FEDERAL EXPRESS CORP, S-8, 1996-05-10

FEDERAL EXPRESS CORP
S-8, 1996-05-10
AIR COURIER SERVICES

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Registration Statement No. 33-________________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

FEDERAL EXPRESS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Delaware 71-0427007
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

2005 Corporate Avenue
Memphis, Tennessee 38132
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

FEDERAL EXPRESS CORPORATION 1995 STOCK INCENTIVE PLAN
(FULL TITLE OF THE PLAN)

KENNETH R. MASTERSON
Executive Vice President, General Counsel and Secretary
Federal Express Corporation
1980 Nonconnah Boulevard
Memphis, Tennessee 38132
(NAME AND ADDRESS OF AGENT FOR SERVICE)

(901) 395-3388
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

Approximate date of commencement of proposed sale to employees: from time to
time after the effective date of this Registration Statement.

CALCULATION OF REGISTRATION FEE

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PROPOSED PROPOSED AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PRICE PER UNIT (1) OFFERING PRICE FEE
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<S> <C> <C> <C> <C>

Common Stock,
par value 1,500,000 $77.0625 $115,593,750 $39,859.91
$.10 per share shares

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</TABLE>

(1) Based upon the average of the high and low prices of the Common Stock
reported on the New York Stock Exchange as of May 8, 1996.

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THIS DOCUMENT CONSTITUTES PART OF A COMBINED PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.

FEDERAL EXPRESS CORPORATION
2005 CORPORATE AVENUE
MEMPHIS, TENNESSEE 38132
(901) 395-3382

COMMON STOCK
(PAR VALUE $.10 PER SHARE)

1995 STOCK INCENTIVE PLAN
1,500,000 SHARES

1993 STOCK INCENTIVE PLAN
1,500,000 SHARES

1989 STOCK INCENTIVE PLAN
1,500,000 SHARES

1987 STOCK INCENTIVE PLAN
1,500,000 SHARES

1984 STOCK INCENTIVE PLAN
600,000 SHARES

1983 STOCK INCENTIVE PLAN
1,320,000 SHARES

1980 STOCK INCENTIVE PLAN
1,000,000 SHARES

MAY 10, 1996

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ITEM 1. PLAN INFORMATION

GENERAL INFORMATION

This document is part of a combined prospectus being delivered by Federal
Express Corporation (the "Company") to each participant in the Company's 1980,
1983, 1984, 1987, 1989, 1993 and 1995 Stock Incentive Plans, as amended (the
"Plans"), to provide information that will enable participants to make an
informed decision regarding investment through the Plans in the common stock of
the Company. The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy and information
statements and other information filed by the Company with the Commission can be
inspected, and copies may be obtained at prescribed rates, at the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, as well as at the following Regional Offices of the Commission: Chicago
Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511 and New York Regional Office, 7 World Trade Center, New York, New York
10048. Such material can also be inspected and copied at the offices of the New
York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.

This document constitutes a part of a Registration Statement on Form S-8
(together with all amendments and exhibits, herein referred to as the
"Registration Statement") filed by the Company under the Securities Act of 1933,
as amended (the "Securities Act"). This document does not contain all of the
information included in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Reference is made to such Registration Statement and to the exhibits relating
thereto for further information with respect to the Company and the common stock
of the Company. This document may from time to time be updated by the Company
in writing or by including updated information in the Company's Annual Report on
Form 10-K, definitive proxy statement or annual report to stockholders.

THE PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN
ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS PROHIBITED. THE PLANS
ARE NOT SUBJECT TO THE PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974 ("ERISA") AND ARE NOT QUALIFIED OR INTENDED TO BE QUALIFIED UNDER
SECTION 401(a) OF THE INTERNAL REVENUE CODE.

THE PLANS

The Company implemented and the stockholders approved the Plans at the
Company's 1980, 1983, 1984, 1987, 1989, 1993 and 1995 annual meetings,
respectively, in order to secure and retain employees of outstanding ability,
further identify the interests of such employees with the interests of the
stockholders, encourage greater stock ownership by, and to provide added
incentive to, those employees who shoulder a major portion of the responsibility
for the Company's success. The Company expects that it will benefit from the
added interest which optionees will have in the welfare of the Company as a
result of their ownership or increased ownership of the Company's common stock.

The 1993 Plan provides for the automatic grant of non-qualified stock
options to purchase 1,000 shares of the Company's common stock immediately
following each of the five consecutive annual stockholder meetings beginning
with the 1994 meeting to the Company's incumbent directors who are not employees
of the Company. Each director elected during the period beginning with the 1994
meeting and ending with the 1998 meeting who is not also an employee of the
Company will be granted, upon being elected, a non-qualified stock option to
purchase 1,000 shares of the Company's common stock under the 1993 Plan.

The Plans provide for the granting of options to purchase for cash an
aggregate of not more than 1,000,000, 1,320,000, 600,000, 1,500,000, 1,500,000,
1,500,000 and 1,500,000 shares, respectively, (after giving effect to
two-for-one stock splits effected in the form of 100% stock dividends in October
1980 and 1983) of the Company's

<PAGE>

common stock to the eligible participants. However, no person may be granted
options for more than 200,000 shares during any fiscal year under the 1995 Plan.

The shares used by the Plans may consist, in whole or in part, of
unissued shares or treasury shares; therefore, shares that are authorized but
unissued have been reserved for issuance upon exercise of options granted.
All of the options are subject to the terms, conditions and restrictions set
forth in the applicable Plan and option agreement.

ADMINISTRATION AND ELIGIBILITY

The 1980, 1983, 1984, 1987, 1989 and 1993 Plans are administered by the
Compensation Committee (the "Committee") of the Company's Board of Directors.
The 1995 Plan is administered by those members, not less than two, of the
Committee each of whom is an "outside director" within the meaning of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), and a
"disinterested person" as defined in Rule 16b-3 of the General Rules and
Regulations under the Exchange Act. The Committee is comprised of Robert H.
Allen, Ralph D. DeNunzio, J. R. Hyde, III, Charles T. Manatt and Jackson W.
Smart, Jr., who serve at the discretion of the Board of Directors and until
their respective successors are elected and qualified. These individuals stand
for election to the Board every three years. The address of the Committee is
c/o General Counsel, Federal Express Corporation, P. O. Box 727, Memphis,
Tennessee 38194-1842.

