Fedex 2016 Annual Meeting of Stockholders – September 26, 2016

FedEx 2016 Annual Meeting of Stockholders – September 26, 2016

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

All right. Ladies and gentlemen, it’s precisely 8:00 in the morning of 26 September 2016. Welcome to the Annual Stockholders Meeting of FedEx Corporation. As I think most of you know, I’m Frederick Wallace Smith, Chairman of the Board and CEO of FedEx Corporation. We appreciate the interest of the stockholders who have come to the meeting and we thank you for being here.

This meeting is being webcast live. I would also like to welcome our stockholders who have joined us via that webcast.

Let me begin by introducing the other members of the FedEx Board of Directors. As I call your name, please stand and be recognized. Jim Barksdale, John Edwardson, Marvin Ellison, Chris Inglis, Kim Jabal, Shirley Jackson, Brad Martin, Joshua Ramo, Susan Schwab, David Steiner and Paul Walsh.

As you may know, Gary Loveman, who has been a member of our Board of Directors since 2007, has retired from the Board effective today. We thank Mr. Loveman for his service and dedication to FedEx and wish him well.

Joining me on stage are Christine Richards, our Executive Vice President, General Counsel and Corporate Secretary who will act as secretary of the meeting; John Ruocco, Assistant Vice President and Senior Relationship Manager of Computershare Trust Company, our transfer agent who has been appointed and duly sworn as Inspector of Election.

Representatives of Ernst & Young are also present and available to answer appropriate questions that you may have of them as auditors of the Company’s fiscal year 2016 financial statements.

As each of you entered the meeting room this morning you were given a copy of the agenda and the annual meeting guidelines. The meeting will be conducted in accordance with the agenda and those guidelines. If you have not received copies of the agenda and guidelines, please raise your hand and copies will be brought to you.

I’ll now call the meeting to order. Ms. Richards will report on the giving of notice of the meeting and the presence of a quorum.

Christine P. Richards EVP, General Counsel & Secretary, FedEx Corp.

Mr. Chairman, I have a complete list of the holders of record of the Company’s common stock at the close of business on August 1, 2016, who are entitled to vote at this meeting. The list is arranged in alphabetical order and indicates the number of shares held by each stockholder. It was prepared and certified by Computershare Trust Company, the Company’s transfer agent for the common stock.

I also have received an affidavit of a representative of Computershare which states that on August 15, 2016, the Notice of Annual Meeting, the Proxy Statement, the Proxy, the 2016 Annual Report and a postage prepaid return envelope were mailed to the stockholders of record as of August 1, 2016.

A tabulation of the proxies received from shareholders indicates that a majority of the shares outstanding on the record day are represented at this meeting and a quorum is present.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Thank you Ms. Richards. A copy of the affidavit will be filed with the records of this meeting.

The polls for each proposal are now open at 8:03 AM Central Time, 26 September 2016. Proposals to be considered today are listed on the agenda and in the proxy materials previously distributed. If you have already submitted your proxy, your shares will be voted accordingly. If there is any stockholder present who has not yet voted and wishes to do so, please hold up your hand so we may distribute ballots. If you have previously voted by a proxy, please do not fill out a ballot unless you wish to change your proxy vote. Anybody in that category? 1

Since there are none—I don’t have to even go through this next one, do I? Good.

The first matter to be taken up is the election of directors. Twelve directors are to be elected today. A nominee will be elected to the Board of Directors if the number of votes cast for such nominee’s election exceeds the number of votes cast against such nominee’s election. If elected, each nominee will serve as a director until the 2017 Annual Meeting and until his or her successor is duly elected and qualified.

The nominees are as follows: James L. Barksdale, John A. Edwardson, Marvin R. Ellison, John C. Inglis, Kimberly A. Jabal, Shirley Ann Jackson, R. Brad Martin, Joshua Cooper Ramo, Susan C. Schwab, Frederick W. Smith, David P. Steiner and Paul S. Walsh.

The next item of business is the proposal to approve, on a non-binding basis, an advisory resolution on named executive officer compensation as follows: Resolved, that the compensation paid to FedEx’s named executive officers as disclosed in the Company’s Proxy Statement for the 2016 Annual Meeting of Stockholders pursuant the to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the accompanying compensation tabled and the related narrative discussion is hereby approved.

Male Speaker:

(Inaudible).

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

No, I think we go through all of these—is that not right? And then we’ll take questions on the proposals.

Male Speaker:

Okay, thank you.

Frederick W. Smith Chairman, President & CEO, FedEx Corp. The next item of business is the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for the fiscal year ending May 31, 2017.

The fourth item of business is the consideration of a stockholder proposal regarding a lobbying activity and expenditure report. I will now ask a qualified representative of the proponents to present the proposal. Please limit the presentation of your proposal to three minutes. First please identify yourself, the institution you represent and the number of shares.

Louis Malizia Clean Yield Asset Management, International Brotherhood of Teamsters General Fund and Newground Social Investment

Mr. Chairman, my name is Louis Malizia and I’m presenting this proposal on behalf of Clean Yield Asset Management and the International Brotherhood of Teamsters General Fund.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

And the number of shares?

Louis Malizia Clean Yield Asset Management, International Brotherhood of Teamsters General Fund and Newground Social Investment

I believe it’s - I’m sure in the statement. I’ll get back to that.

Frederick W. Smith Chairman, President & CEO, FedEx Corp. Well, listen, you’ve been here before and we trust you so we’re going to—

Louis Malizia Clean Yield Asset Management, International Brotherhood of Teamsters General Fund and Newground Social Investment

I’m not …

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

I ASSUME you’re a shareholder. Go ahead.

