Document:

Exhibit 10.79

Compensation Arrangements with Executive Officers

Base Salaries of Named Executive Officers

The
following table sets forth the fiscal 2007 annual base salaries of FedEx’s
named executive officers:

	
  Name and

  Current Position

  	
   

  	
  Base Salary

  	
   

  
	
  Frederick W. Smith

  	
   

  	
  $

  	
  1,399,848

  	
   

  
	
  Chairman, President and

  	
   

  	
   

  	
   

  
	
  Chief Executive Officer

  	
   

  	
   

  	
   

  
	
  David J.
  Bronczek

  	
   

  	
  $

  	
  910,872

  	
   

  
	
  President and Chief Executive Officer –

  	
   

  	
   

  	
   

  
	
  FedEx Express

  	
   

  	
   

  	
   

  
	
  Alan B. Graf, Jr.

  	
   

  	
  $

  	
  872,256

  	
   

  
	
  Executive Vice President and

  	
   

  	
   

  	
   

  
	
  Chief Financial Officer

  	
   

  	
   

  	
   

  
	
  Daniel J.
  Sullivan

  	
   

  	
  $

  	
  902,244

  	
   

  
	
  President and Chief Executive Officer –

  	
   

  	
   

  	
   

  
	
  FedEx Ground

  	
   

  	
   

  	
   

  
	
  T. Michael Glenn

  	
   

  	
  $

  	
  775,056

  	
   

  
	
  Executive Vice President,

  	
   

  	
   

  	
   

  
	
  Market Development and

  	
   

  	
   

  	
   

  
	
  Corporate Communications

  	
   

  	
   

  	
   

  

 

Mr. Smith’s base salary is effective as of July 16,
2006. The base salaries of the other named executive officers are effective as
of July 1, 2006.

Mr. Sullivan has announced that he will retire
effective January 5, 2007.

FY2007
Annual Incentive Compensation Plans

Chairman,
President and Chief Executive Officer

Frederick W. Smith’s
fiscal 2007 annual bonus will be determined by the achievement of corporate
objectives for consolidated pre-tax income for fiscal 2007. The Compensation
Committee may adjust Mr. Smith’s bonus amount upward or downward based on
its consideration of several factors, including: FedEx’s stock price
performance relative to the Standard & Poor’s 500 Composite Index, the
Dow Jones Transportation Average and the Dow Jones Industrial Average; FedEx’s
revenue and operating income growth relative to competitors;

 

 

FedEx’s cash flow; FedEx’s
return on invested capital; FedEx’s U.S. revenue market share; FedEx’s
reputation rankings by various publications and surveys; and the Compensation
Committee’s assessment of the quality and effectiveness of Mr. Smith’s
leadership during fiscal 2007. None of these factors will be given any
particular weight by the Compensation Committee in determining whether to
adjust Mr. Smith’s bonus amount. Mr. Smith’s annual bonus target for
fiscal 2007 is 130% of his base salary, with a maximum payout of 300% of his
target bonus.

Mr. Smith’s
target annual bonus, combined with his base salary, has a 75th percentile target for total annual salary and
bonus for chief executive officers in executive compensation surveys utilized
by the Compensation Committee.

Non-CEO Executive Officers

FedEx Corporation
executive vice presidents participate in the fiscal 2007 annual incentive cash
bonus plan for headquarters employees. Under this plan, the annual bonus target
for each executive is 90% of his or her base salary, with a maximum payout of
240% of the target bonus. A threshold payout of up to 30% of the target bonus
is based on the achievement of individual objectives established at the
beginning of the fiscal year for each executive. Mr. Smith will determine
the achievement level of each executive’s individual objectives at the
conclusion of fiscal 2007. The balance of the bonus payout is based on FedEx’s
consolidated pre-tax income for fiscal 2007 and ranges, on a sliding scale,
from a minimum amount if the plan’s pre-established consolidated pre-tax income
threshold is achieved up to a maximum amount if such financial performance goal
is substantially exceeded.

