Company Name: FedEx Corp.
Public Availability Date: July 1, 2004Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
APPENDIX 3
APPENDIX 4
STAFF REPLY LETTER [INQUIRY LETTER]
July 1, 2004 Robert T. Molinet
Staff Vice President
Securities & Corporate Law
FedEx Corporation
942 South Shady Grove Road
Memphis, TN 38120 Re: FedEx Corporation
Incoming letter dated May 13, 2004
Dear Mr. Molinet: This is in response to your letter dated May 13, 2003 concerning the shareholder
proposal submitted to FedEx by John Chevedden. Our response is attached to the
enclosed photocopy of your correspondence. By doing this, we avoid having to
recite or summarize the facts set forth in the correspondence. Copies of all of
the correspondence also will be provided to the proponent.
In connection with this matter, your attention is directed to the enclosure,
which sets forth a brief discussion of the Division's informal procedures
regarding shareholder proposals. Sincerely,
/s/ Martin P. Dunn
Deputy Director Enclosures cc: John Chevedden
2215 Nelson Avenue, No. 205
Redondo Beach, CA 90278-2453 [INQUIRY LETTER]
Via FedEx Express May 13, 2004 U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, D.C. 20549 Re: FedEx CorporationOmission of Stockholder Proposal of John Chevedden
Ladies and Gentlemen: The purpose of this letter is to inform you, pursuant to Rule 14a-8(j) under the
Securities Exchange Act of 1934, that FedEx Corporation intends to omit from its
proxy statement and form of proxy for the 2004 annual meeting of its
stockholders (the "2004 Proxy Materials") a stockholder proposal and supporting
statement relating to poison pill plans (the "Proposal") submitted by John
Chevedden (the "Proponent"). We believe that the Proposal may be excluded from
our 2004 Proxy Materials pursuant to Rule 14a-8(b) and Rule 14a-8(f)(1) because
the Proponent did not provide the requisite proof of continuous stock ownership
in response to our timely and adequate request for such proof of ownership. We
hereby respectfully request confirmation that the staff of the Division of
Corporation Finance (the "Staff") will not recommend any enforcement action if
we exclude the Proposal from our 2004 Proxy Materials. In accordance with Rule 14a-8(j), we are:
submitting this letter not later than 80 days prior to the date on which we
intend to file definitive 2004 Proxy Materials;
enclosing six copies of this letter and its exhibits; and
simultaneously providing a copy of this letter and all its exhibits to the
Proponent, thereby notifying him of our intention to exclude his Proposal from
our 2004 Proxy Materials. Background
On April 14, 2004, we received the Proposal via facsimile. A copy of the
Proponent's cover letter and the Proposal is attached as Exhibit A. Although the
Proponent indicated in his cover letter that he intends to hold his FedEx shares
through the date of our 2004 annual meeting, he did not include any evidence of
his stock ownership. The Proponent did not appear in our records as a registered stockholder. In
addition, he has not filed a Schedule 13D, Schedule 13G, Form 3, Form 4 or Form
5 with respect to FedEx common stock. Consequently, on April 16, 2004, we sent a
letter via FedEx Express to the Proponent requesting additional documentation
regarding his eligibility under Rule 14a-8(b)(1). In particular, we requested
that he provide a written statement from the record holder of his shares
verifying that, as of the date he submitted the Proposal, he continuously held
the requisite number of shares of FedEx common stock for at least one year. Our
letter stated that his response must be postmarked or transmitted electronically
no later than 14 days from the date of receipt of the letter. For the
Proponent's convenience, we also included a copy of Rule 14a-8. A copy of our
notice of deficiency is attached as Exhibit B. The Proponent received our notice
on April 19, 2004. Proof of delivery information is attached as Exhibit C.