Outside directors in the case of the 1993 Plan, and the Company's key
employees, including officers, who are from time to time responsible for the
management, growth and protection of the business of the Company and its
subsidiaries, are eligible to be granted options under the Plans. The employees
who receive options will be selected from time to time by the Committee, in its
sole discretion, from those eligible. The Committee will determine, in its sole
discretion, the type of options and the number of shares to be awarded to an
optionee (not to exceed 200,000 shares during any fiscal year under the 1995
Plan) as well as set the terms, conditions and provisions of the options
consistent with the terms of the Plans and interpret the Plans and the options
granted thereunder. Except for the automatic grant of options under the 1993
Plan to directors, members of the Committee and directors of the Company are not
eligible to participate in the Plans.

TERMS AND CONDITIONS

Since the options are granted as incentives, no cash consideration is
received for the granting of the option. However, payment in full of the option
price must be made upon exercise of the option. Payment must be in the form of
a cashier's or certified check or wire transfer payable to the Company. The
option price per share for options granted is determined by the Committee, but
is never less than 100% of the fair market value of the stock on the date the
option is granted. In addition, the 1995 Plan does not permit repricing of
options.

Options may not be granted under the Plans after the tenth anniversary date
of Board of Directors' approval of such plans. However, options granted prior
to such date may extend beyond that date. Any plan may be discontinued by the
Board of Directors, but no such termination will impair any options granted
prior thereto.

Options under the Plans may not be exercised later than ten years after the
date of grant. In addition, no option may be exercised until the employee has
remained in the continuous employment of the Company or its subsidiaries for one
year after the grant, except as provided below.

If an optionee's employment by the Company or a subsidiary (or directorship
in the case of the 1989 and 1993 Plans) terminates by reason of the optionee's
retirement, the optionee's option may thereafter be exercised to the extent to
which it was exercisable at the time of the optionee's retirement but may not be
exercised after the expiration of the period of twelve months from the date of
such termination of employment (or directorship in the case of the 1989 and 1993
Plans) or of the stated period of the option, whichever period is the shorter.
If an optionee's employment (or directorship in the case of the

<PAGE>

1989 and 1993 Plans) terminates by reason of permanent disability, the
optionee's option may thereafter be exercised in full (except that in the case
of the 1995 Plan, no options may be exercised less than six months from the date
of grant) but may not be exercised after the expiration of the period of twelve
months from the date of such termination of employment (or directorship in the
case of the 1989 and 1993 Plans) or of the stated period of the option,
whichever period is shorter. If the optionee dies within a period of twelve
months after termination of employment (or directorship in the case of the 1989
and 1993 Plans) by reason of retirement or permanent disability, any unexercised
option, to the extent to which it was exercisable at the time of the optionee's
death, may thereafter be exercised by the legal representative of the estate or
by the legatee of the option under a last will for a period of twelve months
from the date of the optionee's death or the expiration of the stated period of
the option, whichever period is shorter.

If an optionee's employment (or directorship in the case of the 1989 and
1993 Plans) terminates by reason of the optionee's death, the optionee's option
may thereafter be exercised in full by the legal representative of the estate or
by the legatee of the option under a last will for a period of twelve months
from the date of death or the expiration of the stated period of the option,
whichever period is shorter. Should an optionee's employment (or directorship
in the case of the 1989 and 1993 Plans) terminate for any reason other than
death, retirement or permanent disability, the optionee's option is
automatically terminated.

During the optionee's lifetime, the option is only exercisable by the
optionee or the optionee's duly appointed legal representative. The option by
its terms is personal and not transferable by the optionee other than by will or
the laws of descent and distribution.

In the event of a change in control of the Company, each holder of an
unexpired option under any of the Plans becomes entitled to exercise such option
in whole or in part without regard to the date that such option would first be
exercisable, except no option may be exercised less than six months from the
date of grant. This right will continue, with respect to any holder whose
employment with the Company or subsidiary (or directorship in the case of the
1993 Plan) terminates following a change in control, for a period ending on the
earlier of the date of expiration of such option or twelve months after
termination of employment (or directorship in the case of the 1993 Plan).

AMENDMENTS

The Board of Directors may discontinue any of the Plans and the Committee
may amend the same from time to time, but no amendment or discontinuation can be
made which, without the approval of the stockholders, would:

(i) increase the total shares reserved for the Plans;
(ii) decrease the price of an option granted under the Plans to less
than 100% of the fair market value of the common stock on the
date of grant;
(iii) extend the duration of any of the Plans;
(iv) change the classes of employees eligible to receive awards under
the 1995 Plan;
(v) increase the maximum number of options which may be granted to an
optionee under the 1995 Plan;
(vi) decrease the period in which no option will be exercisable to
less than one year under the 1995 Plan;
or
(vii) modify the provisions of options granted to outside directors
under the 1989 and 1993 Plans.

Notwithstanding the above, the provisions of options granted to outside
directors under the 1989 and 1993 Plans may not be amended more than once every
six months, other than to comply with changes in the tax laws.

The 1987, 1989, 1993 and 1995 Plans provide that if the Committee, after
consulting with management of the Company, determines that application of an
accounting standard in compliance with any statement issued by the Financial
Accounting Standards Board concerning the treatment of employee stock options
would have a significant adverse effect on the Company's financial statements
because options granted before issuance of such statement are then outstanding,
then the Committee in its absolute discretion may cancel and revoke all
outstanding options to which such adverse effect is attributed and the holders
of such options shall have no further rights in respect thereof. Cancellation
and revocation will be effective upon written notice by the Committee to the
holders of such options.

<PAGE>

LOANS TO OPTIONEES

The Company may make interest-free demand loans to holders of non-qualified
stock options for the purpose of exercising such options and enabling optionees
to pay any tax liability associated with such exercise. The loans must be fully
secured by shares of the Company's common stock and in any event must be repaid
upon the termination of the optionee's employment (or directorship in the case
of the 1989 and 1993 Plans) for any reason.

Neither the Plans, or any contracts in connection therewith, permit any
person to have or to create a lien on any funds, securities or other property
held under the Plans.

