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FILED PURSUANT TO RULE 424(b)(3)
FILE NO. 33-54297
PROSPECTUS
LOGO Offering by
UNITED PARCEL SERVICE OF AMERICA, INC.
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This Prospectus relates to a continuing offer subject to the terms herein
(the "Offering"), by United Parcel Service of America, Inc. ("UPS") to sell (i)
to eligible UPS managers, supervisors, certain other individuals as determined
from time to time by UPS, in its sole discretion and trustees and custodians of
self-directed individual retirement accounts of such persons, shares of the
common stock of UPS, par value $.10 per share ("UPS Common Stock"), and shares
of the capital stock of Overseas Partners Ltd. ("Overseas"), par value $.10 per
share ("Overseas Capital Stock") in units composed of one UPS share and
one-fourth of an Overseas share, and (ii) to participants in any of UPS's stock
option plans, which currently consist of the 1986 Stock Option Plan, as amended
(the "1986 Plan") and the 1991 Stock Option Plan, as amended and restated (the
"1991 Plan") (the "Stock Option Plans") shares of Overseas Capital Stock. No
fractional units or fractional Overseas shares are being offered, or will be
sold, hereby. Subscriptions will be adjusted, as provided herein, to prevent the
sale of fractional shares of Overseas Capital Stock. See "THE OFFERING -- How to
Subscribe to Units;" and "THE OFFERING -- How to Subscribe to Overseas Capital
Stock."
The Offering commenced in 1994 and will continue for an indefinite period,
subject to the right of UPS to withdraw it at any time. See "THE
OFFERING -- Term of the Offering." All UPS and Overseas shares being offered are
shares which UPS has purchased, or anticipates being able to purchase, from
shareowners of UPS and Overseas and are being offered for the account of UPS.
See "THE OFFERING -- Reasons for the Offering."
The offering price of each unit (the "Unit Price") will equal the sum of
the Current Price of a UPS share plus one-fourth of the Current Price of an
Overseas share at the time a subscription for units is accepted by UPS. The Unit
Price will change from time to time, to reflect any change in the Current Price
of either shares of UPS Common Stock or shares of Overseas Capital Stock. The
offering price of each share of Overseas Capital Stock purchased separately will
equal the Current Price of an Overseas share at the time a subscription for
separate shares of Overseas Capital Stock is accepted by UPS. As used in this
Prospectus, the Current Price of a share of UPS Common Stock at any time means
the price at which the Board of Directors of UPS has most recently authorized
UPS to purchase UPS shares from shareowners, and the Current Price of a share of
Overseas Capital Stock at any time means the book value per share of Overseas
Capital Stock as determined from Overseas' most recent audited balance sheet as
reported in Overseas' most recently published Annual Report mailed to its
shareowners or otherwise generally made available to Overseas' shareowners. The
Current Price of UPS shares is reviewed, and may be changed, by the Board of
Directors at meetings held in each calendar quarter. The Current Price of UPS
shares is communicated in letters by UPS to its shareowners following each
quarterly meeting of the Board, and the book value of Overseas shares generally
is communicated to Overseas shareowners in a letter issued in January. Offerees
who wish to purchase units and Overseas Capital Stock, if eligible, at any time
should refer to these sources to determine the Current Prices when they
subscribe to units. See "THE OFFERING -- How to Calculate the Unit Price;" and
"THE OFFERING -- How to Calculate the Price of Overseas Capital Stock."
All UPS shares offered pursuant to this Prospectus will be acquired by the
purchaser for deposit under the UPS Managers Stock Trust, as amended and
restated (the "Stock Trust"). UPS will have the right to repurchase both the UPS
and the Overseas shares being offered following the purchaser's death,
retirement or other termination of employment with UPS, or an attempted sale or
transfer for value of the shares. See "THE OFFERING -- Rights of UPS to
Repurchase UPS and Overseas Shares Sold in the Offering."
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A subscriber may elect to pay the Unit Price to which he or she has
subscribed by check or money order or by authorizing UPS to deduct the Unit
Price from future salary payments. An eligible manager, supervisor, or certain
other eligible individuals as determined from time to time by UPS, in its sole
discretion, may subscribe, or direct a trustee or custodian of his/her
self-directed individual retirement account to subscribe, to the purchase of not
less than 20 nor more than 10,000 units annually by delivering to UPS a fully
executed Cash Subscription Agreement in the form accompanying this Prospectus,
together with a check or money order for the Unit Price at the date of
transmittal of the request. Subject to certain legal restrictions in some
states, an eligible manager or supervisor who authorizes the UPS subsidiary
employing him or her to deduct the Unit Price from his/her salary payments, may,
at any time, subscribe to units by delivering to UPS an appropriately completed
and fully executed Subscription Agreement and Payroll Deduction Authorization in
the form accompanying this Prospectus. See "THE OFFERING -- How to Subscribe to
Units." A subscriber may pay the subscription price for the Overseas Capital
Stock subscribed to separately only by check or money order. See "THE
OFFERING -- How to Subscribe to Shares of Overseas Capital Stock." An eligible
individual may subscribe, during a specified period, to purchase a limited
number of shares of Overseas Capital Stock based upon the number of shares of
UPS Common Stock received upon exercise of his/her options as described further
herein. See "THE OFFERING -- How to Subscribe to Shares of Overseas Capital
Stock." All subscriptions will be subject to the terms and conditions discussed
herein and no subscription will become binding upon UPS until it has been
accepted by UPS. See "THE OFFERING -- Acceptance of Subscriptions by UPS." All
sales will be made at the Unit Price and the Current Price of Overseas Capital
Stock at the time of acceptance. See "THE OFFERING -- Effects of Changes in
Current Prices or Dividends on Unaccepted Subscriptions." For further
information concerning prices, subscriptions and their acceptance or rejection,
see the following subsections of "THE OFFERING" herein: "Provisions of the
Subscription Agreements for Units;" "Provisions of the Overseas Subscription
Agreement;" "Normal Processing and Acceptance of Subscriptions;" "Delayed
Acceptance of Subscriptions;" and "Rejection of Subscriptions."
The Offering of units is being made to UPS managers and supervisors, who
have received or will receive awards under the UPS Managers Incentive Plan for
distribution in the calendar year in which a subscription for units is received
by UPS, and who, at the date their respective subscriptions are accepted, are
actively employed as UPS managers or supervisors and beneficially own capital
stock of both UPS and Overseas. The Offering of Units is also being made to
certain other eligible individuals as determined from time to time by UPS, in
its sole discretion. The Offering of shares of Overseas Capital Stock is being
made to participants in the Stock Option Plans who have exercised options to
acquire UPS Common Stock in the calendar year in which the subscription for
Overseas Capital Stock is received by UPS. See "THE OFFERING -- Eligibility to
Subscribe to Units;" and "Eligibility to Subscribe to Shares of Overseas Capital
Stock." UPS may limit aggregate subscriptions by any eligible participant to
certain maximums described herein in any calendar year, and it generally
anticipates imposing those limitations.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES OR
INSURANCE COMMISSION OF ANY STATE OR OTHER JURISDICTION NOR HAS ANY
SUCH COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS.
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United Parcel Service of America, Inc.
December 11, 1995
Overseas Partners Ltd.
December 11, 1995
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AVAILABLE INFORMATION
UPS and Overseas are each subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
file reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference room of the
Commission, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the
regional offices of the Commission located at 7 World Trade Center, New York,
New York 10048, and at the Northwest Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60621. Copies of such material can also be
obtained from the Public Reference Section of the Commission, Washington, D.C.
20549, at prescribed rates.
INCORPORATION OF CERTAIN UPS AND OVERSEAS DOCUMENTS BY REFERENCE
The following documents filed by UPS with the Commission are incorporated
herein by reference:
(1) The Annual Report on Form 10-K of UPS for the year ended December
31, 1994;
(2) The Description of Securities contained in Item 14 of the Form 10
of UPS dated April 1970, as updated by Item 5 of the Form 10-K of UPS for
the year ended December 31, 1994;
(3) The Quarterly Report on Form 10-Q for the quarter ended March 31,
1995, and all other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act by UPS since the end of the year covered by its Annual Report
referred to in (1) above.
The following documents filed by Overseas with the Commission are
incorporated herein by reference:
(1) The Annual Report on Form 10-K of Overseas for the year ended
December 31, 1994;
(2) The Description of Securities contained in Item 11 of the Form 10
of Overseas dated January 31, 1984, as amended and restated by the Form 8
of Overseas dated April 18, 1984 and as updated by Item 5 of the Form 10-K
for the year ended December 31, 1994;
(3) The Quarterly Reports on Form 10-Q for the quarter ended March 31,
1995 and all other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act by Overseas since the end of the year covered by its Annual
Report referred to in (1) above.
All documents filed by UPS and Overseas pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of UPS and Overseas shares shall, to
the extent required by law, be deemed to be incorporated by reference in this
Prospectus and to be part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
UPS and Overseas will each, upon written or oral request provide without
charge to any person to whom this Prospectus is delivered a copy of any and all
of the information relating to it which has been incorporated by reference in
this Prospectus, other than exhibits to such information if such exhibits are
not themselves incorporated by reference in such information. For UPS
information such request should be directed to: Secretary, United Parcel Service
of America, Inc., 55 Glenlake Parkway, NE, Atlanta, Georgia 30328, (404)
828-6000. For Overseas information, such request should be directed to:
Secretary, Overseas Partners Ltd., Craig Appin House, Wesley Street, Hamilton 5,
Bermuda, (809) 295-0788.
Overseas is a Bermuda corporation with offices in Hamilton, Bermuda, and
certain of its directors are residents of Bermuda. A substantial portion of
Overseas' assets and all or substantially all of the assets of these directors
are located outside the United States. Accordingly, it may be difficult for
shareowners of Overseas to effect service of process upon Overseas or such
persons within the United States and to enforce against them any judgments based
upon the civil liability provisions of the Securities Act of 1933 or the
Exchange Act (collectively, the "Federal securities laws") which may be obtained
in courts in the United States. Overseas has been advised by its counsel,
Conyers, Dill & Pearman of Hamilton, Bermuda, that there is substantial doubt
that courts in Bermuda would (i) enforce judgments based upon the civil
liability provisions of the Federal securities laws obtained from courts in the
United States against Overseas or any such directors or (ii) recognize actions
based upon such provisions against Overseas or any of such directors.
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THE COMPANIES
UPS
UPS, a Delaware corporation, through subsidiaries, provides specialized
transportation services primarily through the delivery of packages. Service is
offered throughout the United States and in more than 185 other countries and
territories throughout the world. In terms of revenue, UPS is the largest
package delivery company in the world.
