AmazonScience/document-haystack

1also subject to the UPS Key Employee Severance Plan as discussed under “Potential Payments Upon Termination 2or Change in Control”. Grants do not include DEUs or reload features. The number of stock options granted to 3the NEOs in 2023 is shown in the “Grants of Plan-Based Awards” table.4Employment Transition Awards, Retention Arrangements and Recognition Awards5Generally, we do not pay discretionary bonuses in cash or stock, or make other discretionary payments, to our 6executives. In recent periods, however, to attract and retain senior executive talent, the Committee approved 7certain limited payments to external hires to the Company’s Executive Leadership Team. A portion of these 8payments was made to compensate the executives for compensation forfeited at their prior employers and 9transition them into our incentive programs. Any of these payments impacting 2023 compensation are described 10below. In addition, in connection with the hiring of Carol Tomé as CEO in 2020, the Committee provided certain 11incentives to various executive officers in order to help ensure the retention of their services through a 12transition period.13Bala Subramanian joined the Company in July 2022 as Chief Digital and Technology Officer. The Committee, 14working with FW Cook and considering market compensation data and internal pay equity factors, approved his 15compensation package described below. Under the terms of his employment offer letter, Bala is entitled to: (i) a 16RSU grant valued at $3,000,000, vesting 50% in July 2023 and 50% in July 2024; (ii) cash transition payments 17of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; (iii) a RPU grant valued at 18$1,000,000, vesting in December 2023, with the actual payout determined based on the Company’s 19performance under its 2021 LTIP program; and (iv) a prorated 2022 LTIP award. Payments are subject to his 20continued employment through the applicable vesting or payment dates, or termination without cause.21Further, in 2021 the Committee granted Kate Gutmann a special award valued at $350,000 in recognition of her 22extraordinary contributions and performance during 2020. This award consisted of $175,000 in RSUs which vest 23as follows: 25 percent on March 25, 2022; 25 percent on March 25, 2023; and 50 percent on March 25, 2024; 24and a stock option award with a grant date fair value of $175,000 which vests 20% per year over five years 25beginning on March 25, 2022, provided generally that she remains an employee through the applicable 26vesting dates.27In connection with our 2020 CEO transition, we entered into retention arrangements with each of Nando 28Cesarone and Kate Gutmann. The Committee initially intended that these agreements contain both performance 29and time vesting components, and that the performance components be different than the metrics under our 30MIP and LTIP programs. Due to the uncertainty created by the coronavirus pandemic and the importance of the 31retention agreements to the Company, the Committee ultimately determined that the awards would only be time 32based. Nando and Kate each received RSUs valued at $3.0 million which vested as follows: 25% on 33May 13, 2021, 25% on May 13, 2022 and 50% on May 13, 2023. These agreements contain customary non-34competition, non-solicitation and non-disclosure covenants in favor of the Company.35Benefits and Perquisites36The benefits and perquisites provided to our NEOs are not a material part of executive compensation and are 37largely limited to those offered to our employees generally, or that we otherwise believe are necessary or 38appropriate to attract and retain executive talent.39We believe certain perquisites help facilitate our NEOs’ ability to carry out their responsibilities, maximize 40working time and minimize distractions. Additional information on these benefits can be found in the following 41program descriptions.42UPS 401(k) Savings Plan43The UPS 401(k) Savings Plan is open to all U.S.-based employees who are not subject to a collective bargaining 44agreement and who are not eligible to participate in another savings plan sponsored by UPS or one of its 45subsidiaries. We generally match 50% of up to 6% of eligible pay contributed to the UPS 401(k) Savings Plan for 46eligible employees. The match is paid quarterly according to the participant's pre-tax investment elections on file 47with the record keeper. We also generally provide an annual contribution based on years of service and 48expressed as a percentage of eligible compensation (5% for 0-4 years, 6% for 5-9 years, 7% for 10-14 years 49and 8% for 15 or more years). For employees who were hired prior to 2008 and are participants in the Final 50Average Compensation (FAC) formula of the UPS Retirement Plan, we generally make an annual transition 51contribution of 5% of eligible compensation for plan years 2023-2027, which will increase to 7% beginning 52in 2028. 53 5441