OTHER INFORMATION

At the time an option is granted, each optionee is furnished a copy of the
text of the plan under which such option is granted, as well as a copy of the
applicable stock option agreement and other applicable documents.

As of May 1, 1996, there were 526 employees and directors participating in
the Plans.

The 1995 Plan is intended to comply with all applicable conditions of Rule
16b-3 of the General Rules and Regulations under the Exchange Act. All
transactions involving the Company's executive officers are subject to such
conditions, regardless of whether the conditions are expressly set forth in the
1995 Plan. Any provision of the 1995 Plan that is contrary to a condition of
Rule 16b-3 will not apply to executive officers of the Company.

BASIC FEDERAL INCOME TAX CONSEQUENCES

The Company has been advised by its counsel that under current federal
income tax law, the options granted under the Plans have the following income
tax consequences:

DESIGNATION OF OPTIONS AS INCENTIVE STOCK OPTIONS

The Committee may, in its discretion, designate all or a portion of an
option granted under the Plans as an "incentive stock option," as defined in
Section 422 of the Code, subject to the limitations contained in the Code. Any
option that is not so designated by the Committee will be treated as a
non-qualified stock option.

The Plans provide that incentive stock options granted before January 1,
1987 must be exercised in the order granted. This is the "sequencing rule" and
is included in the Plans so optionees are benefited by the tax-favored status
afforded pre-1987 incentive stock options. Incentive stock options granted
after December 31, 1986, however, are not required to be exercised in the order
granted, and the existence of unexercised pre-1987 incentive stock options will
not prevent any optionee from exercising post-1986 incentive stock options.

OPTIONS

Neither the grant nor the exercise of an incentive stock option results in
the recognition of income (for federal income tax purposes) by the optionee or
any tax deduction to the Company. However, upon disposition of stock held
pursuant to the exercise of an incentive stock option, the excess of the sale
price over the exercise price will qualify as a capital gain provided the
optionee does not dispose of the stock for at least two years from the date the
option was granted and holds the stock for at least one year after the date of
exercise of the option.

If the optionee disposes of stock acquired through an incentive stock
option exercise within two years of the date of grant or within one year of the
date of exercise of the incentive stock option, the optionee must include, in
the year of the disqualifying sale, the gain realized on the disposition as
ordinary income to the extent of the lesser of (i) the fair market value of the
stock on the date of exercise minus the exercise price or (ii) the sale price
minus

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the exercise price. The Company will be entitled to a deduction in the same
amount. The excess, if any, of the sale price over the sum of the exercise
price and the amount taxed as ordinary income may qualify as capital gain. If
the optionee exercises an incentive stock option more than three months after
the optionee's termination of employment due to retirement, such exercise will
be treated as an exercise of a non-qualified stock option and ordinary income
will be recognized.

Non-qualified options are taxed under Section 83 of the Code which provides
that property transferred in connection with the performance of services will be
taxed in the year in which the property either becomes transferable or is no
longer subject to a risk of forfeiture. In general, the granting of a
non-qualified stock option under the Plans will not result in the recognition of
taxable income to the optionee or any tax deduction to the Company. However,
upon the exercise of such option, the excess of the market value of the stock
acquired over its exercise price is taxable to the optionees as ordinary income
and is generally deductible by the Company.

Ordinary income recognized upon the exercise of a non-qualified option is
treated as a supplemental wage payment and is subject to both income tax and
FICA withholding. At the end of each month, the Company calculates the
compensation recognized upon the exercise of non-qualified options and
determines the amount of income tax and FICA withholding for each optionee.
The federal income tax withholding rate is 28%. The FICA rate is 7.65% (6.2%
for Social Security and 1.45% for Medicare taxes). The 6.2% portion of FICA
applies to the extent the optionee's income on the date of exercise does not
exceed the statutorily imposed limit ($62,700 in 1996). The 1.45% portion of
FICA applies to all income. The Company pays the withholding taxes to the
IRS, and the state revenue departments as applicable. The optionee
subsequently reimburses the Company for the withholding amounts paid by the
Company.

Notwithstanding the foregoing, Section 162(m) of the Code limits
deductibility by the Company of certain compensation for the chief executive
officer and the four other highest paid executive officers to $1,000,000 per
year, unless certain requirements are met. The Company believes the 1995 Plan
complies with Section 162(m); and accordingly, compensation recognized by the
five highest paid executive officers under the 1995 Plan will qualify for
appropriate tax deductions. The Company's 1980, 1983, 1984 and 1987 Plans also
comply with Section 162(m) because of the Section 162(m) transition rules. The
1989 and 1993 Plans are covered by the transition rules but only until the
Company's first annual meeting held after December 31, 1996. Compensation
received by five the highest paid executive officers under the 1989 and 1993
Plans after such meeting will be subject to the $1,000,000 deductibility limit.

ALTERNATIVE MINIMUM TAX

Although no income is recognized for regular income tax purposes upon the
grant or exercise of an incentive stock option, the difference between the
exercise price of the incentive stock option and the value of the stock on the
date of exercise is a "tax preference item" for determining the applicability of
the alternative minimum tax with respect to a particular taxpayer. Due to the
complexity of this area of the tax law as it applies to any particular
individual's situation, optionees are urged to seek professional tax advice if
they plan to exercise incentive stock options.

STOCK OPTION LOANS

Optionees planning to request an interest-free demand loan to exercise
their non-qualified stock options should consider the tax consequences
associated with such loans. The loans are below-market interest loans for
federal income tax purposes because interest on the loans is payable at a
rate less than the statutorily prescribed applicable federal rate ("AFR").
Most below-market demand loans are recharacterized as arm's length
transactions in which the lender (the Company) is deemed to have made a
payment to the borrower (the optionee) equal to the "foregone interest" or
the amount of interest waived by the lender. This deemed payment will be
treated as additional wages paid to the optionee and subject to withholding
as discussed above. The borrower is generally treated as transferring the
foregone interest back to the lender, thereby generating interest income for
the lender and interest expense for the borrower. Foregone interest is the
amount of interest that would have been payable on the loan if interest had
accrued at the AFR and was payable annually. The imputed payment is treated
as income to the borrower.

