Filed by FedEx Corporation Pursuant to Rule 425
under the Securities Act of 1933
and deemed filed pursuant to Rule 14d-9 under
the Securities Exchange Act of 1934
Subject Company:American Freightways Corporation
Commission File No. 000-17570
Date: November 13, 2000
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FedEx Corporation Broadcast
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November 13, 2000
2:20 p.m.
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MR. SHERMAN: This is a special broadcast in
Harrison, Arkansas of American Freightways. Good
afternoon. My name is John Sherman, Vice President
of People Development for American Freightways.
Today we're broadcasting to our friends at Viking
Freight in San Jose, California, to the FedEx
Corporate offices in Memphis, Tennessee and the
American Freightways management committee joining
us here in our learning center auditorium. The
event we're celebrating today is the acquisition
of American Freightways by the FedEx Corporation.
American Freightways began in 1982 as
Arkansas Freightways. AF is an LTL service
provider in 40 U.S. states with partnerships in
Canada, Mexico, Alaska, Hawaii, Guam, the
Caribbean, South America and many other places
throughout the world. The strength of our company
is the all points coverage direct service. They
serve to every city and every state.
AF has a new American Flyer suite of
services. American Freightways has revolutionized
the LTL industry with some of the fastest transit
times ever performed by a multi-regional LTL
carrier. There's no doubt that American
Freightways is going to be a great addition to the
FedEx family.
As part of this celebration event we have
some very special guests with us. First of all,
the Chairman, President and CEO of the FedEx
Corporation Mr. Fred Smith. Mr. Smith founded
Federal
Express and the express transportation
industry in 1973.
Along with Mr. Smith is the founder and
Chairman of American Freightways, Sheridan
Garrison. Sheridan started American Freightways 18
years ago and has over 42 years of trucking
experience.
Next is Doug Duncan former president and CEO
of Viking Freight and now the president and CEO of
the new FedEx LTL freight group that will support
AF and Viking.
Finally we have Tom Garrison who is
Sheridan's son. Tom has been the President and CEO of
American Freightways for the past three years.
Let's first hear from Fred Smith.
Fred, this is a big day and in fact quite a
historic day for not only American Freightways,
FedEx and Viking, but really the transportation
industry. Tell us what you think about bringing
American Freightways into the FedEx family.
MR. SMITH: It is an exciting day, John, one
I'm just thrilled about. The first and most
important thing I'd like to do today is to welcome
all of the American Freightways team to be part of
the FedEx family of companies. There is a great
fit between FedEx Corporation and American
Freightways. I'm an enormous admirer of Sheridan
and the folks that built this great company. FedEx
as some of you may not know today is more than
just an express company. We have five operating
units. The largest, and I suppose the most famous
of them, of course is FedEx Express. As you said
in the opening, John, that's the company that
started in 1973 and revolutionized the express
transportation industry. Today it's the leader in
the express industry serving 210 countries around
the world handling about 3.3 million shipments of
high priority documents, packages and light
freight. Our second largest operating unit is
FedEx Ground, which is a company we acquired
several years ago. It was at that time RPS. We've
rebranded it. You've undoubtedly seen a lot of the
vehicles with the purple and green in the cities
and towns and on the highways. It's the second
largest ground package service. We
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have recently added a home delivery component to
FedEx Ground.
We have two specialty operating companies.
One, our customs clearance operation FedEx Trade
Networks and an expedited critical transportation
unit, FedEx Custom Critical. And last we have our
logistics and freight unit. It has been our
objective for some time to expand our capabilities
in the freight sector. The reason for that is
pretty simple. Our customers are telling us that
they want FedEx Corporation and our operating
units to offer a broader portfolio of services.
They would like for us to be able to handle their
entire supply chain for them.
We have an excellent western regional LTL
carrier as you mentioned, Viking. It's the market
leader on the West Coast. The culture is very
similar to American Freightways and very similar
to FedEx. High emphasis on impeccable service
levels, great technology and most importantly an
emphasis on treating people right and looking
after the employees and associates.
So our objective of expanding our freight
capabilities led us to American Freightways.
What you've done is absolutely remarkable.
It's clear that you are the leader in the regional
LTL business and eastern part of the country,
everything from Colorado east. The cultures were
absolutely similar, the values were the same, and
it just was one of these things that looked like
five and five equaled about 15.
Mr. Sheridan Garrison and I got to know one
another, and I became a great admirer of his. And
we got along and felt this made a lot of sense.
And it's going to allow us to do things I think
that have never been done before in offering our
customers a broader portfolio of services.
Now, let me emphasize one thing that's very
important for all of the American Freightways team
to understand.
