Exhibit 4.1

 

FedEx Corporation

 

INCENTIVE STOCK PLAN

(AS AMENDED)

 

1.                                       Purpose

 

The purpose of the FedEx Corporation Incentive Stock Plan (the “Plan”) is to aid the Company and its subsidiaries in securing and retaining key employees and directors of outstanding ability and to motivate them to exert their best efforts to achieve the long-term goals of the Company and its subsidiaries.  The Company believes that the ownership or increased ownership of the Company’s Common Stock by employees and directors will further align their interests with those of the Company’s other stockholders and will promote the long-term success of the Company.

 

2.                                       Definitions

 

Unless the context clearly indicates otherwise, for purposes of the Plan, the following terms shall have the respective meanings indicated below:

 

“Award” means an award granted under the Plan, which may be in the form of Restricted Shares or a Stock Option.

 

“Board of Directors” means the Board of Directors of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended.  A reference to any provision of the Code shall include reference to any successor provision of the Code.

 

“Common Stock” means the common stock, par value $0.10 per share, of the Company.

 

“Company” means FedEx Corporation, a Delaware corporation.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.  A reference to any provision of the Exchange Act or rule promulgated under the Exchange Act shall include reference to any successor provision or rule.

 

“Incentive Stock Option” means a Stock Option or portion thereof that is intended to be an “incentive stock option” within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

 

“Non-Management Director” means a member of the Board of Directors who is not an employee of the Company or any of its subsidiaries.

 

“Non-Qualified Option” means a Stock Option or portion thereof that is not an Incentive Stock Option.

 

 

“Participant” means any individual who receives an Award.

 

“Restricted Shares” means shares of Common Stock granted under the Plan that are subject to certain restrictions as provided in Section 8 .

 

“Restricted Stock Award” means a grant of Restricted Shares under the Plan.

 

“Stock Option” is a right granted under the Plan to purchase a specified number of shares of Common Stock at a specified price.  A Stock Option may be an Incentive Stock Option or a Non-Qualified Option.

 

3.                                       Term of the Plan

 

The Plan shall be effective as of the date on which it is approved by the Company’s stockholders.  Unless the Plan is earlier terminated in accordance with the provisions hereof, no Award shall be granted under the Plan after May 31, 2013, but outstanding Stock Options and restrictions on Restricted Shares may extend beyond such date.

 

4.                                       Administration of the Plan

 

(a)                                   The Committee .  The Plan shall be administered by those members, not less than two, of the Compensation Committee of the Board of Directors, each of whom qualifies as both an “outside director” within the meaning of Section 162(m) of the Code and a “non-employee director” as defined in Rule 16b-3 under the Exchange Act (the “Committee”).

 

(b)                                  Authority of the Committee .

 

(1)                                   Subject to the provisions of the Plan, the Committee shall have sole and complete authority and discretion to: (i) select Participants and make Awards; (ii) determine the types of Awards and the number of shares of Common Stock covered by Awards; (iii) establish the terms, conditions, restrictions and other provisions of Awards; and (iv) amend, modify, cancel or suspend Awards.

 

(2)                                   The Committee shall have sole and complete authority and discretion to interpret the Plan and all agreements and other documents and instruments relating to Awards, to adopt, amend and rescind rules for the administration of the Plan and to make such other determinations and take such other actions that it deems necessary or advisable for the effective administration of the Plan.

 

(3)                                   All decisions of the Committee relating to the Plan or any Award shall be final, conclusive and binding on all persons.  Committee decisions shall be made by a majority of its members present at any meeting at which a quorum is present.  Any decision reduced to writing and signed by all of the members of the Committee shall be as fully effective as if it had been made at a meeting duly held.

 

(c)                                   Limitation of Liability .  Neither the Board of Directors nor the Committee, nor any member of either, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with the Plan or any Award.

 

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5.                                       Types of Awards

 

The Committee may grant Stock Options and Restricted Shares under and subject to the provisions of the Plan.

 

6.                                       Stock Subject to the Plan

 

(a)                                   Restricted Shares .  The maximum number of shares of Common Stock available to be issued under the Plan pursuant to Restricted Stock Awards is 1,250,000 shares (subject to adjustment as provided in Section 14 ).

 

(b)                                  Stock Options .  The maximum number of shares of Common Stock that may be optioned and sold under the Plan pursuant to Stock Options is 12,500,000 shares (subject to adjustment as provided in Section 14 ).

 

(c)                                   Restoration of Shares .  To the extent any shares of Common Stock covered by an Award are forfeited, not issued or cease to be issuable for any reason, including, without limitation, because the Award is terminated, canceled or expires unexercised, then the shares of Common Stock subject to such Award may again be used for further Awards under the Plan.

 

(d)                                  Source of Stock .  Shares of Common Stock issued under the Plan may consist, in whole or in part, of authorized but unissued shares or treasury shares.  No fractional shares of Common Stock shall be issued under the Plan.

 

7.                                       Eligibility and Participation in the Plan

 

(a)                                   Eligible Recipients .  Unless otherwise determined by the Committee,

 

(1)                                   key employees, including officers, of the Company and its subsidiaries who are from time to time responsible for the management, growth and protection of the business of the Company and its subsidiaries are eligible to receive Restricted Shares and Stock Options; and

 

(2)                                   Non-Management Directors are eligible to receive Stock Options, but not Restricted Shares.

 

(b)                                  Grant of Awards .  The Committee shall, in its sole and complete discretion and subject to the provisions of the Plan, (1) select from time to time the employees, from among those eligible, who shall receive Awards, (2) determine the type of Award to be granted and (3) determine and establish the terms, provisions, conditions and restrictions of each Award, including the number of shares of Common Stock subject to the Award.  Subject to the provisions of the Plan, Awards may be granted singly or in combination with other Awards or in combination with, in replacement of, as alternatives to or as the payment form for grants or rights under any other compensation plan, contract or agreement of the Company or any subsidiary.  Non-Management Directors may be granted Stock Options as provided in Section 9(d) .

 

(c)                                   No Right to Receive Award .  No employee or Non-Management Director shall have any right to receive an Award or, having received an Award, to receive a future Award.

 

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(d)                                  Rights of Employees and Others .