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If an optionee receives interest-free loans from the Company aggregating in
excess of $10,000 in connection with the exercise of options under any of the
Plans, the optionee will recognize income in an amount equal to the foregone
interest with a corresponding investment interest expense of the same amount.
Investment interest expense may be deductible by the optionee subject to the
limitations on the deductibility of investment interest imposed by Section
163(d) of the Code (i.e., a noncorporate taxpayer's deduction for investment
interest is limited to the amount of the taxpayer's net investment income).

Net investment income is the excess of investment income over investment
expenses. Investment income is the sum of interest, dividends, rents,
royalties, net capital gains and the like on the disposition of property held
for investment. Investment expenses include any expense (other than investment
interest) for which a deduction is allowable in connection with the production
of investment income. Investment income and expenses do not include any items
taken into account in computing income or loss from a passive activity. In
addition, the legislative history of the 1986 Tax Reform Act directs that
deductible investment expenses are those allowed after application of the two
percent adjusted-gross-income floor for deduction of miscellaneous expenses.
Investment interest that is disallowed because of the investment interest
limitation carries forward and is treated as investment interest paid in the
succeeding taxable year and is deductible to the extent of the limitation in the
carryover year.

BECAUSE THE TAX RULES DISCUSSED ABOVE DO NOT PURPORT TO ADDRESS EVERY
SITUATION WHICH MAY RESULT IN TAXATION, OPTIONEES SHOULD CONTACT THEIR
OWN TAX ADVISERS IF THEY HAVE QUESTIONS.

ITEM 2. COMPANY INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION

The documents listed in (a) through (c) below and incorporated by reference
into Item 3 of Part II of the Registration Statement with respect to the 1995
Plan and all documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, are hereby
incorporated by reference in this combined Section 10(a) prospectus and made a
part hereof from the date of filing such documents.

(a) The Company's Annual Report on Form 10-K for the fiscal year ended May
31, 1995 filed on August 5, 1995 pursuant to Section 13 or 15(d) of the
Exchange Act.

(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Company's
annual report referred to in (a) above.

(c) The description of the securities contained in the Company's
registration statement on Form 8-A filed with the Commission on
December 15, 1978 under Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating such description.

Copies of the above mentioned documents incorporated by reference into Item
3 of Part II of the Registration Statement, and incorporated by reference into
this combined Section 10(a) prospectus, are available to participants without
charge, upon request. Requests for such copies should be directed to: Shirlee
Clark, Manager - Media Relations, Federal Express Corporation, by mail at Box
727, Memphis, Tennessee 38194-1850, or by telephone at (901) 395-3490. Any
other documents required to be delivered to employees pursuant to Rule 428(b)
are available in the same manner.

If participants have questions concerning their individual accounts or need
copies of the Plans, they should contact the Legal Department, by mail at Box
727, Memphis, Tennessee 38194-1842, or by telephone at (901) 395-3382.

<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents filed with the Securities and Exchange Commission
(the "Commission") in accordance with the provisions of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") are incorporated herein by
reference and made a part hereof.

(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
May 31, 1995 filed on August 5, 1995 pursuant to Section 13(a) or
15(d) of the Exchange Act;

(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the
Registrant's annual report referred to in (a) above.

(c) The description of the securities contained in the Registrant's
Registration Statement on Form 8-A filed with the Commission on
December 15, 1978 under Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating such description.

All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Registration Statement and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents.

ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL

The validity of the shares of common stock registered hereunder has been
passed on for the Registrant by George W. Hearn, Vice President - Law of the
Company. At May 2, 1996, Mr. Hearn owned zero shares of the Registrant's common
stock and held options to purchase 15,800 shares of such common stock. Of the
options granted, 3,750 were vested at such date.

The consolidated financial statements and schedules of the Registrant
included or incorporated by reference in the Registrant's Annual Report on Form
10-K for the year ended May 31, 1995 and incorporated by reference herein, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said reports.

With respect to the unaudited interim financial information for the
quarters ended August 31, 1995, November 30, 1995 and February 29, 1996,
included in the Company's Quarterly Reports on Form 10-Q for such periods, which
are incorporated by reference in this Registration Statement, Arthur Andersen
LLP has applied limited procedures in accordance with professional standards for
a review of such information. However, their separate reports thereon state
that they did not audit and they do not express an opinion on that interim
financial information. Accordingly, the degree of reliance on their reports on
that information should be restricted in light of the limited nature of the
review procedures applied. In addition, the accountants are not subject to the
liability provisions of Section 11 of the Securities Act for their reports on
the unaudited interim financial information because those reports are not
"reports" or a "part" of this Registration Statement, prepared or certified by
the accountants within the meaning of Sections 7 and 11 of the Securities Act.

ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS

(a) Reference is made to Section 145 of the Delaware General Corporation
Law ("DGCL") as to indemnification by the Registrant of officers and directors.

II-1

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(b) Section 13 of Article III of the by-laws of the Registrant provides
for indemnification of directors as follows:

Section 13. The corporation shall indemnify to the full extent
authorized or permitted by the General Corporation Law of the State of
Delaware any person made, or threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding (whether
civil, criminal, administrative or investigative) by reason of the
fact that he, his testator or intestate is or was a director of the
corporation or serves or served as a director, officer, employee or
agent of any other enterprise at the request of the corporation.

Section 18 of Article V of the by-laws of the Registrant provides for
indemnification of officers as follows:

Section 18. The corporation shall indemnify to the full extent
authorized or permitted by the General Corporation Law of the State of
Delaware any person made, or threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding (whether
civil, criminal, administrative or investigative) by reason of the
fact that he, his testator or intestate is or was an officer or
Managing Director of the corporation or serves or served as a
director, officer, employee or agent of any other enterprise at the
request of the corporation.

(c) The Registrant has also entered into an indemnification agreement with
each of its directors based on the sections of the DGCL that recognize the
validity of additional indemnity rights granted by agreement. The
indemnification agreement alters or clarifies the statutory indemnity with
respect to the Registrant's directors in the following respects: (i) indemnity
is explicitly provided for settlements, fines and judgments in derivative
actions to the maximum extent permitted by Delaware law, (ii) prompt payment of
expenses is provided in advance of indemnification, provided the director
undertakes to repay such amount if it is finally determined the director is not
entitled to be indemnified and (iii) indemnification for all matters involving a
director as a party by reason of the person being a director unless the person
violates the law or the person's conduct is finally adjudged to have been
knowingly fraudulent, deliberately dishonest or willful misconduct. Therefore,
a director who has entered into the indemnification agreement will be entitled
to indemnification automatically according to its terms without prior
independent review of such director's conduct and approval of the
indemnification payment by either disinterested directors, independent counsel
or the stockholders.

