Filed by Bowne Pure Compliance





Exhibit 10.36




Compensation Arrangements with Named Executive Officers




Base Salaries




The following table sets forth the fiscal 2009 annual base salaries of FedEx’s named executive
officers:



	 	 	 	 	 
	Name and	 	 	 
	Current Position	 	Base Salary	 
	 
	 	 	 	 
	Frederick W. Smith

	 	$	1,485,060	 
	Chairman, President and

Chief Executive Officer
	 	 	 	 
	 
	 	 	 	 
	Alan B. Graf, Jr.

	 	$	934,380	 
	Executive Vice President and

Chief Financial Officer
	 	 	 	 
	 
	 	 	 	 
	David J. Bronczek 

	 	$	975,756	 
	President and Chief Executive Officer –

FedEx Express
	 	 	 	 
	 
	 	 	 	 
	T. Michael Glenn

	 	$	861,312	 
	Executive Vice President,

Market Development and

Corporate Communications
	 	 	 	 
	 
	 	 	 	 
	David F. Rebholz

	 	$	905,640	 
	President and Chief Executive Officer –

FedEx Ground
	 	 	 	 







Mr. Smith’s fiscal 2009 base salary is effective as of July 16, 2008. The fiscal 2009 base
salaries of the other named executive officers are effective as of July 1, 2008.



Fiscal 2009 Annual Incentive Compensation Plans




Chairman, President and Chief Executive Officer



Frederick W. Smith’s fiscal 2009 annual bonus will be determined by the achievement of
corporate objectives for fully diluted earnings per share (“EPS”) for fiscal 2009. The independent
members of the Board of Directors, upon the recommendation of the Compensation Committee, may
adjust Mr. Smith’s bonus amount upward or downward based on their evaluation of Mr. Smith’s
performance, including the quality and effectiveness of his leadership and the following corporate
performance measures:




	 	•	 	FedEx’s stock price performance relative to the Standard & Poor’s 500 Composite Index,
the Dow Jones Transportation Average, the Dow Jones Industrial
Average and competitors;
	 
	 	•	 	FedEx’s stock price to earnings (P/E) ratio relative to the Standard & Poor’s 500
Composite Index, the Dow Jones Industrial Average and competitors;




 


 









 





	 	•	 	FedEx’s market capitalization;
	 
	 	•	 	FedEx’s revenue and operating income growth relative to competitors;
	 
	 	•	 	FedEx’s free cash flow (excluding business acquisitions), return on invested capital
(excluding certain unusual items), and weighted average cost of capital;
	 
	 	•	 	Analyst coverage and ratings for FedEx’s stock;
	 
	 	•	 	FedEx’s U.S. and international revenue market share; and
	 
	 	•	 	FedEx’s reputation rankings by various publications and surveys.





None of these factors will be given any particular weight in determining whether to adjust Mr.
Smith’s bonus amount.



Mr. Smith’s annual bonus target for fiscal 2009 is 130% of his base salary, with a maximum payout
of 300% of his target bonus.



Non-CEO Named Executive Officers



The fiscal 2009 annual bonus target payouts for the non-CEO named executive officers, as a
percentage of base salary, are as follows:



	 	 	 	 	 
	Name	 	Target Payout	 
	 
	 	 	 	 
	Alan B. Graf, Jr.
	 	 	90	%
	David J. Bronczek 
	 	 	100	%
	T. Michael Glenn
	 	 	90	%
	David F. Rebholz
	 	 	80	%






The maximum payout for each executive is 240% of his target bonus.



The fiscal 2009 annual bonus for the non-CEO named executive officers will be based on:




	 	•	 	the achievement of individual objectives established at the beginning of the fiscal year
for each executive (30% of each executive’s target bonus); and
	 
	 	•	 	the achievement of corporate objectives for EPS for fiscal 2009 (70% of each executive’s
target bonus).





The annual bonus payout opportunity relating to individual performance is contingent upon
achievement of EPS objectives under the bonus plan (as well as achievement of the
individual performance objectives). Mr. Smith will determine the achievement level of each
executive’s individual objectives at the conclusion of fiscal 2009.



The annual bonus payout opportunity relating to company financial performance ranges, on a
sliding scale, from a minimum amount if the annual bonus plan’s pre-established EPS threshold is
achieved up to a maximum amount if such financial performance goal is substantially exceeded.


