Fedex Pilots Post Medicare Retiree Premium Reimbursement Plan

“FORM 990, PART III, LINE 1 Pursuant to the collective bargaining agreement between FedEx Corporation and the Air Line Pilots Association, International, the mission of the FedEx Pilots Post-Medicare Retiree Premium Reimbursement Plan is to provide eligible retired pilots and their spouses with a reimbursement of premiums paid to Medicare Part B, Medicare Part D, and/or a Medicare Supplement Policy. The Premium Reimbursement Rate is determined annually by the Board in accordance with the Plan Document. GOVERNING BODY FORM 990, PART VI, SECTION A, LINES 1A AND 1B There are 3 regular Board Members, one of which must be an active FedEx pilot, and the other 2 may be active FedEx pilots and/or retired FedEx pilots. All 3 have equal voting rights. There is also an alternate Board Member who may be an active or retired Fedex pilot. The alternate Board Member votes in one of the regular members' absence. SIGNIFICANT CHANGES TO THE ORGANIZATIONAL DOCUMENTS FORM 990, PART VI, LINE 4 In March 2016, the Plan document was amended and restated effective November 3, 2015. The following is a summary of the significant changes: - Effective for retirements on or after November 3, 2015, pilots are no longer required to be covered under the Company-sponsored active or retiree group health plan. - Effective January 1, 2016, the Plan has added Medicare Part B coverage as eligible for reimbursement. - Effective for retirement on or after November 3, 2015, the premium reimbursement will be pro-rated 4% per year of pilot service, up to a maximum of 25 years of pilot service. - Effective with the Company's first pay period in November 2015, the Company's contribution is increased to one (1) dollar per credit hour for each pilot on the seniority list. Additionally, each November thereafter, the contributions will increase by five (5) cents per credit hour for each pilot on the seniority list. - Effective November 3, 2015 the structure of the Administrative Board changed to consist of three or four members as determined by the Air Line Pilots Association, International. There will be three voting members, and if there is a fourth member, the fourth member will be an alternative who will vote in absence of one of the regular members. Additionally, any member may be an active or retired pilot; however, there must be at least one active pilot.”

“Form 990, part vi, section a, line 7a the president of the air line pilots association, international, has the power to appoint and remove all members of the administrative board.”

“Form 990, Part VI, Section A, Line 7b AS THE ASSOCIATION IS THE PLAN SPONSOR, THE PRESIDENT OF THE ASSOCIATION SIGNS ANY PLAN DOCUMENTS AND ANY CHANGES TO THE PLAN DOCUMENT.”

“Form 990, Part VI, Section A, Line 8B The organization does not currently have committees with authority to act on behalf of the governing body.”

“Form 990, Part VI, Section B, Line 11b The final draft of the organization's form 990 is sent to the VEBA Board Members; Steven Hodgson, ALPA management; and Barbara Esplin - consultant who coordinates the audit, Form 5500 and Form 990 for the Plan. Each person reviews the draft Form 990 and is requested to provide any feedback to Barbara Esplin, who in turn reports any comments back to Grant Thornton. The comments are incorporated into the final version of the Form 990 which is filed with the IRS.”

“Form 990, part vi, section b, line 12c fedex pilots post-medicare retiree premium reimbursment plan follows the conflict of interest policy of its related organization air line pilots association, international ("alpa") seen below. (1) alpa's conflict of interest policy is reviewed with employees, a written copy is included in each employee new hire kit, included in the employee handbook and the policy is posted on the employee staff center website. The policy provides examples of some of the relationships that should be avoided. The policy requires that all employees avoid conflicts between their personal interest and the members of, or persons represented by, alpa or the interest of alpa in dealing with employers or with suppliers, customers, and all other organizations or individuals seeking to do business with alpa. If a conflict is reported, discovered, or suspected, it is addressed first by the employee's supervisor and, if necessary, by the human resources department, and in either case, appropriate measures are taken, which can include termination for violation of the policy. (2) in accordance with federal labor laws, alpa is governed by officers elected from among the membership. Accordingly, decisions made by alpa's governing bodies necessarily affect the officers who make up those governing bodies, just as those decisions affect the union members as a whole. However, section 501(a) of the labor-management reporting and disclosure act (lmrda), 29 u.s.c. S501(a), states that officers and other union representatives "occupy positions of trust" with respect to the union and so that "[i]t is, therefore, the duty of each such person, taking into account the special problems and functions of a labor organization, to hold its money and property solely for the benefit of the organization and its members and to manage, invest, and expend the same in accordance with its constitution and bylaws and any resolutions of the governing bodies adopted thereunder, to refrain from dealing with such organization as an adverse party or in behalf of an adverse party in any matter connected with his duties and from holding or acquiring any pecuniary or personal interest which conflicts with the interest of such organization, and to account to the organization for any profit received by him in whatever capacity in connection with transactions conducted by him or under his direction on behalf of the organization." the responsibilities imposed by lmrda section 501(a) may be enforced by union members through suits in federal courts, or by the secretary of labor, and those responsibilities govern the union's actions.”

“Form 990, Part VI, Section B, Line 15a The Administrative Board of the Organization has set the reasonable compensation rate which is articulated in the organization's VEBA Administrative Board Administrative Manual: 1. Retired Members serving on the Board: will be compensated 6 hours per day at the widebody Captain rate, plus a 7.65% override to offset THE EMPLOYER'S SOCIAL SECURITY MATCH. TRAVEL DAYS WILL BE COMPENSATED AT 1/2 (one half) of a full day rate. Partial Days will be prorated. 2. An Administrative Board member who is an active pilot will be compensated via flight pay loss, and the plan will reimburse the Association for the flight pay loss reasonably attributable to the pilot's attendance at the meeting. 3. All VEBA Administrative Board compensation will be approved before payment by the VEBA Administrative Board Chairman or his designee. In no case will a Board Member approve his own compensation. The organization does not compensate its officers directly.”

“Form 990, Part VI, Section B, Line 15b The Plan document dictates that the board members who are active pilots will receive flight pay loss if dropping a trip is required. Retired pilots who are board members receive captain rate for 6 hours of the meeting and for up to 3 each day traveling to and from a meeting.”

“Form 990, Part VI, Section C, Line 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC TO THE EXTENT REQUIRED BY LAW.”

“Form 990, Part XII, Line 1 The Plan's financial statements are prepared on the modified cash basis of accounting, which is consistent with the basis used to prepare the Plan's Form 5500. Certain revenue and related assets are recognized when received, and others, such as investment income, are recognized when earned. Certain expenses are recognized when paid rather than when the obligation is incurred. Purchases and sales of securities are recognized as of the date of the trade, and any related receivable or payable pending settlement is reflected in the statements of net assets available for benefits.”