United Parcel Service, Inc.

Headnote

Mutual Reliance Review System for Exemptive Relief Applications - relief fromregistration and prospectus requirements granted in respect of certain trades in sharesand awards of a US issuer in connection with certain incentive and stock purchaseplans.

Applicable Ontario Statutes

Securities Act, R.S.O. 1990, c.S.5, as am., s.- 25, 35(1)(12)(iii), 53, 72(1)(f)(iii), 74(1)

Applicable Ontario Rules

Rule 45-503 Trades to Employees, Executives and Consultants.

Rule 72-501 Prospectus Exemption for First Trade Over a Market Outside Ontario.

WHEREAS the Canadian securities regulatory authority or regulator (the "DecisionMaker") in each of British Columbia, Alberta, Saskatchewan, Ontario, Nova Scotia andNew Brunswick (the "Jurisdictions") received an application from United Parcel Service,Inc. ("UPS") for a decision pursuant to the securities legislation of the Jurisdictions (the"Legislation") that the requirements contained in the Legislation to be registered to tradein a security (the "Registration Requirement") and to file and obtain a receipt for apreliminary prospectus and a prospectus (the "Prospectus Requirement") (collectively, the"Registration and Prospectus Requirements") shall not apply to certain trades of sharesand awards of UPS in connection with

(a) the UPS 1999 Incentive Compensation Plan (the "Incentive Plan"); and

(b) the UPS Nonqualified Employee Stock Purchase Plan (the "Stock Purchase Plan")(the Incentive Plan and Stock Purchase Plan are collectively referred to herein asthe "UPS Plans");

AND WHEREAS pursuant to the Mutual Reliance Review System for ExemptiveRelief Applications (the "System"), the Ontario Securities Commission is the principalregulator for this application;

AND WHEREAS it has been represented by UPS to the Decision Makers that:

1. UPS is a corporation incorporated under the laws of the State of Delaware.

2. UPS is not and has no present intention of becoming a reporting issuer, orequivalent, under the Act or the securities legislation of any province or territory ofCanada.

3. UPS is subject to the requirements of the Securities Exchange Act of 1934 and isnot exempt from the reporting requirements of the 1934 Act under any rule.

4. The authorized capital of UPS consists of: (a) 1,533,333,333 Class A-1 commonstock (the "Class A-1 Shares"), par value $0.01 per share; (b) 1,533,333,333 ClassA-2 common stock (the "Class A-2 Shares"), par value $0.01 per share; (c)1,533,333,334 Class A-3 common stock (the "Class A-3 Shares"), par value $0.01per share (the Class A-1 Shares, Class A-2 Shares and Class A-3 Shares arecollectively referred to herein as the "Class A Shares"); (d) 5,600,000,000 Class Bcommon stock, par value $0.01 per share (the "Class B Shares"); and (e)200,000,000 preferred stock, par value $0.01 per share.

5. As at May 3, 2000 there were approximately 1,037,596,982 Class A Shares and109,400,000 Class B Shares issued and outstanding. No shares of preferred stockare issued and outstanding.

6. The Class A Shares are not listed on any stock exchange or quoted on anorganized over-the-counter market. The Class B Shares have been listed on theNew York Stock Exchange (the "NYSE") since November 10, 1999, when UPSmade its initial public offering of Class B Shares (the "IPO").

7. The Class A Shares are subject to certain transfer restrictions. Class A-1 Sharesmay be converted into Class B Shares at the holder's option, and will be convertedinto Class B Shares upon transfer to any person other than a "PermittedTransferee" (as set out in schedule A attached hereto). Class A-2 Shares and ClassA-3 Shares may not be transferred to anyone other than a Permitted Transferee orconverted into Class B Shares until 360 days and 540 days, respectively, after theIPO.

8. The Incentive Plan was established to offer performance-based stock incentives tocertain employees (the "Participants") of UPS and UPS affiliates and subsidiaries(the "UPS Companies") to motivate, attract and reward such Participants whocontribute to the success of the UPS Companies.

