Ex-101 INSTANCE DOCUMENT

Exhibit 10.3

Supplemental Agreement No. 4

to

Purchase Agreement No. 3712

between

The Boeing Company

And

Federal Express Corporation

Relating to Boeing Model 767-3S2F Aircraft

THIS SUPPLEMENTAL AGREEMENT, entered into as of the December 10, 2013 by and between THE BOEING COMPANY (Boeing) and FEDERAL EXPRESS CORPORATION (Customer);

W I T N E S S E T H:

A. WHEREAS, the parties entered into that certain Purchase Agreement No. 3712, dated December 14, 2011 (Purchase Agreement), relating to the purchase and sale of certain Boeing Model 767-3S2F Aircraft (the Aircraft); and

B. WHEREAS, Customer desires to add two (2) new firm Aircraft to the Purchase Agreement, hereinafter referred to as Block C Aircraft, with delivery dates as follows:

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree to supplement the Purchase Agreement as follows:

All terms used herein and in the Purchase Agreement, and not defined herein, shall have the same meaning as in the Purchase Agreement.

S4–1

Supplemental Agreement 4 to

Purchase Agreement No. 3712

S4–2

Supplemental Agreement 4 to

Purchase Agreement No. 3712

EXECUTED as of the day and year first above written.

S4–3

TABLE OF CONTENTS

Table 1-A1 to PA 3712

Aircraft Delivery, Description, Price and Advance Payments

Block C Aircraft

Exhibit A To

Boeing Purchase Agreement

BOEING PROPRIETARY

Page 1 of 1

		The Boeing Company
		P.O. Box 3707
		Seattle, WA 98124-2207

FED-PA-03712-LA-1306854

Federal Express Corporation

3610 Hacks Cross Road

Memphis, TN 38125

This letter agreement (Letter Agreement) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement shall have the same meaning as in the Purchase Agreement.

The Attachment to Letter Agreement No FED-PA-03712-LA-1306584 contains performance guarantees (Performance Guarantees).

Article 5.4 of the Aircraft General Terms Agreement Number AGTA-FED between Boeing and Customer dated November 7, 2006 (AGTA) provides that Boeing shall furnish to Customer as soon as practicable flight test data, obtained on an aircraft of the same type as the Aircraft, certified as correct by Boeing, to evidence compliance with the Performance Guarantees (Aircraft Report); and that any Performance Guarantee shall be deemed to be met if reasonable engineering interpretations and calculations based on such flight test data establish that the Aircraft would, if actually flown, comply with such guarantee. This method of demonstrating compliance with the Performance Guarantees is defined as the “Standard Method”. Except as provided in paragraph 1.2, the Standard Method will be used for establishing compliance with all Performance Guarantees.

1.2.1 Notwithstanding the provisions of Article 5.4 of the AGTA, if Customer elects to purchase the option for the Demonstration Method pursuant to paragraph 2 herein for any Aircraft, then Customer shall have the right to request that the Demonstration Method (as defined in paragraph 1.2.4 herein) be used in lieu of the Standard Method. Each Aircraft for which Customer elects to purchase the Demonstration Method shall be a “Demonstration Aircraft”.

BOEING PROPRIETARY

1.2.2 Customer will provide Boeing written notice to purchase the Demonstration Method no later than three (3) months prior to the first day of the month of scheduled delivery of any Demonstration Aircraft. Notwithstanding the foregoing, with respect to MSN 43544, scheduled for delivery in November 2013, Customer agrees to provide written notice to Boeing no later than October 24, 2013.

1.2.3 Customer will coordinate with Boeing to establish a flight plan for the delivery flight with sufficient flight time in stable air to gather the Calibrated Performance data described in Attachment A to this Letter Agreement.

1.2.4 For each Demonstration Aircraft, Boeing shall provide the [*] the respective delivery flight of a Demonstration Aircraft for the purpose of acquiring cruise fuel mileage performance data to be used in demonstrating compliance with the guarantees defined in paragraph 4 below (Particular Guarantees). The methodology described in this paragraph 1.2.4 shall be referred to as the “Demonstration Method”.