On April 28, 2004, the Proponent faxed to us a letter from Fidelity Investments
confirming that "John Chevedden has continuously held no less than 100.000
shares of FDX since January 1, 2004" (emphasis added). A copy of this letter is
attached as Exhibit D. Upon receipt of this facsimile, we immediately called the
Proponent to advise him that the letter did not confirm that he has held the
requisite FedEx shares since April 14, 2003, which is one year prior to the date
he submitted the proposal. The Proponent acknowledged this fact. We have
received no further information from the Proponent regarding his eligibility
under Rule 14a-8(b)(1). Basis for Omission
Pursuant to Rule 14a-8(b)(1), in order to be eligible to submit a proposal, a
stockholder must have continuously held at least $2,000 in market value, or 1%,
of a company's voting securities for at least one year as of the date of
submission of the proposal. Under Rule 14a-8(b)(2)(i), a non-registered
stockholder may prove eligibility by providing a written statement from the
record holder of his shares verifying that, as of the date he submitted the
proposal, he continuously owned the requisite number of shares for at least one
year. If a stockholder fails to follow an eligibility or procedural requirement, under
Rule 14a-8(f)(1), a company may exclude the proposal if:
within 14 days of receiving the proposal, it provides the stockholder with
written notice of the defect, including the time frame for responding; and
the stockholder fails to respond to the notice within 14 days of receiving the
notice or the stockholder timely responds but does not cure the eligibility or
procedural defect. In Staff Legal Bulletin No. 14, "Shareholder Proposals" (July 13, 2001), the
Staff stated that companies should consider the following guidelines when
drafting a notice to a stockholder regarding an eligibility or procedural
defect:
provide adequate detail about what the stockholder must do to remedy the
defect;
although not required, consider including a copy of Rule 14a-8;
expressly state that the stockholder must respond to the company's notice
within 14 days of receiving the notice; and
send the notification by a means that will allow the company to determine when
the stockholder received the notice. The Proponent has failed to provide evidence that he satisfies the continuous
holding period requirement of Rule 14a-8(b)(1). At the time he submitted the
Proposal, he did not include any proof of ownership of FedEx common stock. We
then provided the Proponent with a timely and adequate notice of defect: it
clearly and fully explained the defect, what he must do to correct the defect,
and the time frame for his response. As a convenience, we also included a copy
of Rule 14a-8. The Proponent's response was required to be postmarked or transmitted
electronically no later than May 3, 2004 (14 days after his receipt of our
defect notice). Although he responded within the required time frame, his
response did not cure the eligibility defect. According to Fidelity Investments,
the Proponent has held at least 100 shares of FedEx common stock since January
1, 2004. To demonstrate his eligibility, however, the Proponent was required to
submit proof of continuous ownership since April 14, 2003, which is one year
prior to the date he submitted the Proposal. Upon receipt of his response, as an
additional courtesy, we telephoned the Proponent to advise him that his response
did not cure the eligibility defect. He acknowledged this fact, but provided no
further response by May 3, 2004. The Staff has consistently taken the position that if a proponent does not
provide timely and sufficient supporting documentation that he has satisfied the
minimum ownership requirement for the one-year period specified by Rule
14a-8(b)(1), the proposal may be excluded under Rule 14a-8(f)(1). See, e.g.,
AT&T Wireless Services, Inc. (February 6, 2004); Pfizer Inc. (January 16, 2004);
Burlington Northern Santa Fe Corporation (January 9, 2004); and Morgan Stanley
(December 24, 2002). The Proponent failed to provide, within 14 days of receiving our timely and
adequate notice of deficiency, documentary support that he held the requisite
number of shares of FedEx common stock for at least one year as of the date he
submitted the Proposal. Accordingly, the Proposal may be omitted from our 2004
Proxy Materials in reliance on Rule 14a-8(b) and Rule 14a-8(f)(1).
Conclusion For the foregoing reasons, we respectfully request that the Staff agree that we
may omit the Proposal from our 2004 Proxy Materials. If you have any questions or need any additional information, please feel free
to call the undersigned at (901) 818-7029. Thank you for your prompt attention
to this request. Very truly yours, FedEx Corporation
/s/ Robert T. Molinet
Staff Vice President
Securities & Corporate Law Attachments
cc: John Chevedden [APPENDIX 1]
EXHIBIT A Mr. Frederick W. Smith
Chairman
FedEx Corporation (FDX)
942 S. Shady Grove Rd.
Memphis, TN 38120
PH: 901-369-3600
FX: 901-395-2000 Dear Mr. Smith,
This Rule 14a-8 proposal is respectfully submitted for the next annual
shareholder meeting. This proposal is submitted to support the long-term
performance of our company. I intend to hold my stock until after the annual
sharcholder meeting. This submitted format, with the shareholder-supplied
emphasis, is intended to be used for definitive proxy publication.
Your consideration and the consideration of the Board of Directors is
appreciated. Sincerely, /s/
John Chevedden
Shareholder cc: Kenneth R. Masterson
Corporate Secretary
FX: 901-818-7590 [APPENDIX 2]
3Subject Poison Pills to Shareholder Vote RESOLVED: Shareholders request that our Board of Directors redeem any poison
pill previously issued and not adopt, extend or renew any poison pill unless
such adoption, extension or renewal has been approved by the affirmative vote of
the holders of a majority of shares present and voting on the matter. The vote
to be conducted as soon as may be practicable. This topic also won an overall 60% yes-vote at 79 companies in 2003.1
John Chevedden, 2215 Nelson Ave., No. 205, Redondo Beach, Calif, 90278 submitted
this proposal. Poison Pill Negative "That's the key negative of poison pillsinstead of protecting investors, they
can also preserve the interests of management deadwood as well."