Louis Malizia Clean Yield Asset Management, International Brotherhood of Teamsters General Fund and Newground Social Investment

I’m not positive the Clean Yield’s numbers.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

That’s all right. Go ahead.

Louis Malizia Clean Yield Asset Management, International Brotherhood of Teamsters General Fund and Newground Social Investment

Mr. Chairman, we believe FedEx has a strong corporate responsibility record demonstrated by the actions of the Company taken on environmental, social and governance issues. Unfortunately, with respect to transparency of its lobbying activities, FedEx is not displaying leadership, a situation our proposal seeks to rectify.

This year’s Proxy currently tells investors where to find its lobbying expenditures each quarter on a Senate database, but there are significant gaps in what that database reveals. What we can piece together from the public record is the following.

In the last 10 years FedEx has spent over $128 million on lobbying, according to the Center for Responsive Politics. To date in this year alone FedEx has spent nearly $3 million, is the 20th largest lobbyist among the more than 3,000 organizations tracked by the widely regarded Center for Responsive Politics. These figures are not complete. They do not include state lobbying expenditures where disclosure is uneven or absent all together, although it is public information that our Company spent over $0.5 million lobbying in California alone in 2014 and 2015. These are significant expenditures from the corporate treasury. What did we spend our time and money lobbying for or against? Why not describe it to investors?

FedEx does not disclose trade association payments used for lobbying, even though the Proxy Statement notes that accounting procedures are in place to record and monitor these expenditures for the organizations. It would be simple to add a list of trade associations to whom you pay significant dues and fees, such as the US Chamber of Commerce and the American Trucking Association and disclose the amount of the payment and the percent of that payment that is spent on lobbying. This would render a far more thorough picture of FedEx’s lobbying priorities than the partial and misleading that currently constitute this company’s disclosure.

We believe the ATA stance on misclassification of workers and the Chamber’s anti-union efforts correlates to the company’s high legal costs associated with FedEx Ground misclassification lawsuits as well as court defeats in National Labor Relations Board challenges. Are these organizations leading FedEx down a treacherous and ill-advised path?

Again, we cannot evaluate the extent of the company’s financial and lobbying commitment because of the lack of transparency.

FedEx is a board member of the US Chamber of Commerce, the country’s largest lobby. Since 1998, the Chamber has spent more than $1.2 billion on lobbying and $85 million in 2015 alone, making it the country’s most active lobby. This is particularly problematic because the Chamber has campaigned to block effective environmental regulation in the US and sued the EPA to stop the Clean Power Plan. If this policy goal is accomplished, it will undermine or even render meaningless FedEx’s hard work to reduce its own carbon emissions from the aircraft and trucking fleets. The Chamber—

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Thank you. That’s your three minutes.

Louis Malizia Clean Yield Asset Management, International Brotherhood of Teamsters General Fund and Newground Social Investment

So we urge fellow shareholders for support of this proposal. Thank you.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Thank you. The next item of business is the consideration of a stockholder proposal regarding simple majority vote counting. I will now ask a qualified representative of the proponent to present the proposal. Please limit the presentation of your proposal to three minutes. First, please identify yourself and the institution you represent and provide the number of shares represented.

Louis Malizia Clean Yield Asset Management, International Brotherhood of Teamsters General Fund and Newground Social Investment

Mr. Chairman, I’m, again, Louis Malizia and I’m standing here on behalf of the Newground Social Investment to move Proposal 5, which seeks a democratic simple majority voting standard for shareholder-sponsored items, one that counts votes cast either for or against but does not include abstained votes in the formula.

It must be pointed out that FedEx’s vote counting policies are not mandated by Delaware law as the Proxy implies. It must also be pointed out FedEx has printed a falsehood in the Proxy; the Company claims that its vote-counting methodology applies identically to management-sponsored proposals and stockholder proposals. However, management-sponsored Proposal 1 which is the Board election uses a simple majority formula that is patently different from how shareholder-sponsored items are counted. The majority of Americans would agree that what’s good for the goose is good for the gander. Applied for FedEx, it would be fair to use the same formula for shareholder-sponsored items as is used for the Board election. In addition, it would make voting both consistent and transparent in contrast to the Company’s stilted two-formula policy which places shareholder items at a disadvantage compared to how directors are elected.

Simple majority voting is superior because it neither distorts the channel of communication from shareholders to management, nor ignores voter intent by unilaterally counting every abstained vote as if against shareholder items.

Judging by the number of shareholder proposals to be voted on today, it is clear that FedEx faces growing concern over a range of its practices, which makes it high time for the Company to embrace this good governance measure that increases fairness, equity and transparency. Therefore, we recommend to vote for this common sense proposal, the same voting standard for shareholder items as is used for the Board. Thank you.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

I should note that the second proposal there was by a different group than the first, right?

Louis Malizia Clean Yield Asset Management, International Brotherhood of Teamsters General Fund and Newground Social Investment

Yes. Newground Social Investments.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Okay. Good. Thank you.

The next item of business is the consideration of a stockholder proposal regarding the Holy Land Principles. I’ll now ask a qualified representative of the proponent to present the proposal. Please limit the presentation of your proposal to three minutes. First, please identify yourself, the institution you represent and provide the number of shares represented.

Father Sean McManus Holy Land Principles

My name is Father Sean McManus representing the Holy Land Principles. God bless America. God bless FedEx. Good morning Mr. Chairman and all present here.

The Holy Land Principles are pro-Jewish, pro-Palestinian and pro-Company. The Principles do not call for quotas, reverse discrimination, divestment, disinvestment or boycotts. The Principles do not take any position on the solutions to the Israeli-Palestinian issue. The Principles do not try to tell the Palestinians or the Israelis what to do. The Holy Land Principles only call for fair employment by companies doing business in Israel-Palestine. Let me repeat that. The Holy Land Principles only call for fair employment by American companies doing business in the Holy Land.