With minor exceptions, UPS Common Stock has historically been owned by or
held for the benefit of managers and supervisors actively employed by UPS or
their families; or by former employees, their estates or heirs; or by charitable
foundations established by UPS founders and their family members; or by other
charitable organizations which have acquired their stock by donations from such
shareowners or by UPS itself. In 1995, UPS began to extend ownership pursuant to
the UPS Employees Stock Purchase Plan to other personnel who have at least one
year of employment with UPS.
The Common Stock of UPS is not traded on a national securities exchange or
in the organized over-the-counter market. UPS has been the principal purchaser
of shares of UPS Common Stock through exercise of preferential and other rights
to purchase such shares and through offers to purchase shares from shareowners
as more fully described herein under "DESCRIPTION OF UPS COMMON STOCK," and "UPS
MANAGERS STOCK TRUST."
The executive offices of UPS are at 55 Glenlake Parkway, NE, Atlanta,
Georgia 30328, and its telephone number is (404) 828-6000.
OVERSEAS
Overseas and its wholly-owned subsidiaries are engaged in property,
casualty and life reinsurance and hotel and leasing operations. Its major source
of business is reinsuring shippers' insurance issued by United States-based
insurance companies covering loss or damage to shippers' packages carried by
subsidiaries of UPS. Overseas, through its United States-based leasing
subsidiary, is involved in hotel and leasing operations.
Overseas expects to continue to examine other areas of reinsurance and
other opportunities to expand its leasing operations. However, Overseas believes
that package reinsurance will continue to be a significant part of its business.
There can be no assurance that UPS or its subsidiaries will continue to utilize
the insurance arrangements for which Overseas provides reinsurance.
Overseas was incorporated under Bermuda law in 1983 as a wholly-owned
subsidiary of UPS. On December 31, 1983, ownership of Overseas was distributed
when UPS paid a special dividend to UPS shareowners of one share of Overseas
Capital Stock for each share of UPS Common Stock then outstanding, resulting in
the distribution of approximately 97% of the outstanding Capital Stock of
Overseas to owners of shares of UPS Common Stock. Overseas commenced business on
January 1, 1984.
Overseas Capital Stock is not traded on a securities exchange or in the
organized over-the-counter market. UPS has rights under Overseas' Bye-Laws to
purchase Overseas Capital Stock upon attempted sales and in certain other
circumstances, at a price no greater than the book value per share of Overseas
Capital Stock as reported in its most recently published Annual Report to
Shareowners or otherwise generally made available to Overseas' shareowners, as
more fully described herein under "DESCRIPTION OF OVERSEAS CAPITAL STOCK."
Overseas' address is Craig Appin House, Wesley Street, Hamilton 5, Bermuda,
and its telephone number is (809) 295-0788.
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PERIODIC REPORTS
UPS and Overseas each prepare and distribute an annual report containing
audited financial statements to their respective shareowners. UPS prepares and
distributes quarterly letters to its shareowners discussing developments in
UPS's business and earnings and informing shareowners of the Current Price of a
share of UPS Common Stock. Overseas prepares and distributes to its shareowners
quarterly reports containing financial data for the first three quarters of each
fiscal year. All currency amounts contained in the reports prepared by Overseas
are transacted and expressed in United States dollars.
POTENTIAL CONFLICT OF INTEREST
The chief executive officer and a majority of the directors of Overseas,
other than the directors resident in Bermuda, are also directors, officers or
employees of UPS and shareowners of both companies. In considering which risks
related to UPS's business to reinsure, or which leasing or other arrangements to
enter into with UPS, the directors and officers of Overseas who are also
directors, officers and shareowners of UPS must consider the impact of their
business decisions on each of the two companies. Although prevailing market
conditions are among the factors considered by them in making such decisions,
there can be no assurance that transactions relating to the two companies will
be on the most favorable terms that could be obtained by either party in the
open market. Overseas does not have any formal conflict resolution procedures.
Nevertheless, in connection with the reinsurance by Overseas of risks related to
the business of shippers' reinsurance, Overseas does not believe that there is
any basis to question the rate charged by the primary insurers reinsured by
Overseas, which rates are competitive with those charged to shippers utilizing
other carriers. Additionally, in connection with major transactions in which UPS
and Overseas have been involved, primarily leasing transactions, Overseas has
generally obtained fairness or valuation opinions from one or more leading
investment banking firms or other organizations with significant expertise in
the evaluation of the interests involved.
THE OFFERING
The information below describes the terms of this Offering and discusses
the methods by which eligible participants may subscribe to the units and to
shares of Overseas Capital Stock.
REASONS FOR THE OFFERING.
UPS believes that its success over the years has been derived in large
measure from its policy of seeking to maintain ownership of its Common Stock in
the hands of its active managers and supervisors. To further this objective, UPS
has long maintained the UPS Managers Incentive Plan (the "Incentive Plan"),
under which managers and supervisors have received annual incentive awards of
UPS Common Stock, and has more recently adopted the Stock Option Plans. It has
also provided other arrangements over the years that have enabled managers and
supervisors to purchase shares of UPS Common Stock. Recently, UPS has decided to
expand on this concept by offering its Common Stock to other personnel who have
been employed by UPS for at least one year.
UPS offers shares of Overseas Capital Stock to further its policy of
encouraging ownership of Overseas Capital Stock largely by UPS shareowners.
Since 1984 UPS has provided shares of UPS Common Stock and Overseas Capital
Stock to its active managers and supervisors under the Incentive Plan. Prior to
the effectiveness of a four-for-one stock split in the Common Stock of UPS,
effective on September 6, 1991, such shares were provided on a one-to-one basis
under the Incentive Plan. It is UPS's present intention to provide shares of UPS
Common Stock and Overseas Capital Stock under the Incentive Plan on a
four-to-one basis.
In recent years, UPS has been able to purchase from several sources,
including through the exercise of its rights of purchase under the UPS Managers
Stock Trust and Overseas' Bye-Laws, more shares of UPS Common Stock and Overseas
Capital Stock than it requires for its corporate purposes. UPS anticipates that
this situation may continue in the future. Accordingly, since June 1986, UPS has
made shares of UPS Common Stock and Overseas Capital Stock available for
purchase by eligible managers and supervisors. In
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1995, UPS began permitting such persons to direct trustees and custodians of
their self-directed individual retirement accounts to subscribe to shares in
this Offering. Such shares are available to participants in the Offering in
units consisting of one share of UPS Common Stock and one-fourth of a share of
Overseas Capital Stock under the terms of this Offering.
Prior to the amendments to the 1991 Plan on May 15, 1992 and the 1986 Plan
on October 30, 1992, UPS had provided shares of UPS Common Stock and Overseas
Capital Stock to participants in each Plan upon repurchasing the Book Value
Shares received upon exercise of the options. Amendments to the Plans in 1992
eliminated the concept of Book Value Shares and made the options issued under
the Plans exercisable solely for UPS Common Stock. In order to permit
participants in the Plans to continue to acquire Overseas Capital Stock, UPS
decided in 1993 to allow such participants to purchase through the Offering,
during a specified period, a limited number of shares of Overseas Capital Stock
based upon the number of UPS shares received upon exercise of their options as
described further herein. See "How to Subscribe to Shares of Overseas Capital
Stock." However, no fractional shares of Overseas Common Stock will be sold
hereunder. Subscriptions may be adjusted, as provided herein, to prevent the
sale of fractional Overseas shares. See "How to Subscribe to Units;" and "How to
Subscribe to Overseas Capital Stock."
TERM OF THE OFFERING.
UPS expects to continue the Offering for an indefinite period, subject only
to continued availability of shares of UPS Common Stock and Overseas Capital
Stock in excess of the number of shares needed to meet anticipated corporate
needs, including awards under the Incentive and Stock Option Plans. While UPS's
long range needs for shares are difficult to predict and depend upon a number of
factors, including future growth in UPS's business and earnings and the level of
the Current Prices of UPS shares and Overseas shares in relation to earnings,
UPS plans to continue the Offering and will attempt to fill subscriptions on a
relatively prompt basis over the near term. However, no assurance can be given
that sufficient shares will be available to fill all subscriptions. See "Delayed
Acceptance of Subscriptions; Unavailability of Shares."
In the registration statements to which this Prospectus relates, there were
registered a total of 20,000,000 shares of UPS Common Stock and 6,500,000 shares
of Overseas Capital Stock, subject to adjustments to reflect stock splits, stock
dividends or similar events, for sale in the Offering. UPS considers the total
number of registered shares to be adequate to meet anticipated subscriptions for
shares for a period of two years from the date of this Prospectus. UPS may seek
to cause additional shares to be registered for sale as the need arises in the
future.
USE OF PROCEEDS FROM SALES BY UPS.
The funds derived from the sale of shares of UPS Common Stock and Overseas
Capital Stock offered hereby will be added to UPS's cash and used for the
general purposes of UPS's business. No portion of the proceeds will go to
Overseas.
Any gain or loss realized on the sale of shares of UPS Common Stock offered
hereby, represented by the difference between the prices paid by UPS for the
shares and the prices at which the shares are sold, will be treated as an
addition to or reduction of paid-in capital of UPS. Any such gain or loss on the
sale of shares of Overseas Capital Stock offered hereby will be treated as
earnings or losses by UPS.
ELIGIBILITY TO SUBSCRIBE TO UNITS.
The Offering of units is made, subject to the terms discussed below, to UPS
managers and supervisors who have received awards under the Incentive Plan for
distribution in the calendar year in which the subscription is received by UPS,
and who, at the date their respective subscriptions are accepted by UPS, are
actively employed as UPS managers or supervisors and beneficially own shares of
both UPS Common Stock and Overseas Capital Stock ("eligible managers or
supervisors"). Eligible managers or supervisors may subscribe to units only for
their own account and not for the account of any other person.
