Exhibit 10.7

 

UNITED PARCEL SERVICE, INC.

 

INCENTIVE COMPENSATION PLAN

 

RESTRICTED STOCK AWARD AGREEMENT

 

GRANT

 

This Restricted Stock Award Agreement (the “Agreement”) evidences the grant by
United Parcel Service, Inc., a Delaware corporation (“UPS”), in accordance with
the United Parcel Service, Inc. Incentive Compensation Plan (the “Plan”) and the
terms and conditions below, of                          (        ) shares of
restricted class A common stock of UPS (together with any additional shares
purchased pursuant to Section 2 of the Terms and Conditions hereof, the
“Restricted Stock”) to                         , a non-management director of
UPS (“Director”). This Restricted Stock grant (the “Award”) is granted effective
as of                     , 2005, which is referred to as the “Grant Date.”

 

UNITED PARCEL SERVICE, INC.

By:    

Title:

   

 

TERMS AND CONDITIONS

 

Section 1. Plan and Award Agreement. This Award is subject to all of the terms
and conditions in this Agreement and in the Plan. If a determination is made
that any term or condition in this Agreement is inconsistent with the Plan, the
Plan will control. All of the capitalized terms not otherwise defined in this
Agreement will have the same meaning in this Agreement as in the Plan. A copy of
the Plan is available to Director upon request.

 

Section 2. Shareowner Rights. Director will have the right to vote the shares of
Restricted Stock. If Director forfeits the Restricted Stock under Section 3,
Director will at the same time forfeit the right to vote such shares.

 

Any cash dividends paid with respect to the Restricted Stock shall be applied to
purchase additional shares of class A common stock of UPS. The additional shares
purchased under this Section 2, together with any stock dividends or other
distributions of property made with respect to the shares of Restricted Stock
that remain subject to forfeiture under Section 3, will be held by UPS, and
Director’s rights to receive such shares or other property will vest under
Section 3 at the same time as the shares with respect to which the dividends or
other property are attributable.

 

--------------------------------------------------------------------------------

Except for the right to vote the shares described in this Section 2, Director
will have no other rights as a shareowner with respect to any shares of
Restricted Stock until those shares become vested under Section 3.

 

Section 3. Forfeiture and Vesting. Director will vest in the Restricted Stock on
the earlier of (a) the fifth (5th) anniversary of the Grant Date or (b) the date
of the board of directors meeting that immediately precedes the attainment of
the maximum age after which Director would no longer be eligible to stand for
reelection as a director of UPS pursuant to its Corporate Governance Guidelines
(the “Vesting Date”); provided, however, that Director continuously remains a
director of UPS from the Grant Date through the Vesting Date.

 

In addition, Director will vest in all of the shares of Restricted Stock if
Director’s continuous service as a director of UPS terminates by reason of
Director’s death or disability prior to the Vesting Date. If Director’s service
as a director of UPS terminates before the Vesting Date, other than by reason of
death or disability, Director will forfeit all shares.

 

If the Restricted Stock is forfeited, all of such shares (together with all
distributions made with respect to the Restricted Stock) automatically will
revert back to UPS.

 

Section 4. Custody of Shares. The shares of Restricted Stock will be designated
for the account of Director on the books and records of a transfer agent or
financial institution designated by UPS until the shares become vested under
Section 3. No stock certificates will be issued with respect to shares of
Restricted Stock before the shares become vested.

 

Section 5. Rights in Agreement Not Transferable. No rights granted under this
Agreement are transferable by Director other than by will or the laws of descent
and distribution. The person or persons, if any, to whom the Restricted Stock is
transferred by will or by the laws of descent and distribution will be treated
the same as Director under this Agreement.

 

Section 6. Binding Effect. This Agreement is binding upon UPS, its Subsidiaries
and Director and their respective heirs, executors, administrators and
successors.