Irrespective of what Americans think about the Palestinian-Israeli issue, one thing is certain: Americans expect American companies in the Holy Land to practice fair employment. Yet, incredibly, before we launched the Holy Land Principles, this issue had never been brought before FedEx or any other American company doing business in the Holy Land.

Our resolution calls for FedEx to set the standard by signing and implementing the Holy Land Principles which are based on the very effective McBride Principles for Northern Ireland.

Now initially, American companies resisted signing the McBride Principles, but now 116 companies, including FedEx—to its credit—has signed the McBride Principles. So why would FedEx or any other American company refuse to sign the Holy Land Principles?

Last year, GE, Corning and Intel tried to get the SEC to exclude the Holy Land Principles from their 2015 proxy materials; however, the SEC, standing for truth, justice and the American way, ruled in favor of the Holy Land Principles.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Father, I hate to say this but you’ve got to wind it up here to be fair to the others.

Father Sean McManus Holy Land Principles

Therefore, you know the Holy Land Principles are reasonable and eminently fair. Please vote for the Holy Land Principles. Thank you.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Thank you. The last item of business is the consideration of a stockholder proposal regarding application of Company non- discrimination policies in states with pro-discrimination laws. I will now ask a qualified representative of the proponent to present the proposal. Please limit the presentation of your proposal to three minutes. As before, please identify yourself, the organization you represent and the number of shares represented.

Christine Jantz NorthStar Asset Management

Good morning. My name is Christine Jantz of NorthStar Asset Management. It’s a socially-responsible investment firm based in Boston, and the beneficial owner of over $5.4 million worth of FedEx Corporation common stock. I am here to present Resolution number 7, a proposal asking for the Company to set in place a plan to protect employee rights and shareholder value.

In recent months, several religious freedoms bills have been introduced or passed in parts of the United States which actively discriminate against LGBT employees of our Company, putting the employees as well as their partners and children at risk of violence and discrimination. We believe that there is real risk to the Company if we fail to consider whether our cherished LGBT employees will survive state-wide discrimination in housing, public accommodation and the accompanying public harassment and humiliation.

Our Company’s policies protecting employees from discrimination are robust. Yet we fear that discriminatory legislation will harm employees’ ability to bring their best selves to work.

Here are some of the many issues we are concerned about: LGBT employees residing in states where they can lose their housing if they choose to marry the person that they love. LGBT employees who face harassment, physical violence because lawmakers in their home state are supporting discriminatory laws. LGBT employees who may be refused service, healthcare and access to public facilities simply because of who they are. Customers refusal to engage with FedEx because a FedEx employee has a perceived sexual orientation or gender identity.

At least 160 CEOs and business leaders have signed a letter organized by the Human Rights Campaign urging Governor Pat McCrory, North Carolina General Assembly to repeal the quote radical provisions in the deeply discriminatory law that was rammed through the legislature. Our Company has yet to take a public stance on these discriminatory laws.

We know that FedEx understands the importance of employee morale and employee retention. Without a pre-emptory plan to protect employees and/or remedy employee harassment, the Company puts itself and shareholder value at risk. We urge you to vote for proxy item number 7.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Thank you. Now, ladies and gentlemen, I would like to open the floor to any discussion regarding these proposals. Any questions or comments relating to any of the proposals should be made at this time, not during the general question and answer period which we will have following the conclusion of the meeting.

Please remember questions or statements that are irrelevant to the business of the Company or repetitious of questions or statements by other stockholders will not be permitted. If there are any questions or comments not directly related to these proposals, please defer them until after the conclusion of the meeting. The audience will be given the opportunity to ask general questions at that time.

Male Speaker:

A question about Proposal 2 on the advisory vote on compensation.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Two minutes is the limit here.

Male Speaker:

Sure. Okay. FedEx compensation structure we believe suffers from several critical flaws including low-ball performance hurdles and an excessive focus on earnings per share, a performance measure that long-term investors increasingly consider a poor proxy for underlying long-term profitability. However, the most worrying factor for us is the Compensation Committee’s decision to strip out

nearly $0.5 billion of legal costs from the earnings measure used to calculate our CEO’s long-term bonus. These charges are not only a significant loss to shareholders but stem from strategic decisions to run a now-failed independent contractor model at FedEx Ground. The fines in other words reflect real operational costs. It should be—we hope that incentivizing long-term sustainable value creation demands that executives are exposed to the downside risk and liabilities incurred by their operational and strategic decisions, even if those costs occur in subsequent periods.

So my question would be to the Comp Committee. Will they agree to include such costs when it calculates payouts under the 2016 to 2017 short-term plan and the 2016 to 2018 long-term incentive awards?

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Let me make a comment or two about your issue and then I’ll ask Mr. Walsh, the Chair of the Compensation Committee, if he wants to add anything on it.

Male Speaker:

Thanks.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

First, the most important thing that you and the other stockholders represented here should know is the Board of Directors of this Company is composed of all independent outside directors other than myself. The Compensation Committee is composed completely of independent outside directors and it employs a very distinguished outside consultant on how it conducts its business.

On the issue that you mentioned in particular, FedEx acquired Caliber/RPS which had been using the business model which provided for individuals to come in and own a route and then develop their business and be successful, which was done many, many times and that particular business model was defended successfully over 100 times. The laws changed, in part because of the involvement of the group that you represent, and the business model that related to the charges you talked about has not been in use in FedEx since 2011.

The compensation structure of the Company is designed to focus on the core operations of the Company. You chose me as an example; the reality is all members of the management subject to the LTI were affected by this decision, but on the other side of the coin, you did not mention the puts and takes on the other sides. For instance, the Compensation Committee yesterday was informed that the vast majority of companies who are repurchasing stock do not take that into account and the people involved in the incentive compensation benefit because the number of shares are declining and the EPS goes up.