 

(1)                                   Neither the Plan nor any Award shall (i) confer upon any employee or Non-Management Director any right to remain employed by, or to continue to provide services to, the Company or any subsidiary, (ii) limit in any way the right of the Company or any subsidiary to terminate any individual’s employment by or service on behalf of the Company or any subsidiary, whether or not such individual is a Participant, or (iii) require the Board of Directors to nominate any director for reelection by the Company’s stockholders.

 

(2)                                   No person shall have any rights or claims under or pursuant to the Plan except in accordance with the provisions of the Plan.

 

8.                                       Provisions Applicable to Restricted Stock Awards

 

(a)                                   Terms, Conditions and Restrictions .  The Committee shall establish the terms, conditions, restrictions and other provisions of each Restricted Stock Award. Unless otherwise specified by the Committee, shares subject to a Restricted Stock Award shall be restricted for a period of at least one year and not more than ten years (the “Restriction Period”).  Except as provided in Section 8(g) below, the Participant must remain employed by the Company or a subsidiary during the Restriction Period or otherwise forfeit all right, title and interest in and to the Restricted Shares.  Notwithstanding the foregoing, if a Participant retires at or after the age of 55, but before the age of 60, the Restriction Period shall continue after the Participant’s retirement in accordance with the terms of the Restricted Stock Award or until the earlier to occur of the events described in Sections 8(g)(3) and (4) below.

 

(b)                                  Agreements; Stock Legend .  Each Restricted Stock Award will be evidenced by a written agreement, in such form as may be specified by the Committee, issued by the Company and setting forth the terms, conditions, restrictions and other provisions of such Award.  As a condition to receiving a Restricted Stock Award, each proposed recipient must execute and deliver such agreement to the Company.  Certificates for Restricted Shares may, if the Committee so determines, bear a legend referring to the restrictions and the instruments to which such shares are subject.

 

(c)                                   Rights with Respect to Shares .  A Participant who receives a Restricted Stock Award shall have all rights of ownership with respect to such underlying shares of Common Stock, including the right to vote such shares and to receive any dividends paid thereon, subject, however, to the provisions of the Plan, the agreement relating to the Restricted Stock Award and any legend on the certificate for such shares.  Until such time as any restrictions imposed pursuant to Section 8(a) on any Restricted Shares shall terminate, the Company or its designee will hold the certificate(s) for such Restricted Shares in escrow on such Participant’s behalf.

 

(d)                                  Transferability Restriction .  Shares of Common Stock subject to a Restricted Stock Award may not be sold, pledged, assigned, exchanged, encumbered, hypothecated, transferred or disposed of in any manner during the Restriction Period applicable thereto.

 

(e)                                   Additional Shares Received With Respect to Restricted Shares .  Any shares of Common Stock or other securities of the Company received by a Participant as a stock dividend

 

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on, or in connection with a stock split or combination, share exchange, reorganization, recapitalization, merger, consolidation or otherwise with respect to, shares of Common Stock received as a Restricted Stock Award shall have the same status, be subject to the same restrictions and bear the same legend, if any, as the shares received pursuant to the Restricted Stock Award.

 

(f)                                     Tax Reimbursement .  In the sole discretion of the Committee, any agreement relating to a Restricted Stock Award may provide for a tax reimbursement cash payment to be made by the Company in favor of any Participant in connection with the tax consequences resulting from a Restricted Stock Award, the lapse of restrictions on any Restricted Shares or the payment by a Participant of any taxes related thereto, subject to such conditions as the Committee may specify.

 

(g)                                  Lapse of Restrictions .  Unless otherwise determined by the Committee, any restrictions imposed pursuant to Section 8(a) on Restricted Shares shall terminate with respect to such shares on the earliest to occur of the following, provided , that no restrictions shall lapse less than six months from the date of award in the event of (2) and (3) below, unless otherwise specified by the Committee:

 

(1)                                   the expiration of the Restriction Period (including pursuant to Section 15(b)(1) below);

 

(2)                                   the Participant’s retirement at or after the age of 60;

 

(3)                                   the Participant’s permanent disability; or

 

(4)                                   the Participant’s death.

 

Upon the termination of such restrictions, the certificates for such shares of Common Stock shall be released from escrow and delivered to the Participant or, in the event of the Participant’s death, the Participant’s personal representative and any legend on such certificates shall be removed.

 

9.                                       Provisions Applicable to Stock Options

 

(a)                                   Limit on Awards .  No Participant shall receive Stock Options for more than 600,000 shares of Common Stock during any fiscal year of the Company.

 

(b)                                  Agreements .  Each Stock Option will be evidenced by a written agreement, in such form as may be specified by the Committee, issued by the Company and setting forth the terms, conditions and other provisions of the Stock Option, including the number of shares of Common Stock covered by the Stock Option, the exercise price per share, the term of the Stock Option and the vesting schedule.  A Participant may not exercise a Stock Option until he or she executes and delivers such agreement to the Company.

 

(c)                                   Terms and Conditions .  All Stock Options shall be subject to the following terms and conditions and to such other terms and conditions consistent with the terms of the Plan as the Committee shall determine:

 

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(1)                                   Option Price.   The exercise price per share shall be determined by the Committee, but shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant.  The “Fair Market Value” of the Common Stock on a particular date shall mean, for all purposes under the Plan, the average of the high and low sales prices of the Common Stock as reported on the New York Stock Exchange composite tape on that date.  In the event that such method for determining Fair Market Value is not practicable, then the Committee shall determine the Fair Market Value of the Common Stock in such manner as it deems appropriate.

 

(2)                                   Time of Exercise of Option.   Unless otherwise determined by the Committee, each Stock Option shall be exercisable during and over such period ending not later than ten years from the grant date.  Unless otherwise determined by the Committee, no Stock Option shall be exercisable prior to the first anniversary of the grant date, except as provided in Sections 9(c)(4) and 15(b)(2) below.

 

(3)                                   Method of Exercise and Payment.   Each Stock Option may be exercised by giving written notice to the Company specifying the number of shares to be purchased and accompanied by payment in full (including applicable taxes, if any) in cash therefor.  No Stock Option shall be exercised for less than the lesser of 50 shares or the full number of shares for which the Stock Option is then exercisable.  No Participant shall have any rights to dividends or other rights of a stockholder with respect to shares subject to his or her Stock Option until he or she has given written notice of exercise, paid in full for such shares and, if requested, given the representation described in Section 10 below.

