UPS Franchisees Did Not Follow Shareholder Rules

Black also explained that those shareholders would not have automatically received an annual report from UPS. He explains that as with many corporations now in an effort to be environmentally conscious as well as even more time responsive to shareholders, UPS uses other methods. He said, "Instead, we send a letter specifically known by the SEC and lawyers as the Letter of Notice and Access. It’s a very common procedure, and not UPS specific, that I’m describing." According to Black, the letter gives shareholders several options. He again explains, "How they can get access to the annual report online, if they want it immediately. How they can get access to a proxy so they can vote online if they want to do it immediately. And, how they can get a printed copy of the report and proxy, if they prefer to kill trees."

But he said it also provides the rules for anyone who would like to personally attend the shareholders meeting in Wilmington. And it notes that no matter if you own one share or a million shares you are welcome to attend the actual meeting. "But, he adds, "be advised that to walk through the doors you will need to bring with you proof that you actually own the shares that you are showing you own on the proxy." Again he states that the two who didn't have proof of ownership were indeed denied entry.

Black also said it was wrong that last year they were allowed entry by giving their social security number and driver's license. "That’s why we went to such pains to make sure they understood that this was going to be enforced this year." Last year he said they got in by barging past their security people after the meeting had started. "That’s how they gained entry. We were not going to make a scene in the middle of our shareholders meeting to try to throw them out." He added, "Particularly since we believed they were shareholders, even though they hadn’t shown proof they were, even though we had the legal right to do so. Black said they were not going to interrupt the meeting and send in security to remove them forcibly. He continued, "So, not only did we not kick them out but we also allowed them to ask questions, even though they were not supposed to be there in terms of following the rules for admittance." But Black said they then made it clear to them that next year they were going to follow the rules. He said they told them, "We want you to come and we want you to attend, but you have to show proof of stock ownership. That’s all we ask. And then, lo and behold, they show up again this year not following the rules."

In addressing the question asked about the litigation appearing for the first time this year in the UPS annual report, Black confirmed that Teri McClure, general counsel and secretary of the corporation, explained that every piece of litigation against UPS is reviewed every year. "The reason it was included this year was simply that there had been new developments that moved the case along, so the UPS legal department decided that it had now reached a point in its litigation history, and should be referenced in the 10 K. That was her answer."

Black also stated that he does not view this as much of a newsworthy story. He said when you are talking about a $50 billion corporation that welcomes any and every shareholder who wants to attend the annual meeting and gives them very clear rules to follow, and then, germane to this article, two know to follow the rules and two don't; two are admitted in a heartbeat and two aren't, he questions what's the big story? He said, "Only if you are suggesting that we are discriminating against two shareholders who didn't follow the rules . . . out of the billion plus shares of stock that we had outstanding that two shareholders didn’t follow the rules, I do not see that."