The Compensation Committee and the Board excluded those from the calculation of the incentive compensation and I presume your proposal would not suggest to us that we reverse that particular issue.

Male Speaker:

Certainly not.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

So, the point is that the puts and takes involved in the Compensation Committee’s deliberations are just that, puts and takes. But again, it’s done by outside directors with the assistance of very good compensation executives and the answer to your question in short is no, we will not reverse that decision since we have already voted on it.

Paul Walsh, anything you want to add to that? Nothing to add.

Male Speaker:

Okay.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Any other questions on these proposals?

Okay. I believe that concludes the discussion of the proposals. We’ll now have the Inspector of Election give a report on the preliminary voting results, first of all the stockholders who received ballots, marked them and turned them in. If you still have a ballot, please raise your hands so we may pick them up.

I don’t think anybody is in that category to begin with so I assume we now have all the ballots. Accordingly, I hereby declare the polls closed at 8:25AM Central Time on September 26, 2016.

I’ll now ask the Inspector of Election to report on the preliminary voting results for each of the proposals.

John Ruocco Inspector of Election - Assistant Vice President, Senior Relationship Manager, Computershare Trust Company

Mr. Chairman, there are present at this meeting in person or by proxy 236,095,005 shares of the Company’s common stock out of a total of 265,547,382 shares outstanding and entitled to vote.

With respect to Proposal 1, the election of directors, each director nominee received more cast votes for such nominee’s election than against such nominee’s election.

With respect to Proposal 2, the advisory resolution to approve named executive officer compensation, a majority of the shares present in person or represented by proxy entitled to vote have been voted in favor of this proposal.

With respect to Proposal 3, the ratification and the appointment of independent registered public accounting firm, the majority of shares present in person or represented by proxy and entitled to vote have voted in favor of this proposal.

With respect to Proposals 4 through 7, the majority of the shares present in person or represented by proxy and entitled to vote have voted against these proposals.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Thank you, Mr. Ruocco. To summarize the voting results, each of the director nominees has been duly elected to serve as a director of the Company. The advisory resolution to approve named executive officer compensation has been approved. The appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for fiscal year 2017 has been ratified. None of the stockholder proposals have been adopted.

Please note that the voting results announced by Mr. Ruocco are preliminary. Final voting results will be included in a Form 8-K filed with the Securities and Exchange Commission following this meeting.

Now, ladies and gentlemen, that concludes the official business portion of the meeting. There being no further business, the meeting is hereby adjourned and I will conclude with some brief remarks and a corporate overview followed by a general question and answer session.

Fiscal year 2016 was a pivotal year for FedEx Corporation, one that positioned the Company to reach new heights. Overall, we achieved higher growth and profits despite a low-growth economy. We said we would finish FY16 with an annual run rate of $1.6 billion

in FedEx Express additional profit and we did that. We said we would complete the TNT Express acquisition in the first half of calendar 2016 and we did that too. We said we would improve the Corporation’s margins, EPS, cash flows and returns, and we did that as well.

From FY14 through FY16, our stock repurchase program, we’ve returned more than $8.8 billion to share owners. Our strong balance sheet gives us the flexibility to do this, even while continuing to execute on our strategic growth initiatives.

TNT Express, the largest acquisition we’ve made is transformative and strategically significant. TNT will expand our global portfolio of solutions, in Europe particularly, by broadening our pickup and delivery density and lowering operational cost. We expect the acquisition to generate substantial improvements long term in revenue, earnings and share owner value.

Coupling TNT with the FY15 acquisitions of GENCO and Bongo, now rebranded as FedEx CrossBorder, we have dramatically broadened our service offering.

Through our detailed post-acquisition planning process, we will continue to fully integrate TNT over the next few years, and we’d like to say thanks to our hardworking integration teams who are now making this happen. Equally important we’d like to say welcome to the approximately 56,000 TNT team members who have joined FedEx.

Each FedEx major operating company achieved great things in FY16, particularly in the expansion of our networks and technology. At FedEx Express our profit improvement plans, as I mentioned, have been very successful and we intend to further increase Express margins. One way we’re doing this is through fleet modernization. Every aircraft we replace with a new Boeing 767-300 Freighter adds millions of dollars annually to profits because the new planes use 30% less fuel and require less maintenance expense.

At FedEx Ground we’ve nearly tripled our market share over the last 20 years. We continue to widen our competitive advantage by investing in highly automated facilities that quickly process Ground’s growing package volumes.

Also we’ve begun to combine FedEx Ground and FedEx SmartPost networks for greater flexibility. Add to that new routing technology that makes our deliveries more efficient, particularly in residential areas.

FedEx Freight is the less-than-truckload market leader and continues to reshape the LTL industry just as FedEx did in both the Express and Ground segments. We’re offering customers more convenient shipping solutions such as zone-based pricing which allows customers to quickly find a rate for their shipment.

The new FedEx Freight box is a simplified way to ship LTL that increases security and shipment protection, and to more accurately cost and price LTL shipments, we continue to expand our use of dimensional scanners.

At FedEx Services, we continue to sharpen our revenue management and pricing science as well as revamping our information technology. For example, we’re currently evaluating and executing a number of pricing initiatives to help us increase margins and profitability. We are also concentrating on simplifying and modernizing our IT systems to spend less on infrastructure and upgrades and to lower costs over time.