We're not going to do anything to change much
around American Freightways. American Freightways
has an outstanding CEO in
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Tom Garrison. Just as we did when we acquired RPS,
we've allowed that company to operate under the
FedEx umbrella. We call it our compete
collectively and operate independently strategy.
And Sheridan I think learned a few things in 42
years of being in this business and I have been in
it almost 30 years, and one thing I can promise
you that is focused dedicated operations around a
particular market segment is the way you succeed in
the transportation business.
So American Freightways and Viking are very
focused in their market segment and we intend to
keep that the same.
So we see all kinds of benefits by putting
our companies together. We don't see any downside
and we're looking forward to this association.
We're going to have a lot of fun. Sheridan is
going to be joining our board of directors and I
look forward to his advice and counsel on helping
us manage not just the LTL sector of the business,
although he's going to be the Chairman Emeritus and
Founder of American Freightways, but in managing the
entire spectrum of FedEx operating companies. I was
thinking, Sheridan, with 42 years in the business
you ought to think about making this a career. You
might be able to do something important in this
company.
We're excited about this and we're going to
have a lot of fun and I think the folks at
American Freightways are going to enjoy the
association with FedEx Corporation. Because I can
assure you from everything I know that the values
and the philosophies are very similar and I think
it's a great match.
MR. SHERMAN: Thank you, Fred. We appreciate
your comments.
Sheridan, let's talk to you. 18 years ago you
set out on a journey to build what we now know as the
American dream and during that journey you always
said you never want to be the biggest, you just
want to be the best.
You know, with all these things going right
for you, tell us why now it would be a good time
to sell American Freightways to the FedEx
Corporation
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MR. GARRISON: First, let me say that I didn't
want to be the biggest. I just wanted to be the
best for the time being and then I said if we ever
got to be number 2, I sure would like to be number
1.
But the reason of course that we picked this
time to sell American Freightways, number one, is
sitting right next to me in the form of your CEO,
President and Chairman. FedEx's Fred Smith is a
man that I have deeply admired. So we have some
mutual admirations, Fred. He invented or
originated or designed or whatever you want to
call it the package express business and that in
itself is quite a feat, quite an accomplishment
when you figure he just got a C for it whenever
he wrote it up in school.
Fred is an inspiration to me and I wouldn't
be here today were it not for him personally.
Now, then, as far as the time on the sale,
it's a logical question, of course. I've always
said that the American Freightways stock that my
family owns is not for sale. But circumstances
change, John. We ran into a period here now for
about five or six years where we have been
undervalued for --we've had 17 quarters of
year-to-year improvement, 17 years -- 17 quarters
in a row and we have yet to see any improvement in
the price of our stock.
Now, since one of the jobs of a board of
directors is to bring value to the stock for the
shareholders, it gets to be this type of
situation. FedEx comes to see us, they want to buy
us, if we can make a decent deal, one that is good
for our shareholders and our people and our
customers, then it's a logical thing to do. So
purely a matter of logic. That's all it boils down
to.
Now, the 17 quarters and the stock price and
all that sort of stuff that's not unique to
American Freightways.
We are a small cap corporation. It's true.
But if you look at it this way, the value or the
market cap of American Freightways exceeds that of
Arkansas First Corporation, Consolidated
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Freightways, Roadway and Yellow. All exceeds ABS
and AF together so it's not that we've done that
badly. We've done quite well. We have a very
unique company, great bunch of people who have
done a fabulous job. It all comes down to this,
it's a public company, it's maximized the value
for our shareholders. The only way we could do
that, that we've been able to find out is to sell
the company.
So the market has changed and it's a good
move for customers, it favors the market today,
the (inaudible) such as what FedEx has done so
it's a good move for our customers, it's a good
move for our people.
Our people have more opportunities to grow as
individuals, more security and it's just that
FedEx is a great place to work, great people. I'm
just proud as can be to be associated with FedEx.
Proud to be here on this podium today. Thank you,
gentleman.
MR. SHERMAN: Thank you, Sheridan. We
appreciate your words also.
Now let's talk to you Doug. Doug, we really
have two major events that are going on, the
acquisition of American Freightways and also the
formation of a new FedEx LTL group. Tell us what's
important for the people at Viking and AF to know
what's about to take place.
MR. DUNCAN: Well, I first would like to
express my excitement for having AF as part of
this LTL freight unit at FedEx. It certainly will
make my job a lot easier. It is an exciting time
and I think it will benefit all the companies
involved. I think it's important for both
companies though to realize that the companies
will operate as independent entities. They'll
retain their existing management that are in place
today. And they will continue to support the
processes and the cultures that made each of these
corporations very successful themselves.
