UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.               )

To Our Stockholders:

We cordially invite you to attend the 2005 annual meeting of FedEx’s stockholders. The meeting will take place in The Grand Ballroom at The Peabody Hotel, 149 Union Avenue, Memphis, Tennessee 38103, on Monday, September 26, 2005, at 10:00 a.m. local time. We look forward to your attendance either in person or by proxy.

The purpose of the meeting is to:

1.                Elect thirteen directors, each for a term of one year;

2.                Approve the adoption of an amendment to FedEx’s Incentive Stock Plan to increase the number of shares of common stock reserved for issuance pursuant to stock options by 7,500,000 shares and to increase the number of restricted shares of common stock issuable under the plan by 750,000 shares;

3.                Ratify the appointment of Ernst & Young LLP as FedEx’s independent registered public accounting firm for fiscal year 2006;

4.                Act upon three stockholder proposals, if properly presented at the meeting; and

5.                Transact any other business that may properly come before the meeting.

Only stockholders of record at the close of business on August 1, 2005 may vote at the meeting or any postponements or adjournments of the meeting.

HOW TO VOTE: Please complete, date, sign and return the accompanying proxy card or vote electronically via the Internet or by telephone. The enclosed return envelope requires no additional postage if mailed in either the United States or Canada.

REDUCE MAILING COSTS: If you vote on the Internet, you may elect to have next year’s proxy statement and annual report to stockholders delivered to you via the Internet. We strongly encourage you to enroll in Internet delivery. It is a cost-effective way for us to send you proxy materials and annual reports.

ANNUAL MEETING ADMISSION: If you attend the annual meeting in person, you will need to present your admission ticket, or an account statement showing your ownership of FedEx common stock as of the record date, and a valid, government-issued photo identification. The indicated portion of your proxy card or voter instruction card will serve as your admission ticket.

Your vote is very important. Please vote whether or not you plan to attend the meeting.

2005 PROXY STATEMENT

TABLE OF CONTENTS

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FedEx Corporation

942 South Shady Grove Road
Memphis, Tennessee 38120

2005 PROXY STATEMENT

FedEx’s Board of Directors is furnishing you this proxy statement in connection with the solicitation of proxies on its behalf for the 2005 Annual Meeting of Stockholders. The meeting will take place in The Grand Ballroom at The Peabody Hotel, 149 Union Avenue, Memphis, Tennessee 38103, on Monday, September 26, 2005, at 10:00 a.m. local time. At the meeting, stockholders will vote on the election of thirteen directors, the adoption of an amendment to FedEx’s Incentive Stock Plan to increase the number of option shares and restricted shares issuable under the plan, the ratification of FedEx’s independent registered public accounting firm and, if properly presented at the meeting, three stockholder proposals. Stockholders also will consider any other matters that may properly come before the meeting, although we know of no other business to be presented.

By submitting your proxy (either by signing and returning the enclosed proxy card or by voting electronically on the Internet or by telephone), you authorize Christine P. Richards, FedEx’s Executive Vice President, General Counsel and Secretary, and Alan B. Graf, Jr., FedEx’s Executive Vice President and Chief Financial Officer, to represent you and vote your shares at the meeting in accordance with your instructions. They also may vote your shares to adjourn the meeting and will be authorized to vote your shares at any postponements or adjournments of the meeting.

FedEx’s Annual Report to Stockholders for the fiscal year ended May 31, 2005, which includes FedEx’s audited financial statements, accompanies this proxy statement. Although the Annual Report is being distributed with this proxy statement, it does not constitute a part of the proxy solicitation materials and is not incorporated by reference into this proxy statement.

We are first sending the proxy statement, form of proxy and accompanying materials to stockholders on or about August 15, 2005.

YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY SUBMIT YOUR PROXY EITHER IN THE ENCLOSED ENVELOPE, VIA THE INTERNET OR BY TELEPHONE.

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INFORMATION ABOUT THE ANNUAL MEETING

What is the purpose of the annual meeting?

At the annual meeting, the stockholders will be asked to:

·                    elect thirteen directors, each for a term of one year;

·                    approve the adoption of an amendment to FedEx’s Incentive Stock Plan to increase the number of option shares and restricted shares issuable under the plan;

·                    ratify the appointment of Ernst & Young LLP as FedEx’s independent registered public accounting firm; and

·                    act on three stockholder proposals, if properly presented.

Stockholders also will transact any other business that may properly come before the meeting. Members of FedEx’s management team will be present at the meeting to respond to appropriate questions from stockholders.

Who is entitled to vote?

The record date for the meeting is August 1, 2005. Only stockholders of record at the close of business on that date are entitled to vote at the meeting. The only class of stock entitled to be voted at the meeting is FedEx common stock. Each outstanding share of common stock is entitled to one vote for all matters before the meeting. At the close of business on the record date there were 302,827,249 shares of FedEx common stock outstanding.

Am I entitled to vote if my shares are held in “street name”?