Our team members around the world enable these achievements by delivering the FedEx Purple Promise which states simply, “I will make every FedEx experience outstanding.” We thank them for their commitment and hard work. These efforts, I might add, resulted in FedEx placing number eight on Fortune’s Most Admired Companies list. We intend to continue to improve the efficiency and reliability of our global networks which position FedEx to better provide innovative solutions to meet the growing demands of e-commerce. In this regard, if e-commerce trends continue, 2016 will be the seventh consecutive year that online sales grew about 15% year-over-year. In 2018, e-commerce is forecasted to reach a worldwide merchandise value of $2.4 trillion, a 26% increase over this year.

In turn, we’re constantly expanding FedEx network capacity to handle such increases in e-commerce-generated shipments. Our operating companies are positioned to smoothly handle the upcoming peak season and ongoing e-commerce growth. For example, FedEx Office is preparing for large volumes of e-commerce shipments while making it easier for customers to pack, ship and pickup packages, and we’re also piloting neighborhood third-party retail locations for additional customer convenience.

With acquisitions and network growth, we’ve expanded our presence in the world and we recently announced that our original color scheme of purple and orange will now be applied to all our operating companies’ logos. Coincidence, I might add, had TNT using the exact color purple that FedEx uses. Research has shown that this is the color combination most customers associate with FedEx and we’ll complete this transition to the standard purple and orange logo in phases over the next five years.

Summarizing FY16 in a sentence, I think we could say we’ve done what we said we’d do in terms of financial performance and acquisitions, along with network enhancements and technology improvements. At FedEx, we have the ability to pick up, transport and deliver an item to and from 95% of the human beings on the globe within one to two business days. Every time we add a node to our network, a hub, a station, that node is connected to every other node, resulting in an exponential increase in the number of potential connections. After all, as we often say, the business of FedEx is to connect people and possibilities around the world. With all we’ve accomplished in FY16, we’re now ready to build on our achievements to create even greater success for our shareowners, our customers and our teammates.

Let me now turn to a few organizational items.

First, as I mentioned earlier, Gary Loveman is retiring from our Board today after nine years of service. He was here yesterday doing his duty on his committee assignments. Let me again thank Gary for his contributions and unwavering focus on increasing shareholder value over his nine years of service. We wish him great success in his new position at Aetna.

Mike Glenn, our Executive Vice President of Marketing, Sales and Corporate Communications, and CEO of FedEx Services, has advised us he will retire on 31 December of this year. Mike has worked for FedEx for 35 years and with me directly for 25 years. I have to tell you, our association has been one of the most pleasant and enjoyable of my business career. I will miss Mike greatly. His office is next to mine and our almost daily interactions have been a source of great intellectual interest and enjoyment for me. No one has been more responsible for FedEx’s growth and success than Mike, and he is admired and respected throughout the FedEx ranks, within our industry and in the overall business community. Mike was the architect of many of the FedEx strategies, initiatives and programs that have literally changed the world’s commerce. There is no one I admire more as a colleague and as a man. Mike’s integrity, intelligence, work ethic, professional knowledge, team orientation and commitment to the highest values are simply inspirational.

In this regard, as many within FedEx and outside the Company know, Mike and his wife Donna, who’s sitting here in the audience, have for many years dealt with the significant challenge of raising a special needs child. Tucker, Mike and Donna’s oldest son, is here, and of course the requirements of dealing with his sister have been a great challenge to this family. It is a measure of the man that Mike has decided he must devote even more time to his child’s wellbeing and care. I think no other thing Mike has done demonstrates his great character than this commitment to his family.

I will have more to say about Mike on his last analyst call in December, and I can assure you Mike will stay involved with FedEx in some meaningful way, but his unique skills require we make related organizational changes when he leaves active FedEx service. Before I announce those, though, I’d like for Mike to stand up here. Where is he?

Now, regarding the organizational changes related to Mike’s retirement in a few months, first, our Executive Vice President and Chief Information Officer and the current Co-CEO of FedEx Services, Rob Carter, will become the FedEx Services’ CEO and oversee the administration of the common IT sales solutions, marketing and corporate communications services that are provided for our operating companies.

Second, given the increased breadth of FedEx global operations given the TNT acquisition, Raj Subramaniam, our EVP of Marketing and Corporate Communications, and Don Colleran, EVP of Sales and Solutions, both of whom now report to Mike Glenn, will become members of the Strategic Management Committee, increasing that group from 10 to 11 officers. That will be effective on 1 January of ’17. David Bronczek, the President and CEO of FedEx Express, will become President and Chief Operating Officer of FedEx Corporation in 15 months, on 1 January ’18. In the interim, Dave will chair our Revenue Management Committee upon Mike Glenn’s retirement December 31. When Dave assumes the FedEx Corporation President and COO role, the FedEx Express, FedEx Ground and FedEx Freight CEOs will report to him, along with Raj, Don Colleran and Gloria Boyland, our Corporate Vice President of Operations, Support and Services. At that time, Finance, Legal, IT and our Corporate Vice President of HR will continue to report to me as the Chairman and CEO.

These sequential changes will ensure continuity of our most important project within FedEx at present, the integration of TNT, which Dave Bronczek has overseen and will continue to do so over the critical 18 months following the acquisition which was made, I think, on June the 4th, last June. This will also allow Dave to ensure the new combined FedEx/TNT executive team is functioning well before handing over FedEx Express to its new CEO, who will be named in the fall of 2017.

So, thank you very much for those 35 years of incomparable service, Mike, and I just—words can’t express the appreciation we have for you and Donna and all the things you’ve meant to FedEx.

So, now let me turn the floor over to any questions from anybody in the audience. State your name and who you represent, please.

Robert Barry International Brotherhood of Teamsters

Okay. Mr. Chairman, my name is Robert Barry. I am proxy for the International Brotherhood of Teamsters, Local 710 Pension Fund, but I am also a Charlotte FedEx Freight employee of seven years.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Not from Charlotte, I take it.