Certain of the provisions of the indemnification agreement have not been
tested in court and remain subject to public policy considerations with
respect to their enforceability. The Registrant has been advised that
indemnification of a judgment or amounts paid in settlement in a derivative
suit may be contrary to public policy in the State of Delaware. Because
substantial uncertainty exists as to the validity of such payments, the
Registrant will not make an indemnification payment for fines, judgments or
amounts paid in settlement in a derivative suit without first obtaining an
opinion of independent counsel that such payment is permitted under Delaware
law.

(d) The Registrant has purchased insurance designed to protect the
Registrant and its directors and officers against losses arising from certain
claims, including claims under the Securities Act.

ITEM 8. EXHIBITS

EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------

4.1 Certain provisions of Registrant's Restated Certificate of
Incorporation, as amended, relating to the Common Stock and
defining the rights of security holders. (Filed as Exhibit
3.1 to Registrant's 1995 Third Quarter Report on Form 10-Q,
Commission File No. 1-7806, and incorporated herein by
reference).

5.1 Opinion of George W. Hearn, Vice President - Law, of
Registrant regarding legality.

II-2

<PAGE>

15.1 Letter of Arthur Andersen LLP, independent public
accountants.

23.1 Consent of George W. Hearn (included in Exhibit 5.1).

23.2 Consent of Arthur Andersen LLP, independent public
accountants.

24.1 Powers of Attorney.

99.1 1995 Stock Incentive Plan. (Filed as Exhibit A to
Registrant's 1995 Definitive Proxy Statement, Commission
File No. 1-7806, and incorporated herein by reference.)

99.2 1995 Stock Incentive Plan Stock Option Agreement.

ITEM 9. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information
set forth in the Registration Statement (Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum, aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration
statement.);

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;

PROVIDED, HOWEVER, that paragraphs (a)(l)(i) and (a)(l)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial BONA
FIDE offering thereof.

(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.

(b) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein and
the offering of such securities at that time shall be deemed to be the initial
BONA FIDE offering thereof.

II-3

<PAGE>

(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions referred to in Item 6 of this
Registration Statement, or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-4

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Memphis, State of Tennessee, on this 10th day of May
1996.

FEDERAL EXPRESS CORPORATION
(REGISTRANT)

By: /s/ JAMES S. HUDSON
------------------------
James S. Hudson
VICE PRESIDENT AND CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:

SIGNATURE CAPACITY DATE
--------- -------- ----

/s/ FREDERICK W. SMITH* Chairman of the Board, President,
- -------------------------- Chief Executive Officer
Frederick W. Smith (Principal Executive Officer) and
Director

/s/ ALAN B. GRAF, JR.* Executive Vice President and
- -------------------------- Chief Financial Officer
Alan B. Graf, Jr. (Principal Financial Officer)

/s/ JAMES S. HUDSON Vice President and Controller May 10, 1996
- -------------------------- (Principal Accounting Officer)
James S. Hudson

/s/ ROBERT H. ALLEN* Director
- --------------------------
Robert H. Allen

/s/ HOWARD H. BAKER, JR.* Director
- --------------------------
Howard H. Baker, Jr.

/s/ ANTHONY J.A. BRYAN* Director
- --------------------------
Anthony J.A. Bryan

/s/ ROBERT L. COX* Director
- --------------------------
Robert L. Cox

/s/ RALPH D. DENUNZIO* Director
- --------------------------
Ralph D. DeNunzio

/s/ JUDITH L. ESTRIN* Director
- --------------------------
Judith L. Estrin

<PAGE>

SIGNATURE CAPACITY DATE
--------- -------- ----

/s/ PHILIP GREER* Director
- --------------------------
Philip Greer

/s/ J.R. HYDE, III* Director
- --------------------------
J.R. Hyde, III

/s/ CHARLES T. MANATT* Director
- --------------------------
Charles T. Manatt

/s/ GEORGE J. MITCHELL* Director
- --------------------------
George J. Mitchell

/s/ JACKSON W. SMART, JR.* Director
- --------------------------
Jackson W. Smart, Jr.

/s/ JOSHUA I. SMITH* Director
- --------------------------
Joshua I. Smith

/s/ PETER S. WILLMOTT* Director
- --------------------------
Peter S. Willmott

*/s/ JAMES S. HUDSON May 10, 1996
- --------------------------
James S. Hudson
ATTORNEY-IN-FACT

<PAGE>

EXHIBIT INDEX

EXHIBIT NUMBER EXHIBIT DESCRIPTION

5.1 Opinion of George W. Hearn, Vice President - Law, of
Registrant regarding legality.

15.1 Letter of Arthur Andersen LLP, independent public
accountants.

23.1 Consent of George W. Hearn (included in Exhibit 5.1).

23.2 Consent of Arthur Andersen LLP, independent public
accountants.

24.1 Powers of Attorney.

99.1 1995 Stock Incentive Plan. (Filed as Exhibit A to
Registrant's 1995 Definitive Proxy Statement, Commission
File No. 1-7806, and incorporated herein by reference.)

99.2 1995 Stock Incentive Plan Stock Option Agreement.

<PAGE>

EXHIBIT 5.1

OPINION RE LEGALITY

<PAGE>

[COMPANY LETTERHEAD]

May 9, 1996

Federal Express Corporation
P. O. Box 727
Memphis, TN 38194-1842

Ladies and Gentlemen:

I have acted as the Company's counsel in connection with the filing of a
Registration Statement on Form S-8 (the "Registration Statement") pursuant to
the Securities Act of 1933, as amended, relating to the offering to certain
employees of up to 1,500,000 shares of the Company's Common Stock, par value
$.10 per share (the "Shares") pursuant to the Company's 1995 Stock Incentive
Plan (the "Plan"). This opinion is being furnished to you in response to Item
601(b)(5) of Regulation S-K and the instructions to Form S-8. I am familiar
with the proceedings to date with respect to the Plan and have examined such
records, documents and matters of fact as I have considered relevant for
purposes of this opinion.