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Further, subject to the terms discussed below, trustees and custodians of
self-directed individual retirement accounts (within the meaning of Section
408(a) of the Internal Revenue Code) of eligible managers or supervisors
("eligible fiduciaries") are permitted to subscribe to units. Such individual
retirement accounts must provide that the eligible fiduciaries may purchase and
sell units only upon the direction of the eligible manager or supervisor to whom
such account relates and the terms of such individual retirement account must
provide that the UPS Common Stock and Overseas Capital Stock held by the account
will not be commingled with other property, including a common trust fund or
common investment fund within the meaning of Section 408(a)(5) of the Internal
Revenue Code which holds other individual retirement account assets or the
assets of employee benefit plans exempt from tax under Section 401(a) of the
Internal Revenue Code. Eligible fiduciaries of individual retirement accounts of
eligible managers or supervisors may subscribe to units only for individual
accounts of such employees and only upon the direction of an eligible manager or
supervisor. In addition, an eligible manager or supervisor and his/her eligible
fiduciary may only subscribe to an annual aggregate maximum of 10,000 units,
which UPS may impose. In addition, UPS reserves the right, in its sole
discretion, to permit, from time to time, other individuals, such as
non-employee members of its Board of Directors, to participate in this Offering
upon the same terms as eligible managers or supervisors hereunder.
HOW TO SUBSCRIBE TO UNITS.
An eligible manager or supervisor may subscribe to and pay for units in two
ways: by cash subscription or by payroll deduction subscription. The election to
subscribe to units by one of these methods is not exclusive and does not
preclude an eligible manager or supervisor from subscribing to additional units
by the other method at any time, subject only to the annual aggregate purchase
limitation of 10,000 units which UPS may impose. An eligible fiduciary may
subscribe to and pay for units by cash subscription only.
Cash Subscription. An eligible manager or supervisor may subscribe, or
direct his/her eligible fiduciary to subscribe, to the purchase of not less than
20 nor more than 10,000 units annually by delivering to UPS a fully executed
subscription agreement in the form accompanying this Prospectus (the "Cash
Subscription Agreement"), together with a check or money order payable to
"United Parcel Service of America, Inc." for the aggregate Unit Price of the
units subscribed to and the cost of any additional fractional Overseas shares at
the date of transmittal of the request. For information regarding the
calculation of the Unit Price, see "How to Calculate the Unit Price" below. In
the case of a purchase by an eligible fiduciary, the eligible fiduciary shall
provide such additional information as UPS may require to establish the eligible
fiduciary's status as such, which may include information regarding the
establishment of the individual retirement account and the eligible fiduciary's
authority to act in accordance with the instructions of the directing eligible
manager or supervisor.
If an eligible manager or supervisor or eligible fiduciary submitting a
Cash Subscription Agreement seeks to purchase a number of units not evenly
divisible by four, resulting in a subscription for a fractional number of shares
of Overseas Capital Stock UPS may, at its option, (i) reject the subscription in
full; (ii) notify the subscriber and allow him/her the opportunity to remit the
additional amount to yield a whole share; or (iii) fulfill the subscription for
the purchase of the whole number of shares of Overseas Capital Stock included in
the units and for which payment has been received, and refund any excess monies
to the subscriber. Currently, UPS intends to reject subscriptions that are for
fractional amounts.
Payroll Deduction Subscription. An eligible manager or supervisor, subject
to certain legal restrictions in some states, may also elect, pursuant to the
Payroll Deduction Stock Purchase Plan (the "Payroll Deduction Plan"), to pay the
Unit Price of units subscribed to by means of deductions from such individual's
salary. Managers and supervisors who elect to participate in the Payroll
Deduction Plan may, at any time, subscribe to a fixed number of units, not less
than three and in multiples of three units, in each quarter, on a continuing
basis, by delivering to UPS an appropriately completed and fully executed
subscription agreement in the form accompanying this Prospectus (the
"Subscription Agreement and Payroll Deduction Authorization"). The purchase of
units subscribed to pursuant to a Subscription Agreement and Payroll Deduction
Authorization which authorizes monthly or semi-monthly deductions from the
eligible manager's or supervi-
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sor's salary will be effected quarterly. The dates on which the purchases will
be made for each quarterly period are as follows:
<TABLE>
<CAPTION>
PURCHASE
PERIOD DURING WHICH SALARY DEDUCTIONS MADE DATE
--------------------------------------------------------- ------------
<S> <C>
December - February...................................... February 15
March - May.............................................. May 15
June - August............................................ August 15
September - November..................................... November 15
</TABLE>
If the date on which a purchase is to be effected is a Saturday, Sunday or
legal holiday, the purchase will be effected on the next succeeding business
day. The periods during which salary deductions are made are referred to herein
as "Quarterly Purchase Periods" and the dates on which purchases are effected
are referred to as "Quarterly Purchase Dates." An eligible manager or supervisor
who begins to participate in the Payroll Deduction Plan after the commencement
of a Quarterly Purchase Period will purchase, in such first period of
participation, the number of whole units determined by multiplying the number of
units to which he or she subscribes to in a full Quarterly Purchase Period by a
fraction, the numerator of which is the number of months of participation in
such initial Quarterly Purchase Period and the denominator of which is three.
If an eligible manager or supervisor submitting a Subscription Agreement
and Payroll Deduction Authorization subscribes in any Quarterly Purchase Period
to a number of units that is not evenly divisible by four, resulting in a
subscription for a fractional number of shares of Overseas Capital Stock during
such Quarterly Purchase Period, then, except as described below, on the Purchase
Date relating to that Quarterly Purchase Period, the subscriber will purchase,
in addition to the number of shares of UPS Common Stock subscribed to for such
Quarterly Purchase Period, that number of whole shares of Overseas Capital
Stock, if any, the full cost of which was deducted from such employee's salary
payments during such Quarterly Purchase Period. Any amounts deducted from a
subscriber's salary payments during any such period on account of the
subscription to a fractional Overseas share will be carried forward into the
next Quarterly Purchase Period and, together with any amounts to be deducted on
account of the subscription to Overseas shares during such later Quarterly
Purchase Period, will be applied to the purchase of that number of whole shares
of Overseas Capital Stock the whole cost of which has or will be deducted from
such manager's or supervisor's salary during or prior to such Quarterly Purchase
Period.
Additionally, during November of each year, or, if an eligible manager or
supervisor has made a timely election to withdraw from participation in the
Payroll Deduction Plan and has not timely elected to have all amounts previously
deducted from his/her salary payments refunded to him or her, in the last month
of such manager's or supervisor's participation in the Payroll Deduction Plan,
an upward adjustment in the amount of deductions from the subscriber's salary
payments may be effected to permit the purchase of such fraction of an Overseas
share as may be necessary to result in the purchase of one additional whole
Overseas share (an "Additional Overseas Share"). Such an adjustment will be made
if the amount available for the purchase of shares of Overseas Capital Stock on
the applicable Purchase Date exceeds the amount necessary to purchase a whole
number of Overseas shares. The amount of the adjustment will be that amount
which, together with any such excess amount, equals the Current Price of one
share of Overseas Capital Stock.
Eligible managers or supervisors who elect to participate in the Payroll
Deduction Plan may also subscribe to any number of units, subject to an overall
annual limit (including the units subscribed to by his/her fiduciary) of 10,000
units that UPS may impose, the Unit Price of which will be paid through
deductions from such manager's or supervisor's "one-half month" salary payment,
if any, received in December of each year. If an eligible manager or supervisor
subscribing to units, the Unit Price of which is to be paid through deductions
from the one-half month salary payment, subscribes to the purchase of a number
of units not evenly divisible by four, resulting in a subscription for a
fractional number of Overseas shares, the subscription shall include an
Additional Overseas Share, and the amount deducted from such manager's or
supervisor's one-half month salary payment will be increased by an amount equal
to the Current Price of one share of Overseas Capital Stock multiplied by the
fraction of an Overseas share necessary to be purchased in order to result in
the purchase of such Additional Overseas Share.
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The purchase of units to be paid for by deductions from the one-half month
salary payment will be effected on December 15, or, if such date is a Saturday,
Sunday or legal holiday, the next succeeding business day (the "December 15
Purchase Date," together with the Quarterly Purchase Dates, "Purchase Dates").
Subscriptions for units to be paid for through deductions from the one-half
month salary payment are not continuous and must be renewed annually.
Notwithstanding the deduction of any amount from salary payments in respect
of a subscription to units, a subscriber will not be the beneficial owner of any
shares of UPS Common Stock or Overseas Capital Stock offered hereby, and will
have no rights with respect to any such shares, until the subscription for such
shares has been accepted. See "Acceptance of Subscriptions by UPS."
The Subscription Agreement and Payroll Deduction Authorization authorizes
UPS to deduct from such manager's or supervisor's monthly or semi-monthly salary
payments and/or one-half month salary payment, the Unit Price of the units
subscribed to, plus the amount, if any, of the adjustments described above
necessary to permit the purchase of Additional Overseas Shares, and to pay such
amounts to UPS's account in payment of the Unit Price of the units subscribed
to, including the additional cost of any Additional Overseas Shares, until such
authorization is altered or revoked in writing. Subscribers who receive
semi-monthly salary payments will have one-half of the monthly deduction in
payment for the number of units to which he or she has subscribed deducted from
each semi-monthly salary payment. The amount of any adjustment necessary to
permit the purchase of any Additional Overseas Shares will be deducted from the
monthly or semi-monthly payments to be received in the month in which such
adjustment is made. All amounts deducted from salary payments will be paid to
the account of UPS upon the effectuation of the purchase of units on the
applicable Purchase Date. All amounts which are deducted prior to the Purchase
Date will be held with UPS's general corporate funds pending the application of
such funds to the purchase of units and any Additional Overseas Shares, without
interest to the subscriber.
Each Quarterly Purchase Date will precede the date on which an eligible
manager or supervisor receives the final salary payment from which deductions
for the payment of the aggregate Unit Price and the additional cost of any
Additional Overseas Shares purchased on that quarter's Purchase Date is to be
made. The balance of the aggregate Unit Price and the additional cost of any
Additional Overseas Shares acquired on a Quarterly Purchase Date will be
advanced by UPS, without interest, to the subscriber. Therefore, on the first
day of the month in which a Quarterly Purchase Date occurs, an eligible
manager's or supervisor's authorization of salary deductions in the Quarterly
Purchase Period becomes irrevocable. Any amounts which cannot for any reason be
deducted from the final salary payments in such Quarterly Purchase Period may be
deducted from any subsequent salary payment, offset against any other monies
owing to such employee from UPS, and otherwise remains, until collected, an
obligation of the eligible manager or supervisor upon which he or she remains
personally liable.
UPS may limit aggregate subscriptions by any eligible manager or supervisor
and his/her eligible fiduciary to a maximum of 10,000 units in any calendar
year, and it generally anticipates imposing the limitation.