9. Under the Incentive Plan, UPS may grant incentive stock options, non-qualifiedstock options, restricted stock, performance shares, performance units andmanagement incentive awards (collectively referred to herein as "Awards").

10. Generally, Awards either consist of, or may be exercised to acquire, Class AShares.

11. The Stock Purchase Plan was established to encourage stock ownership by certaineligible employees of the UPS Companies (an "Eligible Employee") to increaseemployee interest in UPS and to promote employee retention.

12. UPS expects the Stock Purchase Plan to continue indefinitely subject to continuedavailability of shares reserved for issuance; however the Stock Purchase Plan maybe amended or terminated by UPS. There are 40,000,000 Class A-1 Sharesreserved for purchase under the Stock Purchase Plan.

13. Participation in each of the UPS Plans is voluntary and Participants and EligibleEmployees will not be induced to participate in the UPS Plans or to acquiresecurities under the UPS Plans by expectation of employment or continuedemployment or by expectation of appointment or continued appointment ininstances where the Participant or Eligible Employee is an officer of a UPSCompany.

14. All Participants and Eligible Employees, regardless of residency, receivesubstantially the same disclosure in respect of the Incentive Plan and StockPurchase Plan, respectively, including U.S. prospectuses prepared by UPS inrespect of the Incentive Plan and Stock Purchase Plan. In addition, UPS will adviseParticipants and Eligible Employees in Canada of the fact that securities legislationof the Jurisdictions imposes resale restrictions on the Class A Shares and Class BShares.

15. As at June 1, 2000, less than 1% of all Participants and less than 1% of all EligibleEmployees were resident in each Jurisdiction (collectively referred to herein as the"Canadian Participants").

16. As at June 1, 2000, residents in each Jurisdiction held less than 1% of each of theClass A Shares and Class B Shares issued and outstanding at that time.

17. In certain Jurisdictions, Canadian Participants will not be able to rely on exemptionsfrom the Registration and Prospectus Requirements for the issue of securitiesunder the Plans, and first trades will not be exempt distributions under theLegislation.

18. UPS will send concurrently to its securityholders in the Jurisdictions copies of allcontinuous disclosure material sent by UPS to its securityholders in the UnitedStates.

AND WHEREAS pursuant to the System this MRRS Decision Document evidencesthe decision of each Decision Maker;

AND WHEREAS each of the Decision Makers is satisfied that the test contained inthe Legislation that provides the Decision Maker with the jurisdiction to make this Decisionhas been met:

THE DECISION of the Decision Makers under the Legislation is that:

(a) the Registration and Prospectus Requirements shall not apply to distributions ofAwards and Class A-1 Shares pursuant to the Plans to Participants and EligibleEmployees resident in New Brunswick;

(b) first trades by Canadian Participants in Class A Shares acquired pursuant to theUPS Plans are not subject to the Registration and Prospectus Requirementsprovided that such trades are made to Permitted Transferees of such CanadianParticipants; and

(c) first trades in a Jurisdiction by Canadian Participants and Permitted Transferees inClass B Shares acquired on the conversion of Class A Shares previously acquiredpursuant to the UPS Plans are not subject to the Prospectus and RegistrationRequirements, provided that:

(i) at the time of the acquisition of the Class B Shares, persons or companieswhose last address as shown on the books of UPS in that Jurisdiction didnot hold more than 10% of the outstanding Class B Shares and did notrepresent in number more than 10% of the total number of holders of ClassB Shares;

(ii) at the time of the acquisition of the Class B Shares, persons or companieswho were resident in that Jurisdiction and who beneficially owned Class BShares did not beneficially own more than 10% of the outstanding Class BShares and did not represent in number more than 10% of the total numberof holders of Class B Shares;

(iii) at the time of the trade of any Class B Shares, UPS is not a reporting issuer,or equivalent, under any of the Legislation; and

(iv) such first trade is executed:

(A) through the facilities of a stock exchange outside of Canada; or

(B) on the NASDAQ Stock Market,

in accordance with the rules of such exchange or market and all applicablelaws.

September 13^th, 2000.

"J. A. Geller"       "R. Stephen Paddon"