U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
NOTICE OF EXEMPT SOLICITATION
1. Name of the Registrant:
FEDEX CORPORATION
_______________________________________________________________________________
2. Name of the person relying on exemption:
AMALGAMATED BANK LONGVIEW FUNDS
_______________________________________________________________________________
3. Address of the person relying on exemption:
275 SEVENTH AVENUE, NEW YORK, NY 10001
_______________________________________________________________________________
4. Written materials. Attach written materials required to be submitted
pursuant to Rule 14a6(g)(1):
(AMALGAMATED BANK LOGO)
THIS IS NOT A PROXY SOLICITATION AND NO PROXY CARDS WILL BE ACCEPTED.
Please execute and return your proxy card according to FedEx's instructions.
September 2013
Dear FedEx Shareholder:
We urge you to vote "YES" on Item #8 ("Stockholder Proposal: Hedging and
Pledging Policy") at the upcoming Annual Meeting of FedEx Corp (NYSE:FDX),
to be held September 23, 2013.
Item #8 is a non-binding, advisory proposal that encourages the board to
deter senior executives from misusing incentive compensation such as stock
options and restricted shares by prohibiting executives from hedging or
pledging such awards as collateral for margin accounts or personal loans.
WHY IS HEDGING AND PLEDGING OF COMPANY SHARES BY INSIDERS A PROBLEM FOR
INVESTORS?
We believe senior executives' share holdings at a company should promote
an alignment of interest between insiders and outside shareholders.
Hedging and pledging risk severing that alignment in the following ways:
- HEDGING COMPANY STOCK PROTECTS INSIDERS FROM DOWNSIDE RISKS IN SHARE
PRICE MOVEMENTS while outside shareowners remain exposed to share
value. Where insiders have been able to hedge their position in
company shares, research indicates a correlation between executive
hedging movements and subsequent financial restatements and
litigation, indicating that executives may be protecting themselves
from predicted downward movements in the share price./1/
- PLEDGING CREATES THE RISK OF INCREASED SHARE PRICE VOLATILITY FOR
SHAREHOLDERS. When an executive pledges shares as collateral for use
in a personal loan or to a margin account, a bank can call in the
pledged shares if the value of the shares violates the terms of the
loans. For example, if a declining share price prompts a violation
of the terms of the personal loan or margin account, a resulting
collateral call or "margin call" can force the insider to suddenly
dump a significant number of shares on the market, which could
further depress the share price to the detriment of other
shareholders.
- EVEN ABSENT A MARGIN CALL, PLEDGING SHARES CREATES A CONFLICT OF
INTEREST FOR SENIOR EXECUTIVES. Senior executives who pledge shares
to personal financial arrangements face an incentive to avoid margin
calls by making decisions to protect their personal finances, which
conflict with their obligation to look out for the company as a
whole.
WHY IS THIS PROPOSAL BEING PRESENTED AT FEDEX?
- FEDEX WAS NAMED BY THE WALL STREET JOURNAL AS "THE MOST EXPOSED"
FOR PLEDGING RISKS:/2/ FedEx Chair and CEO Frederick W. Smith has
pledged over $500 million of FedEx shares. The company's 2013 proxy
statement reports that Smith has pledged 4,344,000 shares to
personal margin accounts or as collateral for loans, as The Wall
Street Journal reported, and an additional 399,000 pledged shares
at a family trust.
- FEDEX EXEMPTS ITS CHAIR AND CEO FROM COMPANY POLICIES BASED ON
HIS SENIOR STAFF'S APPROVAL: Although FedEx describes that it has
a general prohibition of any insider hedging or pledging company
shares, the company policy allows for exemptions. In Smith's case,
his direct report, the General Counsel of the company, has
reviewed the transactions and provided approval. We believe an
enhanced policy deterring all hedging and pledging would further
minimize risks to investors.
- THE RISK OF INSIDERS GAMBLING WITH COMPANY STOCK WERE DRAMATICALLY
DEMONSTRAGTED AT CHESAPEAKE ENERGY when amid market volatility in
2008, Chair and CEO Aubrey McClendon was forced to sell nearly all
of his 5% stake in the company due to margin calls./iii/ By
comparison, Smith holds 6.7% of FedEx and has pledged about 22% of
his holdings to personal financial arrangements.
IS THE REQUEST PRACTICAL?
Yes. ISS has estimated that it would only take 1.37 days to unwind the
amount of the Chair and CEO's pledged shares, based on average daily
trading volume./iv/ In addition, a wide number of companies have adopted
prohibitions on hedging and pledging.
HOW HAS THE COMPANY RESPONDED TO THE SHAREHOLDER PROPOSAL?
The shareholder proponent initiated a discussion with the company in
2011 on the subject of the proposal. However, the company has not
disclosed any changes to its FedEx Securities Manual or corporate
policies on pledging and hedging of company shares by employees.
We urge you to vote FOR Item #8.
Sincerely,
/s/
Scott Zdrazil
First Vice President-Director of Corporate Governance
Amalgamated Bank LongView Funds
(212) 895-4923
scottzdrazil@amalgamatedbank.com
THIS IS NOT A PROXY SOLICITATION AND NO PROXY CARDS WILL BE ACCEPTED.
Please execute and return your proxy card according to FedEx's
instructions.
____________________
/i/ "EIA On Hedging Activities." Gradient Analytics. 9 September 2009.
http://www.gradientanalytics.com/sites/default/files/20090414-EIA-Hedging
-Activity-by-Executives.pdf.
/ii/ Maxwell Murphy. May 15, 2012. "Margin Call: The Most Exposed,"
The Wall Street Journal. http://blogs.wsj.com/cfo/2012/05/15/margin-
call-the-most-exposed/.
/iii/ Alex Berenson and Geraldine Fabrikant. October 13, 2008. "Margin
Calls Prompt Sales, and Drive Shares Even Lower," The New York Times.
http://www.nytimes.com/2008/10/14/business/14margin.html
/iv/"FedEx Corporation." ISS Proxy Advisory Services. 29 August 2013.