How to Calculate the Number of UPS and Overseas Shares Purchased Annually
Under Payroll Deduction Plan. The total number of shares of UPS Common Stock
which an eligible manager or supervisor subscribing to the quarterly purchase of
units pursuant to the Payroll Deduction Plan will purchase during each twelve
month period ending November 30 will equal the number of units subscribed to on
a quarterly basis multiplied by a fraction the numerator of which is the number
of months of such manager's or supervisor's participation in the Payroll
Deduction Plan during such twelve month period, and the denominator of which is
three. The total number of shares of Overseas Capital Stock included in the
units, which such manager or supervisor will purchase during the same period,
will equal the number of units subscribed to on a quarterly basis multiplied by
a fraction the numerator of which is the number of months of such manager's or
supervisor's participation in the Payroll Deduction Plan during such twelve
month period, and the denominator of which is twelve, rounded upward to the next
greater whole number if such calculation does not result in a whole number.
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The number of shares of UPS Common Stock which an eligible manager or
supervisor will purchase pursuant to a subscription for units to be paid for
through deductions from such manager's or supervisor's one-half month salary
payment will be equal to the number of units subscribed to. The number of shares
of Overseas Capital Stock which such a manager or supervisor will purchase
pursuant to a subscription for units will equal the number of units subscribed
to divided by four, rounded up to the next greater whole number if such
calculation does not result in a whole number.
PROVISIONS OF THE SUBSCRIPTION AGREEMENTS FOR UNITS.
Each eligible manager or supervisor or eligible fiduciary who wishes to
subscribe to units must sign the appropriate subscription agreement in order to
evidence such subscriber's agreement to purchase units, to facilitate
recordkeeping with respect to the Offering and to evidence such subscriber's
agreement to certain terms on which UPS's willingness to accept the subscription
is conditioned. Agreements of the subscriber in each of the subscription
agreements, to which each subscriber is referred and which each subscriber
should read in full, include the following:
1. An agreement that all UPS shares purchased by the subscriber will
be deposited in the Stock Trust and an authorization to UPS to deliver the
certificates for those shares to First Fidelity Bank, N.A., Newark, N.J.
("Fidelity") as Trustee of that trust. The purpose and effects of the Stock
Trust are described under "UPS MANAGERS STOCK TRUST" in this Prospectus.
2. An authorization to UPS to deliver certificates for the Overseas
shares to Fidelity, as Custodian for the subscriber, in lieu of physical
delivery of the certificates to the subscriber.
3. An agreement granting UPS the right to purchase the Overseas shares
subscribed to following the retirement, death or other termination of the
employment of the subscriber with UPS. This agreement provides UPS with
purchase rights which are in addition to UPS's rights of purchase arising
out of the Bye-Laws of Overseas, all as described more fully herein under
"Rights of UPS to Repurchase UPS and Overseas Shares Sold in the Offering"
in this section of the Prospectus.
In addition, the Subscription Agreement and Payroll Deduction Authorization
includes a provision authorizing UPS to deduct from the subscriber's monthly or
semi-monthly salary payments during each Quarterly Purchase Period or one-half
month salary payment, an amount equal to the Unit Price of the units subscribed
to in each quarter or from the one-half month salary payment, as the case may
be, plus the cost of any Additional Overseas Shares, and to pay such amount to
UPS' account in payment of the Unit Price of the units subscribed to for such
Quarterly Purchase Period or from the one-half month salary payment, including
the cost of any Additional Overseas Shares. The Subscription Agreement and
Payroll Deduction Authorization also provides that any amounts relating to a
completed sale of units which cannot be deducted from salary payments received
by a subscriber after the date of such sale may be deducted from any other
monies owing to the subscriber from UPS and, until collected, otherwise remains
an obligation upon which the subscriber is personally liable. Further, the Cash
Subscription Agreement and the Subscription Agreement and Payroll Deduction
Authorization include provisions dealing with the possible unavailability of
shares. See "Delayed Acceptance of Subscriptions; Unavailability of Shares."
HOW TO CALCULATE THE UNIT PRICE.
The Unit Price equals the sum of the Current Price of a UPS share and
one-fourth of the Current Price of an Overseas share at the time UPS accepts a
subscription. See "Acceptance of Subscriptions by UPS." The Unit Price will
change from time to time, to reflect changes in the Current Price of either UPS
shares or Overseas shares. Thus it will be necessary for each eligible manager
or supervisor and eligible fiduciary at the time he or she submits a Cash
Subscription Agreement to calculate the amount to be paid to UPS by determining
separately the Current Price of a share of UPS Common Stock and the Current
Price of a share of Overseas Capital Stock, multiplying by one-fourth the
Current Price of a share of Overseas Capital Stock, adding the product to the
Current Price of a share of UPS Common Stock and multiplying such sum by the
number of units to which he or she has subscribed. Additionally, if the number
of units subscribed to is not evenly divisible by four, such subscribers must
also remit the amount, calculated in the manner set forth above
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under "How to Subscribe to Units -- Cash Subscription," necessary to purchase
the next greater whole number of Overseas shares. Salary deductions will be
adjusted automatically so that the total amount deducted during a Quarterly
Purchase Period from the salary payments of an eligible manager or supervisor
participating in the Payroll Deduction Plan equals the Unit Price of a unit on
the applicable Purchase Date multiplied by the number of units subscribed to for
such Purchase Date plus, where applicable, the cost of any Additional Overseas
Shares. See "Effects of Changes in Current Prices or Dividends on Unaccepted
Subscriptions."
The Current Price of a share of UPS Common Stock at any time means the
price at which the Board of Directors of UPS has most recently authorized UPS to
purchase UPS shares from shareowners. The Current Price of UPS Common Stock is
reviewed, and may be changed, by the Board of Directors at meetings held in each
calendar quarter. The Current Price of a UPS share can be determined by
referring to the letter (the "UPS Shareowners Letter") which UPS has sent to its
shareowners following the most recent quarterly meeting of the UPS Board of
Directors.
The Current Price of a share of Overseas Capital Stock at any time means
the book value per share of such stock, determined from Overseas' audited
balance sheet as reported in its most recently published Annual Report to
Shareowners and mailed to its shareowners or otherwise generally made available.
The Current Price of Overseas Capital Stock is subject to change each year with
the publication of Overseas' Annual Report to Shareowners for the preceding
year. The Current Price of an Overseas share can be determined by referring to
Overseas' audited financial statements contained in its most recently published
Annual Report to Shareowners or the letter setting forth the Current Price which
is generally sent to Overseas shareowners in January of each year.
ELIGIBILITY TO SUBSCRIBE TO SHARES OF OVERSEAS CAPITAL STOCK.
The Offering of shares of Overseas Capital Stock is made, subject to the
terms discussed below, to participants in the Stock Option Plans who have
exercised options for UPS Common Stock in the calendar year in which the
subscription is received by UPS ("eligible participants"). Eligible participants
may subscribe to shares of Overseas Common Stock only for their own account and
not for the account of any other person. The only way to subscribe to shares of
Overseas Common Stock is by cash subscriptions.
HOW TO SUBSCRIBE TO SHARES OF OVERSEAS CAPITAL STOCK.
In general an eligible participant may subscribe, during a specified
period, to purchase a number of shares of Overseas Capital Stock equal to
one-fourth of the number of Net Shares of UPS Common Stock (as defined below)
received upon exercise of options in the calendar year ("Option Exercise Year")
in which the subscription is received by UPS. If this calculation results in a
number of shares including a fractional share, the amount will be rounded up to
the next whole share. In the case of cash exercises of options, Net Shares means
the number of shares of UPS Common Stock received upon exercise. In the case of
exercises of options using previously owned shares, Net Shares means the number
of shares of UPS Common Stock received upon exercise of options reduced by the
number of shares of UPS Common Stock used to exercise the options.
The subscription period for the shares of Overseas Capital Stock shall be
from May 15 to July 15 of an Option Exercise Year (the "Subscription Period").
UPS will notify eligible participants by letter of the maximum number of shares
of Overseas Capital Stock to which they may subscribe prior to May 15 of such
Option Exercise Year. A cash subscription agreement shall accompany each letter.
The eligible participant may, at any time during the Subscription Period,
subscribe to any number of shares of Overseas Capital Stock up to the maximum
amount stated in the letter by delivery to UPS of the fully executed
subscription agreement in the form accompanying this Prospectus (the "Overseas
Subscription Agreement"). The Current Price of the shares may be paid only in
cash, and thus, a bank cashier's or personal check or money order payable to
"United Parcel Service of America, Inc." must accompany the Overseas
Subscription Agreement. No subscription for fractional shares will be accepted.
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PROVISIONS OF THE OVERSEAS SUBSCRIPTION AGREEMENT.
An eligible participant who wishes to subscribe to separate shares of
Overseas Capital Stock must sign the appropriate subscription agreement in order
to evidence his/her agreement to purchase the shares, to facilitate
recordkeeping with respect to the Offering and to evidence his/her agreement to
certain terms on which UPS's willingness to accept his/her subscription is
conditioned. Agreements of the subscriber in the Overseas Subscription
Agreement, to which subscriber is referred and which each subscriber should read
in full, include the following:
1. An authorization to UPS to deliver certificates for the Overseas
shares to Fidelity, as Custodian for the subscriber, in lieu of physical
delivery of the certificates to the subscriber.
2. An agreement granting UPS the right to purchase the Overseas shares
subscribed to following the retirement, death or other termination of the
employment of the subscriber with UPS. This agreement provides UPS with
purchase rights which are in addition to UPS's rights of purchase arising
out of the Bye-Laws of Overseas, all as described more fully herein under
"Rights of UPS to Repurchase UPS and Overseas Shares Sold in the Offering"
in this section of the Prospectus.
HOW TO CALCULATE THE PRICE OF OVERSEAS CAPITAL STOCK.
The price of each share of Overseas Capital Stock equals the Current Price
of a share of Overseas Capital Stock at the time UPS accepts a subscription. See
"Acceptance of Subscriptions by UPS." The subscription price will change from
time to time, to reflect changes in the Current Price of Overseas Capital Stock.
The total subscription price will equal the product of the Current Price of a
share of Overseas Capital Stock multiplied by the number of shares.
For a description of the Current Price of a share of Overseas Capital Stock
see "How to Calculate the Unit Price."
ACCEPTANCE OF SUBSCRIPTIONS BY UPS.