If a bank or brokerage firm holds your shares, you are considered the “beneficial owner” of shares held in “street name.”  If your shares are held in street name, these proxy materials are being forwarded to you by your bank or brokerage firm (the “record holder”), along with a voting instruction card. As the beneficial owner, you have the right to direct your record holder how to vote your shares, and the record holder is required to vote your shares in accordance with your instructions. If you do not give instructions to your bank or brokerage firm, it will nevertheless be entitled to vote your shares in its discretion on the election of directors (Proposal 1) and the ratification of the appointment of the independent registered public accounting firm (Proposal 3). Absent your instructions, the record holder will not be permitted, however, to vote your shares on the adoption of the amendment to FedEx’s Incentive Stock Plan (Proposal 2) or the three stockholder proposals (Proposals 4, 5 and 6) and your shares will be considered “broker non-votes” on those proposals.

As the beneficial owner of shares, you are invited to attend the annual meeting. If you are a beneficial owner, however, you may not vote your shares in person at the meeting unless you obtain a proxy, executed in your favor, from the record holder of your shares.

How many shares must be present to hold the meeting?

A quorum must be present at the meeting for any business to be conducted. The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the record date will constitute a quorum. Proxies received but marked as abstentions

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or treated as broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting.

What if a quorum is not present at the meeting?

If a quorum is not present or represented at the meeting, the holders of a majority of the shares entitled to vote at the meeting who are present in person or represented by proxy, or the chairman of the meeting, may adjourn the meeting until a quorum is present or represented. The time and place of the adjourned meeting will be announced at the time the adjournment is taken, and no other notice will be given.

How do I vote?

1.   YOU MAY VOTE BY MAIL.   If you properly complete, sign and date the accompanying proxy card and return it in the enclosed envelope, it will be voted in accordance with your instructions. The enclosed envelope requires no additional postage if mailed in either the United States or Canada.

2.   YOU MAY VOTE BY TELEPHONE OR ON THE INTERNET.   If you are a registered stockholder (that is, if you hold your stock directly and not in street name), you may vote by telephone or on the Internet by following the instructions included on the proxy card. If you vote by telephone or on the Internet, you do not have to mail in your proxy card. If you wish to attend the meeting in person, however, you will need to bring the admission ticket attached to the proxy card with you. Internet and telephone voting are available 24 hours a day. Votes submitted through the Internet or by telephone must be received by 11:59 p.m. Eastern time on September 25, 2005.

If your shares are held in street name, you still may be able to vote your shares electronically by telephone or on the Internet. A large number of banks and brokerage firms participate in a program provided through ADP Investor Communications Services, which offers telephone and Internet voting options. If your shares are held in an account at a bank or brokerage firm that participates in the ADP program, you may vote those shares electronically by telephone or on the Internet by following the instructions set forth on the voting form provided to you.

NOTE: If you vote on the Internet, you may elect to have next year’s proxy statement and annual report to stockholders delivered to you via the Internet. We strongly encourage you to enroll in Internet delivery. It is a cost-effective way for us to send you proxy materials and annual reports.

3.   YOU MAY VOTE IN PERSON AT THE MEETING.   If you are a registered stockholder and attend the meeting, you may deliver your completed proxy card in person. Additionally, we will pass out ballots to registered stockholders who wish to vote in person at the meeting. Beneficial owners of shares held in street name who wish to vote at the meeting will need to obtain a proxy from their record holder.

How do I vote my shares held in a FedEx benefit plan?

If you own shares of FedEx common stock through a FedEx or subsidiary benefit plan, you can direct the trustee or the record holder to vote the shares held in your account in accordance with your instructions by completing the proxy card and returning it in the enclosed envelope or by registering your instructions via the Internet or telephone as directed on the proxy card. If you register your voting instructions by telephone or on the Internet, you do not have to mail in the proxy card. If you wish to attend the meeting in person, however, you will need to bring the admission ticket attached to the

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proxy card with you. In order to instruct a plan trustee on the voting of shares held in your account, your instructions must be received by September 21, 2005. If your voting instructions are not received by that date, each plan trustee will vote your shares in the same proportion as the shares for which voting instructions have been received.

Who can attend the meeting?

Only stockholders eligible to vote or their authorized representatives will be admitted to the meeting. If you plan to attend the meeting, detach and bring with you the stub portion of your proxy card, which is marked “Admission Ticket.”  You also must bring a valid, government-issued photo identification, such as a driver’s license or a passport.

If your shares are held in street name, you must bring the indicated portion of your voter instruction card. Alternatively, you may bring other proof of ownership, such as your most recent brokerage account statement, which clearly shows your ownership of FedEx common stock as of the record date. In addition, you must bring a valid, government-issued photo identification, such as a driver’s license or a passport.

Security measures will be in place at the meeting to help ensure the safety of attendees. Metal detectors similar to those used in airports will be located at the entrance to the meeting room and briefcases, handbags and packages will be inspected. No cameras or recording devices of any kind, or signs, placards, banners or similar materials, may be brought into the meeting. Anyone who refuses to comply with these requirements will not be admitted.

Can I change my vote after I submit my proxy?

Yes, you may revoke your proxy and change your vote:

·                    by signing another proxy with a later date;

·                    by voting electronically by telephone or on the Internet (your latest telephone or Internet vote is counted); or

·                    if you are a registered stockholder, by giving written notice of such revocation to the Secretary of FedEx prior to or at the meeting or by voting in person at the meeting.