The president and chief
executive officer of each of FedEx Express, FedEx Ground, FedEx Freight and
FedEx Kinko’s participate in the fiscal 2007 annual incentive cash bonus plan
sponsored by his respective company. The target annual bonus for the president
and chief executive officer of FedEx Express is 100% of his base salary, with a
maximum payout of 240% of his target bonus. The target annual bonus for the
president and chief executive officer of each of FedEx Ground, FedEx Freight
and FedEx Kinko’s is 80% of base salary, with a maximum payout of 240% of the
target bonus. Under each of these plans, a threshold payout of up to 30% of the
target bonus is based on the achievement of individual objectives established
at the beginning of the fiscal year for each executive. Mr. Smith will
determine the achievement level of each executive’s individual objectives at
the conclusion of fiscal 2007. The balance of the bonus payout under each of
the plans is based on each respective subsidiary’s operating income (30% of the
target bonus) and FedEx’s consolidated pre-tax income (40% of the target bonus)
for fiscal 2007 and ranges, on a sliding scale, from a minimum amount if the
plan’s pre-established subsidiary operating income and FedEx’s consolidated
pre-tax income thresholds are achieved up to a maximum amount if such financial
performance goals are substantially exceeded.

Total
annual salary and bonus for these executive officers for fiscal 2007 (assuming
achievement of all individual and corporate objectives as described above) is
targeted at the 75th percentile of total annual salary and bonus
for comparable positions in the comparison surveys utilized by the Compensation
Committee.

 2
 

 

 

Long-Term
Incentive Cash Bonus Program

The Compensation Committee has established long-term
performance bonus plans for the three-fiscal-year periods 2005 through 2007,
2006 through 2008 and 2007 through 2009, providing long-term cash bonus
opportunities to members of upper management, including executive officers, for
fiscal 2007, 2008 and 2009, respectively, if certain aggregate earnings-per-share
goals established by the Compensation Committee are achieved with respect to
those periods. No amounts can be earned for the fiscal 2005 through 2007, 2006
through 2008 and 2007 through 2009 plans until 2007, 2008 and 2009,
respectively, because achievement of the earnings-per-share goals can only be
determined following the conclusion of the applicable three-fiscal-year period.

The
following table sets forth estimates of the possible future payouts to each of
FedEx’s named executive officers under FedEx’s long-term performance bonus
plans. Mr. Sullivan, who has announced that he will retire effective January 5,
2007, is eligible for payouts under each of the plans based on the proportion
of the applicable three-fiscal-year period during which he was employed.

	
  

  	
   

  	
  Performance

  	
   

  	
  Estimated Future Payouts

  	
   

  
	
  Name

  	
   

  	
  Period

  	
   

  	
  Threshold

  	
   

  	
  Target

  	
   

  	
  Maximum

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ($)

  	
   

  	
  ($)

  	
   

  	
  ($)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Frederick W. Smith

  	
   

  	
  FY2005
  – FY2007

  	
   

  	
  562,500

  	
   

  	
  2,250,000

  	
   

  	
  3,375,000

  	
   

  
	
  

  	
   

  	
  FY2006
  – FY2008

  	
   

  	
  625,000

  	
   

  	
  2,500,000

  	
   

  	
  3,750,000

  	
   

  
	
  

  	
   

  	
  FY2007
  – FY2009

  	
   

  	
  875,000

  	
   

  	
  3,500,000

  	
   

  	
  5,250,000

  	
   

  
	
  David J.
  Bronczek

  	
   

  	
  FY2005
  – FY2007

  	
   

  	
  250,000

  	
   

  	
  1,000,000

  	
   

  	
  1,500,000

  	
   

  
	
   

  	
   

  	
  FY2006
  – FY2008

  	
   

  	
  250,000

  	
   

  	
  1,000,000

  	
   

  	
  1,500,000

  	
   

  
	
   

  	
   

  	
  FY2007
  – FY2009

  	
   

  	
  375,000

  	
   

  	
  1,500,000

  	
   

  	
  2,250,000

  	
   

  
	
  Alan B. Graf, Jr.