No subscription for the purchase of units or shares of Overseas Common
Stock will become binding upon UPS until it has been accepted by UPS. UPS
reserves the right, at its sole discretion, to accept or reject any subscription
in part or in its entirety. Additionally, UPS reserves the right, at its sole
discretion, to reject for any Quarterly Purchase Period, any quarterly
subscription to units by not deducting the aggregate Unit Price of the units
subscribed to for that Quarterly Purchase Period from salary payments made
during such period. UPS also reserves the right to reject any quarterly
subscription to units after deducting any portion of the aggregate Unit Price
from an eligible manager's or supervisor's salary payments by returning the
amount so deducted, without interest, to him/her. The rejection of a
subscription for one or more Quarterly Purchase Periods shall not affect the
ability or right of UPS to accept or reject such eligible manager's or
supervisor's quarterly subscription for any subsequent Quarterly Purchase
Period. In all cases, the Unit Price will be the sum of the Current Price of a
share of UPS Common Stock and one-fourth of the Current Price of a share of
Overseas Capital Stock at the time of acceptance.
UPS's acceptance of a cash subscription will take place at the mailing to
the subscriber of a notice of acceptance, confirming UPS's acceptance of the
subscription, and showing the number and Current Prices of the UPS and Overseas
shares sold to the subscriber ("Notice of Acceptance"). In the case of Payroll
Deduction Plan subscriptions, UPS's acceptance of a subscription will occur only
upon the recording of the purchase of the shares on its books, which will occur,
if at all, on the applicable Purchase Date. In the case of the shares of
Overseas Capital Stock, UPS's acceptance will occur promptly after the close of
the Subscription Period of an Option Exercise Year. The purchaser will be
advised of the acceptance of his/her subscription by an account statement or
receipt from Fidelity, as Trustee under the Stock Trust and as Custodian for
shares of Overseas Capital Stock, indicating the number of shares of UPS Common
Stock and Overseas Capital Stock newly allocated to his/her account. The account
statement or receipt will be mailed to the purchaser as soon as practicable
after the Purchase Date.
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UPS will not accept a subscription for the purchase of units or Overseas
Capital Stock submitted on a cash subscription agreement until the subscriber's
check or money order has been collected. If any check or money order submitted
as payment cannot be collected, UPS may, in its discretion, return the
subscription documents or request the subscriber to forward cash or wire funds
in the amount of his/her payment. UPS will not accept a subscription for the
purchase of units under the Payroll Deduction Plan submitted on a Subscription
Agreement and Payroll Deduction Authorization until the amount deducted from
monthly or semi-monthly salary payments or the one-half month salary payment, as
the case may be, plus the amount which will be deducted from the remaining
salary payments in such Quarterly Purchase Period and which is being advanced to
the subscriber by UPS, shall have been applied to the purchase of units and any
Additional Overseas Share. Amounts deducted from monthly and semi-monthly salary
payments will be applied to the purchase of units and any Additional Overseas
Share on the Quarterly Purchase Dates set forth above. See "How to Subscribe to
Units." Amounts deducted from the one-half month salary payment will be applied
to the purchase of units and any Additional Overseas Share on the December 15
Purchase Date.
Notwithstanding the deduction of any amount from salary payments in respect
of a subscription to units, a subscriber will not be the beneficial owner of any
UPS Common Stock or Overseas Capital Stock offered hereby, and will have no
rights with respect to any such shares, until the subscription for such shares
has been accepted.
NORMAL PROCESSING AND ACCEPTANCE OF SUBSCRIPTIONS.
In the case of units, the process of reviewing cash purchase subscriptions
to determine acceptability and mailing Notices of Acceptance as provided herein,
may normally require up to 15 days after UPS receives the subscription. Eligible
managers or supervisors and eligible fiduciaries whose cash purchase
subscriptions for units are received less than 15 days prior to a change in the
Current Price of UPS Common Stock or Overseas Capital Stock may incur an
increase in the Unit Price or in the Current Price of the Overseas Capital Stock
to which they subscribe. Similarly, cash purchase subscriptions for units
received within 15 days prior to the record date of a dividend on UPS or
Overseas shares may not be processed in time to enable the subscriber to receive
the dividend. For a description of the effect of a change in Current Price or a
declaration of dividends prior to the acceptance of cash subscriptions for
Overseas Capital Stock, see "Effects of Changes in Current Prices or Dividends
on Unaccepted Subscriptions."
The process of reviewing Payroll Deduction Plan subscriptions to determine
acceptability and arranging the deduction of the Unit Price and any adjustments
described herein from salary payments normally requires up to 30 days. A
Subscription Agreement and Payroll Deduction Authorization providing for the
quarterly subscription to units will, if otherwise acceptable, be effected
beginning in the month following its receipt by UPS. Quarterly subscriptions
which first become effective after the first month of a Quarterly Purchase
Period will be effected during such initial period for that number of whole
units determined by multiplying the number of units subscribed to for a full
Quarterly Purchase Period by a fraction the numerator of which is the number of
months of participation in such initial Quarterly Purchase Period and the
denominator of which is three. Payroll Deduction Plan subscriptions to units to
be paid for by deductions from the one-half month salary payment, if otherwise
acceptable, will be effected only if received by UPS on or before November 15.
DELAYED ACCEPTANCE OF SUBSCRIPTIONS; UNAVAILABILITY OF SHARES.
From time to time, delays in the ability of UPS to accept subscriptions
within the normal processing period may arise from either (i) the concurrent
receipt of unexpectedly large numbers of subscriptions or (ii) occasional
circumstances under which UPS may not have sufficient numbers of UPS and
Overseas shares immediately available to fill subscriptions after taking into
account UPS's corporate needs for shares such as for awards under the Incentive
Plan, the fulfillment of UPS's obligations under the Stock Option Plans and the
satisfaction of subscriptions for Overseas Capital Stock under this Offering. In
the event that UPS determines, in its sole discretion, that there are not a
sufficient number of shares of UPS Common Stock and/or Overseas Capital Stock
available to satisfy all subscriptions for units or shares of Overseas Capital
Stock which UPS has accepted or which it anticipates accepting in any period,
UPS will first fill subscriptions for Overseas Capital Stock with the Overseas
shares available as subscriptions for such shares are received.
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UPS will then fill subscriptions for units as such subscriptions are received,
in accordance with the election (as described below) of the subscriber included
on his/her subscription agreement.
Because the units are sold on a basis of 1 share of UPS Common Stock to
1/4 share of Overseas Capital Stock, subscribers of units using Cash
Subscription Agreements will be given the choice to elect on the Cash
Subscription Agreement one of the following to be effective in the event that
UPS makes a determination, as described above, that there are not enough shares
to satisfy such subscription: 1. To allow UPS to substitute for such unavailable
UPS or Overseas shares, any available shares equal to the value of the
unavailable shares and return to the subscriber any amount, without interest, of
the subscription relating to any fractional amount of available shares that
would result from such substitution; 2. To allow UPS to fill his/her
subscription for units with the available shares allocable to such units and
return to the subscriber the amount, without interest, of the subscription
allocable to the unavailable shares; or 3. To require UPS to cancel his/her Cash
Subscription Agreement and return his/her check or money order, without
interest. For the same reasons stated above, subscribers to units participating
in the Payroll Deduction Plan will be given the choice to elect on the
Subscription Agreement and Payroll Deduction Authorization one of the following:
1. To allow UPS to substitute for such unavailable UPS or Overseas shares, any
available shares, up to the nearest number of whole shares, equal to the value
of the unavailable shares and deduct such amount from the subscriber's salary;
2. To allow UPS to fill his/her subscription for units with the available shares
allocable to such units and deduct only that amount from the subscriber's
salary; or 3. To require UPS to suspend the subscriber's participation in the
Payroll Deduction Plan until such quarter as there are sufficient shares
available to satisfy his/her subscription. If no election is made on a
subscription agreement, UPS will reject the subscription agreement as described
below.
Delays may also arise from circumstances relating to the acceptability of
an individual subscription. If a cash subscription is subsequently rejected or
withdrawn, the subscription price will be returned to the subscriber without
interest. If a Payroll Deduction Plan subscription is ultimately rejected, the
amount of the subscription price actually deducted will be returned, without
interest, to the subscriber. If a Payroll Deduction Plan subscription is
withdrawn by the subscriber, any amount actually deducted from the subscriber's
salary payments will be applied to the purchase of units on the applicable
Purchase Date unless the subscriber timely requests the return of such amounts
in writing. In such event, the subscriber will not be entitled to any interest
payments on the amount deducted or returned. If the subscription is ultimately
accepted, the UPS and Overseas shares will be delivered to Fidelity as Trustee
under the Stock Trust and as Custodian for Overseas shares, as described herein,
but no interest will be paid on the subscription payment.
EFFECTS OF CHANGES IN CURRENT PRICES OR DIVIDENDS ON UNACCEPTED SUBSCRIPTIONS.
Units. Units will be sold at the Unit Price in effect when the
subscription is accepted by UPS. Subscribers who remitted payment with their
Cash Subscription Agreement and whose subscriptions have not been accepted by
UPS at the time of an increase in the Current Price of either UPS Common Stock
or Overseas Capital Stock will be notified of the increase, and the individual
subscriber may then choose either (i) to withdraw his/her subscription, (ii) to
pay UPS the additional amount needed to pay the higher Unit Price of the units
and of any additional fractional Overseas shares to which he or she subscribed
or (iii) to reduce to not less than 20 the number of units subject to the
subscription. If the Current Price of the UPS or Overseas shares in a unit
decreases at any such time, UPS will give notice to subscribers of this fact and
afford them the opportunity to withdraw their subscription or either to seek a
refund of the amounts not needed to pay the Unit Price or to increase the number
of units which the subscriber desires to purchase.
Generally, deductions authorized by Subscription Agreement and Payroll
Deduction Authorizations will be appropriately adjusted to reflect changes in
the Current Prices of shares of UPS Common Stock and Overseas Capital Stock so
that the total amount of such deductions to be made in a Quarterly Purchase
Period will be equal to the full Unit Price of all units and any Additional
Overseas Share to be purchased for an eligible manager's or supervisor's account
as of any Quarterly Purchase Date.
The Quarterly Purchase Dates have been set with the expectation that they
will occur in the same month as, and prior to, the quarterly meeting of UPS's
Board of Directors at which a change in price of UPS
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Common Stock is considered by the Board. Therefore, it is anticipated that the
Current Price for all shares of UPS Common Stock included in units to which an
eligible manager or supervisor has subscribed with respect to any Quarterly
Purchase Period will be the Current Price as of the first day of such period.
