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                                                                  EXHIBIT 10.88

                           Federal Express Corporation
                            Long-Term Incentive Plan
                  as Amended and Restated as of October 1, 1996

1.   PURPOSE OF PLAN

     The Federal Express Corporation Long-Term Incentive Plan, as amended and
restated (the "Plan"), is established by Federal Express Corporation (the
"Corporation") to provide a long-term incentive for key employees of the
Corporation and its subsidiaries, to reward key employees for attaining high
financial performance levels during defined performance periods and to retain
and motivate them to exert their best efforts on behalf of the Corporation and
its subsidiaries.

2.   ADMINISTRATION

     This Plan shall be administrated by the Compensation Committee of the Board
of Directors (the "Committee"). The Committee shall have the sole authority to:
(i) select the key employees eligible to participate in the Plan; (ii) establish
performance criteria under the Plan; (iii) approve and make awards under the
Plan; (iv) interpret the Plan; (v) adopt, amend and rescind rules and
regulations for the administration of the Plan; (vi) determine the level of
achievement of performance criteria; and (vii) generally to administer the Plan
and make all determinations in connection therewith which may be necessary or
advisable, and all such actions of the Committee shall be binding upon all
participants. Committee decisions and selections shall be made by a majority of
its members present at the meeting at which a quorum is present, and shall be
final. Any decision or selection 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.

3.   EFFECTIVE DATE; PERFORMANCE PERIODS

     The effective date of this Plan is June 1, 1993.

     Performance periods for awards under this Plan shall be established by the
Committee in its sole discretion. Unless otherwise designated by the Committee,
a performance period for any award under the Plan shall be three consecutive
fiscal years and shall commerce on June 1 of the first fiscal year of such
period and end on May 31 of the third fiscal year of such period. The number of
performance periods that may be established is unlimited and performance periods
may overlap.

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4.   ELIGIBILITY

     Key employees of the Corporation who are from time to time responsible for
the management, growth and protection of the business of the Corporation and its
subsidiaries shall be eligible to participate for awards under the Plan. No
member of the Board of Directors of the Corporation shall be eligible to
participate in the Plan unless such director is also an employee of the
Corporation. The employees who shall participate in the Plan shall be selected
from time to time by the Committee in its sole discretion, from those eligible.

     Except as provided below, a participant must be in an eligible position at
the beginning of a performance period and at the end of such period in order to
receive an award under this Plan. However, participants promoted to a managing
director or officer position or to a higher officer position on or before
September 1 of the first fiscal year of the performance period shall participate
at their new position for the entire performance period. In addition, for
performance periods beginning after FY94, participants promoted to an officer
position or to a higher officer position after September 1 of the first fiscal
year of such performance periods shall participate at the new position for the
remainder of the performance period on a pro rata basis.

5.   CONDITIONS

     (a) Awards shall be prorated for time spent on a Corporation-approved leave
of absence. In such case, awards shall be reduced by an amount equal to the
product of the amount of the award if there had been no leave of absence during
the performance period times a ratio, the numerator of which shall be the number
of full or partial months on leave and the denominator of which shall be the
total number of months in the performance period.

     (b) If a participant's employment is terminated or such participant becomes
ineligible to participate in the Plan for reasons other than retirement, death
or permanent disability (as defined under the terms of the Corporation's short-
and long-term disability plans or the Corporation's supplemental long-term
disability plan or as otherwise determined by the Committee) prior to the end of
a performance period, such participant shall cease to participate and shall
forfeit any award accrued on behalf of the participant under the Plan during
such performance period.

     (c) If a participant's employment is terminated due to retirement, death or
permanent disability (as defined under the terms of the Corporation's short- and
long-term disability plans or the Corporation's supplemental long-term
disability plan or as otherwise determined by the Committee), the

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amount of award accrued under the Plan to the date of such termination shall be
paid to the participant or, in the case of death, to the participant's personal
representative, in accordance with the terms of the Plan, if all performance
criteria are attained.




6.   PERFORMANCE CRITERIA

     At the beginning of a performance period, the Committee may establish a
performance goal or goals on which payment of awards will be based. The
Committee may modify these goals in extraordinary circumstances (i.e., mergers,
acquisitions, recapitalizations, extraordinary expense or income items, etc.).

     Upon establishing such goals, the Committee may determine the projected
dollar amount of individual awards ranging from threshold amounts if the
performance criteria are minimally achieved, up to maximum amounts if the
performance criteria are exceeded. The Committee may determine an additional
bonus opportunity if the performance criteria are substantially exceeded.

     The performance goals and target awards for each performance period shall
be set forth in writing and distributed to each eligible participant and shall
become effective when communicated to participants.

7.   PAYMENT OF AWARDS

     No amounts can be earned until the end of a performance period because it
is only after the conclusion of such period that the Committee can determine the
extent of achievement of the established performance goals and awards.

     Unless otherwise determined by the Committee, awards shall be paid within
three months after the end of the applicable performance period in accordance
with the terms established by the Committee. Such payments shall be net of all
applicable withholdings.

8.  AMENDMENTS

         This Plan may be amended any time or from time to time by the Committee
provided that no amendment or alteration shall materially impair the rights of
any participant accrued at the time of the amendment.



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9.   NO EFFECT ON EMPLOYMENT RIGHTS

         Nothing herein shall in any manner be construed to limit in any way the
right of the Corporation to terminate an employee's employment at any time, or
give any right to an employee to remain employed by the Corporation.

10.  DISPUTE RESOLUTION

         All disputes under this Plan shall be resolved by the Committee within
its sole discretion and all decisions by the Committee in such matters shall be
final and binding on the Corporation and the participants.

11.  TERMINATION OF PLAN

         The Committee may terminate the Plan in whole or suspend it for any
performance period at any time. A suspension for a particular performance period
shall not, however, affect any other performance period except to the extent
specified by the Committee.




Approved by the Compensation Committee of the Board of Directors of the
Corporation at its meeting held on October 1, 1996.

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