Your attendance at the meeting itself will not revoke your proxy unless you give written notice of revocation to the Secretary before your proxy is voted or you vote in person at the meeting.

Will my vote be kept confidential?

Yes, your vote will be kept confidential and not disclosed to FedEx unless:

·                    required by law;

·                    you expressly request disclosure on your proxy; or

·                    there is a proxy contest.

Who will count the votes?

FedEx’s transfer agent, EquiServe Trust Company, N.A., will tabulate and certify the votes. A representative of the transfer agent will serve as the inspector of election.

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How does the Board of Directors recommend I vote on the proposals?

Your Board recommends that you vote:

·                    FOR the election of the thirteen nominees to the Board of Directors;

·                    FOR the adoption of the amendment to FedEx’s Incentive Stock Plan to increase the number of option shares and restricted shares issuable under the plan;

·                    FOR the ratification of the appointment of Ernst & Young LLP as FedEx’s independent registered public accounting firm; and

·                    AGAINST each of the stockholder proposals.

What if I do not specify how my shares are to be voted?

If you submit a proxy but do not indicate any voting instructions, your shares will be voted:

·                    FOR the election of the thirteen nominees to the Board of Directors;

·                    FOR the adoption of the amendment to FedEx’s Incentive Stock Plan to increase the number of option shares and restricted shares issuable under the plan;

·                    FOR the ratification of the appointment of Ernst & Young LLP as FedEx’s independent registered public accounting firm; and

·                    AGAINST each of the stockholder proposals.

Will any other business be conducted at the meeting?

FedEx’s Bylaws require stockholders to give advance notice of any proposal intended to be presented at the meeting. The deadline for this notice has passed and we have not received any such notices. If any other matter properly comes before the stockholders for a vote at the meeting, however, the proxy holders will vote your shares in accordance with their best judgment.

How many votes are required to elect the director nominees?

The affirmative vote of a plurality of the votes cast at the meeting is required to elect the thirteen nominees as directors. This means that the thirteen nominees will be elected if they receive more affirmative votes than any other person. If you vote “Withheld” with respect to one or more nominees, your shares will not be voted with respect to the person or persons indicated, although they will be counted for purposes of determining whether there is a quorum.

What happens if a nominee is unable to stand for election?

If a nominee is unable to stand for election, the Board of Directors may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders will vote your shares for the substitute nominee, unless you have withheld authority.

How many votes are required to adopt the amendment to FedEx’s Incentive Stock Plan?

The adoption of the amendment to FedEx’s Incentive Stock Plan to increase the number of option shares and restricted shares issuable under the plan requires the affirmative vote of a majority of the shares present at the meeting in person or by proxy and entitled to vote.

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How many votes are required to ratify the appointment of FedEx’s independent registered public accounting firm?

The ratification of the appointment of Ernst & Young LLP as FedEx’s independent registered public accounting firm requires the affirmative vote of a majority of the shares present at the meeting in person or by proxy and entitled to vote.

How many votes are required to approve each of the stockholder proposals?

If properly presented at the meeting, approval of each stockholder proposal requires the affirmative vote of a majority of the shares present at the meeting in person or by proxy and entitled to vote. Approval of a stockholder proposal would merely serve as a recommendation to the Board to take the necessary steps to implement such proposal.

How will abstentions be treated?

Abstentions will be treated as shares present for quorum purposes and entitled to vote, so they will have the same practical effect as votes against a proposal.

How will broker non-votes be treated?

Broker non-votes will be treated as shares present for quorum purposes, but not entitled to vote. Absent instructions from you, your broker may not vote your shares on the adoption of the amendment to FedEx’s Incentive Stock Plan (Proposal 2) or the three stockholder proposals (Proposals 4, 5 and 6). A broker non-vote with respect to these proposals will not affect their outcome.

Your broker will be entitled to vote your shares in its discretion on the election of directors (Proposal 1) and the ratification of the appointment of the independent registered public accounting firm (Proposal 3), without your voting instructions on these items.

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STOCK OWNERSHIP

Directors and Executive Officers

The following table sets forth the amount of FedEx’s common stock beneficially owned by each director, each named executive officer included in the Summary Compensation Table on page 20 and all directors and executive officers as a group, as of August 1, 2005. Unless otherwise indicated, beneficial ownership is direct and the person indicated has sole voting and investment power.

*                    Less than 1% of FedEx’s outstanding common stock.

(1)            Reflects the number of shares that can be acquired at August 1, 2005 or within 60 days thereafter through the exercise of stock options. These shares are excluded from the column headed “Number of Shares,” but included in the ownership percentages reported in the column headed “Percent of Class.”

(2)            Based on 302,827,249 shares outstanding on August 1, 2005.

(3)            Includes 15,187,448 shares owned by Mr. Smith, 4,141,280 shares owned by Frederick Smith Enterprise Company, Inc. (“Enterprise”), a family holding company, 736 shares owned by Mr. Smith’s spouse, 82,343 shares owned by Mr. Smith’s daughter and 82,343 shares owned by Mr. Smith’s minor child. Regions Morgan Keegan Trust, FSB, Memphis, Tennessee, as trustee of a trust of which Mr. Smith is the lifetime beneficiary, holds 55% of Enterprise’s outstanding stock and Mr. Smith owns 45% directly. Also includes 2,252 shares held in FedEx’s retirement savings plan. Mr. Smith’s business address is 942 South Shady Grove Road, Memphis, Tennessee 38120.