The Current Price of a share of Overseas Capital Stock generally changes only in
early January of each year when Overseas announces the audited book value per
share as determined as of December 31 of the preceding year. Therefore, it is
anticipated that an adjustment in the amount of deductions within a Quarterly
Purchase Period to reflect a change in Current Prices will only occur in the
December through February Quarterly Purchase Period to reflect the change, if
any, in the Current Price of a share of Overseas Capital Stock. Because any
increase or decrease in the Current Price of a share of Overseas Capital Stock
is likely to occur before the February 15 Quarterly Purchase Date, the Price of
all units to which an eligible manager or supervisor has subscribed in the
December through February Quarterly Purchase Period, including units for which
salary deductions were made prior to the change, will be affected by the change
in the Current Price of Overseas Capital Stock. Accordingly, the total price of
units subscribed to in such Quarterly Purchase Period will be adjusted by the
amount of the change in the Current Price of an Overseas share multiplied by the
number of whole shares of Overseas Capital Stock included in the units
subscribed to, including, where appropriate, any Additional Overseas Share; the
amount of salary deductions to be made from each of the remaining salary
payments during such Quarterly Purchase Period will be adjusted to reflect the
change in the Current Price of a share of Overseas Capital Stock and the fact
that the amount of the deduction made in December was based on the former
Current Price of a share of Overseas Capital Stock; and deductions in subsequent
months will be adjusted to reflect the new Current Price.
In the event that a change in the Current Price of a share of UPS Common
Stock or Overseas Capital Stock occurs between the first day of a Quarterly
Purchase Period and the related Quarterly Purchase Date, other than as described
above, similar adjustments will be made, including adjustments relating to the
cost of any Additional Overseas Share. If for any reason it is not possible to
increase deductions to reflect an increase in the Current Prices of UPS shares
and Overseas shares and therefore the Unit Price of subscribed-for units cannot
be deducted from the employee's salary during a Quarterly Purchase Period, UPS
will apply the amount scheduled to be deducted from salary payments during such
Quarterly Purchase Period to the purchase of the maximum number of units which
such amount will purchase as of the Quarterly Purchase Date. The excess of the
amount deducted over the Unit Price of the units purchased will be applied to
reduce the amount of the deductions to be made from such subscriber's subsequent
salary payments. If, as a result of the timing of any decrease in such Current
Prices, deductions exceed the Unit Price of subscribed-for units, the excess
will likewise be applied to reduce the amount of the deductions to be made from
such subscriber's subsequent salary payments.
Subscribers will not be entitled to receive, and no adjustment will be made
on account of any cash or stock dividend made payable to shareowners of record
on a date preceding acceptance of subscriptions (including where subscriptions
are accepted on a Purchase Date). In the event of a distribution characterized
by the Board of Directors of UPS or Overseas, as the case may be, as a stock
split prior to acceptance of subscriptions which have been received, the number
of shares subject to the subscription will be adjusted proportionately.
Overseas Capital Stock. Overseas Capital Stock will be sold at the Current
Price in effect when the subscription is accepted by UPS. Subscribers who
remitted payment with their Overseas Subscription Agreement and whose
subscriptions have not been accepted by UPS at the time of an increase in the
Current Price of the Overseas Capital Stock will be notified of the increase,
and the individual subscriber may then choose either: (i) to withdraw his/her
subscription, (ii) to pay UPS the additional amount needed to pay the higher
subscription price or (iii) to reduce his/her subscription.
Subscribers will not be entitled to receive, and no adjustments will be
made on account of any cash or stock dividend made payable to shareowners of
record on a date preceding acceptance of subscriptions. In the event of a
distribution characterized by the Board of Directors of Overseas as a stock
split prior to acceptance of subscriptions which have been received, the number
of shares subject to the subscription will be adjusted proportionately.
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REJECTION OF SUBSCRIPTIONS.
UPS must retain the exclusive right to accept or reject any subscription
until the subscription has been accepted. Since the primary purpose of the
Offering is to enhance the ownership relationship of managers and supervisors
with UPS, events such as changes in a subscriber's employment status with the
Company or the personal financial circumstances of the subscriber or conditions
or activities which suggest that the subscriber is seeking to purchase shares
with a view to short-term speculation rather than investment may result in
rejection. Similarly, changes in applicable federal or local law or regulation
which make it impracticable to continue the Offering generally or in particular
areas may require the rejection of subscriptions or suspension of solicitations.
These examples are intended to illustrate reasons why UPS must reserve the right
to reject any subscription or group of subscriptions and are not intended to
limit the discretion of UPS to reject any subscription. In addition, UPS expects
that it will reject subscriptions which fail to comply with the terms of the
Offering as described in this Prospectus and in the applicable subscription
agreement, although it may alternatively, from time to time, provide a
subscriber with the opportunity to conform to the subscription agreement before
doing so. Upon the rejection of subscriptions, UPS will refund to the
subscriber, without interest, any monies paid by, or deducted from the salary
of, such subscriber on account of his/her subscription.
UPS additionally reserves the right to reject any Payroll Deduction Plan
subscription in whole or in part. UPS in its sole discretion may also reject for
one or more Quarterly Purchase Periods, any quarterly subscription to units by
not deducting the Unit Price of units subscribed to for that Quarterly Purchase
Period from salary payments. UPS may also reject any quarterly subscription to
units after deducting the Unit Price from a subscriber's salary payments by
returning the amount so deducted, without interest, to the subscriber.
WITHDRAWAL OF PAYROLL DEDUCTION PLAN SUBSCRIPTIONS; CHANGE IN THE NUMBER OF
UNITS SUBSCRIBED TO.
An eligible manager or supervisor who has submitted a Subscription
Agreement and Payroll Deduction Authorization and subscribed to units to be paid
for by means of deductions from salary payments may withdraw such subscription
at any time. In the case of quarterly subscriptions, a written notice of
withdrawal will be effective to prevent future deductions from monthly or
semi-monthly salary payments commencing with salary payments to be received in
the month following receipt of the notice by UPS. A written notice of withdrawal
will be effective to prevent a deduction from the one-half month salary payment
only if it is received before November 15. By virtue of a subscriber's agreeing
to participate in the Payroll Deduction Plan and to have UPS process the salary
deductions without charging the subscriber the cost of the related
administrative expenses, a subscriber will be deemed to have agreed that he or
she is entitled to withdraw such subscription and receive a refund of any amount
previously deducted from his/her salary payments in respect of such subscription
only if a written request is received before the first day of the month in which
the next Quarterly Purchase Date occurs in the case of quarterly subscriptions,
or November 15 in the case of subscriptions payable from the one-half month
salary payment. If any such request is not timely received, the subscriber will
purchase the maximum number of units, including any Additional Overseas Share
which may be purchased with the amount deducted, and the amount scheduled to be
deducted, from his/her monthly or semi-monthly salary payments during such
Quarterly Purchase Period in the case of quarterly subscriptions, or the amount
scheduled to be deducted from such subscriber's one-half month salary payment in
the case of subscriptions payable from the one-half month salary payment. No
fractional units or fractional shares of Overseas Capital Stock will be sold.
Any excess amount deducted will be returned to the subscriber, without interest.
Subscribers may increase or decrease the number of units to which they wish
to subscribe in each Quarterly Purchase Period by submitting a new Subscription
Agreement and Payroll Deduction Authorization. The adjusted subscription and
salary deductions will become effective in the month following receipt of the
form by UPS. A subscriber who wishes to adjust the number of units to which he
or she has subscribed from his/her one-half month salary payment may do so by
submitting a new Subscription Agreement and Payroll Deduction Authorization
which UPS must receive by November 15.
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<PAGE> 17
DELIVERY OF THE UPS AND OVERSEAS SHARES FOR THE ACCOUNT OF PURCHASERS UPON
ACCEPTANCE.
As soon as practicable after UPS has accepted a subscription, UPS will
deliver (i) to the Trustee of the Stock Trust, for the benefit of the
subscriber, the UPS shares subscribed to by the purchaser and (ii) to the
Custodian of the Overseas shares, for the benefit of the subscriber, the
Overseas shares subscribed to by the purchaser. A receipt for the UPS shares
will be sent to subscribers by Fidelity as Trustee under the Stock Trust, and
acknowledgements for the Overseas shares will be sent to subscribers by Fidelity
as Custodian for the Overseas shares.
The Overseas shares will be deposited with Fidelity as Custodian for each
subscriber. Fidelity will register the shares in its name and will sell or
otherwise dispose of the shares upon the subscriber's instruction and in
conformity with the restrictions contained in the subscription agreements. Any
cash dividends and other distributions which may be paid on the Overseas shares
will be promptly remitted by Fidelity, as Custodian, to the shareowner.
Owners of Overseas shares held by Fidelity receive periodic statements of
the number of shares of Overseas Capital Stock held for their account and of
dividends paid on those shares. Notice of any regular or special meeting of
shareowners of Overseas are forwarded to shareowners by Fidelity, which votes
the shares as directed by the shareowner or, on request, furnishes the
shareowner with its proxy thus permitting the shareowner to vote the shares of
Overseas stock held for him or her at the meeting.
Until instructions are received by Fidelity requesting that the
certificates for Overseas shares be delivered to a purchaser, Fidelity will
continue to hold such shares, as Custodian for the purchaser.
RIGHTS OF UPS TO REPURCHASE UPS AND OVERSEAS SHARES SOLD IN THE OFFERING.
The UPS Certificate of Incorporation provides UPS with the right to
purchase all or a portion of the shares of UPS Common Stock which a shareowner
seeks to sell or otherwise attempts to transfer for value to a third person at
the same price and upon the same terms as the shares are proposed to be sold to
the third person. See "DESCRIPTION OF UPS COMMON STOCK -- The UPS Right of
Preferential Purchase." In addition, all the UPS shares will be subject to UPS's
purchase rights under the Stock Trust. Under the Trust Agreement governing the
Stock Trust, UPS has certain rights to purchase shares subject to the Stock
Trust at their fair value (as defined in the Trust Agreement) following a trust
participant's death, retirement or other termination of employment with UPS and
when a trust participant seeks to withdraw shares held for his/her benefit under
the Stock Trust. For a more complete discussion of the Stock Trust, the UPS
rights of repurchase and the restrictions on transferability of shares subject
to the Stock Trust, see "UPS MANAGERS STOCK TRUST" herein.
Overseas' Bye-Laws provide UPS with the right to purchase all or a portion
of the shares of Overseas Capital Stock upon a proposed sale or other attempted
transfer for value of those shares, at a price equal to the lesser of the
defined book value of the shares proposed to be sold or the proposed sale price.
See "DESCRIPTION OF OVERSEAS CAPITAL STOCK -- UPS's Right of First Refusal." In
addition, subscribers, in the Subscription Agreement, will be required to afford
UPS the right to purchase the Overseas shares subscribed for following the
beneficial owners retirement, death or other termination of employment with UPS.
