Consulting Agreement - FedEx Corp. and Dennis H. Jones

                              CONSULTING AGREEMENT


       THIS AGREEMENT is made this 14 day of July, 2000 by and between FEDEX
CORPORATION, a Delaware corporation (the "Company"), and DENNIS H. JONES
("Jones").

       WHEREAS, Jones has submitted his resignation from the Company effective
August 31, 2000 and the parties have agreed to a consulting arrangement and wish
to reduce such arrangement to writing.

       NOW, THEREFORE, in consideration of the foregoing and the mutual
undertakings contained in this Agreement, the parties agree as follows:

       SECTION 1. TERM. The term of this Agreement ("Term") shall begin on the
earlier of September 1, 2000 or the date Jones begins other full-time, permanent
employment with a successor employer and shall end on December 31, 2002, unless
earlier terminated under the provisions of Section 13 of this Agreement.

       SECTION 2. CONSULTING COMPENSATION. Jones shall remain an executive
officer of the Company until the beginning date of the Term of this Agreement
and shall become an unclassified employee of the Company on such date and shall
remain so for the Term of this Agreement. For and in consideration of the
consulting services to be performed by Jones and the further covenants and
agreements made by him under this Agreement, the Company shall, for the Term
hereof, provided Jones is not in default under this Agreement: 

(a)    pay to Jones from the beginning date of the Term of this Agreement 
       through December 31, 2002 basic monthly compensation of $48,528 in 
       semi-monthly installments;

(b)    provide Jones and his dependents coverage under the Company's employee
       benefit plans to the same extent that coverage existed immediately before
       the date as of which this Agreement is made;



(c)    reimburse Jones for not otherwise reimbursed reasonable and necessary
       travel and lodging expenses incurred in seeking other employment;

(d)    provide, at its expense, tax and financial counseling services up to, but
       not beyond, April 15, 2002 in accordance with the program applicable to
       executive officers of the Company;

(e)    continue to provide Jones the high-speed telephone line currently
       provided by the Company; however, Jones will reimburse to the Company the
       cost of providing such telephone line after the beginning date of the
       Term of this Agreement; and

(f)    use its best efforts to provide executive access for Jones and members of
       his immediate family, to the extent within the Company's control, to
       Disney World and Disneyland.

Notwithstanding subsection (b) above, neither Jones nor his dependents shall 
be entitled to travel on Company aircraft, but may obtain interline travel 
tickets through the Federal Express Corporation Corporate Travel department. 
However, Jones shall be entitled to discount shipping privileges on the same 
basis as provided to other employees until he attains age 55.

                SECTION 3. HEALTH INSURANCE, CERTAIN PERSONAL PROPERTY AND 
BOARD SEAT RESIGNATIONS. The Company agrees to provide Jones and his 
dependents health benefit coverage after the Term of this Agreement until 
Jones attains age 55, on substantially the same basis as provided by the 
Company to participants in its Retiree Group Health Plan as it then exists. 
The Company may provide such coverage through the purchase of an insurance 
policy or otherwise, as it shall determine in its sole and exclusive 
discretion. In addition, the Company agrees that Jones may keep Company 
computer equipment currently in his possession but Jones agrees to return to 
the Company his identification badge at the end of the Term of this 
Agreement. Upon execution of this Agreement, Jones hereby resigns, without

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further notice, his seats on the boards of directors of all Company 
subsidiaries and affiliates of the Company (as defined in Section 13 of this 
Agreement).

