UPS Global | Site Guide
UPS Investor Relations
Home | Contact IR | UPS Web Sites   PressroomPop-up Pressroom | CommunityPop-up Community
Navigation Tabs
FinancialsCompany InformationSustainability
Navigation Tabs
Governance

Advisory Information for Investors
Governance
Board Committee Charters
Audit Committee Charter
Compensation Committee Charter
Nominating and Corporate Governance Committee Charter
Audit Committee Charter
I. STATEMENT OF PURPOSE
The Audit Committee represents the Board of Directors in discharging its responsibilities relating to the accounting, reporting and financial practices of the Company and its subsidiaries. The Audit Committee has general responsibility for oversight of the accounting and financial reporting processes of the Company and its subsidiaries, including oversight of the integrity of the Company's financial statements, the Company's systems of disclosure controls and internal controls, the Company's compliance with legal and regulatory requirements, the qualification and independence of the Company's auditors, the performance of the Company's internal audit function and independent auditors, and the preparation of the report that the Securities and Exchange Commission (the "SEC") requires to be included in the Company's annual proxy statement.
II. COMMITTEE MEMBERS

The Board of Directors appoints an Audit Committee of at least three members, consisting entirely of "independent" directors of the Board, and designates one member as chairperson. "Independent" means a director who satisfies all criteria for independence of an audit committee member established by the SEC and the New York Stock Exchange (the "NYSE"), both as determined by the Board of Directors.

Each member of the Audit Committee must be financially literate and at least one member of the Audit Committee will have such accounting or related financial management expertise as required to be a "financial expert" in compliance with the criteria established by the SEC, both as determined by the Board of Directors. No member of the Audit Committee shall serve on more than three public company audit committees.
III. POWERS, DUTIES AND RESPONSIBILITIES

In carrying out its intended purpose, the Audit Committee shall have the powers, duties and responsibilities delegated to it by the Board of Directors as set forth below. The Audit Committee shall:

