Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

RELATED PARTY TRANSACTIONS

Policy on Review and Preapproval of Related Person Transactions

The Board adopted a Policy on Review and Preapproval of Related Person Transactions (the “RPT Approval Policy”), which is included in the Corporate Governance Guidelines. The RPT Approval Policy requires that all proposed related person transactions (as defined in the RPT Approval Policy) and all proposed material changes to existing related person transactions be reviewed and preapproved by the Governance Committee. To the extent the related person (as defined in the RPT Approval Policy) is a director or an immediate family member of a director, the transaction or change must also be reviewed and preapproved by the full Board. The RPT Approval Policy provides that a related person transaction or a material change to an existing related person transaction may not be preapproved if it would:

• interfere with the objectivity and independence of any related person’s judgment or conduct in carrying out his or her duties and responsibilities to FedEx Freight;

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• not be fair as to FedEx Freight; or

• otherwise be opposed to the best interests of FedEx Freight and its stockholders.

The RPT Approval Policy requires the Governance Committee to annually (i) review each existing related person transaction that has a remaining term of at least one year or remaining payments of at least $120,000, and (ii) determine, based upon all material facts and circumstances and taking into consideration our contractual obligations, whether it is in the best interests of FedEx Freight and its stockholders to continue, modify, or terminate the transaction or relationship.

In accordance with the RPT Approval Policy, the Governance Committee has reviewed and approved the following existing related person transactions and determined that they remain in the best interests of FedEx Freight and its stockholders.

Agreements with FedEx in Connection with the Spin-Off

In order to govern the ongoing relationships between us and FedEx after the Spin-Off and to facilitate an orderly transition, we and FedEx entered into agreements providing for various services and rights following the Spin-Off, and under which we and FedEx agree to indemnify each other against certain liabilities arising from our respective businesses. The following summarizes the terms of the material agreements we entered into with FedEx in connection with the Spin-Off.

Separation and Distribution Agreement

In connection with the Spin-Off, we and FedEx entered into the Separation and Distribution Agreement. The Separation and Distribution Agreement sets forth our agreements with FedEx regarding the principal actions taken in connection with the Spin-Off, including those related to certain reorganization transactions and the distribution of 80.1% of the issued and outstanding shares of our common stock to FedEx’s stockholders. It also sets forth other agreements that govern certain aspects of our relationship with FedEx following the Spin-Off. This summary of the Separation and Distribution Agreement is subject to and qualified in its entirety by reference to the full text of the Separation and Distribution Agreement, which is included as an exhibit to this Annual Report.

Transfer of Assets and Assumption of Liabilities

The Separation and Distribution Agreement allocates the assets and liabilities to each of us and FedEx as part of the Spin-Off. However, (i) the Employee Matters Agreement allocates certain employee-related liabilities (including pension liabilities) and assets (see “— Employee Matters Agreement” below for a summary of such allocation) and (ii) the Tax Matters Agreement allocates certain tax liabilities and assets (see “— Tax Matters Agreement” below for a summary of such allocation). In particular, the Separation and Distribution Agreement provides that, among other things, subject to the terms and conditions included in the Separation and Distribution Agreement, we generally are contractually allocated with:

Assets

• assets of the FedEx Freight business;

• the equity interests of subsidiaries that are our subsidiaries after the Spin-Off, in addition to any other specified joint venture or other minority equity interests owned by us after the Spin-Off;

• contracts of the FedEx Freight business or its assets or liabilities that are not related (other than in a de minimis respect) to the remaining business of FedEx or its assets or liabilities, along with certain other contracts;

• certain specified patents and other intellectual property (excluding patents) primarily related to the FedEx Freight business, excluding (i) the “FedEx” and “FedEx Freight” trademarks, the FedEx logo and font, and the FedEx purple and orange trade dress or variations thereof and (ii) certain other specified intellectual property (subject, in each case, to certain licenses described in more detail below under “— Agreements Governing Intellectual Property”), and certain specified intellectual property;

• accruals, counterclaims, insurance claims, rights to coverage under applicable insurance policies, warranties, contractual indemnities, control rights and other similar rights, in each case to the extent related to any liability that has been contractually allocated to us, except in respect of occurrences prior to the Spin-Off that are already covered by FedEx policies;

• certain information technology assets and other information technology assets of the FedEx Freight business (subject to certain limited exceptions); and

• financial assets of the FedEx Freight business and/or that are owned by us or one of our subsidiaries.