(4)            Includes 2,000 shares held in a managed account of which Mr. Barksdale is trustee and 40,800 shares held in other managed accounts.

(5)            Excludes 41,784 shares owned by members of Mr. Greer’s family, as to which Mr. Greer disclaims beneficial ownership, and includes 37,312 shares owned by Greer Investment Partner II, L.P. Mr. Greer disclaims beneficial ownership of the shares owned by the partnership except to the extent of his pecuniary interest therein.

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(6)            Includes 11,600 shares owned by family trusts.

(7)            Includes the following shares held in FedEx’s retirement savings plan:  Mr. Bronczek – 655 shares; Mr. Graf – 420; shares; and Mr. Masterson – 792 shares.

(8)            Includes 108,000 shares owned by Glenn Family Partners, L.P. Mr. Glenn disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Also includes 537 shares held in FedEx’s retirement savings plan.

(9)            Does not include Mr. Masterson, who retired as FedEx’s Executive Vice President, General Counsel and Secretary effective June 1, 2005.

(10)     Includes 31,410 stock units held in deferred compensation plans. These stock units are payable in shares of FedEx common stock on a one-for-one basis.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires directors and certain officers of FedEx and persons who own more than ten percent of FedEx’s common stock to file with the Securities and Exchange Commission initial reports of beneficial ownership (Form 3) and reports of subsequent changes in their beneficial ownership (Form 4 or Form 5) of FedEx’s common stock. Such directors, officers and greater-than-ten-percent stockholders are required to furnish FedEx with copies of the Section 16(a) reports they file. The Securities and Exchange Commission has established specific due dates for these reports, and FedEx is required to disclose in this proxy statement any late filings or failures to file.

Based solely upon a review of the copies of the Section 16(a) reports (and any amendments thereto) furnished to FedEx and written representations from certain reporting persons that no additional reports were required, FedEx believes that its directors, reporting officers and greater-than-ten-percent stockholders complied with all these filing requirements for the fiscal year ended May 31, 2005, except Judith L. Estrin, who inadvertently failed to timely report a single transaction involving the transfer of 10,000 shares of FedEx common stock, which transaction was subsequently reported on a Form 5.

Significant Stockholders

The following table lists certain persons known by FedEx to own beneficially more than five percent of FedEx’s outstanding shares of common stock.

(1)            As of June 30, 2005, PRIMECAP Management Company, a registered investment advisor, had sole voting power over 3,163,882 shares and sole investment power over all 21,550,557 shares.

(2)            As of March 31, 2005, Marsico Capital Management, LLC, a registered investment advisor, had sole voting power over 14,737,712 shares and sole investment power over all 18,607,833 shares.

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CORPORATE GOVERNANCE MATTERS

Corporate Governance Documents

In furtherance of its longstanding goals of providing effective governance of FedEx’s business and affairs for the long-term benefit of stockholders and promoting a culture and reputation of the highest ethics, integrity and reliability, the Board of Directors has adopted Corporate Governance Guidelines, charters for its Audit, Compensation and Nominating & Governance Committees and a Code of Business Conduct & Ethics for directors, officers and employees of FedEx. Each of these documents is available, free of charge, in print to any stockholder who requests it and in the corporate governance section of the Investor Relations page of our Web site at http://www.fedex.com/us/ investorrelations/corpgov. The information on FedEx’s Web site, however, is not incorporated by reference in, and does not form part of, this proxy statement.

Director Independence

The Board of Directors has determined that all of its members are independent and meet the independence requirements of the New York Stock Exchange and the Board’s standards for determining director independence, except for Frederick W. Smith and J.R. Hyde, III. Mr. Smith is FedEx’s Chairman of the Board, President and Chief Executive Officer. Mr. Hyde has an ownership interest in HOOPS, L.P., with which FedEx has a relationship. For more information, please see page 14, “Certain Relationships and Related Transactions.”  The Board’s standards for determining director independence are included in FedEx’s Corporate Governance Guidelines and are attached to this proxy statement as Appendix A.

Each member of the Audit, Compensation and Nominating & Governance Committees meets the applicable independence requirements of the New York Stock Exchange.

Audit Committee Financial Experts

The Board of Directors has determined that at least one member of the Audit Committee, John A. Edwardson, is an audit committee financial expert as such term is defined in Item 401(h)(2) of Regulation S-K, promulgated by the Securities and Exchange Commission.

Director Mandatory Retirement

A director must retire immediately before the annual meeting of FedEx’s stockholders during the calendar year in which he or she attains age 72. There are no directors retiring under this provision at the annual meeting.

Stock Ownership Goal for Directors and Senior Officers

In order to further align the interests of our directors and senior officers with those of FedEx’s stockholders, the Board of Directors has established a goal that (i) within three years after joining the Board, each non-management director own FedEx shares valued at three times his or her annual retainer fee, and (ii) within four years after being appointed to his or her position, each member of senior management own a certain number of FedEx shares (the number of shares depends on the officer’s position). For purposes of meeting this goal, unvested restricted stock is counted, but unexercised stock options are not. The Board also recommends that each director and senior officer retain shares acquired upon stock option exercises until his or her goal is met. The stock ownership goal is included in FedEx’s Corporate Governance Guidelines. As of August 1, 2005, each of the nine

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directors who had been on the Board for over three years and each of the seven officers who had been a FedEx executive officer for over four years owned sufficient shares to comply with this goal.