  Services of Independent Auditors
(a) Have sole authority to appoint and oversee a registered public accounting firm (as defined by applicable law) to serve as the Company's independent auditors and to perform the Company's annual financial statement audit (subject, if applicable, to shareholder ratification). This authority shall include the sole discretion to retain and terminate such independent auditors, to approve the terms and conditions of all audit engagements as well as all significant non audit engagements with such independent auditors (including preapproval of such services as required by applicable law, rule or regulation), and to determine the compensation to be paid to such independent auditors. In no event shall the Audit Committee engage the Company's independent auditor to perform any service enumerated in Section 201(a) of the Sarbanes Oxley Act of 2002, except as may otherwise be provided by law or regulation.
(b) Oversee the work performed by the Company's independent auditors (including resolution of disagreements between management and the independent auditors regarding financial reporting). Such independent auditors shall report directly to the Audit Committee and shall be ultimately accountable to the entire Board of Directors through the Audit Committee.
(c) Review with the independent auditors the scope of the audit and review the results of the annual audit examination and any reports of the independent auditors with respect to the Company's financial statements or policies.
(d) Review the independent auditor's attestation and report on management's internal control report.
(e) Review information, including written statements from the independent auditors, concerning any relationships between the auditors and the Company or any other relationships that may adversely affect the independence of the auditors and assess the independence of the outside auditor as set forth in Independence Standards Board Standard No. 1 and the rules, regulations and standards of the SEC and the NYSE. The Audit Committee shall, at least annually, obtain and review a report by the Company's independent auditors describing: (1) the firm's internal quality control procedures; (2) any material issues raised by the most recent internal quality control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues; and (3) (to assess the auditor's independence) all relationships between the independent auditors and the Company.
  Audit Practices and Financial Reporting Matters
(f) Discuss with management and the independent auditors the Company's annual audited financial statements and quarterly financial statements, including the Company's disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and a discussion with the independent auditors of their judgments as to the quality of the Company's accounting principles.
(g) Review with management and the independent auditors the results of any significant matters identified as a result of the independent auditors' interim review procedures prior to the filing of each Form 10 Q or as soon thereafter as possible. The Audit Committee Chair may perform this function on behalf of the Audit Committee.
(h) Discuss earnings press releases and financial information and earnings guidance provided to analysts and rating agencies.
(i) Review the annual program for the Company's internal audits and review audit reports submitted by the internal auditing staff. Review the adequacy of the Company's internal controls at least quarterly.
(j) Review and discuss with the independent auditors and the internal auditors the integrity of the Company's financial reporting processes (both internal and external) and internal controls (including disclosure controls).
(k) Review changes in the accounting policies of the Company and accounting and financial reporting proposals that may have a significant impact on the Company's financial reports, and make reports on the foregoing to the Board of Directors.
(l) Regularly review with the independent auditors any audit problems or difficulties and management's response, including any restrictions on the scope of the independent auditors' activities or access to information and any significant disagreements with management.
(m) Meet separately, periodically, with management, with internal auditors (or other personnel responsible for the internal audit function) and with independent auditors in connection with the performance of its oversight function.
  Company Governance Policies and Compliance
(n) Prepare the report that SEC rules require to be included in the Company's annual proxy statement.
(o) Establish clear policies for the Company to follow in hiring employees or former employees of the independent auditors.
(p) Discuss with management policies with respect to financial risk assessment and risk management, including guidelines to govern the process by which major financial and accounting risk assessment and management is undertaken by the Company.
(q) Review the adequacy of this Audit Committee Charter on an annual basis and conduct an annual performance evaluation of the Audit Committee.
(r) Review with management and the independent auditors any correspondence with regulators or governmental agencies and any employee complaints or published reports, which raise material issues regarding the Company's financial statements or accounting policies. In connection therewith, the Audit Committee shall establish procedures for (1) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and (2) the confidential, anonymous submission by employees of the Company of concerns of questionable accounting or auditing matters.
(s) Oversee the Company's Business Conduct and Compliance Program.
  General Powers
(t) Have the ability (but not the obligation) to conduct or authorize, if it considers appropriate, investigations into any matters within the scope of its responsibilities.
(u) Have the authority (without the necessity or requirement of approval from the Board of Directors) to obtain advice, services and assistance from outside legal, accounting or other advisors, as the Audit Committee deems necessary to assist it in carrying out its responsibilities, and to determine the compensation for any such advisors.
(v) Perform such activities consistent with this Charter, the Company's bylaws and applicable law as the Board of Directors or the Audit Committee deems necessary or appropriate.
(w) Make reports and recommendations to the Board of Directors within the scope of its functions.
IV. SCOPE OF DUTIES

While the Audit Committee has the responsibilities and the authority set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements are complete and accurate and are in accordance with GAAP. This is the responsibility of the independent auditors and management, respectively. Nor is it the duty of the Audit Committee to assure compliance by the Company or its subsidiaries with applicable laws and regulations and the Business Conduct and Compliance Program.
V. COMMITTEE MEETINGS