1.2.5 Establishing compliance with the Particular Guarantees shall be referred to as “Demonstration Calibrated Performance” and will be derived as follows:

1.2.5.1 During the delivery flight of each Demonstration Aircraft, cruise fuel mileage data will be obtained utilizing the calibrated production instruments of such Demonstration Aircraft. Such data shall be obtained during periods of stable cruise, in accordance with and subject to the applicable provisions of Part A of Attachment A to this Letter Agreement. The data will be analyzed in accordance with the applicable provisions of Part B of Attachment A hereto for establishing the Demonstration Calibrated Performance of the applicable Demonstration Aircraft.

1.2.6 As soon as practicable, but not later than [*] following completion of the Demonstration Method flight of each Demonstration Aircraft, Boeing shall present to Customer the final results of the Demonstration Calibrated Performance data together with supporting flight test data and analysis. To the extent the Demonstration Calibrated Performance as set forth in the Aircraft Report for such Demonstration Aircraft is equal to or better than the minimum value of the Particular Guarantees, compliance with such Guarantees shall be established for such Demonstration Aircraft.

2.1 The price for the Demonstration Method shall be [*]. Subject to the provisions of paragraphs 2.2 through 2.3, below, such amount [*]. For the avoidance of doubt, the price described in this article [*].

BOEING PROPRIETARY

2.2 If Boeing fails to demonstrate compliance with the guaranteed minimum value of any of the Particular Guarantees on any Demonstration Aircraft, Boeing shall test subsequently delivered Aircraft using the Demonstration Method, as soon as possible, considering the time available between the realization of failure and the first subsequent airplane delivery, [*]. In addition, Boeing [*] of any of the Particular Guarantees; and

2.3 If, by means of such test, Boeing successfully demonstrates that any Aircraft is in compliance with the guaranteed minimum value of the Particular Guarantees by the Demonstration Method, then tests of each subsequently delivered Aircraft, if any, shall be at Customer’s option and at Customer’s expense. If Boeing fails to demonstrate compliance with the guaranteed minimum value of any of the Particular Guarantees by the Demonstration Method on subsequently delivered Aircraft, [*]. In addition, Boeing shall test subsequently delivered Aircraft [*].

Customer agrees that Boeing may use the Aircraft to conduct the flight tests described in paragraph 1.2 hereof and that Customer will accept delivery of such Demonstration Aircraft [*].

4.1 The guarantees for which the Demonstration Method of compliance will be applicable are the Cruise Range Guarantee set forth in paragraph 2.3, the Mission Payload Guarantees set forth in paragraphs 2.4.1, 2.4.2, 2.4.3, and 2.4.4, and the Mission Block Fuel Guarantee set forth in paragraph 2.4.5 of the Performance Guarantees adjusted as set forth in paragraph 4.2 below.

4.2 When using the Demonstration Method for a Demonstration Aircraft, the guarantee values of the applicable Performance Guarantees shall be [*] to account for the use of calibrated cockpit instruments, in lieu of more extensive flight tests using flight test instrumentation systems and methods as described in the then current revision of Boeing Document D041A404, “The Determination of Cruise Fuel Mileage by Flight Testing Boeing Commercial Production Airplanes”. Such adjustments which reflect the effect of [*] on the guarantee parameter are applied to the guarantee values in the following manner:

a) Cruise Range – [*]

b) Mission Payload Guarantee 2.4.1 – [*]

c) Mission Payload Guarantee 2.4.2 – [*]

d) Mission Payload Guarantee 2.4.3 – [*]

e) Mission Payload Guarantee 2.4.4 – [*]

BOEING PROPRIETARY

f) Mission Block Fuel Guarantee 2.4.5 – [*]

4.3 Such Cruise Range, Mission Payload, and Mission Block Fuel Guarantees so adjusted are hereinafter referred to as the “Particular Guarantees”.