Our goal going forward is simply trying to be
- -- to try to combine these three great brands into
a powerhouse to give a competitive advantage to
all three companies.
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And I think we can very readily do that. It is
important to note that we're coming together. We
will have coverage all across the country. But our
clear focus is going to be on regional
transportation, next day and second day where we
have a real differentiation and a real advantage
in the marketplace and we can continue to grow
with superior margin. That won't change at all.
There are probably some people listening that
have got some concerns in areas where we have
overlap and duplicate facilities, and I can assure
you we will resolve those issues. But these are
two growth companies and growth markets, and we're
going to need more people not less. So hopefully
we can put everybody's fears to rest very quickly
in that regard.
MR. SHERMAN: Doug, let me ask you this. This
is a major undertaking. It won't take place
tomorrow, I'm sure. You have been through this
type of acquisition before. What can you share
with the AF associates about what to expect during
this type of transition?
MR. DUNCAN: Well, I think the culture of both
corporations is very open and honest and very
supportive of the people that run this business,
and we'll continue that. We've got some changes to
make, we've got some things to look at, but we
will address that through very open and honest
communications as to what's going on and everybody
will be kept up to speed.
Over time we will evaluate best practices
between the two companies and then find ways that
we can improve and do what's best for the
businesses.
But still these companies will operate as
separate entities in the regional markets and will
help each other become more successful.
MR. SHERMAN: Great. Doug, in 1996 Viking
attempted to merge with some other LTLs in the
country, and I'm sure your fellow associates at
Viking want to know how today's events differ from
those of previous times?
MR. DUNCAN: I don't even think they are
comparable, to be honest with you. These --
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the combination of phenomenally successful
companies as is today. Our objective is to bring
them together and let them work together under the
auspices of FedEx which has got a similar culture
and I think it will fit and blend very well
together. The companies are successful on their
own so that we're in no hurry and no urgency to do
anything that will jeopardize the good things that
we do in each company today.
I think second of all is just the fit. I mean
strategically we're a fit, geographically a fit,
but I think even more so we're a huge fit
culturally as well. Both companies have a huge
work ethic towards the customer but they are also
a very people friendly environment which I can
tell you will be supported mightily from the FedEx
Corporation organization as well so these two
things together make it a completely different
issue.
You know we're - (inaudible)-- how are we
going to approach that in that way? (inaudible)
MR. DUNCAN: Well, again, we're going to focus
on the regional markets. What made AF profitable
today will make AF profitable tomorrow. The same
for Viking. The trick is we'll figure out a way to
operate interregionally between the two companies
but we've got the luxury of the time to do that
only when it makes sense and only when we've got
everything in place to be very successful with it.
MR. Sherman: Thank you, Doug. Tom, now it's
your turn. You've been a part of making American
Freightways what it is today. We appreciate all
the incredible work that you've helped all of us
to do.
How do you feel about what you and the AF
team have been able to accomplish over the last
few years?
MR. TOM GARRISON: John, I'm proud of what
American Freightways has done for the past few
years. Stop and think, in 18 short years we have
built one of the largest and most successful LTL
carriers in the nation. And we've done this by
taking care of the customer, number one, by
working efficiently and by marketing
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and selling, getting the right kind of freight on
our trucks and going after the right markets and
learning how to price those services in the
correct way.
I think this had validated that FedEx is
interested in acquiring American Freightways and I
think (inaudible) for all of the people on the
American team, I'm proud of the outstanding
individuals we have been able to attract and keep
at American Freightways. We've made that very
important in that regard. We set up to live by
principles and to those people. One of the most
important things we have at American Freightways
is that, we've done just that, we have taken care
of the customers, taken care of the people,
honored our customers, worked hard, we worked
together, we made the most of our resources and
had a lot of fun while we've done it.
MR. SHERMAN: Tom, what are your personal
feelings about becoming really part of a family
that is a household name in the transportation
industry?
MR. TOM GARRISON: John, I'm very excited
about it. Being affiliated with FedEx will give us
a company with a broad market of good (inaudible).
It will put us in touch with some of the
market channels that we are not in touch with
today and the (inaudible) that we always can't get
in touch with and traffic managers today. We have
a backing foundation of a very strong corporation
behind us to help us through times of economic
uncertainty and get (inaudible).
MR. SHERMAN: That's great, Tom.Thanks very
much.
Gentlemen, we're about to conclude our
broadcast. What I would like to do is stop and let
each one of you comment and make a closing comment
if you would.
Fred, we'll start again with you.