 

(4)                                   Rights After Termination of Employment.

 

(i)                                      Retirement .   Unless otherwise determined by the Committee, if a Participant’s employment or directorship terminates by reason of his or her retirement, the Participant’s Stock Option will continue to vest in accordance with its terms and may be exercised until the expiration of the stated period of the Stock Option; provided , however , that if the Participant dies after such termination of employment or directorship, any unexercised Stock Option, to the extent to which it was exercisable at the time of the Participant’s death, may thereafter be exercised by the legal representative of the estate or by the legatee of the Stock Option under the last will for a period of twelve months from the date of the Participant’s death or the expiration of the stated period of the Stock Option, whichever period is the shorter.

 

(ii)                                   Disability .   Unless otherwise determined by the Committee, if a Participant’s employment or directorship terminates by reason of permanent disability, the Participant’s Stock Option may thereafter be exercised in full (except that no Stock Option may be exercised less than six months from the grant date) for a period of twenty-four months from the date of such termination of employment or directorship or the stated period of the Stock Option, whichever period is the shorter; provided , however , that if the Participant dies within a period of twenty-four months after such termination of employment or directorship, any outstanding Stock Option may thereafter be exercised by the legal representative of the estate or by the legatee of the Stock Option under the last will for a period of twelve months from the date of the Participant’s death or the expiration of the stated period of the Stock Option, whichever period is the shorter.

 

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(iii)                                Death .   Unless otherwise determined by the Committee, if a Participant’s employment or directorship terminates by reason of the Participant’s death, the Participant’s Stock Option may thereafter be exercised in full by the legal representative of the estate or by the legatee of the Stock Option under the last will for a period of twelve months from the date of the Participant’s death or the expiration of the stated period of the Stock Option, whichever period is the shorter.

 

(iv)                               Other .   Unless otherwise determined by the Committee, if a Participant’s employment or directorship terminates for any reason other than death, retirement or permanent disability, the Participant’s Stock Option shall thereupon terminate.

 

(d)                                  Grant of Stock Options to Non-Management Directors .  Non-Management Directors shall not be eligible to receive any Awards other than Stock Options as specified in this Section 9(d) .

 

(1)                                   Discretionary Awards.   The Committee may grant a Non-Qualified Option to any Non-Management Director for such number of shares of Common Stock as the Committee shall determine; provided , however , that such grants of Non-Qualified Options only may be made (i) immediately following an annual meeting of the Company’s stockholders to any of the Non-Management Directors who are then incumbent after such meeting and (ii) in connection with a Non-Management Director’s election or appointment to the Board of Directors if other than at an annual meeting.

 

(2)                                   Terms and Conditions of Stock Options.   The Committee shall establish the terms and conditions of Non-Qualified Options granted to Non-Management Directors, provided , that any Non-Qualified Option granted to a Non-Management Director (i) shall have an exercise price per share not less than 100% of the Fair Market Value of the Common Stock on the date of grant and (ii) shall not be exercisable earlier than one year from the date of grant, except as provided in Sections 9(c)(4) and 15(b)(2) .  Unless otherwise provided in the Plan, all provisions of the Plan with respect to the terms of Non-Qualified Options granted to employees shall be applicable to Non-Qualified Options granted to Non-Management Directors.

 

(e)                                   Designation of Certain Options as Incentive Stock Options .   Stock Options, or portions thereof, granted to employees may in the discretion of the Committee be designated as Incentive Stock Options.  In addition to the other applicable terms and conditions contained in this Section 9 , the aggregate Fair Market Value of the shares of Common Stock covered by an Incentive Stock Option (determined at the time the Stock Option is granted) with respect to which an Incentive Stock Option is exercisable for the first time by any individual Participant during any calendar year (under the Plan and all other similar plans of the Company and its subsidiaries) shall not exceed $100,000 (or such other amount as may be specified by Section 422(d) of the Code).

 

(f)                                     Transferability Restriction .  Unless otherwise determined by the Committee, a Stock Option by its terms shall be personal and may not be sold, pledged, assigned, exchanged, encumbered, hypothecated, transferred or disposed of in any manner by the Participant other than by will or by the laws of descent and distribution.  During a Participant’s lifetime, only the Participant or a duly appointed legal representative may exercise the Stock Option, unless otherwise determined by the Committee.

 

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(g)                                  Repricing Prohibited .  Neither the Committee nor the Company shall “reprice” outstanding Stock Options for any reason.  For purposes of the Plan, a “repricing” means lowering the exercise price per share of an outstanding Stock Option or any other action that has the same effect or is treated as a repricing under generally accepted accounting principles and includes, without limitation, a tandem cancellation of a Stock Option at a time when its exercise price per share exceeds the fair market value of the underlying Common Stock and exchange for another option or other equity security (unless such cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction).

 

(h)                                  Use of Proceeds .   Proceeds received by the Company pursuant to the exercise of Stock Options shall constitute general funds of the Company.

 

10.                                Compliance with Applicable Laws; Investment Representation

 

Notwithstanding any other provision of the Plan or any agreement relating to a particular Award, the Company shall have no obligation to issue any shares of Common Stock under the Plan unless such issuance would comply with all applicable laws and the applicable requirements of any securities exchange or similar entity.  Prior to the issuance of any shares of Common Stock under the Plan, the Company may require a written statement that the Participant is acquiring such shares for his or her own account for investment and not for the purpose or with the intention of distributing the shares or any part thereof.  The certificates representing shares of Common Stock issued under the Plan may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws and regulations and to reflect any restrictions on transfers.

 

11.                                Transfer, Leave of Absence, Etc.

 

For purposes of the Plan, (a) a transfer of an employee from the Company to a subsidiary, or vice versa, or from one subsidiary to another, and (b) a leave of absence, duly authorized in writing by the Company or a subsidiary, shall not be deemed a termination of employment.