Liabilities

• liabilities of the FedEx Freight business, other than certain liabilities arising prior to the Spin-Off that were or would reasonably be expected to be submitted for coverage (or would have been submitted for coverage but for any applicable deductible or retention), in each case, in part or in whole, under certain occurrence-based and other insurance policies that currently cover FedEx Freight and were retained by FedEx in connection with the Spin-Off;

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• liabilities (including under applicable federal and state securities laws) relating to (i) any disclosure document filed or furnished with the SEC in connection with the Spin-Off, except for statements expressly relating to the remaining business of FedEx, (ii) any financing disclosure documents in connection with any offer by us for sale or registration of the transfer or distribution of any securities or indebtedness, except for statements expressly relating to the remaining business of FedEx, and (iii) any of our financing arrangements;

• liabilities to the extent related to previously discontinued or divested businesses and operations that were, at the time of discontinuation or divestment, managed or associated with the FedEx Freight business;

• liabilities for borrowed money, interest rate swaps, and similar arrangements that were incurred or guaranteed by us will be retained by or contractually allocated to us; and

• liabilities relating to indemnification obligations to any of our or our subsidiaries’ current or former directors or officers and ownership of any specified joint venture or other minority equity interests owned by us after the Spin-Off.

All other assets and liabilities of FedEx are contractually retained by FedEx.

Except as expressly set forth in the Separation and Distribution Agreement or any ancillary agreement, all assets are transferred on an “as is,” “where is” basis and the respective transferees bear the economic and legal risks that (i) any conveyance is insufficient to vest in the transferee good title, free and clear of any security interest, and (ii) any necessary consents or governmental approvals are not obtained or that any requirements of laws or judgments are not complied with. In general, neither us nor FedEx make any representations or warranties regarding any assets or liabilities transferred or contractually allocated pursuant to the Separation and Distribution Agreement, any consents or governmental approvals that may be required in connection with such transfers or contractual allocations, or any other matters.

Information in this Annual Report with respect to the assets and liabilities of the parties following the Spin-Off is presented based on the contractual allocation of such assets and liabilities pursuant to the Separation and Distribution Agreement, unless the context otherwise requires. Certain of the liabilities and obligations contractually allocated to one party or for which one party has an indemnification obligation under the Separation and Distribution Agreement and the other agreements relating to the Spin-Off are the legal or contractual liabilities or obligations of another party. Each such party that continues to be subject to such legal or contractual liability or obligation relies on the applicable party that was contractually allocated the liability or obligation or the applicable party that undertook an indemnification obligation with respect to the liability or obligation, as applicable, under the Separation and Distribution Agreement, to satisfy the performance and payment obligations or indemnification obligations with respect to such legal or contractual liability or obligation.

Further Assurances. To the extent any transfers of assets and contractual allocations of liabilities contemplated by the Separation and Distribution Agreement were not consummated on or prior to the Spin-Off, the parties will cooperate with each other to effect such transfers or assumptions while holding such assets or liabilities for the benefit of the appropriate party so that all the benefits and burdens relating to such asset or liability inure to the party contractually allocated such asset or liability. Each party will use commercially reasonable efforts to take or to cause to be taken all actions, and to do, or to cause to be done, all things reasonably necessary under applicable law or contractual obligations to consummate and make effective the transactions contemplated by the Separation and Distribution Agreement.

Shared Contracts. Shared contracts were generally assigned in part if so assignable, or amended, bifurcated, or replicated to facilitate the Spin-Off so that the appropriate party was contractually allocated the rights, benefits, and the related portion of any liabilities inuring to its business, and each party will use commercially reasonable efforts to obtain the consents required to partially assign, amend, bifurcate, or replicate any shared contract.

Intercompany Accounts. Subject to certain specified exceptions, the Separation and Distribution Agreement settled certain accounts that were formerly intercompany accounts within FedEx.

Release of Claims and Indemnification. Except as otherwise provided in the Separation and Distribution Agreement, each party fully released and forever discharged the other party and its respective subsidiaries and affiliates from all liabilities existing or arising from any acts or events occurring or failing to occur or alleged to have occurred or to have failed to occur or any conditions existing or alleged to have existed on or before the Spin-Off. The releases do not extend to obligations or liabilities under any agreements between the parties that remain in effect following the Spin-Off pursuant to the Separation and Distribution Agreement or any ancillary agreement. These releases are subject to certain exceptions set forth in the Separation and Distribution Agreement.

