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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 Governance, Safety, and Public Policy 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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Board Leadership; Chief Executive Officer. The Board of Directors elects a Chairman from among its members. 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. Additionally, the Board may elect one of its independent members as Vice Chairman of the Board. If elected, the Vice Chairman of the Board is the Board’s designated successor to serve as Chairman of the Board.
The Chairman of the Board will preside at all meetings of the stockholders and the Board of Directors unless the Chairman of the Board designates the Vice Chairman of the Board (or Lead Independent Director if no Vice Chairman of the Board is serving) 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 Vice Chairman of the Board (or Lead Independent Director if no Vice Chairman of the Board is serving) will preside. If no Vice Chairman of the Board or Lead Independent Director is serving, the Chairman of the Board will designate another director to preside at any such meeting. The Company’s bylaws provide that the Chairman of the Board may, but need not be, the Chief Executive Officer. The Board believes that the Company is currently well served by having the Company’s founder serve as Executive Chairman and Chairman of the Board.
If the Chairman of the Board is the Chief Executive Officer, an Executive Chairman, or another director who does not satisfy the Board’s standards for determining director independence attached hereto as Appendix B, the chairperson of the Governance, Safety, and Public Policy Committee will be the Lead Independent Director and will have the following responsibilities and authority:
- Preside at executive sessions of the non-management and independent Board members and, if a Vice Chairman of the Board is not serving, preside at all other meetings of the Board of Directors at which the Chairman of the Board is not present;
- Serve as a liaison between the Chairman of the Board 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 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.
The Company’s bylaws provide that a Vice Chairman of the Board shall exercise the powers and perform the duties of the Chairman of the Board when the Chairman of the Board is not present. If elected, the Vice Chairman of the Board has the following additional responsibilities and authority:
- Work closely with the Chairman of the Board to assist the Chairman of the Board in carrying out his or her duties;
- Provide such other assistance as the Chairman of the Board may request;
- Communicate with stockholders of the Company, as appropriate, if requested by such stockholders; and
- Such other duties as may be prescribed by the Board of Directors from time to time.
The Chief Executive Officer is responsible to the Board of Directors for the day-to-day management of the Company’s business and affairs.
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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.
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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 Governance, Safety, and Public Policy 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 Governance, Safety, and Public Policy Committee will consider director candidates proposed by the Company’s stockholders. To recommend a prospective director candidate for the Governance, Safety, and Public Policy 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 Governance, Safety, and Public Policy Committee, c/o Corporate Secretary, 942 South Shady Grove Road, Memphis, Tennessee 38120.
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Board Membership Criteria. The Governance, Safety, and Public Policy 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/logistics/supply chain management experience; international experience; financial expertise; marketing expertise; retail/e-commerce expertise; technological/digital/cybersecurity expertise; energy expertise; human resource management expertise; risk management 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 Governance, Safety, and Public Policy 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 Governance, Safety, and Public Policy 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.
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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. However, the Board of Directors, upon the recommendation of the Governance, Safety, and Public Policy Committee, may grant an exception to this policy for a specific director. Any such exception must be renewed annually.
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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/or Lead
Independent Director (if serving) 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/or Lead Independent Director (if serving) in the event of any significant change in
that director’s personal or professional circumstances (as determined by the Governance, Safety,
and Public Policy Committee), including a change in his or her principal employment or job
responsibilities. In each case, the Governance, Safety, and Public Policy 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/or the
chairperson of the Governance, Safety, and Public Policy 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 and Finance Committee may serve on more than two other public company audit committees.