Policy Statement on Poison Pills

The Board of Directors has adopted a policy requiring stockholder approval for any future “poison pill” prior to or within twelve months after adoption of the poison pill. (A poison pill is a device used to deter a hostile takeover. Note that FedEx does not currently have, nor have we ever had, a poison pill.)  The policy on poison pills is included in FedEx’s Corporate Governance Guidelines.

Executive Sessions of Non-Management Directors

Non-management Board members meet without management present at least twice annually at regularly scheduled executive sessions. At least once a year, such meetings include only the independent members of the Board. The Chairman of the Nominating & Governance Committee presides over meetings of the non-employee and independent directors.

Communications with Directors

You may communicate directly with any member or committee of the Board of Directors by writing to:  FedEx Corporation Board of Directors, c/o Corporate Secretary, 942 South Shady Grove Road, Memphis, Tennessee 38120. Please specify to whom your letter should be directed. The Corporate Secretary of FedEx will review all such correspondence and regularly forward to the Board a summary of all such correspondence and copies of all correspondence that, in her opinion, deals with the functions of the Board or its committees or that she otherwise determines requires the attention of any member, group or committee of the Board of Directors. Board members may at any time review a log of all correspondence received by FedEx that is addressed to Board members and request copies of any such correspondence.

Nomination of Director Candidates

The Nominating & Governance Committee will consider director nominees proposed by 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 below, 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. FedEx’s Bylaws require stockholders to give advance notice of stockholder proposals, including nominations of director candidates. For more information, please see page 61, “Additional Information – Stockholder Proposals for 2006 Annual Meeting.”

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 identifies, evaluates and recruits highly qualified director candidates and recommends them to the Board. The Nominating & Governance Committee considers potential candidates for director, which may come to the attention of the Nominating & Governance Committee through current directors, management, professional search firms, stockholders or other persons. The Nominating & Governance Committee considers and evaluates a director candidate recommended by a stockholder in the same manner as a nominee recommended by a Board member, management or other sources.

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If the Nominating & Governance Committee has either identified a prospective nominee or determines that an additional or replacement director is required, the Nominating & Governance Committee may take such measures that it considers appropriate in connection with its evaluation of a director candidate, including candidate interviews, engagement of an outside firm to gather additional information and inquiry of persons with knowledge of the candidate’s qualifications and character. In its evaluation of director candidates, including the members of the Board of Directors eligible for reelection, the Nominating & Governance Committee considers the current size and composition of the Board of Directors and the needs of the Board of Directors and the respective committees of the Board.

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 FedEx 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 FedEx’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 FedEx and its stockholders.

In addition, it is expected that the following qualities or skills be possessed by one or more of FedEx’s Board members:  transportation industry experience; international experience; financial expertise; marketing expertise; technological expertise; and government experience.

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MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

Meetings

During fiscal 2005, the Board of Directors held six meetings. Each director attended at least 75% of the meetings of the Board and any committees on which he or she served.

Committees

The Board of Directors has a standing Audit Committee, Compensation Committee, Information Technology Oversight Committee and Nominating & Governance Committee. Each committee’s written charter, as adopted by the Board of Directors, is available on the FedEx Web site at http://ir.fedex.com/governance/committeechar.cfm. Committee memberships are as follows:

The Audit Committee, which held twelve meetings during fiscal 2005, performs the following functions:

·                    oversees the independent registered public accounting firm’s qualifications, independence and performance;

·                    assists the Board of Directors in its oversight of (i) the integrity of FedEx’s financial statements; (ii) the effectiveness of FedEx’s disclosure controls and procedures and internal control over financial reporting; (iii) the performance of the internal auditors; and (iv) FedEx’s compliance with legal and regulatory requirements; and

·                    preapproves all audit and allowable non-audit services to be provided by FedEx’s independent registered public accounting firm.

The members of the Audit Committee meet all independence and qualification requirements of the New York Stock Exchange. The Board of Directors has determined that at least one member of the Audit Committee, John A. Edwardson, is an audit committee financial expert.

The Compensation Committee, which held six meetings during fiscal 2005, performs the following functions:

·                    evaluates the performance and recommends to the independent members of the Board the compensation of FedEx’s Chairman of the Board, President and Chief Executive Officer;

·                    discharges the Board’s responsibilities relating to the compensation of executive management; and

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·                    oversees the administration of FedEx’s equity compensation plans and employee benefit and fringe-benefit plans and programs.

The members of the Compensation Committee meet all independence requirements of the New York Stock Exchange.

The Information Technology Oversight Committee, which held six meetings during fiscal 2005, performs the following functions:

·                    oversees major information technology (“IT”) related projects and technology architecture decisions;

·                    ensures that FedEx’s IT programs effectively support FedEx’s business objectives and strategies; and

·                    advises FedEx’s senior IT management team and the Board of Directors on IT-related matters.