The Separation and Distribution Agreement provides for cross-indemnities that, except as otherwise provided, are principally designed to place financial responsibility for the obligations and liabilities contractually allocated to us under the Separation and Distribution Agreement with us and financial responsibility for the obligations and liabilities contractually allocated to FedEx under the Separation and Distribution Agreement with FedEx. Specifically, each party will indemnify, defend, and hold harmless the other party and its respective affiliates and subsidiaries and each of their respective officers, directors, employees, and agents (and the heirs, executors, successors, and assigns of any of the foregoing) for any losses to the extent relating to, arising out of, or resulting from:

• the liabilities each party was contractually allocated pursuant to the Separation and Distribution Agreement (or any third-party claim that would, if resolved in favor of the claimant, constitute such a liability); and

• any breach by such party of any provision of the Separation and Distribution Agreement.

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Each party’s indemnification obligations with respect to such liabilities pursuant to the Separation and Distribution Agreement or such breach are uncapped; provided that the amount of each party’s indemnification obligations are subject to reduction by any insurance proceeds or other third-party proceeds received by the party being indemnified that reduce the amount of the loss. The Separation and Distribution Agreement also specifies procedures with respect to claims subject to indemnification and related matters. Indemnification with respect to taxes is governed by the Tax Matters Agreement.

Legal Actions. Except as otherwise set forth in the Separation and Distribution Agreement or any ancillary agreement, we are contractually allocated liabilities relating to legal actions to the extent related to the FedEx Freight business or the assets or liabilities contractually allocated to us, and FedEx has been contractually allocated all other liabilities relating to legal actions. Each party to the Separation and Distribution Agreement will indemnify the other party for its respective indemnifiable losses, if any, arising out of or resulting from such legal actions allocated to such party, as well as, for those arising out of or resulting from any legal actions related to the liabilities such party has been contractually allocated or (unless contractually allocated specifically to the other party) its ongoing business. Each party to a claim will cooperate in defending any claims against both parties for events that took place prior to, on, or after the date of the Spin-Off.

Dispositions. FedEx initially retained 19.9% of the outstanding shares of our common stock following the Spin-Off. In order to preserve the tax-free status of the Spin-Off and certain related transactions for U.S. federal income tax purposes, FedEx must generally dispose of the retained shares of our common stock within 24 months of the completion of the Spin-Off.

Insurance. Following the Spin-Off, we assigned to FedEx rights we had to certain occurrence-based and other insurance policies covering occurrences or events prior to the Spin-Off (for which FedEx assumed the associated liabilities), retained certain access to FedEx cargo insurance policies that cover liabilities for any shipment of goods by FedEx Freight (for which we are retaining the associated liabilities), and otherwise generally are responsible for obtaining and maintaining, at our own cost, our own insurance coverage.

Dispute Resolution. Except as otherwise set forth in the Separation and Distribution Agreement, if a dispute arises between us and FedEx under the Separation and Distribution Agreement, the general counsels of the parties and/or such other executive officers as the parties may designate will negotiate to resolve any disputes for a reasonable period of time. If the parties are unable to resolve the dispute in this manner, then the dispute will be resolved through binding arbitration.

Term, Termination, and Amendment. After the Spin-Off, the term of the Separation and Distribution Agreement is indefinite and it may only be terminated or modified with the prior written consent of both FedEx and us.

Other Matters Governed by the Separation and Distribution Agreement. Other matters governed by the Separation and Distribution Agreement include, among others, access to financial and other information, confidentiality, access to and provision of records, and separation of guarantees and other credit support instruments.

Transition Services Agreement

In connection with the Spin-Off, we and FedEx entered into the Transition Services Agreement. Pursuant to the Transition Services Agreement, each of FedEx and FedEx Freight provide certain transitional services to the other. The services, including certain support functions such as order creation, customer data management, marketing, clearance, data and analytics, and other functions, as well as the technology operations and support technologies required for those functions, are provided for a limited time, generally for no longer than two years following the effective time, and are provided for specified fees, which are generally based on previous allocation models and/or on a cost/cost-plus basis. This summary of the Transition Services Agreement is subject to and qualified in its entirety by reference to the full text of the Transition Services Agreement, the form of which is included as an exhibit to this Annual Report.

