FedEx Policy on Personal Use of Corporate Aircraft

Purpose of the Policy

FedEx Corporation has established a policy regarding the personal use of its corporate aircraft, aimed at providing clear guidelines and procedures. This policy is essential for managing travel conducted using FedEx's fleet, which primarily serves business purposes.

Definitions of Travel Types

Under this policy, travel on FedEx corporate aircraft is categorized into three types:

Business Travel: This refers to flights that are reasonable and necessary for conducting FedEx's business, directly attributable to the company activities.
Business-related Travel: This type of travel includes spouses or adult guests of FedEx employees who accompany the employee on a business trip, primarily to assist with business purposes.
Personal Travel: Flights taken by FedEx officers, their family members, or guests that do not fall under the categories of business or business-related travel. Importantly, travel for children is considered personal unless they are FedEx employees traveling for business.

Key Terms

CEO: Chairman, President, and Chief Executive Officer of FedEx Corporation.
CFO: Executive Vice President and Chief Financial Officer of FedEx Corporation.
Code: Refers to the Internal Revenue Code of 1986 and its amendments.
Corporate Aviation: The department responsible for managing corporate aircraft at FedEx Express.
General Counsel: The executive responsible for legal affairs at FedEx.
SMC: Strategic Management Committee of FedEx Corporation.

Permitted Personal Use

For the CEO: The CEO must use FedEx corporate aircraft for both personal and business travel and is not charged for personal travel by family members or guests when his travel is categorized as business.
For Other Officers: They may also use the aircraft for personal travel, but only officers and their families are permitted to do so. Exceptions can be granted by the CEO, General Counsel, or CFO in extraordinary situations.

Priority of Use and Travel Categorization

When scheduling a flight, an officer must inform Corporate Aviation whether the travel is business, business-related, or personal. The categorization primarily depends on the main purpose of the trip, and all relevant information must be verified and recorded.

Charges for Personal Travel

Officers undertaking personal travel on corporate aircraft will be billed for two times the cost of fuel for the trip plus any applicable taxes. Personal travel costs are consolidated with the number of passengers:

If business travelers occupy 50% or more of the seats, no charge exists for personal travel on that flight.
Conversely, if business travelers occupy less than 50%, costs are allocated evenly across all passengers. For example, a flight with 12 passengers would allocate costs for personal travelers equally, multiplied by two for the fuel charge.

Reports for Executives

SMC members will receive monthly usage reports detailing their personal travel on corporate aircraft each fiscal year, including invoiced amounts and cumulative costs incurred.

Imputed Income and Tax Reimbursements

Imputed income is calculated according to IRS guidelines, specifically using Standard Industrial Fare Levels (SIFLS) that reflect the approximate cost of airline tickets for comparable travel. Changes in travel costs may result in imputed income assessments:

The CEO is specifically charged at a 'safe harbor' SIFL rate for personal travel and is provided tax protection for imputed income for himself and his traveling family members.
Other officers may receive tax protection for personal or business-related travel of their family members only if pre-approved by an SMC member and communicated to the FedEx Tax Department.

Compliance and Questions

All flights must comply with applicable laws. Any situations not directly addressed by this policy should align with its overarching intent. Questions or clarifications regarding the policy should be directed to the General Counsel or designated representatives.