I am of the opinion that:

1. The Company is a corporation duly organized and validly existing under
the laws of the State of Delaware and is duly authorized to carry on
the business in which it is engaged.

2. The Shares will be legally issued, fully paid and nonassessable when
the Shares are issued and sold pursuant to the terms of the Plan which
has been included in the Registration Statement.

I do not find it necessary for purposes of this opinion and, accordingly, do not
purport to cover herein the application of the "Blue Sky" or securities laws of
various states to sales of the Shares.

I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to me under Item 5 "Interests of Named Experts
and Counsel" of the Registration Statement.

Very truly yours,

/s/ GEORGE W. HEARN
George W. Hearn
Vice President - Law

<PAGE>

EXHIBIT 15.1

LETTER OF ARTHUR ANDERSEN LLP

<PAGE>

[Arthur Andersen LLP Letterhead]

May 3, 1996

Federal Express Corporation
Box 727
Memphis, Tennessee 38194

Ladies and Gentlemen:

We are aware that Federal Express Corporation will be incorporating by reference
in this Form S-8 Registration Statement its Form 10-Q for the quarters ended
August 31, 1995, November 30, 1995 and February 29, 1996, which include our
reports dated September 14, 1995, December 13, 1995 and March 13, 1996,
respectively, covering the unaudited interim financial information contained
therein. Pursuant to Regulation C of the Securities Act of 1933, those reports
are not considered part of this Registration Statement prepared or certified by
our firm or reports prepared or certified by our firm within the meaning of
Sections 7 and 11 of the Act.

Very truly yours,

/s/ ARTHUR ANDERSEN LLP
- ------------------------
Arthur Andersen LLP

<PAGE>

EXHIBIT 23.2

CONSENT OF ARTHUR ANDERSEN LLP

<PAGE>

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 registration statement of our reports dated June 29,
1995, included (or incorporated by reference) in Federal Express Corporation's
Form 10-K for the year ended May 31, 1995, and to all references to our firm
included in this registration statement.

/s/ ARTHUR ANDERSEN LLP
-----------------------------
Arthur Andersen LLP

Memphis, Tennessee
May 3, 1996

<PAGE>

EXHIBIT 24.1

POWERS OF ATTORNEY

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick W.
Smith, William J. Razzouk, Alan B. Graf, Jr. and James S. Hudson, and each of
them, with full power of substitution and resubstitution, as his true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration Statement
on Form S-8 to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to up to 1,500,000 shares of
Common Stock, par value $.10 per share, of the Corporation under its 1995 Stock
Incentive Plan and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective; and hereby ratifies and confirms all that such attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes may lawfully
do or cause to be done by virtue of these presents.

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of November
1995.

/s/ ROBERT H. ALLEN
------------------------------
Robert H. Allen

STATE OF TEXAS

COUNTY OF HARRIS

I, Earlene L. Barbeau, a Notary Public in and for the aforesaid State and
County, do hereby certify that Robert H. Allen, personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ EARLENE L. BARBEAU
------------------------------
NOTARY PUBLIC

My Commission Expires:

March 8, 1997

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of November
1995.

/s/ HOWARD H. BAKER, JR.
------------------------------
Howard H. Baker, Jr.

STATE OF TENNESSEE

COUNTY OF SCOTT

I, Betty B. Lowe, a Notary Public in and for the aforesaid State and
County, do hereby certify that Howard H. Baker, Jr. personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ BETTY B. LOWE
------------------------------
NOTARY PUBLIC

My Commission Expires:

August 27, 1997

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of November
1995.

/s/ ANTHONY J.A. BRYAN
------------------------------
Anthony J.A. Bryan

STATE OF TENNESSEE

COUNTY OF SHELBY

I, Joyce J. Jones, a Notary Public in and for the aforesaid State and
County, do hereby certify that Anthony J.A. Bryan, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ JOYCE J. JONES
------------------------------
NOTARY PUBLIC

My Commission Expires:

August 12, 1998

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of November
1995.

/s/ ROBERT L. COX
------------------------------
Robert L. Cox

STATE OF TENNESSEE

COUNTY OF SHELBY

I, Lillian W. Powers, a Notary Public in and for the aforesaid State and
County, do hereby certify that Robert L. Cox, personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ LILLIAN W. POWERS
------------------------------
NOTARY PUBLIC

My Commission Expires:

April 29, 1997

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of November
1995.

/s/ RALPH D. DENUNZIO
------------------------------
Ralph D. DeNunzio

STATE OF NEW YORK

COUNTY OF NEW YORK

I, Pauline E. Kalahele, a Notary Public in and for the aforesaid State and
County, do hereby certify that Ralph D. DeNunzio personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ PAULINE E. KALAHELE
------------------------------
NOTARY PUBLIC

My Commission Expires:

February 28, 1996

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

That the undersigned, a Director of FEDERAL EXPRESS CORPORATION, a Delaware
corporation (the "Corporation"), does hereby constitute and appoint Frederick W.
Smith, William J. Razzouk, Alan B. Graf, Jr. and James S. Hudson, and each of
them, with full power of substitution and resubstitution, as her true and lawful
attorneys-in-fact and agents, with full power and authority to execute in the
name and on behalf of the undersigned as such Director, a Registration Statement
on Form S-8 to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended, with respect to up to 1,500,000 shares of
Common Stock, par value $.10 per share, of the Corporation under its 1995 Stock
Incentive Plan and any and all amendments to such Registration Statement whether
filed prior or subsequent to the time such Registration Statement becomes
effective; and hereby ratifies and confirms all that such attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes may lawfully
do or cause to be done by virtue of these presents.

IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of December
1995.

/s/ JUDITH L. ESTRIN
------------------------------
Judith L. Estrin

STATE OF TENNESSEE

COUNTY OF SHELBY

I, Joyce J. Jones, a Notary Public in and for the aforesaid State and
County, do hereby certify that Judith L. Estrin, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that she signed and delivered the
foregoing instrument as her free and voluntary act, for the uses and purposes
therein set forth.