Tax Matters Agreement

In connection with the Spin-Off, we and FedEx entered into the Tax Matters Agreement. The Tax Matters Agreement governs the parties’ respective rights, responsibilities, and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings, and other matters regarding taxes. This summary of the Tax Matters Agreement is subject to and qualified in its entirety by reference to the full text of the Tax Matters Agreement, which is included as an exhibit to this Annual Report.

Allocation of Taxes

In general, except with respect to certain transaction taxes triggered by the Spin-Off, which are generally borne by the party that is responsible for such taxes under applicable law, we are responsible for any U.S. federal, state, local, or foreign taxes (and any related interest, penalties, or audit adjustments) imposed with respect to tax returns that include only us and/or any of our subsidiaries (including any such tax returns filed on a consolidated, combined, or unitary basis) for any taxable periods or portions thereof, and FedEx is responsible for any U.S. federal, state, local, or foreign taxes with respect to tax returns that include FedEx or any of its subsidiaries (as determined immediately after the Spin-Off), including those that also include us and/or any of our subsidiaries, for any taxable periods or portions thereof. In addition, we are required to pay FedEx the amount of any tax benefits that we realize after the Spin-Off to the extent that FedEx is responsible under the Tax Matters Agreement for the corresponding tax.

Neither party’s obligations under the Tax Matters Agreement are limited in amount or subject to any cap. The Tax Matters Agreement also assigns responsibilities for administrative matters, such as the filing of returns, payment of taxes due, retention of records, and

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conduct of audits, examinations, or similar proceedings. In addition, the Tax Matters Agreement provides for cooperation and information sharing with respect to tax matters.

FedEx is generally responsible for preparing and filing any tax return that includes FedEx or any of its subsidiaries (as determined immediately after the Spin-Off), including those that also include us and/or any of our subsidiaries. We are generally responsible for preparing and filing any tax returns that include only us and/or any of our subsidiaries.

The party responsible for preparing and filing any tax return and for the corresponding tax generally has primary authority to control tax contests related to any such tax return or tax. We generally have exclusive authority to control tax contests with respect to tax returns that include only us and/or any of our subsidiaries and any corresponding tax.

Preservation of the Tax-Free Status of Certain Aspects of the Spin-Off and Certain Related Transactions

We and FedEx intend for the Spin-Off, together with certain related transactions, to qualify for non-recognition of income, gain, and loss under Section 355 and related provisions of the Code.

FedEx received a legal opinion to the effect that the Spin-Off, together with certain related transactions, qualifies for non-recognition of income, gain, and loss under Section 355 and related provisions of the Code. In addition, FedEx received a legal opinion and the Private Letter Ruling from the IRS that the Spin-Off, together with certain related transactions, qualified for the non-recognition of income, gain, and loss under Section 355 and related provisions of the Code. In connection with the tax opinion and Private Letter Ruling, we and FedEx have made certain representations regarding the past and future conduct of our respective businesses and certain other matters.

Pursuant to the Tax Matters Agreement, we also agreed to certain covenants that contain restrictions intended to preserve the tax-free status of the Spin-Off and certain related transactions, including restrictions from taking or failing to take any action where such action or failure to act would be inconsistent with the Private Letter Ruling or the legal opinion. Generally, we are prohibited from taking any action, or failing to take any action, where such action or failure to act would reasonably be expected to adversely affect the tax-free status of these transactions, for all relevant time periods. In addition, during the time period ending two years after the date of the Spin-Off, these covenants include specific restrictions on our ability to:

• discontinue the active conduct of our trade or business or reduce the employee headcount of such trade or business by a certain threshold;

• issue or sell our stock or other securities (including securities convertible into our stock but excluding certain compensatory arrangements);

• amend our certificate of incorporation (or other organizational documents) or take any other action, whether through a stockholder vote or otherwise, affecting the voting rights of our common stock;

• sell or otherwise dispose of assets outside the ordinary course of business; and

• enter into any other transaction or series of transactions which would cause us to undergo a 50% or greater change in our stock ownership.

We may take certain actions prohibited by these covenants only if we obtain and provide to FedEx an opinion from a U.S. tax counsel or accountant of recognized national standing, in either case, that is acceptable to FedEx, to the effect that such action will not affect the tax-free status of the Spin-Off and certain related transactions, or if we obtain prior written consent of FedEx, in its sole and absolute discretion, waiving such requirement.

We also agreed to indemnify FedEx and its affiliates against any and all tax-related liabilities incurred by them relating to the Spin-Off and certain related transactions to the extent caused by an acquisition of our stock or assets or by any other action undertaken by us. This indemnification will apply even if such liabilities result from an action FedEx has permitted us to take that would otherwise have been prohibited under the tax-related covenants described above.