The Nominating & Governance Committee, which held six meetings during fiscal 2005, performs the following functions:

·                    identifies individuals qualified to become Board members;

·                    recommends to the Board director nominees to be proposed for election at the annual meeting of stockholders;

·                    recommends to the Board directors for appointment to Board committees; and

·                    assists the Board in developing and implementing effective corporate governance, compliance and ethics programs.

The members of the Nominating & Governance Committee meet all independence requirements of the New York Stock Exchange.

Attendance at Annual Meeting of Stockholders

FedEx expects all board members to attend annual meetings of stockholders. Each member of the Board of Directors attended the 2004 annual meeting of stockholders.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Loans to Management

Prior to enactment of the Sarbanes-Oxley Act in July 2002, FedEx made an interest-free demand loan to T. Michael Glenn, FedEx’s Executive Vice President – Market Development and Corporate Communications, to assist him in exercising non-qualified stock options and paying any tax liability associated with such exercises. In July 2004, Mr. Glenn paid in full the outstanding balance of the loan in an amount of $538,732, which amount was the highest outstanding balance of the loan during fiscal 2005.

FedEx has ceased providing any loans in connection with the exercise of stock options and no longer extends or maintains credit, arranges for the extension of credit, or renews an extension of credit, in the form of a personal loan, to or for any of its directors or members of management, including its executive officers.

Compensation Committee Interlocks and Insider Participation; Transactions with Management and Other Relationships

Messrs. Greer, Barksdale, Busch, Manatt, Walsh and George J. Mitchell served on FedEx’s Compensation Committee during fiscal 2005. Senator Mitchell retired as a director at the 2004 annual meeting of stockholders. Mr. Barksdale is a former officer of FedEx Express (FedEx’s predecessor) and his employment with FedEx Express ended in 1992.

In July 2005, FedEx Ground entered into a five-year lease for a FedEx Home Delivery facility near Milwaukee, Wisconsin. FedEx Ground will occupy this facility at an initial gross lease rate of $409,835 per year, which amount will increase to $425,497 per year after the third year of the lease. The gross lease payment includes base rent, taxes, common area maintenance, insurance and utilities. John A. Edwardson is a passive investor with an 11.67% ownership interest in the real estate development company that owns the facility.

J.R. Hyde, III and his wife together own approximately 13% of HOOPS, L.P., the owner of the NBA Memphis Grizzlies professional basketball team. Mr. Hyde, through one of his companies, also is the general partner of the minority limited partner of HOOPS. During fiscal 2002, FedEx entered into a multi-year, $90 million naming rights agreement with HOOPS. Under this agreement, FedEx has certain marketing rights, including the right to name the new arena where the Grizzlies play “FedExForum.”  Pursuant to a separate agreement with HOOPS, the City of Memphis and Shelby County, FedEx has agreed to pay $2.5 million a year for the balance of the twenty-five year term of the agreement if HOOPS terminates its lease for the new arena after 17 years.

In November 1999, FedEx entered into a multi-year, $205 million naming rights agreement with the NFL Washington Redskins professional football team. Under this agreement, FedEx has certain marketing rights, including the right to name the Redskins’ stadium “FedExField.”  In August 2003, Frederick W. Smith acquired an approximate 10% ownership interest in the Washington Redskins and joined its Leadership Council, or board of directors.

During fiscal 2005, Mr. Smith’s son-in-law was a 50% owner of a company that provided insurance brokerage and consulting services in connection with certain insurance and legal services plan benefits offered by FedEx to certain of its employees. Mr. Smith’s son-in-law’s company was paid commissions and fees directly by the benefit providers and not FedEx. During fiscal 2005, such commissions and fees totaled approximately $585,000.

Mr. Smith’s son has been employed by FedEx as a senior solutions analyst since May 2005 at an annual salary of $67,500.

During fiscal 2005, Mr. Smith reimbursed FedEx approximately $98,000 in connection with certain personal use of corporate aircraft.

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PROPOSAL 1 – ELECTION OF DIRECTORS

The Board of Directors currently consists of thirteen members. At the 2004 annual meeting, stockholders approved amendments to FedEx’s Bylaws eliminating the classified structure of the Board whereby one of three classes of directors stood for reelection each year and each class of directors held office for a three-year term. All of FedEx’s directors are now elected at each annual meeting of stockholders and hold office for one-year terms. The current term of each director expires at the upcoming annual meeting. The Board proposes that the following nominees, all of whom are currently serving as directors, be reelected for one-year terms expiring at the annual meeting of stockholders to be held in 2006 and until their successors are duly elected and qualified.

Each nominee has consented to being named in this proxy statement and has agreed to serve if elected. If a nominee is unable to stand for election, the Board of Directors may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders will vote your shares for the substitute nominee, unless you have withheld authority.

The affirmative vote of a plurality of the votes cast at the meeting is required to elect the thirteen nominees as directors. This means that the thirteen nominees will be elected if they receive more affirmative votes than any other person.

YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE THIRTEEN NOMINEES.

The following table sets forth, with respect to each nominee, his or her name, age, principal occupation and employment during the past five years, the year in which he or she first became a director of FedEx (or its predecessor, FedEx Express) and directorships held in other public companies.