  	
   

  	
  FY2005
  – FY2007

  	
   

  	
  187,500

  	
   

  	
  750,000

  	
   

  	
  1,125,000

  	
   

  
	
  

  	
   

  	
  FY2006
  – FY2008

  	
   

  	
  187,500

  	
   

  	
  750,000

  	
   

  	
  1,125,000

  	
   

  
	
  

  	
   

  	
  FY2007
  – FY2009

  	
   

  	
  300,000

  	
   

  	
  1,200,000

  	
   

  	
  1,800,000

  	
   

  
	
  Daniel J.
  Sullivan

  	
   

  	
  FY2005
  – FY2007

  	
   

  	
  150,000

  	
   

  	
  600,000

  	
   

  	
  900,000

  	
   

  
	
   

  	
   

  	
  FY2006
  – FY2008

  	
   

  	
  175,000

  	
   

  	
  700,000

  	
   

  	
  1,050,000

  	
   

  
	
   

  	
   

  	
  FY2007
  – FY2009

  	
   

  	
  250,000

  	
   

  	
  1,000,000

  	
   

  	
  1,500,000

  	
   

  
	
  T. Michael Glenn

  	
   

  	
  FY2005
  – FY2007

  	
   

  	
  187,500

  	
   

  	
  750,000

  	
   

  	
  1,125,000

  	
   

  
	
  

  	
   

  	
  FY2006
  – FY2008

  	
   

  	
  187,500

  	
   

  	
  750,000

  	
   

  	
  1,125,000

  	
   

  
	
  

  	
   

  	
  FY2007 – FY2009

  	
   

  	
  300,000

  	
   

  	
  1,200,000

  	
   

  	
  1,800,000

  	
   

  

 

The
estimated individual future payouts set forth in the table above are set dollar
amounts ranging from threshold amounts, if the earnings-per-share 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.

 3
 

 

 

Other Arrangements

FedEx executive officers are eligible to receive certain
perquisites offered by FedEx, including financial counseling and tax
preparation services, personal use of corporate aircraft and, pursuant to FedEx’s
executive security policy, personal security and other services, including home
security systems and monitoring.

Executive officers also receive tax reimbursement
payments relating to restricted stock awards and certain perquisites.

 4Exhibit 10.80

Compensation Arrangements with Outside Directors

Beginning in July 2006, non-management (outside)
directors will be paid:

·                  a quarterly retainer of $18,750;

·                  $2,000 for each in-person Board meeting attended;

·                  $1,000 for each telephonic Board meeting attended;

·                  $1,750 for each in-person committee meeting
attended, other than for the Audit Committee;

·                  $875 for each telephonic committee meeting
attended, other than for the Audit Committee;

·                  $2,000 for each in-person Audit Committee meeting
attended; and

·                  $1,000 for each telephonic Audit Committee meeting
attended.

Directors who attend an in-person Board or committee
meeting telephonically will be paid 75% of the applicable in-person meeting fee.

Committee chairpersons of the Compensation, Nominating &
Governance and Information Technology Oversight Committees will be paid an
additional annual fee of $12,000. The Audit Committee chairperson will be paid
an additional annual fee of $20,000. Each outside director who is elected at
FedEx’s 2006 annual meeting will receive a stock option for 4,400 shares of
FedEx common stock on the date of the 2006 annual meeting. Any outside director
appointed to the Board after the 2006 annual meeting will receive a stock
option for 4,400 shares of FedEx common stock upon his or her appointment.

Outside directors are provided or reimbursed for travel (including
spousal travel for certain meetings) and lodging and are reimbursed for other
customary out-of-pocket expenses incurred in attending Board, committee and stockholder
meetings. In addition, outside directors have FedEx Express and FedEx Ground
discount shipping privileges and discount service privileges at FedEx Kinko’s
on the same basis as provided generally to employees.

Charles
T. Manatt was elected to the Board of Directors at the 2004 annual meeting of
stockholders. Mr. Manatt previously served as a director of FedEx (and its
predecessor, FedEx Express) from 1989 until his resignation in December 1999
to become the United States ambassador to the Dominican Republic. In accordance
with the terms of the FedEx Corporation Amended and Restated Retirement Plan
for Outside Directors, Mr. Manatt is paid a retirement benefit of $36,000
per year, payable in quarterly installments. The payments to Mr. Manatt
under this plan will end in December 2009 unless Mr. Manatt elects,
in accordance with the terms of the plan, to be paid a lump sum amount for the
remaining installments.

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