 

12.                                Tax Withholding

 

All distributions under the Plan (including, without limitation, the grant of Awards and the issuance of Common Stock pursuant to an Award) are subject to withholding of all applicable taxes, and the Committee may condition the delivery of any Award or the issuance of any Common Stock pursuant to an Award on the satisfaction of applicable withholding obligations (including, without limitation, by requiring a Participant to relinquish a portion of any proceeds received by the Participant in connection with the sale of shares acquired upon exercise of a Stock Option).

 

13.                                Prohibition on Loans

 

The Company shall not loan funds to any Participant for the purpose of paying the exercise price associated with any Stock Option or for the purpose of paying any taxes associated with the issuance, exercising or vesting of any Award.

 

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14.                                Changes in Capitalization

 

If the outstanding Common Stock shall at any time be changed or exchanged as a result of a stock dividend, stock split, share combination, exchange or reclassification, recapitalization, merger, consolidation or other corporate reorganization affecting the Common Stock, (a) the number and kind of shares that have been issued and that may thereafter be issued under the Plan, (b) the number and kind of shares underlying Restricted Stock Awards still subject to a Restriction Period, (c) the exercise prices and the number and kind of shares subject to outstanding Stock Options and (d) such other terms of Awards as the Committee deems appropriate, shall be approximately and equitably adjusted by the Committee in its sole and complete discretion.

 

15.                                Change of Control

 

(a)                                   Definition .  For purposes of the Plan, the term “Change of Control” means the occurrence of any of the following events following the effective date of the Plan:

 

(1)                                   Any “person” (as such term is used in Sections 13(d) and 14 of the Exchange Act), other than (i) the Company, (ii) any subsidiary of the Company, (iii) any employee benefit plan (or a trust forming a part thereof) maintained by the Company or any subsidiary of the Company, (iv) any underwriter temporarily holding securities of the Company pursuant to an offering of such securities or (v) any person in connection with a transaction described in clauses (i), (ii) and (iii) of Section 15(a)(2) below, becomes the “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing 30% or more of the total voting power of the Company’s then outstanding voting securities, unless such securities (or, if applicable, securities that are being converted into voting securities) are acquired directly from the Company in a transaction approved by a majority of the Incumbent Board (as defined below).

 

(2)                                   The consummation of a merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued, or the sale or other disposition, in one transaction or a series of transactions, of all or substantially all of the assets of the Company (a “Corporate Transaction”), unless:

 

(i)                                      the stockholders of the Company immediately before such Corporate Transaction will own, directly or indirectly, immediately following such Corporate Transaction, at least 60% of the total voting power of the outstanding voting securities of the corporation or other entity resulting from such Corporate Transaction (including a corporation or other entity that acquires all or substantially all of the Company’s assets, the “Surviving Company”) or the ultimate parent company thereof in substantially the same proportion as their ownership of the voting securities of the Company immediately before such Corporate Transaction;

 

(ii)                                   the individuals who were members of the Board of Directors immediately prior to the execution of the agreement providing for such Corporate Transaction constitute a majority of the members of the board of directors or equivalent governing body of the Surviving Company or the ultimate parent company thereof; and

 

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(iii)                                no person, other than (A) the Company, (B) any subsidiary of the Company, (C) any employee benefit plan (or a trust forming a part thereof) maintained by the Company or any subsidiary of the Company, (D) the Surviving Company, (E) any subsidiary or parent company of the Surviving Company, or (F) any person who, immediately prior to such Corporate Transaction, was the beneficial owner of securities of the Company representing 30% or more of the total voting power of the Company’s then outstanding voting securities, is the beneficial owner of 30% or more of the total voting power of the then outstanding voting securities of the Surviving Company or the ultimate parent company thereof.

 

(3)                                   The stockholders of the Company approve a complete liquidation or dissolution of the Company.

 

(4)                                   Directors who, as of the effective date of the Plan, constitute the Board of Directors (the “Incumbent Board”), cease to constitute at least a majority of the Board of Directors (or, in the event of any merger, consolidation or reorganization the principal purpose of which is to change the Company’s state of incorporation, form a holding company or effect a similar reorganization as to form, the board of directors of such surviving company or its ultimate parent company); provided , however , that any individual becoming a member of the Board of Directors subsequent to the effective date of the Plan whose election, or nomination for election by the Company’s stockholders, was approved by a vote of a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened proxy contest relating to the election of directors.

 

                                                Notwithstanding the foregoing, a Change of Control will not be deemed to occur solely because any person (a “Subject Person”) becomes the beneficial owner of more than the permitted amount of the outstanding voting securities of the Company as a result of the acquisition of voting securities by the Company which, by reducing the number of voting securities outstanding, increases the proportional number of voting securities beneficially owned by the Subject Person, provided , that if a Change of Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such acquisition by the Company, the Subject Person becomes the beneficial owner of any additional voting securities that increases the percentage of the then outstanding voting securities beneficially owned by the Subject Person to 30% or more of the total voting power, then a Change of Control will have occurred.

 

(b)                                  Effect of Change of Control .  Notwithstanding any other provision of the Plan, upon a Change of Control:

 

(1)                                   Restricted Shares.   In the event of a Change of Control as described in Section 15(a)(2) , as shall be determined by the Committee: (i) the stock certificates evidencing any Restricted Shares shall be canceled and the Company shall make a cash payment to those Participants in an amount equal to the highest price per share received by the holders of Common Stock in connection with such Change of Control multiplied by the number of Restricted Shares then held by such Participant, with any non-cash consideration to be valued in good faith by the Committee; or (ii) the Restriction Periods with respect to all outstanding Restricted Shares shall immediately lapse.  In the event of a Change of Control as described in Section 15(a)(1) , (3) or (4) ,

 

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the Restriction Periods with respect to all outstanding Restricted Shares shall immediately lapse.

 

(2)                                   Stock Options .  In the event of a Change of Control, all outstanding Stock Options shall become fully vested and immediately exercisable.  Notwithstanding any other provision of the Plan, any Participant whose employment or directorship terminates following a Change of Control may exercise his or her Stock Option in full for a period ending on the earlier of the date of expiration of such Stock Option or the date which is twelve months after such termination of employment or directorship.

