UPS Revises Guidelines for Employee Stock Sales
ATLANTA. - UPS (NYSE:UPS) today announced it has modified the terms of its insider trading compliance guidelines to enable employees to use stock trading plans that comply with the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934.
The company also streamlined its process for employees to exercise stock options.
Both changes are designed to provide more flexibility for employees to manage their financial affairs without jeopardizing the company’s ability to prevent improper insider trading. The revised guidelines were approved by the Audit Committee of the UPS Board of Directors.
Rule 10b5-1 plans allow employees to specify in advance that company shares be purchased or sold on a set schedule during the year on what is known as a “non-discretionary basis.” Thus the purchase or sale of stock occurs automatically without any direction or control by the employee at the time of the transaction.
Such trading plans can be activated only at a time when the employee does not possess material, non-public information about the company.
“Since the adoption of Rule 10b5-1 in 2000, we have seen a number of large public companies allow their employees to utilize these procedures,” noted Andy Dolny, UPS’s vice president of investor relations. "We believe that it is useful for our employees to have the flexibility and comfort that these trading plans provide.
“Most of our senior management employees have spent virtually their entire careers with UPS and in accordance with our owner-manager philosophy, have accumulated significant amounts of UPS stock,” Dolny continued. “Under our ownership guidelines, employees will continue to maintain sizeable investments in UPS, but Rule 10b5-1 trading plans allow them to diversify their investment portfolio in a prudent manner while avoiding concerns about buying or selling stock while in possession of material non-public information.”
Under the new guidelines, the company also made it easier for employees to use shares of stock they already own to pay the exercise price of employee stock options.
Information regarding any purchases or sales by senior officers using these plans will be included in forms filed with the Securities and Exchange Commission.
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