NOMINEES FOR ELECTION TO THE BOARD

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DIRECTORS’ COMPENSATION

Outside Directors’ Compensation

Beginning in July 2005, non-employee (outside) directors will be paid:

·                    a quarterly retainer of $16,250;

·                    $2,000 for each in-person Board meeting attended;

·                    $1,000 for each telephonic Board meeting attended;

·                    $1,750 for each in-person committee meeting attended, other than for the Audit Committee;

·                    $875 for each telephonic committee meeting attended, other than for the Audit Committee;

·                    $2,000 for each in-person Audit Committee meeting attended; and

·                    $1,000 for each telephonic Audit Committee meeting attended.

Committee chairpersons of the Compensation, Nominating & Governance and Information Technology Oversight Committees will be paid an additional annual fee of $10,000. The Audit Committee chairperson will be paid an additional annual fee of $17,500. Each outside director who is elected at the annual meeting also will receive a stock option for 5,400 shares of common stock on the date of the 2005 annual meeting. Any outside director appointed to the Board after the 2005 annual meeting will receive a stock option for 5,400 shares of common stock upon his or her appointment. Frederick W. Smith, the only director who is also a FedEx employee, receives no additional compensation for serving as a director.

Outside directors are provided or reimbursed for travel and lodging and are reimbursed for other customary out-of-pocket expenses incurred in attending Board, committee and stockholder meetings. In addition, outside directors have FedEx Express and FedEx Ground discount shipping privileges and discount service privileges at FedEx Kinko’s on the same basis as provided generally to employees.

The Compensation Committee annually reviews director compensation, including, among other things, comparing FedEx’s director compensation practices with those of other public companies of comparable size. Before making a recommendation regarding director compensation to the Board, the Compensation Committee considers that the directors’ independence may be compromised if compensation exceeds appropriate levels or if FedEx enters into other arrangements beneficial to the directors.

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Retirement Plan for Outside Directors

At its July 1997 meeting, the Board of Directors of FedEx Express (FedEx’s predecessor) voted to freeze the Retirement Plan for Outside Directors (that is, no further benefits would be earned under this plan). This plan is unfunded and any benefits under the plan are payable out of the assets of FedEx as a general, unsecured obligation of FedEx.

Concurrent with the freeze, the Board amended the plan to accelerate the vesting of the benefits for each outside director who was not yet vested under the plan. In general, each outside director is entitled to a retirement benefit beginning as of the first day of the fiscal quarter of FedEx next following the date of termination of his or her directorship or the date such director attains age 60, whichever is later. The benefit is an annual amount, payable as a lump-sum distribution or in quarterly installments for no less than ten years and no more than fifteen years depending on years of service, equal to 10% for each year of service up to 100% of the annual retainer fee being paid to the outside director at the time the plan was frozen. Each outside director then serving on the Board who was not yet vested (two directors) will now receive a benefit equal to 10% for each year of service up to the date the plan was frozen. The remaining outside directors will receive their benefits based on their years of service and annual retainer at the time the plan was frozen. Once all benefits are paid from the plan, it will be terminated.

Charles T. Manatt was elected to the Board of Directors at the 2004 annual meeting of stockholders. Mr. Manatt previously served as a director of FedEx (and its predecessor, FedEx Express) from 1989 until his resignation in December 1999 to become the United States Ambassador to the Dominican Republic. In accordance with the terms of the plan, Mr. Manatt is paid a retirement benefit of $36,000 per year, payable in quarterly installments. The payments to Mr. Manatt under this plan will end in December 2009 unless Mr. Manatt elects, in accordance with the terms of the plan, to be paid a lump-sum amount for the remaining installments.

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SUMMARY COMPENSATION TABLE

The following table sets forth the compensation awarded to, earned by or paid to FedEx’s chief executive officer and its four other most highly compensated executive officers for services rendered in all capacities during the fiscal year ended May 31, 2005 and each of the previous two fiscal years.

(1)            Includes (a) tax reimbursement payments and (b) the aggregate incremental cost to FedEx of providing perquisites.

(a)           Tax Reimbursement Payments.   The amounts shown include tax reimbursement payments relating to restricted stock awards (other than with respect to Mr. Smith, who did not receive any restricted stock awards during the last three fiscal years) and certain perquisites. The amount shown for Mr. Masterson for fiscal 2005 also includes tax reimbursement payments relating to retirement gifts. Tax reimbursement payments were as follows:

(b)          Perquisites.   In past proxy statements, personal use of corporate aircraft was valued using the Standard Industry Fare Level (SIFL) rates determined by the Department of Transportation and published by the Internal Revenue Service. The SIFL rates are used to determine the amount of compensation income that is imputed to an executive for tax purposes for personal use of corporate aircraft. In addition, the amount reported for personal use of corporate aircraft was based on

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the amount included in an executive’s Form W-2 for the immediately preceding calendar year.

Beginning with this proxy statement, personal use of corporate aircraft is valued based on the aggregate incremental cost to FedEx on a fiscal-year basis. The incremental cost to FedEx of personal use of corporate aircraft is calculated based on the variable operating cost to FedEx, which includes the cost of fuel, aircraft maintenance, crew travel, on-board catering, landing fees, ramp fees and other smaller variable costs. Because FedEx corporate aircraft are used primarily for business travel, fixed costs that do not change based on usage, such as pilots’ salaries and purchase and lease costs, are excluded from this calculation. In addition, the named executive officers reimbursed FedEx for a portion of their personal use of corporate aircraft. Accordingly, the incremental cost to FedEx for any personal use of corporate aircraft is reduced by the amount reimbursed by the executive. The fiscal 2004 and 2003 amounts have been recalculated using this methodology.