 

(c)                                   Deemed Change of Control .  If the Company enters into an agreement or series of agreements or the Board of Directors adopts a resolution that results in the occurrence of a Change of Control, and the employment or directorship of a Participant is terminated after the entering into of such agreement or series of agreements or the adoption of such resolution, then, upon the occurrence of the Change of Control, a Change of Control shall be deemed to have retroactively occurred on the date of entering into of the earliest of such agreements or the adoption of such resolution.

 

16.                                Amendments

 

The Board of Directors or the Committee may suspend or terminate the Plan at any time and the Committee may amend or modify the Plan and amend, modify, cancel or suspend any Award at any time and from time to time; provided , however , that without the consent of the Participant affected, no such suspension, termination, cancellation, amendment or modification may materially impair the rights of any Participant under any Award theretofore granted, except as provided in Section 17 below.  Notwithstanding the foregoing, without the requisite vote of the Company’s stockholders, no such amendment or modification may:

 

(a)                                   increase the total number of shares of Common Stock issuable under the Plan pursuant to Section 6 ;

 

(b)                                  expand the type of Awards available under the Plan;

 

(c)                                   materially expand the class of persons eligible to receive Awards;

 

(d)                                  extend the term of the Plan;

 

(e)                                   materially change the method of determining the exercise price per share of Stock Options;

 

(f)                                     “reprice” an outstanding Stock Option;

 

(g)                                  increase the maximum number of shares subject to Stock Options that may be granted to a Participant; or

 

(h)                                  delete or limit the provisions of Section 9(g) (repricing prohibition) or Section 13 (loan prohibition).

 

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In addition, any “material revision” of the Plan (within the meaning of the rules of the New York Stock Exchange) not listed in Sections 16(a) through (h) above also shall require the requisite vote of the Company’s stockholders.

 

17.                                Cancellation of Outstanding Options

 

If the Committee, after consulting with management of the Company, determines that application of an accounting standard in compliance with any statement issued by the Financial Accounting Standards Board concerning the treatment of Stock Options would have a significant adverse effect on the Company’s financial statements because of the fact that Stock Options granted before the issuance of such statement are subject to new accounting rules, then the Committee in its absolute discretion may cancel and revoke all outstanding Stock Options to which such adverse effect is attributed and the holders of such Stock Options shall have no further rights in respect thereof.  Such cancellation and revocation shall be effective upon written notice by the Committee to the holders of such Stock Options.

 

18.                                Foreign Jurisdictions

 

Awards granted to Participants who are foreign nationals or who are employed by the Company or any of its subsidiaries outside of the United States may have such terms and conditions different from those specified in the Plan and such additional terms and conditions as the Committee, in its judgment, determines to be necessary, appropriate or desirable to foster and promote achievement of the material purposes of the Plan and to fairly accommodate for differences in local law, tax policy or custom or to facilitate administration of the Plan.  The Committee may approve such sub-plans, appendices or supplements to, or amendments, restatements or alternative versions of, the Plan as it may consider necessary, appropriate or desirable, without thereby affecting the terms of the Plan as in effect for any other purpose.  The special terms and any appendices, supplements, amendments, restatements or alternative versions, however, shall not include any provisions that are inconsistent with the terms of the Plan as then in effect, unless the Plan could have been amended to eliminate such inconsistency without further approval by the Company’s stockholders.

 

19.                                Compliance with Section 16(b)

 

With respect to Participants who are subject to Section 16 of the Exchange Act (“Reporting Persons”), transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 under the Exchange Act.  All transactions under the Plan involving Reporting Persons are subject to such conditions, regardless of whether the conditions are expressly set forth in the Plan.  Any provision of the Plan that is contrary to a condition of Rule 16b-3 shall not apply to such Reporting Persons.

 

 

Adopted September 29, 2003

Amended September 27, 2004 and September 26, 2005

 

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Exhibit 4.2

 

RULES

 

OF

 

THE FEDEX CORPORATION INCENTIVE STOCK PLAN

 

2005 INLAND REVENUE APPROVED SUB-PLAN FOR THE

 

UNITED KINGDOM

 

 

Adopted by the Company on: December 4, 2005

 

Approved by the Inland Revenue on: December 7, 2005

 

Inland Revenue reference no: X23020/WPR

 

 

SCHEDULE

 

RULES OF THE FEDEX CORPORATION INCENTIVE STOCK PLAN

2005 INLAND REVENUE APPROVED SUB-PLAN FOR THE

UNITED KINGDOM

 

1               General

 

This schedule to the FedEx Corporation Incentive Stock Plan, as amended (“the Plan”), sets out the rules of the FedEx Corporation Incentive Stock Plan 2005 Inland Revenue Approved Sub-Plan for the United Kingdom (“the Sub-Plan”).

 

2               Establishment of Sub-Plan

 

FedEx Corporation (“the Company”) has established the Sub-Plan under Section 18 of the Plan (Foreign Jurisdictions), which authorises the Company to establish sub-plans to the Plan.

 

3               Purpose of Sub-Plan

 

The purpose of the Sub-Plan is to aid the Company and its subsidiaries in securing and retaining key employees and directors of outstanding ability in the United Kingdom and to motivate them to exert their best efforts to achieve the long-term goals of the Company and its subsidiaries. The Company believes that the ownership or increased ownership of Shares by employees and directors will further align their interests with those of the Company’s other shareholders and will promote the long-term success of the Company and its subsidiaries.

 

In particular, the Sub-Plan seeks to enable the grant to, and subsequent exercise by, employees and directors in the United Kingdom, on a tax favoured basis, of rights to acquire Shares under the Plan.

 

4               Inland Revenue approval of Sub-Plan

 

The Sub-Plan is intended to be approved by the Inland Revenue under Schedule 4.

 

5               Rules of Sub-Plan

 

The rules of the Plan, in their present form and as amended from time to time, shall, with the modifications set out in this schedule, form the rules of the Sub-Plan. In the event of any conflict between the rules of the Plan and this schedule, the schedule shall prevail.

 

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6               Relationship of Sub-Plan to Plan

 

The Sub-Plan shall form part of the Plan and not a separate and independent plan.