/s/ JOYCE J. JONES
------------------------------
NOTARY PUBLIC

My Commission Expires:

August 12, 1998

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of November
1995.

/s/ PHILIP GREER
------------------------------
Philip Greer

STATE OF NEW YORK

COUNTY OF KINGS

I, Kathleen M. Rode, a Notary Public in and for the aforesaid State and
County, do hereby certify that Philip Greer, personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ KATHLEEN M. RODE
------------------------------
NOTARY PUBLIC

My Commission Expires:

May 31, 1996

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of
November 1995.

/s/ J. R. HYDE, III
------------------------------
J. R. Hyde, III

STATE OF TENNESSEE

COUNTY OF SHELBY

I, Harry L. Goldsmith, a Notary Public in and for the aforesaid State and
County, do hereby certify that J. R. Hyde, III, personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ HARRY L. GOLDSMITH
------------------------------
NOTARY PUBLIC

My Commission Expires:

September 1, 1997

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of November
1995.

/s/ CHARLES T. MANATT
------------------------------
Charles T. Manatt

DISTRICT OF COLUMBIA

I, Bernida D. Evans, a Notary Public in and for the aforesaid State and
County, do hereby certify that Charles T. Manatt, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ BERNIDA D. EVANS
------------------------------
NOTARY PUBLIC

My Commission Expires:

November 30, 1999

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 22nd day of November
1995.

/s/ GEORGE J. MITCHELL
------------------------------
George J. Mitchell

DISTRICT OF COLUMBIA

I, June L. Todd, a Notary Public in and for the aforesaid State and County,
do hereby certify that George J. Mitchell, personally known to me to be the same
person whose name is subscribed to the foregoing instrument, appeared before me
this day in person, and acknowledged that he signed and delivered the foregoing
instrument as his free and voluntary act, for the uses and purposes therein set
forth.

/s/ JUNE L. TODD
------------------------------
NOTARY PUBLIC

My Commission Expires:

August 31, 1996

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of November
1995.

/s/ JACKSON W. SMART, JR.
------------------------------
Jackson W. Smart, Jr.

STATE OF ILLINOIS

COUNTY OF COOK

I, Esperanza Acosta, a Notary Public in and for the aforesaid State and
County, do hereby certify that Jackson W. Smart, Jr. personally known to me to
be the same person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that he signed and
delivered the foregoing instrument as his free and voluntary act, for the uses
and purposes therein set forth.

/s/ ESPERANZA ACOSTA
------------------------------
NOTARY PUBLIC

My Commission Expires:

February 8, 1997

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 22nd day of November
1995.

/s/ JOSHUA I. SMITH
------------------------------
Joshua I. Smith

STATE OF MARYLAND

COUNTY OF PRINCE GEORGES

I, Gaye P. Cotton, a Notary Public in and for the aforesaid State and
County, do hereby certify that Joshua I. Smith, personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ GAYE P. COTTON
------------------------------
NOTARY PUBLIC

My Commission Expires:

April 24, 1999

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of November
1995.

/s/ PETER S. WILLMOTT
------------------------------
Peter S. Willmott

STATE OF ILLINOIS

COUNTY OF COOK

I, Joan L. Noble, a Notary Public in and for the aforesaid State and
County, do hereby certify that Peter S. Willmott personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ JOAN L. NOBLE
------------------------------
NOTARY PUBLIC

My Commission Expires:

March 5, 1999

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

That the undersigned, the principal executive officer and a director of
FEDERAL EXPRESS CORPORATION, a Delaware corporation (the "Corporation"), does
hereby constitute and appoint William J. Razzouk, Alan B. Graf, Jr. and James S.
Hudson, and each of them, with full power of substitution and resubstitution, as
his true and lawful attorneys-in-fact and agents, with full power and authority
to execute in the name and on behalf of the undersigned as such officer and
director, a Registration Statement on Form S-8 to be filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, with
respect to up to 1,500,000 shares of Common Stock, par value $.10 per share, of
the Corporation under its 1995 Stock Incentive Plan and any and all amendments
to such Registration Statement whether filed prior or subsequent to the time
such Registration Statement becomes effective; and hereby ratifies and confirms
all that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of these
presents.

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of November
1995.

/s/ FREDERICK W. SMITH
------------------------------
Frederick W. Smith

STATE OF TENNESSEE

COUNTY OF SHELBY

I, June Y. Fitzgerald, a Notary Public in and for the aforesaid State and
County, do hereby certify that Frederick W. Smith, personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ JUNE Y. FITZGERALD
------------------------------
NOTARY PUBLIC

My Commission Expires:

January 26, 1999

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

That the undersigned, the principal financial officer of FEDERAL EXPRESS
CORPORATION, a Delaware corporation (the "Corporation"), does hereby constitute
and appoint Frederick W. Smith, William J. Razzouk and James S. Hudson, and each
of them, with full power of substitution and resubstitution, as his true and
lawful attorneys-in-fact and agents, with full power and authority to execute in
the name and on behalf of the undersigned as such officer, a Registration
Statement on Form S-8 to be filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, with respect to up to 1,500,000
shares of Common Stock, par value $.10 per share, of the Corporation under its
1995 Stock Incentive Plan and any and all amendments to such Registration
Statement whether filed prior or subsequent to the time such Registration
Statement becomes effective; and hereby ratifies and confirms all that such
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes may lawfully do or cause to be done by virtue of these presents.

IN WITNESS WHEREOF, I have hereunto set my hand this 20th day of November
1995.

/s/ ALAN B. GRAF, JR.
------------------------------
Alan B. Graf, Jr.

STATE OF TENNESSEE

COUNTY OF SHELBY

I, Joyce J. Jones, a Notary Public in and for the aforesaid State and
County, do hereby certify that Alan B. Graf, Jr., personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ JOYCE J. JONES
------------------------------
NOTARY PUBLIC

My Commission Expires:

August 12, 1998

<PAGE>

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

That the undersigned, the principal accounting officer of FEDERAL EXPRESS
CORPORATION, a Delaware corporation (the "Corporation"), does hereby constitute
and appoint Frederick W. Smith, William J. Razzouk and Alan B. Graf, Jr., and
each of them, with full power of substitution and resubstitution, as his true
and lawful attorneys-in-fact and agents, with full power and authority to
execute in the name and on behalf of the undersigned as such officer, a
Registration Statement on Form S-8 to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, with respect to up to
1,500,000 shares of Common Stock, par value $.10 per share, of the Corporation
under its 1995 Stock Incentive Plan and any and all amendments to such
Registration Statement whether filed prior or subsequent to the time such
Registration Statement becomes effective; and hereby ratifies and confirms all
that such attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes may lawfully do or cause to be done by virtue of these
presents.

IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of November
1995.

/s/ JAMES S. HUDSON
------------------------------
James S. Hudson

STATE OF TENNESSEE

COUNTY OF SHELBY

I, Charleda M. Smith, a Notary Public in and for the aforesaid State and
County, do hereby certify that James S. Hudson, personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed and delivered the
foregoing instrument as his free and voluntary act, for the uses and purposes
therein set forth.

/s/ CHARLEDA M. SMITH
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NOTARY PUBLIC

My Commission Expires:

October 12, 1999

Doc. 9250

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EXHIBIT 99.2

1995 STOCK INCENTIVE PLAN STOCK OPTION AGREEMENT

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STOCK OPTION AGREEMENT
PURSUANT TO
FEDERAL EXPRESS CORPORATION
1995 STOCK INCENTIVE PLAN

A STOCK OPTION for a total of ___________ shares of Common Stock, par
value $.10 per share, of Federal Express Corporation, a Delaware corporation
(the "Company"), is hereby granted to ______________ (the "Optionee"), at the
price determined as provided herein, and in all respects subject to the terms,
definitions and provisions of the Company's 1995 Stock Incentive Plan (the
"Plan"), which is incorporated herein by reference.

1. OPTION PRICE. The option price is $ ____________ for each share,
being one hundred percent (100%) of the fair market value, as determined by the
Committee, of the Common Stock on the date of grant of this Option.

2. EXERCISE OF OPTION. This Option shall be exercisable in accordance
with provisions of Section 6 of the Plan as follows:

(i) SCHEDULE OF RIGHTS TO EXERCISE. Twenty percent (20%) after one
year from the date of grant; forty percent (40%) after two years; sixty percent
(60%) after three years; eighty percent (80%) after four years; and one hundred
percent (100%) after five years.

(ii) METHOD OF EXERCISE. This Option shall be exercisable by a
written notice which shall:

(a) state the election to exercise the Option, the number
of shares in respect of which it is being exercised, the person in
whose name the stock certificate or certificates for such shares of
Common Stock is to be registered and the address and Social Security
Number of such person (or if more than one, the names, addresses and
Social Security Numbers of such persons);

(b) contain such representations and agreements as to the
holder's investment intent with respect to such shares of Common Stock
as may be satisfactory to the Company's counsel;

(c) be signed by the person or persons entitled to exercise
the Option and, if the Option is being exercised by any person or
persons other than the Optionee, be accompanied by proof, satisfactory
to counsel for the Company, of the right of such person or persons to
exercise the Option; and

(d) be in writing and delivered in person or by first class
or interdepartmental mail to the President of the Company or his
designee.

Payment of the purchase price of any shares with respect to which
the Option is being exercised shall be by certified or bank cashier's check.

(iii) RESTRICTIONS ON EXERCISE. This Option may not be exercised
if the issuance of the shares upon such exercise would constitute a violation of
any applicable federal or state securities or other law or regulation. As a
condition to the exercise of this Option, the Company may require the person
exercising this Option to make any representation and warranty to the Company as
may be required by any applicable law or regulation.

3. DESIGNATION OF CERTAIN OPTION SHARES AS INCENTIVE STOCK OPTIONS. The
maximum number of option shares granted hereunder are (as permitted by Section 7
of the Plan) hereby designated incentive stock options, as that term is defined
in Section 422(b) of the Internal Revenue Code (the "ISO Shares"). Pursuant to
the exercise schedule as provided in Section 2(i) of this Agreement, the number
of ISO Shares and non-qualified option shares ("NQO Shares") exercisable on and
after the anniversaries described in such Section 2(i) shall be as set forth in
the table below; provided, however, that if pursuant to any provision of the
Plan or amendment to this Agreement any of the option shares hereby granted
become exercisable sooner than as provided in Section 2(i) hereof, then the
number of option shares that may be ISO Shares with respect to any calendar year
during which they are first exercisable shall,

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notwithstanding the table below, be limited to the quotient obtained by dividing
$100,000 by the option price set forth in Section 1 hereof.

Anniversary of ISO NQO
Grant Date Shares Shares
-------------- ------ ------

(i) NOTICE TO COMPANY OF DISPOSITION OF ISO SHARES. Optionee
agrees that, in the event the Optionee disposes of any of the ISO Shares within
one year after the date of exercise of the option to purchase same, the Optionee
will promptly notify the Company of such disposition. Such notice shall be in
writing and shall specify (i) the number of ISO Shares so disposed of, (ii) the
price paid for such shares by the Optionee upon the exercise of the option, and
(iii) the price or other consideration received for such shares. All
certificates for Common Stock issued upon the exercise of an option to purchase
ISO Shares shall bear such legend or other distinctive impression, as determined
by the Committee, as will notify the transfer agent of such stock to advise the
Company of the disposition of ISO Shares within one year after the issuance
thereof.

4. TRANSFERABILITY OF OPTION. This Option may not be transferred in any
manner otherwise than by will or the laws of descent or distribution and may be
exercised during the lifetime of the Optionee only by the Optionee. The terms
of this Option shall be binding upon the heirs, personal representatives and
successors of the Optionee.

5. TERM OF OPTION. This Option may not be exercised more than ten (10)
years from the date of grant of this Option, as set forth below, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option.

6. OPTIONEE ACKNOWLEDGMENT. Optionee acknowledges receipt of a copy of
the Plan, which is annexed hereto, and represents that such Optionee is familiar
with the terms and provisions thereof, and hereby accepts this Option subject to
all the terms and provisions thereof. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee
upon any questions arising under the Plan or this Option.

Date of Grant: ____________, 199__.

FEDERAL EXPRESS CORPORATION

By:
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CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER

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OPTIONEE