MR. SMITH: John, as I said at the onset I'm
very excited about this. I think the fit is
absolutely ideal. Geographically, strategy-wise
and most important, culturally and looking forward
to seeing the results of our combined companies in
the years ahead to
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absolutely outstrip anybody in the transportation
sector. So it's going to be a lot of fun.
MR. SHERMAN: Great. Sheridan.
MR. GARRISON: I can't improve on anything he
said today. It's really just a marvelous
transaction. I don't have very much to say. We
need to be out there hauling freight, I'm ready to
go.
MR. SHERMAN: Doug, please.
MR. DUNCAN: I would like to say I'm somewhat
surprised at the American associates and I'm
anxious to prove to all of you that this is a good
day for your company and for you personally and
that you're going to really enjoy being part of
FedEx.
MR. SHERMAN: Tom.
MR. TOM GARRISON: John, I'm proud to be
affiliated with FedEx. I look forward to working
with them as well as with their expertise and
looking to build a transportation powerhouse
second to none.
MR. SHERMAN: Gentlemen, thank you very much
for your time. I appreciate it. This brings us to
the conclusion of the broadcast today. From
Harrison, Arkansas, we look toward to an exciting
relationship with Viking and FedEx.
(Time noted: 2:37 p.m.)
Taken by:
Amy Klein - Court Reporter
Elisa Dreier Reporting Corp. (212) 557-5558
780 Third Avenue, New York, NY 10017
Certain statements contained in this press release are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, such as statements relating to management's views with respect to
future events and financial performance and the proposed FedEx acquisition of
AF. Such forward-looking statements are subject to risks, uncertainties and
other factors, which could cause actual results to differ materially from
historical experience or from future results expressed or implied by such
forward-looking statements. Potential risks and uncertainties include, but are
not limited to, economic and competitive conditions in the markets where FedEx
operates, matching capacity
10
to volume levels and other uncertainties detailed from time to time in press
releases and filings with the SEC by FedEx and its subsidiaries.
ALL AF STOCKHOLDERS SHOULD READ THE TENDER OFFER STATEMENT CONCERNING THE
TENDER OFFER FOR SHARES OF AF COMMON STOCK THAT WILL BE FILED BY FEDEX
CORPORATION WITH THE SEC AND MAILED TO AF STOCKHOLDERS. THE TENDER OFFER
STATEMENT (INCLUDING THE OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND
OTHER OFFER DOCUMENTS) WILL CONTAIN IMPORTANT INFORMATION THAT AF STOCKHOLDERS
SHOULD READ CAREFULLY BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR
SHARES. AF stockholders will be able to obtain the tender offer statement, as
well as other filings containing information about FedEx Corporation and AF,
without charge, at the SEC's Internet site (http://www.sec.gov). In addition,
copies of the tender offer statement and other documents filed with the SEC by
FedEx Corporation may be obtained for free from FedEx by directing a request to
FedEx Corporation, 942 S. Shady Grove Road, Memphis, Tennessee 38120,
Attention: Investor Relations, telephone: (901) 818-7200.
ALL AF STOCKHOLDERS SHOULD READ THE PROXY STATEMENT/ PROSPECTUS CONCERNING THE
MERGER AND RELATED TRANSACTIONS THAT WILL BE FILED WITH THE SEC AND MAILED TO
AF STOCKHOLDERS. THE PROXY STATEMENT/ PROSPECTUS WILL CONTAIN IMPORTANT
INFORMATION THAT AF STOCKHOLDERS SHOULD READ CAREFULLY BEFORE MAKING ANY
DECISION REGARDING THE MERGER AND RELATED TRANSACTIONS. AF stockholders will be
able to obtain the proxy statement/prospectus, as well as other filings
containing information about FedEx Corporation and AF without charge, at the
SEC's Internet site (http://www.sec.gov). In addition, the proxy
statement/prospectus and other documents filed with the SEC by AF may be
obtained for free from American Freightways Corporation, 2200 Forward Drive,
Harrison, Arkansas 72601, Attention: Investor Relations, telephone: (870)
741-9000.
FedEx and AF and their officers and directors may be deemed to be participating
in the solicitation of proxies from AF's stockholders with respect to the
merger and related transactions. Information regarding the officers and
directors of FedEx is included in the FedEx Proxy Statement for its 2000 Annual
Meeting of Stockholders filed with the SEC on August 14, 2000. Information
regarding the officers and directors of AF is included in the AF Proxy Statement
for its 2000 Annual Meeting of Stockholders filed with the SEC on March 11,
2000. These documents are available free of charge at the SEC's Internet site
(http://www.sec.gov) or by contacting FedEx or AF at the addresses set forth
above.