       SECTION 4. LTI AND MIC SETTLEMENT. Jones understands and 
agrees that any claims he may have with respect to the Company's Long Term 
Incentive ("LTI") Plans are settled by (i) any LTI payment due to him in his 
current position in calendar year 2000 under the Company's FY1998-2000 LTI 
Plan, and (ii) any amount payable under the FY1999-2001 LTI Plan to Executive 
Vice Presidents of the Company, multiplied by a fraction, the numerator of 
which is 27 and the denominator of which is 36, with the result multiplied by 
the average percentage of Jones' achievement of his Management by Objectives 
("MBO") goals for fiscal years 1998 through 2000. In addition, Jones shall be 
entitled to (i) Management Incentive Compensation ("MIC") for fiscal year 
2000 calculated by multiplying the number of points allocated to his position 
by the percentage achievement of his MBO goals for such year, and (ii) the 
MBO dollar point value, if any, for FY2001 established for Executive Vice 
Presidents (assuming Jones achieved 100% of his MBO objectives for such 
year), multiplied by a fraction, the numerator of which is three and the 
denominator of which is 12. Such FY2000 and FY2001 MIC and LTI settlements 
shall be paid at the same time as MIC and LTI payments are made to other 
participants in such programs. It is understood and agreed that Jones 
shall receive no other LTI or MIC payments other than as specified in this 
Section 3.

       SECTION 5. JONES'S SERVICES; ACKNOWLEDGEMENT OF DUTY OF LOYALTY. Jones 
agrees to perform such reasonable services as may be requested from time to 
time during the Term of this Agreement by the Company's Chief Executive 
Officer. Jones agrees to make himself available at all reasonable times to 
perform such services during such period. Jones acknowledges his duty of 
loyalty to the Company and covenants to conduct himself in accordance with 
such duty during the Term of this Agreement.

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       SECTION 6. OTHER EMPLOYMENT. If Jones obtains other employment 
providing comparable or better benefits, including life and other insurance, 
medical, dental, disability, vision care and similar coverage as under the 
Company's plans during the Term of this Agreement, or medical benefits 
thereafter pursuant to Section 3 of this Agreement, Jones, on behalf of his 
dependents, heirs and beneficiaries, hereby waives any claims he or they may 
have with respect to Company benefits to the extent covered by a successor 
employer's benefit plan or plans.

       SECTION 7. WITHHOLDING. Any payments made pursuant to this Agreement 
shall be net of (i) all amounts required to be withheld from such payments 
pursuant to applicable income tax, Social Security and unemployment insurance 
laws and regulations, and (ii) such other amounts as are withheld from such 
payments pursuant to Jones's authorization.

       SECTION 8. STOCK OPTION AND RESTRICTED STOCK MATTERS. Jones shall 
remain an employee of the Company during the Term of this Agreement. 
Accordingly, Jones may exercise any options granted under the Company's stock 
incentive plans which vest before the end of such Term and are exercisable in 
accordance with the provisions of such stock incentive plans; provided, 
however, that no loans shall be made pursuant to the Company's Stock Option 
Loan Policy for purposes of exercising such options or paying any taxes in 
connection therewith. In addition, Jones shall remain an unclassified 
employee of the Company until December 31, 2002 for purposes of satisfying 
the employment condition for becoming entitled to receive all shares of 
restricted stock then vested. However, Jones shall not be entitled to any 
stock option or restricted stock grants after the date of this agreement. 
Jones agrees to repay in full the balance of all currently outstanding stock 
option loans on or before December 31, 2002.

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       SECTION 9. REFERENCES. The Company shall cause its executive officers, 
and each of them, to, upon request of a prospective employer for a reference 
with respect to Jones, favorably recommend Jones in a manner commensurate 
with his record.

       SECTION 10. RESTRICTIVE COVENANT. Jones covenants and agrees that he 
will not, during the Term of this Agreement and for a period of two years 
thereafter, engage as a principal, employee, agent, consultant, independent 
contractor or in any capacity whatsoever with a Competitor of the Company, 
except with the prior written consent of the Company, which consent will not 
be unreasonably withheld. For this purpose, "Competitor" shall mean and be 
limited to either of United Parcel Service, Airborne Freight Corporation, 
DHL, Emery Worldwide, TNT Express Worldwide, or any of their principal 
affiliates and any entity succeeding to their business by reason of a change 
in identity, merger or consolidation. In addition to any other rights or 
remedies available to the Company on breach of this covenant, the Company 
shall be entitled to enforcement hereof by court injunction. In addition, 
Jones acknowledges his duty of loyalty as an employee of the Company and 
covenants and agrees that he will not, during the Term of this Agreement, 
knowingly engage in any activity which would be detrimental or adverse to the 
interests of the Company.

