FedEx Corporation Policy on Personal Use of Corporate Aircraft Summary

FedEx Corporation Policy on Personal Use of Corporate Aircraft

Purpose

FedEx maintains a fleet of corporate aircraft primarily for business travel by FedEx employees. This policy outlines guidelines and procedures for personal use of these aircraft.

Definitions

Travel Categories

  • Business: Travel by a FedEx employee that is reasonable and necessary for FedEx's business.

  • Business-related: Travel by an employee's spouse or adult guest accompanying the employee on a business trip to assist with the business purpose.

  • Personal: Travel by a FedEx officer, their family, or guests that is not business or business-related. Travel by children is categorized as personal unless they are FedEx employees on business travel.

Key Roles

  • CEO: FedEx Corporation’s Chairman, President, and Chief Executive Officer.

  • CFO: FedEx Corporation’s Executive Vice President and Chief Financial Officer.

  • General Counsel: FedEx Corporation’s Executive Vice President, General Counsel, and Secretary.

  • SMC: FedEx Corporation Strategic Management Committee.

Other Definitions

  • Code: The Internal Revenue Code of 1986, as amended.

  • Corporate Aviation: The Corporate Aviation Department of FedEx Express.

Permitted Personal Use of Corporate Aircraft

CEO

The CEO is required to use FedEx corporate aircraft for personal and business travel per FedEx’s executive security policy. The CEO’s family and guests can also use the aircraft for personal travel without incurring costs, taxes, or fees when accompanying the CEO on business travel.

Other Officers

Any other FedEx officer, their family, and guests may use FedEx corporate aircraft for personal travel.

Others

Personal travel is generally not permitted for non-officers. However, the CEO, General Counsel, and CFO can grant waivers in extraordinary circumstances.

Priority of Use

Use of corporate aircraft by FedEx officers is subject to priority guidelines issued by Corporate Aviation.

Categorization of Travel Procedures

Officers must inform Corporate Aviation whether their travel (and that of their family/guests) is business, business-related, or personal when scheduling a flight. The primary trip purpose determines the travel category. This information is recorded on the aircraft passenger authorization form, which the officer must verify and sign. A time-share agreement executed by the officer must be on file with Corporate Aviation prior to personal corporate aircraft travel by that officer or his or her family or guests. Corporate Aviation handles all regulatory filings related to personal travel on FedEx aircraft.

Service by FedEx Officers on an External Board

If the CEO and General Counsel approve an officer’s service on an external board, travel to that board’s meetings is categorized as business travel. Travel to other board or shareholder meetings will be categorized as personal.

Examples of Trip Categorizations

  • Officer attends a business meeting: The officer's flight is categorized as business travel.

  • Spouse accompanies officer to meet customers: If the spouse's primary purpose is to meet and interact with customers, their travel is business-related. If the purpose is personal, it is categorized as personal.

  • Officer's child accompanies them to a business meeting: The officer's travel is business; the child's travel is personal (unless the child is a FedEx employee on business travel).

  • SMC member attends a business meeting with other officers and a non-officer guest: The SMC member's travel is business; the others' travel is personal.

Charges for Personal Travel

For personal travel by officers, their family, or guests (excluding the CEO’s family/guests accompanying him on business travel), FedEx invoices the officer for two times the cost of fuel, plus applicable passenger ticket taxes and fees, as well as two times the fuel costs associated with any required deadhead flights. Payment is due within 15 calendar days of invoice receipt.

If business travelers occupy 50% or more of the available seats, no payment is required for those traveling personally.

If business travelers occupy less than 50% of the seats, fuel costs for personal travelers are allocated based on the total number of passengers. For example, if there are 12 passengers, each personal traveler will be allocated 1/121/12 of the fuel cost, multiplied by two, plus taxes and fees.

Reports

SMC members receive a monthly report detailing their personal aircraft usage, amounts invoiced and paid, and the cumulative aggregate incremental cost of such travel for the year.

Imputed Income and Tax Reimbursements

Imputed income is calculated using Standard Industrial Fare Levels (SIFLs) published by the U.S. Department of Transportation. SIFL rates approximate first-class airline ticket costs. FedEx imputes income to officers for personal and business-related travel to the extent that the SIFL value for all such travel from December 1 through November 30 exceeds the officer’s aggregate fuel payments.

The CEO is imputed income at “safe harbor” SIFL rates and receives tax protection (tax reimbursement payments) for imputed income from his personal travel and that of his family/guests who travel with him. However, the CEO is not tax-protected for personal travel by family/guests who do not travel with him.

SMC members receive tax protection for imputed income from business-related travel by their spouses and adult guests.

Other officers and employees receive tax protection for imputed income from business-related travel of their spouses/adult guests if an SMC member approves the trip and tax reimbursement in advance, and this approval is provided to the FedEx Tax Department on time.

Except as noted above, FedEx does not provide tax protection for imputed income related to personal or business-related travel on corporate aircraft.

Other

All usage of FedEx corporate aircraft must comply with applicable laws, rules, and regulations. Situations not covered in this policy should be addressed according to the policy’s intent. Questions should be directed to the General Counsel or their designees.

Amended May 25, 2007

Imputed income is calculated based on Standard Industrial Fare Levels (SIFLs), which estimate first-class airline ticket costs. FedEx calculates this income for officers based on personal and business-related travel. If the total SIFL value for travel from December 1 through November 30 exceeds what the officer paid in fuel costs, the difference is considered imputed income. The CEO receives tax protection (reimbursement) for imputed income from their personal travel and that of family/guests traveling with them, but not for family/guests traveling without the CEO. SMC members get tax protection for imputed income from business-related travel by their spouses and adult guests. Other officers and employees receive tax protection for imputed income from business-related travel of their spouses/adult guests only if an SMC member approves it in advance. Otherwise, FedEx generally does not provide tax protection for imputed income from personal or business-related travel.