Robert Barry International Brotherhood of Teamsters

I’m from Charlotte, yes.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Are you?

Robert Barry International Brotherhood of Teamsters

Yes, Charlotte FedEx Freight employee seven years, currently 2388567. I’m here today to raise to the Board of Directors and the shareholders a serious issue that I believe affects all of us at FedEx. It’s the lack of affordable healthcare. As a cancer survivor who is 151 days in remission, it is an issue close to my heart and my family’s heart. Your high deductible plan implemented in 2014 has caused a burden on me and my co-workers’ families. It has been noted in the Commercial Appeal, a Memphis newspaper, that the change was designed to slow down one of the Company’s fastest growing expenses. The article is called “FedEx Shifts Gears on Healthcare.”

We are the people who helped this $50 billion corporation be so successful, and what was once a benefit is now a burden to me and more of your co-workers than you know about. I have incurred over $13,900 in the last two years in medical expenses, including out-of- pocket costs and payroll deductions off our weekly pay checks. Our weekly payroll deductions have risen 76% since 2010. This is a concession of 76%. In 2017, that will rise to 84% concession being deducted out of our weekly pay checks. Deductibles have risen 380% since 2010, another employee concession here at FedEx.

Mr. Chairman, you seem to find plenty of money to support a race car, a race team, a major golf tournament, a football stadium, of which you have a conflict of interest by being part owner of that team, but taking care of your employees, you can’t seem to find the resources. Thank God I voted for the Teamsters and we won our election in Charlotte because the Teamsters helped me in a time of need by raising money for me and my family to help me with that $13,000 that FedEx let me down on. Your health plan let me down. When are you going to start putting people first, Mr. Chairman?

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

So, let me—thank you, you can sit down now, if you want to. Thank you. I’m certainly sorry you had the illness in your family, but as I said last year at this meeting, the basic reason that companies like FedEx—and we are just one among thousands and thousands who have moved to higher deductible plans—is because of the Affordable Care Act that was passed several years ago, with the support, I might add, of the International Brotherhood of Teamsters. The Affordable Care Act was designed to do something very simple. It was designed to take money from people who had good healthcare plans, or could afford them and chose not to buy them, particularly, young, healthy people, and move that money over to people who could not afford healthcare or could not get it. It’s just that simple.

Second, you leave out an important aspect of our healthcare plan, and that is the savings accounts which we put in place every year that allow you to help mitigate some of those deductible expenses.

Now, to the comment—you had your two minutes. That’s the rules of the meeting. Now, the most important thing, presuming that you want to continue to work at FedEx—and I presume you do, because you have the interest to come here—the most important thing that we can do for you and the people of FedEx is to generate lots of freight, lots of packages and lots of revenue that provide the wages and benefits that allow us to do things like, over the last two years, we had no increase last year in our healthcare costs, borne by employees, and this year—where’s Judy Edge here? How much is it? Four point three percent this year.

So, I am sure—are you driver? I’m sure you’re a great driver. We’re doing our best to give you the best technology, the safest equipment, and so forth. So, please give us the credit that we’re not idiots on spending money on race cars, on sports sponsorships, or whatever the things that you just listed, for no good reason. Mike Glenn, who’s one of the greatest marketeers in current American history, and the most expert person in sports marketing, will tell you that every dollar that we spend on those sports marketing is designed to produce the traffic that you transport in your truck. So, that is simply—you do not know how business operates, if you want us to quit having customer hosting and advertising.

So, within the context of the Affordable Care Act, we think we have done a good job of trying to balance the needs of our employees with the needs of the Company. So, that’s the answer to your question.

Next question.

Mike Thiemer Almaga Trust Company

Mr. Chairman, Mike Thiemer, FedEx road driver, South Brunswick, New Jersey, representing the proxy of Amalga Trust Company, 145 shares. As far as a follow-up to Mr. Barry there—

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

It’s not a salvo, it’s an answer to the question.

Mike Thiemer Almaga Trust Company

The Affordable Care Act, sir, okay? We’re self-insured. My name is Mike—

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Wait a minute, I’m not sure you understand what I just said. The Affordable Care Act—well, you go ahead and make your points here.

Mike Thiemer Almaga Trust Company

Do I get my time back?

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

You can get your time back. I’ll give you 15 seconds more. How about that?

Mike Thiemer Almaga Trust Company

Thank you. We would like to know why our healthcare is driving so many employees into bankruptcy. We are a Fortune 500 Company and a Top 100 Company to work for. With that being said, we must ask ourselves why the average tenure with FedEx Freight is only seven to 10 years. Why are there so many fund raisers going on for co-workers if our healthcare is so good? That being said, the word around FedEx is FedEx gives and FedEx takes back. Every time we get a raise, our healthcare costs go up. For us to be considered a Cadillac plan, we would exceed $27,000. The average cost by the Company per driver is $14,000. That gives the Company a $13,000 leeway to raise our healthcare better and lower our deductible. If the union carriers can do this, why can’t FedEx?

I have a co-worker who recently was diagnosed with multiple myeloma. Along with a heavy dose of chemotherapy once a week, his kidneys have also been affected and he undergoes five hours of dialysis procedure three times a week. Disability is 60% of his pay, which already makes a loss of 40%. His wife does not work, and even if she did, she would have to go on FMLA to take care of him. Then the bills come in before he even leaves the hospital. That’s when people start putting these charges on their charge cards and getting into trouble with the credit card companies and filing bankruptcy.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

That’s your two minutes plus your 15 seconds. Thank you very much.