Pursuant to FedEx’s executive security policy, the named executive officers are provided personal security and other services, including home security systems and monitoring. In addition, Mr. Smith is required to use FedEx corporate aircraft for personal, as well as business, travel.

The perquisites that exceeded 25% of each executive’s total perquisites for the year or years indicated were as follows:

F.W. Smith:  (1) Personal security and other services – $476,020, $510,627 and $607,688 for 2005, 2004 and 2003, respectively; and (2) personal use of corporate aircraft – $258,730 and $271,320 for 2005 and 2004, respectively.

D.J. Bronczek:  (1) Personal use of corporate aircraft – $75,907, $36,373 and $30,845 for 2005, 2004 and 2003, respectively; and (2) Memphis Grizzlies season tickets – $39,613, $38,254 and $35,988 for 2005, 2004 and 2003, respectively.

K.R. Masterson:  (1) Financial counseling and tax preparation services – $40,140 for 2005; and (2) Memphis Grizzlies season tickets – $39,613, $38,254 and $35,988 for 2005, 2004 and 2003, respectively.

A.B. Graf, Jr.:  (1) Personal use of corporate aircraft – $41,049 and $21,863 for 2005 and 2004, respectively; (2) Memphis Grizzlies season tickets – $20,837 for 2003; and (3) personal security and other services – $18,459 for 2005.

T.M. Glenn:  (1) Memphis Grizzlies season tickets – $39,613 and $38,254 for 2005 and 2004, respectively; and (2) imputed interest in connection with an interest-free demand loan – $47,203 and $119,519 for 2004 and 2003, respectively.

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(2)            The amounts in the table represent the closing market value of the shares awarded at the date of grant. At May 31, 2005, the number and value of the aggregate restricted stock holdings of the named executive officers were as follows:

Shares of restricted stock awarded to the named executive officers generally vest ratably over four years beginning on the first anniversary of the grant date. The restrictions on the shares held by the named executive officers lapse as follows:

D.J. Bronczek:  10,456 shares in fiscal 2006; 7,456 shares in fiscal 2007; 4,456 shares in fiscal 2008; and 1,976 shares in fiscal 2009.

K.R. Masterson:  18,478 shares in fiscal 2006. In connection with Mr. Masterson’s retirement, the vesting of his restricted shares was accelerated in accordance with the terms of FedEx’s restricted stock plans.

A.B. Graf, Jr.:  7,897 shares in fiscal 2006; 5,647 shares in fiscal 2007; 3,397 shares in fiscal 2008; and 1,537 shares in fiscal 2009.

T.M. Glenn:  7,897 shares in fiscal 2006; 5,647 shares in fiscal 2007; 3,397 shares in fiscal 2008; and 1,537 shares in fiscal 2009.

Holders of restricted shares are entitled to receive any dividends paid on such shares.

(3)            The amounts shown for Mr. Smith include excess life and umbrella insurance premiums paid on Mr. Smith’s behalf. The amounts shown for Messrs. Bronczek, Graf, and Glenn include a $500 matching contribution under the FedEx 401(k) plan and excess life and umbrella insurance premiums paid on their behalf. The amounts shown for Mr. Masterson include a $500 matching contribution under the FedEx 401(k) plan, excess life and umbrella insurance premiums paid on Mr. Masterson’s behalf of $11,734, $9,370 and $5,721, respectively, for 2005, 2004 and 2003, and $95,491 of retirement gifts (including any related sales tax paid by FedEx) for 2005.

(4)            The amounts shown include special recognition bonuses.

(5)            Mr. Masterson retired effective June 1, 2005.

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STOCK OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information regarding stock option grants under FedEx’s stock option plans made during the fiscal year ended May 31, 2005 to the named executive officers. The amounts shown for each named executive officer as potential realizable values are based entirely on assumed annualized rates of stock price appreciation of five percent and ten percent over the full ten-year term of the options. These assumed rates of growth were selected by the Securities and Exchange Commission for illustration purposes only and are not intended to predict future stock prices, which will depend upon overall stock market conditions and FedEx’s future performance and prospects. Consequently, there can be no assurance that the potential realizable values shown in this table will be achieved.

*                    The exercise price of the options granted to the individuals shown above was the fair market value of FedEx’s common stock (the average of the high and low prices of the stock on the New York Stock Exchange) at the date of grant. The options granted are subject to a vesting schedule as follows:  25% after one year from date of grant; 50% after two years; 75% after three years; and 100% after four years. The options may not be transferred in any manner other than by will or the laws of descent and distribution and may be exercised during the lifetime of the optionee only by the optionee. During fiscal 2005, options for a total of 2,646,651 shares were granted to various employees of FedEx and its subsidiaries.

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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

The following table sets forth for each named executive officer certain information about stock options exercised during the fiscal year ended May 31, 2005 and unexercised stock options held at the end of the fiscal year.