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Majority Voting for Director Elections; Modification of Holdover Rule/Director Resignation Policy. The Company’s bylaws provide for a majority-voting standard to be used in all director elections other than at a contested election meeting (as defined therein). Pursuant to this standard, a director nominee must receive more votes cast “for” than “against” his or her election in order to be elected to the Board of Directors. The bylaws provide that the Board shall not change this majority-voting standard to a plurality-voting standard without stockholder approval.
The Company's bylaws also address the so-called "holdover" rule of Delaware law, under which an incumbent director who fails to receive the required votes for reelection remains in office until his or her disqualification, death, resignation or removal. In particular, as permitted by Delaware law, the bylaws contain provisions to ensure that any candidate for reelection to the Board will have already tendered an irrevocable resignation conditioned upon failure to receive the required vote. The bylaws require the Board, within 90 days after certification of the election results, to accept any such resignation unless there is a compelling reason not to do so and to promptly disclose its decision (including, if applicable, the reasons for rejecting the resignation) in a filing with the Securities and Exchange Commission. Accordingly, absent a compelling and publicly disclosed reason, no Board member who fails to receive a majority vote will remain in office.
If a Board member fails to receive the required vote for reelection, the Nominating & Governance Committee will promptly consider whether the Board member's resignation should be accepted and recommend a course of action to the Board of Directors. The Board member whose resignation is under consideration should not participate in any recommendation or decision regarding that resignation.
While the determination of whether there is a compelling reason to reject a Board member's resignation is ordinarily a director-by-director, fact-specific inquiry, a situation in which no director nominee receives a majority vote would constitute a compelling reason for a Board member to remain in office, as the absence of a Board of Directors would cause significant uncertainty and disruption to the Company.
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Chairman of the Board and Chief Executive Officer. The Chairman of the Board is responsible for management of the Board's affairs, including ensuring the Board is organized properly, functions effectively and fulfills its responsibilities, and will preside at all meetings of the stockholders and the Board of Directors, unless the Chairman of the Board designates the Lead Independent Director to preside at any such meeting or the Chairman of the Board is not present at a meeting of the Board of Directors, in which case the Lead Independent Director will preside. The Chief Executive Officer is responsible to the Board of Directors for the day-to-day management of the Company's business and affairs. The Company's bylaws provide that the Chairman of the Board shall be the Chief Executive Officer, unless the Board of Directors decides otherwise. The Board believes that the Company has been and continues to be well served by having the Company's founder serve as both Chairman of the Board and Chief Executive Officer.
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Lead Independent Director. So long as the Chairman of the Board is the Chief Executive Officer, the chairperson of the Nominating & Governance Committee will be the Lead Independent Director. The Lead Independent Director will have the following responsibilities and authority:
- Preside at all meetings of the Board of Directors at which the Chairman of the Board and Chief Executive Officer is not present, including executive sessions of the non-management and independent Board members;
- Serve as a liaison between the Chairman of the Board and Chief Executive Officer and independent Board members, it being understood that all Board members have complete and open access to any member of management;
- Review and approve Board meeting agendas and Board meeting schedules and consult with the Chairman of the Board and Chief Executive Officer with regard to other information sent to the Board of Directors in connection with Board meetings or other Board action, it being understood that all Board members may place items on the agenda for Board meetings;
- Call meetings of the independent Board members, as necessary or appropriate; and
- Communicate with stockholders of the Company, as appropriate, if requested by such stockholders.
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Size of Board. The Company's bylaws provide that the Board of Directors shall consist of not more than fifteen members (with the exact number to be determined by the Board). The Board should be neither too small to maintain the needed expertise and independence, nor too large to function effectively. The Board of Directors currently believes that the optimal number of Board members is between eleven and fourteen, allowing, however, for changing circumstances that may warrant a higher or lower number from time to time.
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Selection of New Director Candidates. The Board of Directors has a duty to the Company's stockholders to identify the most qualified candidates to serve as Board members. The Board is responsible for recommending director candidates for election by the stockholders and for electing directors to fill vacancies or newly created directorships. The Board has delegated the screening and evaluation process for director candidates to the Nominating & Governance Committee, which will identify, evaluate and recruit highly qualified director candidates and recommend them to the Board.