 

7               Interpretation

 

In the Sub-Plan, unless the context otherwise requires, the following words and expressions have the following meanings:

 

Approval Date		the later of the date on which the Inland Revenue notifies the Company or its advisers that the Sub-Plan is in a format capable of approval under Schedule 4 and the date on which the Sub-Plan is adopted by the Company provided that in either case no amendment to a rule of the Sub-Plan is made after the relevant date and prior to the date on which the Sub-Plan is approved by the Inland Revenue under Schedule 4;
Associated Company		the meaning given to that expression by paragraph 35 of Schedule 4;
Close Company		the meaning given to that expression by section 414(1) of ICTA 1988, and paragraph 9(4) of Schedule 4;
Consortium		the meaning given to that word by paragraph 36(2) of Schedule 4;
Control		the meaning given to that word by section 840 of ICTA 1988 and “Controlled” shall be construed accordingly;
Date of Grant		the date on which an Option is granted to an Eligible Employee in accordance with Section 7(b) of the Plan;
Eligible Employee		an individual who falls within Section 7(a) of the Plan (Eligible Recipients) and who is:
		(a)    an employee (other than a director) of the Company or a company participating in the Sub-Plan; or
		(b)    a director of the Company or a company participating in the Sub-Plan who is contracted to work at least 25 hours per week for the Company and its subsidiaries or any of them (exclusive of meal breaks)

 

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		and who, in either case, is not eligible solely by reason that he is a non-executive director of a company participating in the Sub-Plan and does not have at the Date of Grant of an Option, and has not had during the preceding twelve months, a Material Interest in a Close Company which is the Company or a company which has Control of the Company or a member of a Consortium which owns the Company;
ICTA 1988		the Income and Corporation Taxes Act 1988;
Inland Revenue		the UK Board of Inland Revenue;
Jointly Owned Company		a company eligible to participate in the Sub-Plan under the provisions of paragraph 34 of Schedule 4;
Key Feature		a provision of the Sub-Plan which is necessary in order to meet the requirements of Schedule 4;
Market Value		notwithstanding Section 9(c)(1) of the Plan (Option Price),
		(a)    in the case of an Option granted under the Sub-Plan:
		(i)     if at the relevant time the Shares are listed on the New York Stock Exchange, the average of the high and low sales prices of the Shares as reported on the New York Stock Exchange composite tape on the Date of Grant;
		(ii)    if paragraph (i) above does not apply, the market value of a Share as determined in accordance with Part VIII of the Taxation of Chargeable Gains Act 1992 and agreed in advance with Inland Revenue Shares Valuation;
		(b)    in the case of an option granted under any other share option scheme, the market value of an ordinary share in the capital of the Company determined under the rules of

 

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		such scheme for the purpose of the grant of the option;
Material Interest		the meaning given to that expression by paragraphs 9 to 14 of Schedule 4;
Option		a subsisting right to acquire Shares granted under the Sub-Plan;
Option Holder		an individual who holds an Option or, where the context permits, his legal personal representatives;
Ordinary Share Capital		the meaning given to that expression by Section 832(1) of ICTA 1988;
Plan Administrator		the “Committee”, as that term is defined in Section 4(a) of the Plan (Administration of the Plan);
Relevant Employment		employment with any of the Company, and any company Controlled by the Company and any Jointly Owned Company;
Schedule 4		Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003;
Shares		shares of “Common Stock”, as that term is defined in Section 2 of the Plan (Definitions);
Share Certificate		the certificate issued in respect of the Shares acquired on the exercise of an Option under rule 23 (Issue or transfer of Shares on Exercise of Options); and
Share Option Agreement		a written agreement between the Company and an Eligible Employee setting forth the terms, conditions, limitations and other provisions applicable to the Option.

 

In this schedule, unless the context otherwise requires:

 

7.1            words and expressions not defined above have the same meanings as are given to them in the Plan;

 

7.2            the rule headings are inserted for ease of reference only and do not affect their interpretation;

 

7.3            a reference to a rule is a reference to a rule in this schedule, and a reference to a section is a reference to a section in the Plan;

 

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7.4            the singular includes the plural and vice-versa and the masculine includes the feminine;

 

7.5            a reference to a statutory provision is a reference to a United Kingdom statutory provision and includes any statutory modification, amendment or re-enactment thereof; and

 

7.6            the Interpretation Act 1978 applies to the Sub-Plan in the same way as it applies to an enactment.

 

8               Companies participating in Sub-Plan

 

The companies participating in the Sub-Plan shall be the Company and any company Controlled by the Company and any Jointly Owned Company which has been nominated by the Company to participate in the Sub-Plan.

 

9               Shares used in Sub-Plan

 

The Shares shall form part of the Ordinary Share Capital of the Company and shall at all times comply with the requirements of paragraphs 16 to 20 of Schedule 4.

 

10            Grant of Options

 

An Option shall be granted under and subject to the rules of the Plan as modified by this schedule.

 

11            Identification of Options

 

A Share Option Agreement issued in respect of an Option shall expressly state that it is issued in respect of an Option. An option which is not so identified shall not constitute an Option.

 

12            Contents of Share Option Agreement

 

A Share Option Agreement issued in respect of an Option shall state:

 

12.1          that it is issued in respect of an Option;

 

12.2          the Date of Grant of the Option;

 

12.3          the number of Shares subject to the Option;

 

12.4          the exercise price per Share under the Option;

 

12.5          any condition imposed on the exercise of the Option;

 

12.6          the date(s) on which the Option will ordinarily become exercisable, whether in whole or in part; and

 

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12.7          the period during which an Option shall remain exercisable (if at all) following termination of employment, if different than as set forth in the Plan.

 

13            Earliest date for grant of Options

 

An Option may not be granted earlier than the Approval Date.

 

14            Persons to whom Options may be granted

 

An Option may not be granted to an individual who is not an Eligible Employee at the Date of Grant.

 

15            Options non transferable

 

An Option shall be personal to the Eligible Employee to whom it is granted and shall not be capable of being transferred, charged or otherwise alienated (other than by will or by the laws of descent and distribution).

 

16            Limit on number of Shares placed under Option under Sub-Plan

 

For the avoidance of doubt, Shares placed under Option under the Sub-Plan shall be taken into account for the purpose of Section 6 of the Plan (Stock Subject of the Plan).