UPS may exercise this right to purchase all or a portion of the Overseas shares
of a former employee at any time within a period of three years following such
retirement, death or other termination (if the shareowner then owns less than
500 shares of Overseas Capital Stock) or in cumulative annual installments of up
to 10% per year of such shares during a period of thirteen years following such
termination (if the shareowner then owns 500 or more such shares). The purchase
price is the per share book value of Overseas Capital Stock as determined from
Overseas' audited balance sheet and reported in its most recently published
Annual Report to Shareowners preceding the date of purchase or otherwise
generally made available as of the date of such purchase to shareowners. A
legend describing this right of purchase may be placed on the certificates
representing the Overseas shares. Any transferee of Overseas shares will hold
those shares subject to this right of purchase by UPS.
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<PAGE> 18
CHANGE IN THE OFFERING; INTERPRETATION.
UPS reserves the right, in its sole discretion, to change any term or
condition of, or terminate in its entirety, this Offering at any time, or from
time to time. The interpretation of the terms and conditions of this Offering
shall be in the sole discretion of the Board of Directors of UPS, or any
committee of the Board of Directors to which the Board of Directors has
delegated such responsibility, and any such interpretation which may be made by
the Board of Directors or any such committee from time to time is final and
binding upon all offerees and subscribers in this Offering.
If, at any time or from time to time, there shall occur a change in the
nature of a share of UPS Common Stock or Overseas Capital Stock as a result of a
combination or reclassification of such shares, a subdivision of such shares
characterized by the Board of Directors of UPS or Overseas, as the case may be,
as a stock split or stock dividend, or other similar event, then, unless the
Board of Directors of UPS shall otherwise expressly determine, the number or
type of shares of UPS Common Stock or Overseas Capital Stock comprising a unit
shall automatically be changed and adjusted to reflect such combination,
reclassification, subdivision or other event.
DESCRIPTION OF UPS COMMON STOCK
UPS is authorized to issue 900,000,000 shares of common stock, par value
$.10 per share ("Common Stock"), of which 580,000,000 are issued and outstanding
(including those shares held by UPS for distribution in connection with its
stock plans) on the date hereof. UPS is also authorized to issue 200,000,000
shares of preferred stock, without par value. At present, no shares of preferred
stock have been designated or are outstanding.
Each share of UPS Common Stock is entitled to one vote in the election of
directors and other matters, except that, generally, any shareowner or
shareowners acting as a group (other than the Trust or any employee benefit plan
of UPS) who beneficially own more than 10 percent of the voting stock are
entitled to only one one-hundredth of a vote with respect to each vote in excess
of 10 percent of the voting power of the then outstanding voting stock. Holders
have no preemptive or other right to subscribe to additional shares. In the
event of liquidation or dissolution, they are entitled to share ratably in the
assets available after payment of all obligations. The shares sold pursuant to
this Offering are fully paid and nonassessable. The shares are not redeemable by
UPS except through UPS's exercise of the preferential right of purchase
mentioned below and, in the case of stock subject to the Stock Trust, UPS's
right of purchase in the circumstances described in "UPS MANAGERS STOCK TRUST"
herein.
THE UPS RIGHT OF PREFERENTIAL PURCHASE.
The UPS Certificate of Incorporation provides that no outstanding shares of
UPS capital stock entitled to vote generally in the election of directors may be
transferred, except by bona fide gift or inheritance, unless the shares shall
have been first offered, by written notice, for sale to UPS at the same price
and on the same terms upon which they are to be offered to the proposed
transferee. UPS has the option, within thirty days after receipt of the notice,
to acquire all or a portion of the shares upon the terms offered. If UPS fails
to exercise or waives the option, the shareowner may, within a period of twenty
days thereafter, sell to any other person all, but not part, of the shares which
were previously offered to UPS, for the price and on the terms described in the
offer. All transferees of shares hold their shares subject to the same
restriction. Shares previously offered but not transferred within the twenty-day
period remain subject to the initial restrictions. Shares may be pledged or
otherwise used as collateral security, but no transfer may be made upon a
foreclosure of the pledge unless the shares shall have first been offered to UPS
in the manner described above.
In addition, any shareowner who is an "affiliate" of UPS, as that term is
defined in Rule 144 under the Securities Act of 1933, could effect a public
resale of such participant's shares to a purchaser other than UPS only under the
applicable provisions of that rule or upon delivery of an effective prospectus
applicable to such a resale.
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<PAGE> 19
UPS MANAGERS STOCK TRUST
The Stock Trust is a method by which the individuals who manage and
supervise the affairs of UPS are provided with means of participating in the
stock ownership of UPS during their years of active service and by which their
stock is made available for those who will succeed them in the management of
UPS.
All shares in the Stock Trust are held by Fidelity, as Trustee, for the
benefit of the participants in the Stock Trust, subject to certain rights of
repurchase which the Trust Agreement gives up to UPS.
Participants in the Stock Trust are entitled to receive all dividends on
their shares of UPS Common Stock, except that stock dividends are added to the
shares held by the Trustee for the benefit of the individual participants.
Participants are also furnished with annual reports, proxy statements and other
communications of UPS to its shareowners. A participant may vote his/her shares
by directing the Trustee how to vote, or if a participant chooses to vote
personally, by directing the Trustee to deliver a proxy to him or her.
Any participant may request withdrawal of all or some of the shares held
for his/her benefit under the Stock Trust at any time, or from time to time. UPS
becomes entitled to purchase the shares at their fair value, as defined, within
60 days of receipt of the written request. The Stock Trust defines "fair value"
as the fair value of the shares at the time of sale, or if there is a difference
of opinion as to the value, "fair value" is considered the average price per
share of all shares of UPS Common Stock sold during the 12 months preceding the
sale involved.
For many years, UPS has purchased all shares which employees have asked to
have withdrawn from the Stock Trust at the price at which it was then expressing
its willingness to purchase its own shares.
There is no assurance that UPS will at all times need or be able to
purchase shares which participants wish to sell. If UPS does not purchase the
shares that participants ask to withdraw, they would then be entitled to receive
them, free and clear of the Stock Trust, after expiration of the 60 days and
would be free to sell them subject to a continuing preferential purchase right
which UPS has with respect to all of its stock. See "DESCRIPTION OF UPS COMMON
STOCK -- The UPS Right of Preferential Purchase." There is no charge to
participants upon withdrawal of shares from the Stock Trust.
The Stock Trust provides that participants may, with the consent of UPS,
temporarily withdraw shares from the Trust to pledge them as security for loans
by executing with UPS a consent setting forth the terms and conditions of
withdrawal and delivering it to the Trustee. The Stock Trust also provides that
an attempted assignment or levy upon shares shall be treated as a request to
withdraw the shares from the Stock Trust. Further, consistent with prior
practices under the Stock Trust before it was amended and restated, a
participant may transfer shares of UPS Common Stock by gift or by will or the
laws of descent and distribution to family members, and, in certain limited
circumstances, donations of UPS Common Stock to others may be permitted with the
consent of UPS provided that the transferee of the participant (all such
transferees, collectively the "participant's transferees") agrees to the terms
of the Stock Trust.
The Trust Agreement gives UPS the right to purchase a participant's shares
at their fair value, as defined, following a participant's death, retirement or,
termination of employment. However, if at least 1,000 shares are held for the
benefit of a participant and the participant's transferees under the Stock
Trust, UPS may purchase a cumulative annual amount of 10% of the 1,000 or more
shares held for the benefit of a participant and participant transferees, unless
the owner requests withdrawal of shares from the Stock Trust, whereupon UPS can
purchase them within 60 days of the request.
Further, under the trust agreements in use until July, 1995, which have not
subsequently been modified, if at least 500 shares are held for the benefit of a
participant under such trust agreements when active employment ceases, UPS can
purchase a cumulative annual amount of 10% of the 500 or more shares held for
the benefit of such participant for a period of 13 years after the cessation of
the participant's active employment, unless the participant requests withdrawal
of shares from the trust whereupon UPS can purchase these within 60 days of the
request. If UPS fails to purchase any shares held under such trust agreements
within 13 years after the cessation of the participant's active employment, the
participant has the right to withdraw them, free and clear of the Stock Trust
but subject to the preferential purchase right of UPS referred
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<PAGE> 20
to above. In addition, under trust agreements in use until 1967, which have not
subsequently been modified, UPS has the right in certain cases to purchase stock
held by a participant at any time within three years after the participant
ceases to be an active employee, even though 500 or more shares are held for the
participant's benefit.
If less than 1,000 shares are held for the benefit of a participant and the
participant's transferees when active employment ceases, UPS may purchase all of
the shares beneficially owned by the participant and the participant's
transferees at any time, subject to the owner's right to request withdrawal and
the right of UPS to purchase the shares within the next 60 days.
In addition, under trust agreements in use until July 1995, which have not
subsequently been modified, if less than 500 shares are held for the benefit of
such participant when active employment ceases, UPS may purchase all of the
participant's shares at any time within the following three years, subject to
participant's right to request withdrawal and the right of UPS to purchase the
shares within the next 60 days.
The Stock Trust may be terminated by the vote of a majority of the shares
subject to the Stock Trust, with the prior written consent of UPS, or if the
Trustee should resign, by failure of a majority of participants or UPS to
designate a successor trustee. UPS has the right to remove the Trustee at any
time, with or without cause, and to appoint a successor Trustee. Upon
termination, the shares would be delivered to participants subject to UPS's
right to purchase such shares at fair value upon ninety (90) days' prior written
notice of intention to purchase. UPS may assign its purchase rights under the
Stock Trust to another party.
DESCRIPTION OF OVERSEAS CAPITAL STOCK
Overseas is authorized to issue 900,000,000 shares of Capital Stock, $.10
par value per share, of which 136,000,000 were issued and outstanding on the
date hereof. It is also authorized to issue 200,000,000 shares of Preference
Stock, par value $.10 per share. At present no such shares have been issued or
are outstanding nor are there any plans to issue any such shares.
Each share of Overseas Capital Stock is entitled to one vote in the
election of directors and other matters except that any "Substantial
Shareholder," as defined in Overseas' Bye-Laws, is entitled to only one-
hundredth of a vote with respect to each vote which is in excess of 10 percent
of Overseas' outstanding voting stock (as hereinafter defined). The term
Substantial Shareholder is defined to mean any shareholder, other than UPS or
any employee benefit plan of Overseas or UPS, who is the beneficial owner of
more than 10 percent of the voting power of the outstanding shares of Overseas
entitled to vote generally in the election of directors ("Voting Stock"). There
are no limitations imposed by foreign law, or by Overseas' Memorandum of
Association and Bye-Laws, or by any agreement or other instrument to which
Overseas is a party or to which it is subject, on the right of shareowners,
solely by reason of their citizenship or domicile, to vote Overseas Capital
Stock. Upon liquidation, Overseas' shareowners are entitled to share on a pro
rata basis in the assets of Overseas legally available for distribution to
shareowners.