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Recommendation of Director Candidates by Stockholders. The Nominating & Governance Committee will consider director candidates proposed by the Company's stockholders. To recommend a prospective director candidate for the Nominating & Governance Committee's consideration, stockholders may submit the candidate's name, qualifications, including whether the candidate satisfies the requirements set forth in these Guidelines, and other relevant biographical information in writing to: FedEx Corporation Nominating & Governance Committee, c/o Corporate Secretary, 942 South Shady Grove Road, Memphis, Tennessee 38120.
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Board Membership Criteria. The Nominating & Governance Committee is responsible for establishing and reviewing with the Board annually the criteria for Board membership. Candidates nominated for election or reelection to the Board of Directors must possess the following minimum qualifications:
- The highest level of personal and professional ethics, integrity and values;
- An inquiring and independent mind;
- Practical wisdom and mature judgment;
- Broad training and experience at the policy-making level in business, finance and accounting, government, education or technology;
- Expertise that is useful to the Company and complementary to the background and experience of other Board members, so that an optimal balance of Board members can be achieved and maintained;
- Willingness to devote the required time to carrying out the duties and responsibilities of Board membership;
- Commitment to serve on the Board for several years to develop knowledge about the Company's business;
- Willingness to represent the best interests of all stockholders and objectively appraise management performance; and
- Involvement only in activities or interests that do not conflict with the director's responsibilities to the Company and its stockholders.
In addition, it is desirable that the following qualities or skills be possessed by one or more of the Company's Board members: transportation industry experience; international experience; financial expertise; marketing expertise; technological expertise; energy expertise; and government experience. The Board seeks a diverse blend of experience and perspectives, institutional knowledge and personal chemistry, and directors who will provide sound and prudent guidance with respect to all of the Company's operations and interests. We also are committed to having a Board whose membership reflects a diversity of gender, race, ethnicity, age and background.
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Director Independence. The Board of Directors will have a majority of members who are independent and who meet the applicable independence requirements of the New York Stock Exchange, the Securities Exchange Act of 1934 and any other applicable law. The Board will affirmatively determine, and the Company will disclose as required, as to each Board member whether he or she is independent. The Board will make each such independence determination following the receipt of the recommendation and findings of the Nominating & Governance Committee. The Board's standards for determining director independence are attached hereto as Appendix B.
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Extending Invitation to Potential Director to Join Board. Once the Board of Directors, upon the recommendation of the Nominating & Governance Committee, determines to elect or nominate a new Board member, the formal invitation to the prospective Board member to join the Board of Directors will be extended, on behalf of the Board, by the Chairman of the Board and Chief Executive Officer.
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Mandatory Retirement for Non-Management Directors. A non-management director must retire from the Board immediately before the Company’s annual meeting of stockholders during the calendar year in which he or she attains age 75. A non-management director may not be nominated to a new term if he or she would be age 75 or older at the end of the calendar year in which the election is held.
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Mandatory Offer of Resignation Upon Change of Status. A management director must submit a letter of resignation as a Board member to the Chairman of the Board and Chief Executive Officer and/or Lead Independent Director upon any termination of his or her employment with the Company. A non-management director must submit a letter of resignation to the Chairman of the Board and Chief Executive Officer and/or Lead Independent Director in the event of any significant change in that director’s personal or professional circumstances (as determined by the Nominating & Governance Committee), including a change in his or her principal employment or job responsibilities. In each case, the Nominating & Governance Committee will review whether such change in circumstances is consistent with the criteria for Board membership, and will recommend a course of action to the Board of Directors.
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Term Limits. There are no term limits for service on the Board of Directors. The absence of term limits allows the Company to retain Board members who have been able to develop, over a period of time, increasing insight into the Company and its operations and, therefore, provide an increasing contribution to the Board as a whole.
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Limit on Number of Other Directorships and Other Commitments. Service as a member of the Company's Board of Directors is a significant commitment in terms of both time and responsibility. Accordingly, each Board member is encouraged to limit the number of other boards on which he or she serves and be mindful of his or her other existing and planned future commitments, so that such other directorships and commitments do not materially interfere with his or her service as an effective and active member of the Company's Board. Specifically, Board members should not sit on more than three other public company boards, and Board members who are executive officers of public companies should not sit on more than one other public company board. Board members must advise the Chairman of the Board and Chief Executive Officer and/or the chairperson of the Nominating & Governance Committee in advance of accepting an invitation to serve on another board.
In addition, given the significant time demands and responsibilities of serving on a public company audit committee, no member of the Audit Committee may serve on more than two other public company audit committees.