 

17            Inland Revenue limit (£30,000)

 

An Option may not be granted to an Eligible Employee if the result of granting the Option would be that the aggregate Market Value of the Shares subject to all outstanding options granted to him under the Sub-Plan or any other share option scheme established by the Company or an Associated Company and approved by the Inland Revenue under Schedule 4 to ITEPA 2003 would exceed sterling £30,000 or such other limit as may from time to time be specified in paragraph 6 of Schedule 4 to ITEPA 2003.  For this purpose, the United Kingdom sterling equivalent of the Market Value of a Share on any day shall be determined by taking the spot sterling/US dollar exchange rate for that day as shown in the Financial Times.

 

18            Exercise price under Options

 

Notwithstanding Section 9(c)(1) of the Plan (Option Price), the amount payable per Share on the exercise of an Option shall not be less than the Market Value of a Share on the Date of Grant and shall be stated on the Date of Grant.

 

19            Exercise of Options

 

Subject to rule 20, each Option shall be exercisable for a period commencing no earlier than the third anniversary of the Date of Grant and ending on the tenth anniversary of the Date of Grant.

 

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20            Early Exercise or Lapse of Options

 

Options maybe exercised or lapse in accordance with Section 9(c)(4) of the Plan (Rights After Termination of Employment). Notwithstanding Section 9(c)(4) of the Plan, the Plan Administrator shall determine the period during which the Option shall remain exercisable following such termination and this shall be stated in the Share Option Agreement if different from that stated in Section 9(c)(4) of the Plan, and it may not thereafter be altered.

 

21            Material Interest

 

An Option may not be exercised if the Option Holder then has, or has had within the preceding twelve months, a Material Interest in a Close Company which is the Company or which is a company which has Control of the Company or which is a member of a Consortium which owns the Company.

 

22            Manner of payment for Shares on exercise of Options

 

The amount due on the exercise of an Option, including the exercise price and any amounts due in accordance with rule 27 (Tax and social security withholding), shall be paid in cash or by cheque or banker’s draft and may be paid out of funds provided to the Option Holder on loan by a bank, broker or other person.

 

The amount may be paid via a cashless exercise procedure, provided the Inland Revenue has agreed to this in advance. The date of exercise of an Option shall be the date on which the stock plan administrator processes the exercise notice.

 

23            Issue or transfer of Shares on exercise of Options

 

The Company shall, as soon as reasonably practicable and in any event not later than thirty days after the date of exercise of an Option, issue or transfer to the Option Holder, or procure the issue or transfer to the Option Holder of, the number of Shares specified in the notice of exercise and shall deliver to the Option Holder, or procure the delivery to the Option Holder of, a Share Certificate (or equivalent evidence) in respect of such Shares, subject only to compliance by the Option Holder with the rules of the Sub-Plan and in particular compliance with rule 27 (Tax and social security withholding) and to any delay necessary to complete or obtain:

 

23.1          the listing of the Shares on any stock exchange on which Shares are then listed; or

 

23.2          such registration or other qualification of the Shares under any applicable law, rule or regulation as the Company determines is necessary or desirable.

 

24            Rights attaching to Shares issued on exercise of Options

 

All Shares issued in respect of the exercise of an Option shall, as to any voting, dividend, transfer and other rights, including those arising on a

 

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liquidation of the Company, rank equally in all respects and as one class with the shares of the same class in issue at the date of such issue save as regards any rights attaching to such shares by reference to a record date prior to the date of such issue.

 

25            Amendment of Sub-Plan

 

Notwithstanding Section 16 of the Plan (Amendments), no amendment to a Key Feature of the Sub-Plan, whether taking the form of an amendment of the Plan or this schedule, shall take effect until it has been approved by the Inland Revenue.

 

26            Adjustment of Options

 

Notwithstanding Section 14 of the Plan (Changes in Capitalization), any adjustment of an Option:

 

26.1          shall not be made unless the adjustment is permitted pursuant to paragraph 22(3) of Schedule 4; and

 

26.2          shall not take effect until it has been approved by the Inland Revenue.

 

27            Tax and social security withholding

 

27.1          Where, in relation to an Option granted under the Sub-Plan the Company or, if different, the Option Holder’s employing company, is liable, or is in accordance with current practice believed to be liable, to account to any revenue or other authority for any sum in respect of any tax or social security liability of the Option Holder, the Option Holder shall be required to reimburse the Company or the Option Holder’s employing company an amount sufficient to discharge the liability. Alternatively, the Option Holder may, by agreement with the Company, enter into some other arrangement to ensure that such amount is available to it (whether by authorising the sale of some or all of the Shares subject to his Option and the payment to the Company or such employing company of the requisite amount out of the proceeds of sale or otherwise).

 

27.2          The Company may require an Option Holder to execute a copy of the Share Option Agreement or some other document (which in either case may be in electronic form) in order to bind himself contractually to any such arrangement as is referred to in rule 27.1 and return the executed document to the Company by a specified date.

 

28            Exercise of discretion by Plan Administrator

 

In exercising any discretion which it may have under the Sub-Plan, the Plan Administrator shall act fairly and reasonably.

 

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29            Relationship of Sub-Plan to contract of employment

 

29.1          the Sub-Plan shall not form part of any contract of employment between the Company or any company Controlled by the Company or any Jointly Owned Company and an Eligible Employee;

 

29.2          unless so expressly provided in his contract of employment, an Eligible Employee has no right to be granted an Option;

 

29.3          the benefit to an Eligible Employee of participation in the Sub-Plan (including, in particular but not by way of limitation, any Options held by him) shall not form any part of his remuneration or count as his remuneration for any purpose and shall not be pensionable; and

 

29.4         if an Eligible Employee ceases to be in Relevant Employment, he shall not be entitled to compensation for the loss of any right or benefit under the Sub-Plan (including in particular but not by way of limitation, any Options held by him which lapse by reason of his ceasing to be in Relevant Employment) whether by way of damages for unfair dismissal, wrongful dismissal, breach of contract or otherwise.