 


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Long-Term Incentive Program




FedEx’s long-term incentive (“LTI”) plans for the three-fiscal-year periods 2007 through 2009,
2008 through 2010 and 2009 through 2011, provide long-term cash bonus opportunities to members of
upper management, including the named executive officers, for fiscal 2009, 2010 and 2011,
respectively, if certain aggregate EPS goals established by the Board of Directors are achieved
with respect to those periods. No amounts can be earned for the fiscal 2007 through 2009, 2008
through 2010 and 2009 through 2011 plans until 2009, 2010 and 2011, respectively, because
achievement of the EPS goals can only be determined following the conclusion of the applicable
three-fiscal-year period.



FedEx acquired Kinko’s, Inc. (now known as FedEx Office) in fiscal 2004. During the fourth
quarter of fiscal 2008, FedEx recorded a charge of approximately
$891 million ($696 million, net of tax, or
$2.23 per diluted share), predominantly for impairment of the value
of the Kinko’s trade name and the
goodwill recorded as a result of the Kinko’s acquisition. The Board of Directors, upon the
recommendation of its Compensation Committee, decided that this charge would be excluded from
fiscal 2008 EPS for the purposes of (i) determining achievement levels under the LTI plans for the
three-fiscal-year periods 2007 through 2009 and 2008 through 2010, and (ii) setting EPS goals under
the LTI plan for the three-fiscal-year period 2009 through 2011.



The following table sets forth estimates of the possible future payouts to each of FedEx’s
named executive officers under FedEx’s LTI plans:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Estimated Future Payouts	 
	 	 	Performance	 	 	Threshold	 	 	Target	 	 	Maximum	 
	Name	 	Period	 	 	($)	 	 	($)	 	 	($)	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Frederick W. Smith
	 	FY2007– FY2009	 	 	875,000	 	 	 	3,500,000	 	 	 	5,250,000	 
	 
	 	FY2008– FY2010	 	 	875,000	 	 	 	3,500,000	 	 	 	5,250,000	 
	 
	 	FY2009– FY2011	 	 	875,000	 	 	 	3,500,000	 	 	 	5,250,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Alan B. Graf, Jr.
	 	FY2007– FY2009	 	 	300,000	 	 	 	1,200,000	 	 	 	1,800,000	 
	 
	 	FY2008– FY2010	 	 	300,000	 	 	 	1,200,000	 	 	 	1,800,000	 
	 
	 	FY2009– FY2011	 	 	300,000	 	 	 	1,200,000	 	 	 	1,800,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	David J. Bronczek
	 	FY2007– FY2009	 	 	375,000	 	 	 	1,500,000	 	 	 	2,250,000	 
	 
	 	FY2008– FY2010	 	 	375,000	 	 	 	1,500,000	 	 	 	2,250,000	 
	 
	 	FY2009– FY2011	 	 	375,000	 	 	 	1,500,000	 	 	 	2,250,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	T. Michael Glenn
	 	FY2007– FY2009	 	 	300,000	 	 	 	1,200,000	 	 	 	1,800,000	 
	 
	 	FY2008– FY2010	 	 	300,000	 	 	 	1,200,000	 	 	 	1,800,000	 
	 
	 	FY2009– FY2011	 	 	300,000	 	 	 	1,200,000	 	 	 	1,800,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	David F. Rebholz
	 	FY2007– FY2009	 	 	250,000	 	 	 	1,000,000	 	 	 	1,500,000	 
	 
	 	FY2008– FY2010	 	 	250,000	 	 	 	1,000,000	 	 	 	1,500,000	 
	 
	 	FY2009– FY2011	 	 	250,000	 	 	 	1,000,000	 	 	 	1,500,000	 






 


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The estimated individual future payouts set forth in the table above are set dollar amounts
ranging from threshold (minimum) amounts, if the EPS goal achieved is less than target, up to
maximum amounts, if the plan goal is substantially exceeded. There can be no assurance that the
estimated future payouts shown in this table will be achieved.



Other Arrangements




FedEx’s named executive officers are eligible to receive certain other annual compensation,
including certain perquisites and other personal benefits, such as personal use of corporate
aircraft (though the officers are required to reimburse FedEx for substantially all of the
incremental cost of such usage), security services and equipment (pursuant to FedEx’s executive
security procedures) and tax return preparation and financial counseling services.



In addition, FedEx’s named executive officers receive tax reimbursement payments relating to
restricted stock awards, certain business-related use of corporate aircraft and certain
perquisites.




 


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