Mike Thiemer Almaga Trust Company

Thank you.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

So, let me go to the comment that he made about the Affordable Care Act. When the Affordable Care Act was originally passed, again, with the strong support of organized labor, including the International Brotherhood of Teamsters, they put in a provision called the Cadillac Tax, and what that meant was the Cadillac Tax kicked in as an excise tax when healthcare plans reached a certain level. So, the design of our healthcare plan, after the ACA, was done on the assumption that that would be put in place in 2018, and the cost of the program would be related to our hitting the Cadillac healthcare excise tax in 2018, which is a 40% tax. Congress, was it last year, changed the bar and moved that to 2020, which is one of the reasons that we had no healthcare increases last year and a very small healthcare increase this year.

The examples you had are absolutely tragic, but our statistics show that the people who use up the maximum healthcare of their family, and their deductibles and maximum out-of-pocket, is 0.007, so it is a tiny percentage. We, every year, look at our—our Benefits Steering Board looks at these benefits, costs and benefits trade-off, and will continue to do so, but it’s incorrect to say that the wage increases which we are providing for our employees, on average, are being eaten up by the healthcare plan. That’s just factually incorrect.

Of course, again, a tragic situation like you described, our hearts go out to them. We all wish that human life didn’t have the kind of bad draws of the cards that that person had. But, again, the Affordable Healthcare Act has driven all of this. One of the things that you 13

don’t hear—you were talking about spending money one way or another. Alan Graf, our CFO, how much did we pay in new taxes as a result of the Affordable Care Act into that provision? Wasn’t it $60 million? It’s tens of millions of dollars. So, that money went from FedEx to pay for people who didn’t have healthcare or couldn’t afford it. Maybe the Benefits Steering Committee, if it had—I think the number is $60 million, that sticks in my mind. Maybe it’s not far off that, it’s about right—our Chief of Accounting. If we had that $60 million back, then maybe we would have put it into a lower deductible, or whatever the case may be.

So, it’s just not as simple as you say, and many of the plans that you’re comparing it to are legacy plans, which I can assure you, if the Cadillac Tax comes into effect, are not going to stand, any more than the Central States Teamsters Pension Plan stood, which is underfunded to an incredible degree. Stuff happens and you have to manage events the way they’re dealt to you, and we’ve done the best job that we can, and I think we’ve done a fair job.

Other questions.

Jorge Lopez SPIU General Fund

Mr. Chairman, my name is Jorge Lopez, a proxy for SPIU General Fund. I am a seven-year FedEx Freight driver from Stockton, California. The issue I would like to address to the shareholders and Board of Directors is a serious issue at our facility.

Back in 2015, in March, my co-workers and I chose to exercise our federal right to unionize and won overwhelmingly our election. It’s been a year-and-a-half and we have yet been able to sit down and bargain a fair contract. During that time, Stockton FedEx Freight management has accrued numerous unfair labor charges filed with the National Labor Relations Board, to which we have prevailed on every count.

Mr. Chairman, will you commit management to seriously engage the union and bargain in good faith, as it is required by federal law?

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

So, you are discussing a legal issue and, accordingly, I’ll ask the General Counsel to answer it.

Christine P. Richards EVP, General Counsel & Secretary, FedEx Corp.

All of our actions in connection with the actions at Stockton are in accordance with the requirements of the law under the National Labor Relations Act. We have proceeded through the process. We have responded to every unfair labor charge that has been made, and I respectfully disagree with your characterization of the outcome of those matters. The Company stands ready and willing to bargain in good faith, but we are proceeding through the process to exercise our rights as permitted under that law. We appreciate you coming today and making this question.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Any other questions?

Patrick Harrington Southwest Capital Pension Fund

Mr. Chairman, my name is Patrick Harrington. I am a proxy for the Southwest Carpenters Pension Fund. I am a 21-year road driver for FedEx Freight in Charlotte, North Carolina. I want to raise an issue that is deeply troubling to me, my co-workers and I, our retirement security. Our portable pension, which we started in 2008, is calculated on a minimum of six factors by FedEx, which includes the performance of the Company, which allows for reductions, but as far as I can tell, not increases. There is absolutely no healthcare benefit available to us in retirement. We have drivers and dock workers that, because of this lack of medical coverage, medical bills could easily drown out monthly pension checks which, incredibly, could be as low as $355 per month for an employee with 30 years of service to this Company. My own pension benefit as of last week is $142 a month after 21 years of service. 14

Mr. Chairman, will this Company commit to reinstalling a defined pension plan, or working with employees to set new parameters to our existing plan, that will allow employees to retire with dignity and respect for the jobs we perform faithfully every day?

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Let me ask you one question. Are you a former Watkins driver?

Patrick Harrington Southwest Capital Pension Fund

No, sir, an American Freightways driver.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

American Freightways driver? Well, I can’t answer the particular question about the $300 you’re talking about. You’re taking an isolated example, which is the same situation over here. We, unfortunately, can’t manage a company with 470,000 people by anecdote in an untoward issue, but to the best of my knowledge, our pension plan is extremely well funded, it’s an excellent plan, and, again, I point out you compare that to the Central States Teamsters Plan, which is going to run out of money in 10 years and people are looking, if anything, at getting 40% of their value.

So, if you’ll send your particular inquiry in, we’ll be glad to answer it to you, but I can’t answer a specific question like that standing up here today, sorry.

Patrick Harrington Southwest Capital Pension Fund

Thank you, sir.

Michael Thomas Indianapolis Hub

Good morning. My name is Michael Thomas. I’m a ramp agent in the Indianapolis Hub. My question is not about healthcare. With the acquisition of TNT that you talked about, do you know if there’ll be any expansions going on within the US network to compensate for that additional volume, or will most of that stay over there, or is it too soon to tell?

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

No, there’ll be significant expansions in the US because of that, and specifically in Indianapolis. As you may know, we’ve asked for a PILOT, for a significant expansion of the equipment installed in Indianapolis—I think $170 million—and related facility expenses will make that expansion, if it’s approved, $300 million. So, that’s on the griddle right now and exactly where you work.