Term and Termination

There is no termination provision in the Tax Matters Agreement and, unless specifically stated otherwise, the parties’ respective rights, responsibilities, and obligations generally survive until the expiration of the relevant statute of limitations.

Employee Matters Agreement

In connection with the Spin-Off, we and FedEx entered into the Employee Matters Agreement. The Employee Matters Agreement addresses employment and employee compensation and benefits matters, including with respect to severance, workers’ compensation, paid time off, and sharing of employee records and information. The Employee Matters Agreement also addresses the allocation and treatment of assets and liabilities relating to FedEx and FedEx Freight current and former employees and the assets and liabilities of the compensation and benefit plans and programs in which the current and former employees participate. This summary of the Employee Matters Agreement is subject to and qualified in its entirety by reference to the full text of the Employee Matters Agreement, which is included as an exhibit to this Annual Report.

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Except as specifically provided in the Employee Matters Agreement, FedEx Freight generally is responsible for (i) employment-related liabilities (other than those related to FedEx compensation and benefit plans) associated with current and former FedEx Freight employees, irrespective of whether such liabilities arose prior to, on, or following the Spin-Off and (ii) employment-related liabilities arising following the Spin-Off associated with FedEx employees who transferred to FedEx Freight in connection with the Spin-Off. FedEx generally retained assets and liabilities under FedEx-sponsored employee compensation and benefits plans and FedEx Freight generally assumed assets and liabilities under FedEx Freight-sponsored employee compensation and benefits plans, provided that FedEx Freight assumed certain assets and liabilities related to periods of service prior to the Spin-Off under FedEx-sponsored employee compensation and benefits plans associated with FedEx Freight employees as well as FedEx employees that are transferred to FedEx Freight in connection with the Spin-Off.

Prior to or as of the Spin-Off (except as agreed in respect of temporary transition services or delayed transfer employees), FedEx Freight employees ceased active participation in FedEx compensation and benefit plans and began to participate in FedEx Freight compensation and benefit plans. In particular, FedEx Freight (i) established its own defined benefit pension plan and assumed the assets and liabilities from certain FedEx defined benefit pension plans as described in the Employee Matters Agreement, (ii) established a 401(k) savings plan for U.S. employees, which accepts direct rollovers of account balances from the FedEx 401(k) savings plan for any employees who elect such a rollover, and (iii) established its own nonqualified parity pension plan and assumed liabilities from FedEx’s nonqualified parity pension plan. The Employee Matters Agreement also addresses the liabilities and responsibilities related to annual cash bonus incentives, long-term cash bonus incentives, severance and vacation, retiree health, and paid time-off benefits.

Agreements Governing Intellectual Property

Intellectual Property Cross-License Agreement

In connection with the Spin-Off, we and FedEx, Federal Express, and FedEx Dataworks entered into the Intellectual Property Cross-License Agreement. Pursuant to the Intellectual Property Cross-License Agreement, each of FedEx, Federal Express, and FedEx Dataworks, on the one hand, and FedEx Freight, on the other hand, grant and receive licenses to and from each other in respect of certain patents, know-how, and copyrights. The Intellectual Property Cross-License Agreement will remain in effect on a licensed-patent-by-licensed-patent and licensed-copyright-by-licensed-copyright basis until expiration, invalidation, or abandonment thereof and with respect to all other licensed intellectual property, in perpetuity. The Intellectual Property Cross-License Agreement will generally not be terminable. In addition, the agreement is not assignable by either party without the other party’s consent other than to (i) an affiliate or (ii) a third party in connection with the sale, separation, divestiture, disposition, or other ceasing to control of the applicable portion of the assets or businesses of the licensee to which the Intellectual Property Cross-License Agreement relates. This summary of the Intellectual Property Cross-License Agreement is subject to and qualified in its entirety by reference to the full text of the Intellectual Property Cross-License Agreement, which is included as an exhibit to this Annual Report.