Source: Morningstar.com, Aug. 15, 2003
Pills Entrench Current Management
"They [poison pills] entrench the current management, even when it's doing a
poor job. They [poison pills] water down shareholders' votes and deprive them of
a meaningful voice in corporate affairs." Source: "Take on the Street" by Arthur Levitt, SEC Chairman, 1993-2001, page 215
The Potential of a Offer for Our Stock Can Motivate Our Directors
Hectoring directors to act more independently is a poor substitute for the
bracing possibility that shareholders could turn on a dime and sell the company
out from under its present management. Source: Wall Street Journal, Feb. 24, 2003, Special 12-page "Corporate
Governance" insert. Diluted Stock
"There are often reasons that hostile takeovers should fail. But anti-democratic
schemes to flood the market with diluted stock are not one of them."
Source: The Motley Fool, June 13, 1997.
Like a Dictator "[Poison pill] That's akin to the argument of a benevolent dictator, who says,
'Give up more of your freedom and I'll take care of you."
Source: T.J. Dermot Dunphy, CEO of Sealed Air (NYSE) for more than 25 years.
Council of Institutional Investors Recommendation
The Council of Institutional Investors www.cii.org, whose members have $2
trillion invested, called for shareholder approval of poison pills.2
Subject Poison Pills to Shareholder Vote Yes on 3
Notes: The above submitted format is intended for publication.
Please note that the title of the proposal and the headings in the proposal are
part of the argument in favor of the proposal. In the interest of clarity the title of the proposal is intended to be
consistent throughout the proxy materials. In the interest of clarity the headings and sources are not intended to be
separated from the accompanying text. Please advise if there is any typographical question.
-----FOOTNOTES----- 1 IRRC (Investor Responsibility Research Center) Corporate Governance Bulletin,
June - Sept. 2003 2 Council of Institutional Investors Corporate Governance Policies, updated
September 4, 2003 [APPENDIX 3]
EXHIBIT B VIA FEDERAL EXPRESS April 16, 2004
John Chevedden
2215 Nelson Avenue
No. 205
Redondo Beach, California 90278-2453 Subject: Your Stockholder Proposal
Dear Mr. Chevedden: We received your stockholder proposal on April 14, 2004.
Pursuant to Rule 14a-8(b)(1) under the Securities Exchange Act of 1934, in order
to be eligible to submit a proposal, you must have continuously held at least
$2,000 in market value, or 1%, of FedEx Corporation common stock for at least
one year as of the date you submitted the proposal. Your name did not appear in our records as a registered stockholder. As required
by Rule 14a-8(b)(2), please provide a written statement from the record holder
of your shares verifying that, as of the date you submitted the proposal, you
continuously owned the requisite shares of FedEx Corporation common stock for at
least one year. I have enclosed for your convenience a copy of Rule 14a-8.
Please send the statement to my attention. My contact information is included on
the attached business card. Rule 14a-8(f) provides that your response must be
postmarked, or transmitted electronically, no later than 14 days from the date
you receive this letter. If you have any questions, please call me.
Sincerely, FedEx Corporation
/s/ C. Edward Klank III
Enclosure [APPENDIX 4]
EXHIBIT D April 28, 2004 John R. Chevedden
2215 Nelson Ave. Number 205
Redondo Beach, CA 90278-2453 To Whom It May Concern:
I am responding to Mr. Chevedden's request to confirm his positions in Federal
Express Inc. (FDX) at Fidelity Investments. I can confirm that John Chevedden has continuously held no less than 100,000
shares of FDX since January 1, 2004. I hope this information is helpful. If you have any questions, please contact me
at 800-556-7891, extension 6761. I am available Monday through Friday, 8:30 a.m.
to 5:00 p.m. Eastern time. Sincerely,
Jason DuBose
Client Service Specialist
Our File: W022472-27APR04 [STAFF REPLY LETTER]
July 1, 2004 Response of the Office of Chief Counsel
Division of Corporation Finance Re: FedEx Corporation
Incoming letter dated May 13, 2004
The proposal relates to poison pills. There appears to be some basis for your view that FedEx may exclude the proposal
under rule 14a-8(f). We note that the proponent appears to have failed to
supply, within 14 days of receipt of FedEx's request, documentary support
sufficiently evidencing that he continuously held FedEx's securities for the
one-year period required by rule 14a-8(b). Accordingly, we will not recommend
enforcement action to the Commission if FedEx omits the proposal from its proxy
materials in reliance on rules 14a-8(b) and 14a-8(f). Sincerely,
/s/ Grace K. Lee
Special Counsel
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