The acquisition of TNT is designed to do exactly what you said. It’s designed to produce more volume for, in this particular case, with FedEx Express. That’s what business is all about. That’s why we sponsor NASCAR. That’s why we acquired TNT. We’re trying to make business decisions that allow us to grow the Company, increase profitability, and we are committed to making that something that’s good for our teammates, too. So, it will definitely be a good thing for Indianapolis, that I can assure you.

Michael Thomas Indianapolis Hub

Thank you.

Mel Mendieta Service Employees International Union Pension Masters Trust

Mr. Chairman, my name is Mel Menditea. I’m a proxy for Service Employee International Union Pension Masters Trust. I’m a 26-year city driver out of Stockton, California. I’m here to address the shareholders and members of the Board about management’s lack of respect for freight drivers on a day-to-day basis. For example, they’re forcing us to use our personal cell phones to conduct day-to-day business. Another one that’s kind of disturbing is our Service Center Manager. Just a couple of weeks ago, on Employee Appreciation Week, he barbecued expired hamburgers, causing some of our drivers to get sick.

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

That’s rough, I’ll tell you. I had a lot of bad food in the Marine Corps, but I can tell you, bad hamburger is no good. Go ahead.

Mel Mendieta Service Employees International Union Pension Masters Trust

Especially while the surrounding Service Centers are having barbecued steak, chicken, taco bars, et cetera. This is one of the main reasons I voted for the union representation to sit down and hammer out a fair agreement and address the needs of the drivers and the Company. To date, my co-workers and I have been frustrated by management’s lack of commitment to collective bargaining. First, they’re not recognizing a majority election for Teamster representation by exhausting legal channels to overturn our vote and then making it difficult for drivers to participate in negotiations by making impossible schedules, demands, and barely spending any time at the actual table to discuss proposals.

I have here over a thousand, maybe 1,500 signatures across the country, if I can leave them with you.

Mr. Chairman, will you commit management and seriously engage in the union bargaining in good faith, as required by federal law?

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Well, first of all, I’m not going to accept any thousand signatures from anybody in this room. If you want to get me, you can email me. There are all kinds of channels to do that. The Corporate Secretary has already answered the question that you just posed.

Christopher Bushmire Chevy Chase Trust

Mr. Chairman, Christopher Bushmire, representing Chevy Chase Trust, and 89,605 shares. The question is to the General Counsel, and it was alluded to by one of the employees, about the anti-worker, anti-union campaign. It is accurate that our Company has not prevailed at any level of any litigation, or anything referenced to the collective rights and the collective bargaining of the employees. We’ve spent millions and millions and millions of dollars on this, to the point where, just on September 22, the NLRB put a decision that said the real damage is done by permitting the kind of sandbagging that FedEx has gotten away with here. When will we stop sandbagging our employees’ rights to their freedom of speech and freedom of association and put those millions of dollars back into the Company and invest in our employees?

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

That question has been asked by two preceding people and answered. You’re certainly welcome to make these questions, they’re political statements, and we’re going to give you the same answer. You’re involved in a legal process and the legal process always has two sides. Ms. Richards represents the Company’s side. Presumably, the IBT represents the other side. So, it is where it is.

Next question.

John Curran New York Carpenters Pension Fund

Hello, my name is John Curran, I represent the New York Carpenters Pension Fund. Over the past six years, shareholders have provided over $2.7 million in personal security benefits to our top executives. This is over and above nearly $1 million for personal use of corporate aircraft. The $300,000 or so the CEO receives annually is the largest security perks in corporate America, while our named executives are paid amounts above the median S&P 500 CEO. Worth nearly $4 billion, I’m sure the CEO has more to lose than the average person from a burglary, but it’s less than clear why shareholders should be paying to keep his billions safe. Accordingly, can the Compensation Committee explain why the payments are vital to attracting and retaining executives when our closest competitor, UPS, provides no such benefits?

Frederick W. Smith Chairman, President & CEO, FedEx Corp.

Well, a couple of things here. First of all, a famous man one time said anybody’s entitled to their own opinion, but nobody’s entitled to their own set of facts, and the facts you just relayed are incorrect. I pay out of my pocket, as described in the Proxy, for personal use of the airplane. The only exception to that if somebody is accompanying me, and the Tax Department concludes that that person, usually my wife, to an event for a Company matter, is subject to the US Federal Aviation tax for tickets, but any purely personal use for the airplane, I pay for, and I think that was $367,000.

Second, as to the personal security and the compensation, let me get to the latter first. As I mentioned, our Compensation Committee is composed of completely independent directors. We have no relationship, other than the fact that they govern the compensation of the executives. Despite the Teamsters putting a letter out to attempt to persuade shareholders to vote against Say on Pay, our compensation program, do you know what the percentage of votes were for our compensation program? It’s about 95%, as of the votes a few minutes ago, 95%.

Third, in terms of the personal security situation, most of that is security that has to, under the rules, be provided when somebody is driving me around from one place to another, including today. We have 35,000 employees in the local area and around. That’s what the Security Department says they want to do. It’s done with the advice of a professional security firm. That’s what I agree to let them do. It’s as simple as that.

Last, we don’t have compensation any place close to the levels that you’re talking about. Our base compensation for our named executive officers—and we looked at this just yesterday in the Comp Committee—is about at the 50 percentile of the market for our Company. Now, we can make it up to the 75 percentile or get up to the 100 percentile, but your facts are just incorrect. So, that’s the answer to your question.

Other things?

Okay, well, we appreciate everybody being here today and with that, we’ll adjourn the meeting. Thank you. See you next year, God willing.