Trademark License Agreement

In connection with the Spin-Off, we and Federal Express entered into the Trademark License Agreement. The Trademark License Agreement provides FedEx Freight with a license to continue to use certain names, trademarks, and brands owned by Federal Express, including the “FedEx Freight” name and mark, in connection with the FedEx Freight business as conducted prior to the Spin-Off in the United States, Canada, and Mexico. The license granted to us under the Trademark License Agreement is for an initial term of five years from the effective date of the Spin-Off, and will automatically renew annually in one-year increments for up to an additional five years unless either party provides the other with notice of its election not to renew, and is not otherwise terminable by Federal Express other than in connection with a material uncured breach by FedEx Freight, bankruptcy of FedEx Freight, or a change of control of FedEx Freight. This summary of the Trademark License Agreement is subject to and qualified in its entirety by reference to the full text of the Trademark License Agreement, which is included as an exhibit to this Annual Report.

Stockholder and Registration Rights Agreement

In connection with the Spin-Off, we and FedEx entered into a stockholder and registration rights agreement (the “Stockholder and Registration Rights Agreement”), pursuant to which we agree that, upon the request of FedEx, we will use our reasonable best efforts to effect the registration under applicable federal and state securities laws of any shares of our common stock retained by FedEx. In addition, FedEx agreed to vote any shares of our common stock that it retains immediately after the separation in proportion to the votes cast by our other stockholders. In connection with the Stockholder and Registration Rights Agreement, FedEx granted us a proxy to vote its shares of our common stock in such proportion. This proxy, however, will be automatically revoked as to any particular share upon any sale or transfer of such share from FedEx to a person other than FedEx, and neither the Stockholder and Registration Rights Agreement nor the proxy limits or prohibits any such sale or transfer. This summary of the Stockholder and Registration Rights Agreement is subject to and qualified in its entirety by reference to the full text of the Stockholder and Registration Rights Agreement, which is included as an exhibit to this Annual Report.

Director Independence

The Board has reviewed the independence of each director. Based on information provided by each director concerning such director’s background, employment, and affiliations, the Board has determined that each of Messrs. Davis, Frieson, Gorman, and Sauerland and Mses. Miller and Salcido do not have relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and meet the independence requirements set forth by the listing standards of the NYSE, such that a majority of our directors are independent. The Board has determined that each member of the Audit Committee, HRCC, and Governance Committee is independent. Under the Board’s standards of director independence, which are included in the Corporate

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Governance Guidelines, a director will be considered independent only if the Board affirmatively determines that such director has no direct or indirect material relationship with FedEx Freight, other than as a Board member. In making its independence determinations, the Board broadly considers all relevant facts and circumstances. The Board assumes that each of the following relationships with FedEx Freight is not a “material relationship” and therefore will not, by itself, prevent a Board member from being considered “independent”:

• Prior Employment of Director. The Board member was employed by FedEx Freight or was personally working on FedEx Freight’s audit as an employee or partner of FedEx Freight’s independent auditor, and over five years have passed since such employment, partner, or auditing relationship ended.

• Prior Employment of Immediate Family Member. An immediate family member was an officer of FedEx Freight or was personally working on FedEx Freight’s audit as an employee or partner of FedEx Freight’s independent auditor, and over five years have passed since such employment, partner, or auditing relationship ended.

• Current Employment of Immediate Family Member. An immediate family member is employed by FedEx Freight in a non-officer position, or by FedEx Freight’s independent auditor not as a partner and not personally working on FedEx Freight’s audit.

• Interlocking Directorships. An executive officer of FedEx Freight served on the board of directors of a company that employed the Board member or employed an immediate family member as an executive officer, and over five years have passed since either such relationship ended.

• Transactions and Business Relationships. The Board member or an immediate family member is a partner, greater than 10% stockholder, director, or officer of a company that makes or has made payments to, or receives or has received payments (other than contributions, if the company is a tax-exempt organization) from, FedEx Freight for property or services, and the amount of such payments has not within any of such other company’s three most recently completed fiscal years exceeded one percent (1%) (or $1 million, whichever is greater) of such other company’s consolidated gross revenues for such year.

• Indebtedness. The Board member or an immediate family member is a partner, greater than 10% stockholder, director, or officer of a company that is indebted to FedEx Freight or to which FedEx Freight is indebted, and the aggregate amount of such debt is less than one percent (1%) (or $1 million, whichever is greater) of the total consolidated assets of the indebted company.

• Charitable Contributions. The Board member is a trustee, fiduciary, director, or officer of a tax-exempt organization to which FedEx Freight contributes, and the contributions to such organization by FedEx Freight have not within any of such organization’s three most recently completed fiscal years exceeded one percent (1%) (or $250,000, whichever is greater) of such organization’s consolidated gross revenues for such year.