 

30            Disapplication of certain provisions of Plan

 

The provisions of the Plan dealing with:

 

the amendment, modification, cancellation or suspension of awards in Section 4(b)(1)(iv);

 

restricted stock awards pursuant to Section 8 of the Plan;

 

incentive stock options pursuant to Section 9(e) of the Plan;

 

tax withholding pursuant to Section 12 of the Plan;

 

restricted shares pursuant to Section 15(b)(1) of the Plan; and

 

cancellation of outstanding options pursuant to Section 17 of the Plan;

 

shall not form part of, and no such rights may be granted under, the Sub-Plan.

 

The words “unless otherwise determined by the Committee” in Sections 9(c)(4)(i), 9(c)(4)(ii), 9(c)(4)(iii), 9(c)(4)(iv) and 9(f) shall not apply in this Sub-Plan.

 

The words dealing with the amendment, modification, cancellation or suspension of awards in Section 16 shall not apply in this Sub-Plan.

 

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31            Term of the Plan

 

The Sub-Plan shall be effective from the Approval Date. Unless the Plan is earlier terminated, no Option shall be granted under the Sub-Plan after 31 May 2013, but outstanding Options may extend beyond such date.

 

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Exhibit 4.3

 

 

SHARE OPTION AGREEMENT

PURSUANT TO

FEDEX CORPORATION

INCENTIVE STOCK PLAN, AS AMENDED,

AND THE FEDEX CORPORATION INCENTIVE STOCK PLAN

2005 INLAND REVENUE APPROVED SUB-PLAN FOR THE UNITED KINGDOM

 

A SHARE OPTION for a total of         shares of Common Stock, par value $.10 per share, of FedEx Corporation, a Delaware corporation (the “Company”), is hereby granted to         (the “Optionee”), at the price determined as provided herein, and in all respects subject to the terms, definitions and provisions of the Company’s 2005 Inland Revenue Approved Sub-Plan for the United Kingdom (the “Sub-Plan”), which is incorporated herein by reference. This Option is a United Kingdom Inland Revenue approved Option. Capitalized terms used herein but not otherwise defined shall have the meanings given to such terms in the Sub-Plan.

 

1.                                        Exercise Price .  The exercise price is U.S.$         for each share, being one hundred percent (100%) of the Market Value, as determined by the Committee in accordance with the rules of the Sub-Plan, of the Common Stock on the Date of Grant of this Option.

 

2.                                        Exercise of Option .  This Option shall be exercisable in accordance with provisions of the Sub-Plan as follows:

 

(i)                                      Schedule of Rights to Exercise .  100% after three years from the Date of Grant.

 

(ii)                                   Restrictions on Exercise .  This Option may not be exercised if the issuance of the shares upon such exercise would constitute a violation of any applicable Federal, state or foreign securities or other law or regulation.  As a condition to his exercise of this Option, the Company may require the person exercising this Option to make any representation and warranty to the Company as may be required by any applicable law or regulation.

 

3.                                        Non-Classification of Option Shares for U. S. Tax Purposes .  Optionee is not a citizen or resident of the United States.  Accordingly, the option shares herein granted are not classified as either incentive stock options or non-qualified options for purposes of United States income tax laws and no loans shall be made pursuant to the Company’s Stock Option Loan Policy in connection with the purchase of such shares or the payment of any taxes related thereto.

 

4.                                        Transferability of Option .  This Option may not be sold, pledged, assigned, exchanged, encumbered, hypothecated, transferred or disposed of in any manner otherwise than by will or the laws of descent or distribution and may be exercised during the lifetime of the

 

 

Optionee only by the Optionee or a duly appointed legal representative.  The terms of this Option shall be binding upon the heirs, personal representatives and successors of the Optionee.

 

5.                                        Term of Option .  This Option may not be exercised more than ten (10) years from the date of grant of this Option, as set forth below, and may be exercised during such term only in accordance with the Plan and the terms of this Option.

 

6.                                        Optionee Acknowledgment .  Optionee acknowledges receipt of copies of the FedEx Corporation Incentive Stock Plan, as amended, and Sub-Plan and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all the terms and provisions thereof.  Optionee further represents that neither the Company nor any person acting on behalf of the Company or any subsidiary or affiliate of the Company has advised the Optionee in any manner in respect of this Option or received any fee from the Optionee in connection herewith.  Optionee hereby agrees to accept as binding, conclusive and final for all purposes whatsoever all decisions, determinations or interpretations of the Committee in its sole discretion and judgment upon any questions, disputes or disagreements arising under or as a result of the Plan, the Sub-Plan or this Option.

 

7.                                        Notices .  Every notice relating to this Option shall be in writing.  All notices to the Company shall be addressed to: FedEx Corporation, Securities and Corporate Law Department, 942 South Shady Grove Road, Memphis, Tennessee  38120, U.S.A.  Notices to the Optionee shall be addressed to the address specified by the Optionee in the space provided at the end of this Agreement.  Either party, by notice to the other, may designate a different address to which notices shall be sent.  Any notice by the Company to the Optionee at his or her last designated address shall be effective to bind the Optionee and any other person who acquires rights or a claim thereto hereunder.

 

8.                                        This Agreement has been made in and shall be governed and interpreted and construed in accordance with the laws of the State of Tennessee, U.S.A.

 

Date of Grant:
	FEDEX CORPORATION
	By:
		CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

 

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IF YOU ELECT TO ACCEPT THE OPTION, INDICATE YOUR ACCEPTANCE BELOW

 

I hereby accept the above Option to purchase shares of the Common Stock of the Company in accordance with and subject to the terms and restrictions of the FedEx Corporation Incentive Stock Plan 2005 Inland Revenue Approved Sub-Plan for the United Kingdom, with which I am familiar, and agree to be bound thereby and by the actions of the Compensation Committee and of the Board of Directors.  I also agree that this Option, the letter dated          forwarding this Option, the FedEx Corporation Incentive Stock Plan, as amended, and the FedEx Corporation Incentive Stock Plan 2005 Inland Revenue Approved Sub-Plan for the United Kingdom constitute agreements with the Company in accordance with the terms and provisions thereof.

 

	OPTIONEE
	(Number)         (Street)
	(City)
	(Country)
	DATE

 

IF YOU ELECT TO REJECT THE OPTION, INDICATE YOUR REJECTION BELOW

 

I hereby reject the above Option to purchase shares of the Common Stock of the Company.

 

	OPTIONEE
	DATE