5.1 Aircraft Delivery. The parties agree that a “Compliance Deviation” shall refer to instances in which a demonstrated value (regardless of the method by which the compliance is demonstrated) exceeds the guaranteed minimum value of a particular Performance Guarantee. In the event of a Compliance Deviation for any Aircraft at the time Boeing tenders for delivery, Boeing will provide the applicable remedies set forth in paragraph 5.2 and paragraph 6. Customer cannot refuse to accept delivery of such Aircraft because of such Compliance Deviation.

5.2 Post Delivery Improvement to Reduce or Eliminate the Compliance Deviation. In the event of a Compliance Deviation for any Aircraft, the following terms and conditions will apply:

5.2.1 To the extent Boeing reasonably determines it is economically and technically practicable, Boeing will use reasonable efforts to design, or cause to be designed by engine manufacturer, airplane drag improvement parts and/or engine fuel flow improvement parts (Improvement Parts) which, when installed in such Aircraft, would reduce or eliminate the Compliance Deviation.

5.2.2 If Boeing provides, or causes to be provided Improvement Parts for such Aircraft, then Customer and Boeing will mutually agree upon the details of an Improvement Parts program. The Improvement Parts [*]; except Improvement Parts provided by the engine manufacturer [*]. Boeing and/or engine manufacturer, as applicable, will provide reasonable support for such a Improvement Parts program [*].

5.2.3 If Customer elects to install Improvement Parts in such Aircraft, such installation will be within [*] after the delivery of such Improvement Parts to Customer as long as such installation can be accomplished during normal Aircraft line maintenance. Improvement Parts which cannot be installed during Aircraft line maintenance will be installed within a mutually agreed period of time. All Improvement Parts will be installed in accordance with Boeing and engine manufacturer instructions.

5.2.4 Boeing will provide and will cause engine manufacturer to provide [*]. Improvement Parts related to engines will apply also to spare engines [*]. Boeing will provide or will cause the engine manufacturer to provide Customer reasonable advance written notice of the estimated on-dock date at Customer’s maintenance base for any such Improvement Parts. Customer’s [*] must reference this Letter Agreement and be submitted to Boeing Warranty and Product Assurance Contracts using established warranty procedures set forth in Exhibit C of the AGTA and other terms identified in the Improvement Parts program contemplated in paragraph 5.2.2 herein.

BOEING PROPRIETARY

In the event that Boeing has not provided, or caused to be provided by the engine manufacturer, Improvement Parts which eliminate the Compliance Deviation, then Boeing will provide only the remedies described in this paragraph 6.

6.1 [*]. [*]

6.1.1 [*]

6.1.2 Customer will provide to Boeing, within [*].

6.1.3 Boeing will review the [*]. At its option, Boeing may request additional information from Customer to further substantiate the [*]. Such additional information will not be unreasonably requested by Boeing, nor unreasonably withheld by Customer.

6.2 [*]. [*] In no event [*] set forth in Attachment B hereto [*].

6.3 [*]. The amount of performance improvement attributable to any Improvement Parts will be determined by Boeing analysis based on data certified to be correct by Boeing. The amount of such improvement will be deemed to be the amount of improvement as calculated using reasonable engineering interpretations based on the data furnished pursuant to Article 5.4 of the AGTA and the data furnished pursuant to this paragraph 6.3. If Customer elects not to install Improvement Parts in any applicable Aircraft as set forth in paragraph 5.2 above, [*].

Boeing and Customer agree it is not the intent of the parties to provide benefits hereunder in addition to the benefits to be provided under the Purchase Agreement, and any direct commitment to Customer by the engine manufacturer.