Fidelity is the transfer agent and registrar for Overseas Capital Stock.
Its address is 765 Broad Street, Newark, New Jersey 07101.
UPS'S RIGHT OF FIRST REFUSAL.
Overseas' Bye-Laws provide that no outstanding shares of Overseas Voting
Stock, including shares of Overseas Capital Stock, may be transferred, except by
bona fide gift or inheritance, unless such shares shall have first been offered,
by written notice, for sale to UPS at the lower of their book value or the price
at which they are to be offered to the proposed transferee and on the same terms
upon which they are to be offered to the proposed transferee. Notices of
proposed transfers must be sent to the Treasurer of UPS, must set forth the
number of shares proposed to be sold, the proposed price per share, the name and
address of the proposed transferee, the terms of the proposed sale and must
contain a statement by the proposed transferee that the information contained in
the notice is true and correct. UPS has the option, within 30 days after receipt
of the notice, to purchase all or a portion of such shares. If UPS fails to
exercise or waives the option, the shareowner may, within a period of 20 days
thereafter, sell to the proposed transferee all, but not part, of the shares
which
20
<PAGE> 21
were previously offered to UPS and not purchased by it pursuant to its option,
for the price and on the terms described in the notice. All transferees of
shares hold their shares subject to the same restrictions. Shares previously
offered to UPS but not transferred within the 20 day period remain subject to
the initial restrictions. Shares of Overseas Voting Stock may be pledged but
they may not be transferred upon foreclosure unless they have first been offered
to UPS in the manner described above.
In addition, any shareowner who is an "affiliate" of Overseas, as that term
is defined in Rule 144 under the Securities Act of 1933, could effect a public
resale of each participant's shares to a purchaser other than Overseas only
under the applicable provision of that rule or upon delivery of an effective
prospectus applicable to such a resale.
UPS'S RIGHT TO PURCHASE SHARES DISTRIBUTED AS INCENTIVE AWARDS AND SHARES
SUBSCRIBED TO IN THIS OFFERING.
UPS also has the right under Overseas' Bye-Laws to purchase shares of
Overseas Capital Stock, distributed as incentive awards (including awards under
the Incentive Plan) to employees of UPS and its subsidiaries following the
recipient's retirement, death or other termination of employment. UPS may
exercise this right to purchase all or a portion of such shares of a former
employee at any time within a period of three years following such termination
(if the shareowner owns less than 500 shares of UPS Capital Stock) or thirteen
years (if the shareowner owns 500 or more of such shares). The purchase price
will be the Current Price of the shares purchased at the time of purchase. Any
transferee of shares of such Overseas Capital Stock owned by recipients of the
incentive awards of Overseas shares will hold the same, including any Overseas
shares transferred, subject to this right of purchase by UPS.
Additionally, under Overseas' Bye-Laws and agreements with certain Overseas
shareowners, including the subscription agreements relating to this Offering,
UPS has other rights to purchase Overseas Capital Stock at its book value per
share under certain circumstances. The rights to purchase Overseas Capital Stock
afforded UPS by subscribers in this Offering are similar, but not identical, to
UPS's right to purchase Overseas shares distributed as incentive awards. See
"THE OFFERING -- Rights of UPS to Repurchase UPS and Overseas Shares Sold in
This Offering."
EXPERTS -- UPS
The financial statements incorporated in this Prospectus by reference from
UPS's Annual Report on Form 10-K for the year ended December 31, 1994, 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.
EXPERTS -- OVERSEAS
The financial statements incorporated in this Prospectus by reference from
Overseas' Annual Report on Form 10-K for the year ended December 31, 1994, have
been audited by Deloitte & Touche, 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.
LEGAL MATTERS CONCERNING THE UPS SHARES
The due issuance of the UPS shares being offered has been passed upon by
Messrs. Schnader, Harrison, Segal & Lewis, Philadelphia, Pennsylvania. William
H. Brown, III, a director of UPS, is a partner of Schnader, Harrison, Segal &
Lewis. As of July 1, 1995, Mr. Brown owned 23,300 shares of Common Stock of UPS.
LEGAL MATTERS CONCERNING THE OVERSEAS SHARES
The due issuance of the Overseas shares being distributed as described
herein has been passed upon by Conyers, Dill & Pearman of Hamilton, Bermuda.
Richard S.L. Pearman and John M. Sharpe, each of whom is a Director of Overseas,
are members of that firm, and Nicolas G. Trollope, who is an Alternate Director
of
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<PAGE> 22
Overseas, is also a member of that firm. Jeffrey L. Schulte, a partner of
Schnader, Harrison, Segel & Lewis, has been appointed as the duly authorized
agent of Overseas in the United States for service of process. His address is
Suite 2800, 303 Peachtree Street, N.E., Atlanta, Georgia 30308-3252.
NOTICE TO RESIDENTS OF CALIFORNIA
The offering of securities pursuant to this Prospectus is not being
extended to California residents. However, UPS is willing to consider the waiver
of its rights of first refusal relating to shares of UPS Common Stock and
Overseas Capital Stock to enable managers and supervisors who are residents of
California and who seek to purchase shares of UPS Common Stock and Overseas
Capital Stock from shareowners who wish to sell such shares. Interested
employees should contact UPS Shareowner Relations.
NOTICE TO RESIDENTS OF INDIANA
The purchase of shares of Overseas Capital Stock may not be effected by
means of salary deductions in Indiana. Therefore, residents of Indiana who wish
to subscribe to units and to participate in the Payroll Deduction Plan must
tender to UPS, by means of a check or money order, the purchase price of the
shares of Overseas Capital Stock subscribed to by the first day of the month in
which a Quarterly Purchase Date occurs, or by November 15 in the case of
subscriptions to be paid for out of the one-half month salary payment. If such
payment is not received in a timely fashion UPS reserves the right to reject a
subscription for units in its entirety, in which case a subscriber will not be
entitled to purchase any securities, or to fulfill the subscription only for
shares of UPS Common Stock. Salary deductions for the purchase price of shares
of UPS Common Stock will be effected in the manner provided for deduction of the
Unit Price.
If an eligible manager or supervisor resident in Indiana subscribes to a
number of units in any Quarterly Purchase Period or from the one-half month
salary payment which is not evenly divisible by four, resulting in a
subscription for a fractional number of shares of Overseas Capital Stock, then
UPS may, at its option, (i) reject the subscription in full; (ii) notify the
subscriber and allow him/her the opportunity to remit the additional amount to
yield a whole share; or (iii) fulfill the subscription for the purchase of the
whole number of shares of Overseas Capital Stock included in the units and for
which payment has been received, and refund any excess monies to the subscriber.
Currently, UPS intends to reject subscriptions that are for fractional amounts.
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<PAGE> 23
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE DISTRIBUTION OF SHARES OF THE COMMON STOCK OF UPS AND THE CAPITAL STOCK
OF OVERSEAS DESCRIBED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY UPS OR OVERSEAS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION
OF UNITS OR OVERSEAS CAPITAL STOCK SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF UPS OR OVERSEAS
SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION WITH RESPECT TO THE FOREGOING SHARES, OR ANY OTHER SECURITIES, OR
AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE OR JURISDICTION INTO WHICH
NEITHER UPS NOR OVERSEAS IS QUALIFIED TO FORWARD SUCH SHARES OR AN OFFER OR
SOLICITATION WITH RESPECT THERETO TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
FORWARD THE SHARES IN SUCH STATE OR JURISDICTION.
---------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
----
<S> <C>
Available Information................................ 3
Incorporation of Certain UPS and Overseas Documents
by Reference....................................... 3
The Companies........................................ 4
UPS................................................ 4
Overseas........................................... 4
Periodic Reports..................................... 5
Potential Conflict of Interest....................... 5
The Offering......................................... 5
Reasons for the Offering........................... 5
Term of the Offering............................... 6
Use of Proceeds from Sales by UPS.................. 6
Eligibility to Subscribe to Units.................. 6
How to Subscribe to Units.......................... 7
Provisions of the Subscription Agreements for
Units............................................ 10
How to Calculate the Unit Price.................... 10
Eligibility to Subscribe to Shares of Overseas
Capital Stock.................................... 11
How to Subscribe to Shares of Overseas Capital
Stock............................................ 11
Provisions of the Overseas Subscription
Agreement........................................ 12
How to Calculate the Price of the Overseas Capital
Stock............................................ 12
Acceptance of Subscriptions by UPS................. 12
Normal Processing and Acceptance of
Subscriptions.................................... 13
Delayed Acceptance of Subscriptions; Unavailability
of Shares........................................ 13
Effects of Changes in Current Prices or Dividends
on Unaccepted Subscriptions...................... 14
Rejection of Subscriptions......................... 16
Withdrawal of Payroll Deduction Plan Subscriptions;
Change in the Number of Units Subscribed To...... 16
Delivery of the UPS and Overseas Shares for the
Account of Purchasers upon Acceptance............ 17
Rights of UPS to Repurchase UPS and Overseas Shares
Sold in the Offering............................. 17
Change in the Offering; Interpretation............. 18
Description of UPS Common Stock...................... 18
The UPS Right of Preferential Purchase............. 18
UPS Managers Stock Trust............................. 19
Description of Overseas Capital Stock................ 20
UPS's Right of First Refusal....................... 20
UPS's Right to Purchase Shares Distributed as
Incentive Awards and Shares Subscribed to in This
Offering......................................... 21
Experts -- UPS....................................... 21
Experts -- Overseas.................................. 21
Legal Matters Concerning the UPS Shares.............. 21
Legal Matters Concerning the Overseas Shares......... 21
Notice to Residents of California.................... 22
Notice to Residents of Indiana....................... 22
</TABLE>
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LOGO
SHARES OF
UNITED PARCEL SERVICE
OF AMERICA, INC.
COMMON STOCK
AND
SHARES OF
OVERSEAS PARTNERS
LTD.
CAPITAL STOCK
UNITED PARCEL SERVICE OF AMERICA, INC.
DECEMBER 11, 1995
OVERSEAS PARTNERS LTD.
DECEMBER 11, 1995
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