts due on the Securities at the time of
their respective Stated Maturities but may not be sufficient to pay amounts due
on the Securities upon any acceleration resulting from the Event of Default. In
that case, we would remain liable for the payments. (Sections 13.03 and 13.04)
Modification of the Indenture
The indenture provides that we and the trustee may, without the consent of
any Holders of Securities, enter into supplemental indentures for the purposes,
among other things, of adding to our covenants, adding additional Events of
Default, establishing the form or terms of Securities or curing ambiguities or
inconsistencies in the indenture or making other provisions, provided that any
action to cure ambiguities or inconsistencies shall not adversely affect the
interests of the Holders of any Outstanding series of Securities in any
material respect. (Section 9.01)
Modifications and amendments of the indenture may be made by us and the
trustee with the consent of the Holders of a majority in aggregate principal
amount or, if the Securities are not payable at Maturity for a fixed principal
amount, the aggregate issue price, of the Outstanding Securities of each series
affected thereby, except that no modification or amendment may, without the
consent of the Holder of each Outstanding Security affected thereby,
(a) change the Stated Maturity of the Maturity Consideration or any
installment of Maturity Consideration or interest on, any Security,
(b) reduce the principal amount of or reduce the amount or change the
type of Maturity Consideration or reduce the rate of interest on, or any
premium payable upon the redemption of, or the amount of Maturity
Consideration of an Original Issue Discount Security or any other Security
that would be due and deliverable or payable upon a declaration of
acceleration of the Maturity thereof upon the occurrence of an Event of
Default, of any Security,
(c) change the Place of Payment where, or the coin or currency in which,
any Maturity Consideration or interest on any Security are deliverable or
payable,
(d) impair the right to institute suit for the enforcement of any
payment on or with respect to any Security,
(e) reduce the percentage in principal amount or aggregate issue price,
as the case may be, of Securities of any series, the consent of whose
Holders is required for modification or amendment of the indenture or for
waiver of compliance with certain provisions of the indenture or for waiver
of certain defaults, or
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(f) modify the requirements contained in the indenture for consent to or
approval of certain matters except to increase any percentage for a consent
or approval or to provide that certain other provisions cannot be modified
or waived without the consent of the Holder of each Security affected
thereby. (Section 9.02)
A supplemental indenture that changes or eliminates any covenant or other
provision of the indenture which has been expressly included solely for the
benefit of one or more particular series of Securities, or that modifies the
rights of the holders of Securities of the series with respect to the covenant
or other provision, shall be deemed not to affect the rights under the
indenture of the Holders of Securities of any other series. (Section 9.02)
The Holders of a majority in aggregate principal amount of the Outstanding
Securities of a series may, on behalf of the Holders of all the Securities of
the series, waive compliance by us with certain restrictive provisions of the
indenture. (Section 10.08)
Notices
Notices to Holders of Securities will be given by mail to the addresses of
the Holders as they may appear in the Security Register. (Section 1.06)
Title
We the trustee and any agent of us or the trustee may treat the Person in
whose name a Security is registered as the absolute owner of a Security for the
purpose of making payment and for all other purposes. (Section 3.08)
Governing Law
The indenture and the Securities will be governed by, and construed in
accordance with, the law of the State of New York. (Section 1.12)
Regarding the Trustee
Citibank, N.A. is the trustee under the indenture. We have other customary
banking relationships with Citibank, N.A. in the ordinary course of business.
PLAN OF DISTRIBUTION
We may sell debt securities to one or more underwriters for public offering
and sale by them or may sell debt securities to investors directly or through
agents. Any underwriter or agent involved in the offer and sale of the debt
securities (the "offered debt securities") will be named in an applicable
prospectus supplement.
Underwriters may offer and sell the offered debt securities at a fixed price
or prices that may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to prevailing market prices or at
negotiated prices. We also may offer and sell the offered debt securities in
exchange for one or more of our outstanding issues of debt securities. We also
may, from time to time, authorize underwriters acting as our agents to offer
and sell the offered debt securities upon the terms and conditions as shall be
set forth in any prospectus supplement. In connection with the sale of offered
debt securities, underwriters may be deemed to have received compensation from
us in the form of underwriting discounts or commissions and may also receive
commissions from purchasers of offered debt securities for whom they may act as
agent. Underwriters may sell offered debt securities to or through dealers, and
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions, which may be changed from
time to time, from the purchasers for whom they may act as agent.
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Any underwriting compensation paid by us to underwriters or agents in
connection with the offering of offered debt securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable prospectus supplement. Underwriters,
dealers and agents participating in the distribution of the offered debt
securities may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the offered debt
securities may be deemed to be underwriting discounts and commissions, under
the Securities Act. Underwriters, dealers and agents may be entitled, under
agreements with us, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act, and to
reimbursement by us for certain expenses.
If so indicated in an applicable prospectus supplement, we will authorize
dealers acting as our agents to solicit offers by certain institutions to
purchase offered debt securities from us at the public offering price set
forth in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on the date or dates stated in the
prospectus supplement. Each contract will be for an amount not less than, and
the aggregate principal amount of offered debt securities sold pursuant to
contracts shall be not less nor more than, the respective amounts stated in
the prospectus supplement. Institutions with whom contracts, when authorized,
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and other
institutions, but will in all cases be subject to our approval. Contracts will
not be subject to any conditions except
(1) the purchase by an institution of the offered debt securities
covered by its contracts shall not at the time of delivery be prohibited
under the laws of any jurisdiction in the United States to which the
institution is subject, and
(2) if the offered debt securities are being sold to underwriters, we
shall have sold to the underwriters the total principal amount of the
offered debt securities less the principal amount thereof covered by
contracts.
Agents and underwriters will have no responsibility in respect of the
delivery or performance of contracts.
All offered debt securities will be a new issue of securities with no
established trading market. Any underwriters to whom offered debt securities
are sold by us for public offering and sale may make a market in such offered
debt securities, but the underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any offered debt
securities.
Any underwriter may engage in over-allotment, stabilizing transactions,
short covering transactions and penalty bids in accordance with Regulation M
under the Exchange Act. Over-allotment involves sales in excess of the
offering size, which creates a short position. Stabilizing transactions permit
bids to purchase the underlying security so long as the stabilizing bids do
not exceed a specified maximum. Short covering transactions involve purchases
of the offered debt securities in the open market after the distribution is
completed to cover short positions. Penalty bids permit the underwriters to
reclaim a selling concession from a dealer when the offered debt securities
originally sold by the dealer are purchased in a covering transaction to cover
short positions. Those activities may cause the price of the offered debt
securities to be higher than it would otherwise be. If commenced, the
underwriters may discontinue those activities at any time.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for us in the ordinary
course of business.
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VALIDITY OF OFFERED DEBT SECURITIES
The validity of the debt securities will be passed upon for UPS by Hunton &
Williams, New York, New York. Certain legal matters in connection with the debt
securities will be passed upon for the underwriters by Brown & Wood LLP, New
York, New York.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference from United Parcel Service of America, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1998 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
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$50,012,000
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UNITED PARCEL SERVICE, INC.
Floating Rate Senior Notes Due 2050
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PROSPECTUS SUPPLEMENT
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PaineWebber Incorporated
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March 22, 2000
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