Customer agrees that the remedies contained in paragraphs 5.2 and 6 are Customer’s exclusive remedies for purposes of resolving all issues with respect to the Performance Guarantees of Customer’s Aircraft and are in lieu of all other rights, remedies claims and causes of action Customer may have in connection therewith. Customer releases Boeing and its successors, affiliates and subsidiaries from all rights, remedies, claims and causes of action relating to or arising from such Performance Guarantees.

BOEING PROPRIETARY

Notwithstanding any other provisions of the Purchase Agreement, the rights and obligations described in this Letter Agreement are provided to Customer in consideration of Customer’s becoming the operator of the Aircraft and cannot be assigned in whole or, in part.

Customer understands and agrees that the information contained herein represents confidential business information and has value precisely because it is not available generally or to other parties. Customer agrees to limit the disclosure of its contents to employees of Customer with a need to know the contents for purposes of helping Customer perform its obligations under the Purchase Agreement and who understand they are not to disclose its contents to any other person or entity without the prior written consent of Boeing.

BOEING PROPRIETARY

If the foregoing correctly sets forth your understanding of our agreement with respect to the matters treated above, please indicate your acceptance and approval below.

ACCEPTED AND AGREED TO this

Date: 10/25/13

BOEING PROPRIETARY

Attachment A to Letter Agreement No. FED-PA-03712-LA-1306854

Page 1

PART A

DATA SOURCES AND METHOD OF DATA ACQUISITION

Demonstration Method

Since special flight test instrumentation will not be used, data will be taken from flight deck instrument displays or available aircraft data systems and the appropriate calibration corrections will be applied to such data. The applicable instruments shall be calibrated in Boeing laboratories or equivalent prior to the test. The following tabulation summarizes the minimum data which will be taken.

The corrections applied to the data will be in accordance with normal engineering practices as detailed in the then current revision of Boeing Document D041A404, “The Determination of Cruise Fuel Mileage by Flight Testing Boeing Commercial Production Airplanes.” These procedures correct the data for instrument calibrations, temperature deviation from a standard day, variation from unaccelerated level flight, difference between test and nominal gross weight divided by ambient static pressure ratio (W/d), altitude effect, Reynolds Number effect, wing aeroelastics, center of gravity, variation in electrical load, ECS operation, the differences between the measured fuel heating value and the Boeing standard value of 18,580 BTU/LB, and other corrections as appropriate.

BOEING PROPRIETARY

Attachment A to Letter Agreement No. FED-PA-03712-LA-1306854

Page 2

PART B

METHOD FOR DETERMINING CALIBRATED PERFORMANCE

Demonstration Method

1. For each Demonstration Aircraft, a series of points will be taken during the delivery flight to determine Cruise Specific Air Range with the target of getting [*] Mach numbers at or near the cruise Mach number specified in the Performance Guarantees and for [*] W/d values to be representative of conditions of the Performance Guarantees with a minimum impact on the scheduled flight plan. All test data will be adjusted to represent conditions of level, unaccelerated flight on a standard day and nominal conditions consistent with those used in the analysis of extensive flight test data obtained on an aircraft of the same type as the Aircraft as documented in the Cruise Performance Substantiation Document for the applicable Model 767-300 Freighter.

2. For the purpose of determining the Demonstration Calibrated Performance to be used in demonstrating compliance with the Particular Guarantees, the numerical average of deviations of the data for the Demonstration Aircraft will be calculated as compared to the database used for the “Standard Method”. The average deviation so determined will be used to determine an adjustment factor to be applied to the fuel mileage level documented in the Cruise Performance Substantiation Document for the applicable Model 767-300 Freighter. This factored fuel mileage level will be used to establish the Demonstration Calibrated Performance to be used in the calculation of compliance of the Demonstration Aircraft with the Particular Guarantees.

BOEING PROPRIETARY

Attachment B to Letter Agreement No. FED-PA-03712-LA-1306854

Page 1

[*]

[*]

(a) [*] pursuant to paragraph 6.2 of the Letter Agreement to which this Attachment B is incorporated [*]

[*]

BOEING PROPRIETARY