       SECTION 11. NON-DISCLOSURE OF PROPRIETARY INFORMATION. Jones 
acknowledges that he possesses substantial proprietary information which is 
or may become valuable assets of the Company, and that he may obtain 
knowledge of additional such proprietary information during the term of this 
Agreement. Jones hereby covenants and agrees that he will not on any 
occasion, during or after the Term of this Agreement, disclose any such 
non-public proprietary information to any person except upon the express 
written authorization of the Company.

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SECTION 12.  RELEASE AND INDEMNIFICATION.

(a)    Jones hereby releases the Company from any and all liabilities, claims
       and causes of action arising, or which may arise in the future, from or
       in connection with his employment or its termination with or by the
       Company or the furnishing of services hereunder, other than the
       obligations of the Company under this Agreement.

(b)    Jones agrees to indemnify and hold harmless the Company and its
       directors, officers, agents and employees from and against any and all
       liabilities, damages, claims, demands, suits, judgments and expenses, in
       any manner arising out of or in connection with any act or omission of
       Jones outside the scope and course of his employment with the Company or
       the performance of services hereunder.

(c)    The Company hereby releases Jones from any and all liabilities, claims
       and causes of action arising, or which may arise in the future, from or
       in connection with his employment with or by the Company, other than the
       undertakings and obligations of Jones under this Agreement.

(d)    The Company agrees to indemnify and hold harmless Jones from and against
       any and all liabilities, claims, costs and expenses, including reasonable
       attorneys' fees, in any matter arising out of or in connection with his
       employment with the Company provided that Jones was acting within the
       scope and course of his employment with respect to such matter.

(e)    The release and indemnities provided hereunder shall continue in full
       force and effect after the termination or expiration of this Agreement.

       SECTION 13. DEFAULT AND TERMINATION. A failure by Jones to perform 
such services as may be reasonably requested of him pursuant to this 
Agreement or a breach by Jones of any covenant or agreement contained herein 
shall constitute a default by Jones. In the event of such default, the 
Company shall, in addition to any

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right or remedy available to it at law or in equity, have the right to 
immediately terminate this Agreement by written notice to Jones. In addition, 
this Agreement shall immediately terminate in the event that Jones becomes 
employed by an affiliate of the Company in another position, whether or not 
such employment commences before or during the Term of this Agreement. For 
this purpose, "affiliate of the Company" shall mean any entity in which the 
Company or one or more of its subsidiaries has an ownership interest or which 
is commercially identified with the Company's or any of its subsidiaries' 
trade names, service marks or trademarks through a licensing arrangement or 
otherwise. Upon any such termination, the Company shall not be obligated to 
make any further payments pursuant to this Agreement.

       SECTION 14. ENTIRE CONTRACT. This Agreement, the Release and Waiver of 
Rights and Claims executed by the parties and dated the same date as this 
Agreement and the outstanding promissory notes evidencing Jones' stock option 
loans from the Company together constitute the entire contract between the 
parties with respect to the subject matters to which they pertain. Any and 
all other agreements, representations and understandings of the parties shall 
be deemed merged into such instruments.

       SECTION 15.  GOVERNING  LAW.  This  Agreement is made in and shall be 
governed,  construed  and enforced in accordance with the laws of the State 
of Tennessee.

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       IN WITNESS  WHEREOF,  the parties have caused this  Agreement to be 
duly  executed  this 14 day of July, 2000.

                                           FEDEX CORPORATION

                                          /s/ Frederick W. Smith
APPROVED BY                         By: -------------------------------
LEGAL DEPARTMENT:                                
                                    Title: Chairman and CEO
                                          -------------------------------

By:     /s/ GWH
    ---------------------------


                                         /s/DENNIS H. JONES         
                                         ---------------------------
                                            DENNIS H. JONES

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