The Audit Committee will meet as often as it deems necessary or appropriate, in its judgment, either in person or telephonically, and at such times and places as the Audit Committee determines, provided that the Audit Committee will meet at least four times each year. The majority of the members of the Audit Committee constitute a quorum.
Back to Top
Compensation Committee Charter
1. Members. The Board of Directors appoints a Compensation Committee of at least three members, consisting entirely of "independent" directors of the Board and designates one member as chairperson. "Independent" means a director who (i) satisfies all criteria to be a "non-employee director" within the meaning of Rule 16b-3 promulgated by the Securities and Exchange Commission (the "SEC"), (ii) meets the New York Stock Exchange (the "NYSE") definition of "independence" (including all criteria imposed with respect to service on a compensation committee), (iii) meets the definition of "outside director" under Section 162(m) of the Internal Revenue Code, and (iv) is otherwise free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Compensation Committee, all as determined by the Board of Directors.
2. Purposes, Duties and Responsibilities. The Compensation Committee shall discharge the Board's responsibilities with respect to compensation of the Company's executive officers, including determination of certain compensation awards for senior executives, and produce an annual report on executive compensation for inclusion in the Company's proxy statement relating to its annual meeting of stockholders. Specifically, the Compensation Committee will:
(a) Establish corporate goals and objectives relevant to the compensation for the Chairman and Chief Executive Officer ("CEO").
(b) Evaluate the CEO's performance in light of such goals and objectives and establish the compensation for the CEO based on this evaluation.
(c) Establish the compensation of other executive officers based upon the recommendation of the CEO.
(d) Make awards to executives under UPS Stock Option Plans and the UPS Management Incentive Plan.
(e) Review and approve the design of other benefit plans pertaining to executives of the company.
(f) Review and recommend to the Board of Directors regarding the design and approval of all incentive compensation plans and equity-based plans not otherwise approved pursuant to clause (e) above.
(g) Approve such reports on compensation as are necessary for filing with the SEC and other government bodies.
(h) Administer all plans that require "disinterested administration" under Rule 16b-3 under the Securities Exchange Act of 1934.
(i) Approve the amendment or modification of any compensation or benefit plan pertaining to executives of the Company that does not require shareowner approval, if any.
(j) Review and recommend to the Board of Directors changes to the outside directors' compensation.
(k) Retain outside consultants and obtain assistance from members of management as the Committee deems appropriate in the exercise of its authority.
(l) Make reports and recommendations to the Board of Directors within the scope of its functions.
(m) Prepare an annual report on executive compensation satisfying the requirements of Item 402(k) of Regulation S-K for inclusion in the Company's proxy statement relating to its annual meeting of stockholders.
(n) Conduct an annual performance evaluation of the Compensation Committee.
3. Meetings. The Compensation Committee will meet as often as it deems necessary or appropriate, in its judgment, either in person or telephonically, and at such times and places as the Committee determines. The majority of the members of the Compensation Committee constitutes a quorum.
Nominating and Corporate Governance Committee Charter
1. Members. The Board of Directors appoints a Nominating and Corporate Governance Committee of at least three directors of the Board and designates one member as chairperson. The Nominating and Corporate Governance Committee shall consist entirely of "independent" members of the Board of Directors. "Independent" means a director who (i) satisfies all criteria for independence established by the Securities and Exchange Commission (the "SEC"), (ii) meets the New York Stock Exchange (the "NYSE") definition of "independence" (including all criteria imposed with respect to service on nominating, corporate governance or similar committee) and (iii) is otherwise free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Nominating and Corporate Governance Committee, all as determined by the Board of Directors.
2. Purposes, Duties and Responsibilities. The Nominating and Corporate Governance Committee assists the Board of Directors in identifying, screening and recommending qualified candidates to serve as directors of the Company and in developing and recommending to the Board of Directors a set of corporate governance principles for the Company. Specifically, the Nominating and Corporate Governance Committee will:
(a) Periodically receive and consider recommendations, from the CEO and others, regarding succession at the CEO and other senior officer levels.
(b) Recommend to the Board candidates for election or reelection to the Board at each Annual Meeting of Shareowners of the Company.
(c) Recommend to the Board candidates for election by the Board to fill vacancies occurring on the Board.
(d) Consider shareowner nominees.
(e) Make recommendations to the Board concerning the selection criteria to be used by the Committee in seeking nominees for election to the Board.
(f) Aid in attracting qualified candidates to serve on the Board.
(g) Make recommendations to the Board concerning the Company's corporate governance principles, including the structure, composition and functioning of the Board and all Board committees, the delegation of authority to management, Board oversight of management actions and reporting duties of management.
(h) Review Board meeting procedures, including the appropriateness and adequacy of the information supplied to directors prior to and during Board meetings.
(i) Evaluate or provide for evaluation of Board and management performance.
(j) Review and recommend retirement policies for directors.
(k) Review any outside directorships in other public companies held by senior company officials.
(l) Make reports and recommendations to the Board of Directors within the scope of its functions.
(m) Conduct an annual performance evaluation of the Nominating and Corporate Governance Committee.
3. Meetings. The Nominating and Corporate Governance Committee will meet as often as it deems necessary or appropriate, in its judgment, either in person or telephonically, and as such times and places as the Committee determines. The majority of the members of the Nominating and Corporate Governance Committee constitutes a quorum.
Back to Top
Home | Financials | Company Information | Governance | Contact IR | Site Guide | UPS Websites
UPS Global | UPS Corporate
 
Copyright  1994 - United Parcel Service of America, Inc. All rights reserved.
Web Site Terms of Use | UPS Privacy Policy | Trademarks | UPS Code of Business Conduct