Notice of 2015 Annual Meeting Proxy Statement 2014 Annual Report

172 Pages·2015·0.68 MB·English

www.xpo.com
Notice of 2015 Annual Meeting
Proxy Statement
2014 Annual Report
XPO Logistics, Inc. (NYSE: XPO) facilitates more than 37,000 deliveries a day as one of the largest
and fastest growing providers of transportation logistics services in North America. XPO is the third
largest freight brokerage firm, the third largest provider of intermodal services, the largest provider
of last mile logistics for heavy goods, the largest manager of expedited shipments, and a leading
provider of highly engineered, technology-enabled supply chain solutions. Additionally, XPO has
growing positions in managed transportation and global forwarding. The company's two business BOARD OF DIRECTORS: FINANCIAL AND OTHER
units –transportation and logistics –utilize relationships with ground, rail, sea and air carriers and COMPANY INFORMATION:
other suppliers to serve over 15,000 customers in the manufacturing, retail, industrial, technology,
Copies of XPO Logistics, Inc.’s financial
Bradley S. Jacobs
aerospace, commercial, life sciences and governmental sectors. XPO is built to deliver constant
information such as the Company’s Annual
Chairman and Chief Executive Officer,
growth in capacity, competitive pricing, passionate service and technological innovation, with over
Report on Form 10-K as filed with the SEC,
XPO Logistics, Inc.
200 locations and approximately 10,000 employees. www.xpo.com
quarterly reports on Form 10-Q and Proxy
Statement are available at the Company’s
G. Chris Andersen website at www.xpo.comor by contacting
Founder and Managing Partner, “Investor Relations” at our corporate
G.C. Andersen Partners, LLC executive office address.
Forward-Looking Statements:
This document includes forward-looking statements within the meaning of Section 27A of the Michael G. Jesselson ANNUAL MEETING OF STOCKHOLDERS:
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as President,
The Annual Meeting of Stockholders will be
amended, including XPO’s future financial targets. All statements other than statements of historical Jesselson Capital Corporation
held on May 19, 2015 at 10:00 a.m., Eastern
fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking
Daylight Time (EDT), at the Marriott Hotel &
statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,”
Adrian P. Kingshott Spa, located at 243 Tresser Boulevard,
“believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,”
Chief Executive Officer, AdSon LLC; Stamford, CT 06901.
“expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” or the
Senior Advisor to
negative of these terms or other comparable terms. However, the absence of these words does not
Headwaters Merchant Bank
mean that the statements are not forward-looking. These forward-looking statements are based on TRANSFER AGENT:
certain assumptions and analyses made by us in light of our experience and our perception of
Computershare Investor Services, LLC
historical trends, current conditions and expected future developments, as well as other factors we James J. Martell Tel. [phone]
believe are appropriate in the circumstances. Independent Operating Executive,
www.computershare.com/investor
These forward-looking statements are subject to known and unknown risks, uncertainties and Welsh, Carson, Anderson & Stowe
assumptions that may cause actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or achievements expressed Mailing address - courier:
Jason D. Papastavrou
or implied by such forward-looking statements. Factors that might cause or contribute to a material 211 Quality Circle, Suite 210
Founder and Chief Investment Officer,
difference include those discussed in XPO’s filings with the Securities and Exchange Commission College Station, TX 77845
ARIS Capital Management, LLC
and the following: economic conditions generally; competition; XPO’s ability to find suitable
Co-founder,
acquisition candidates and execute its acquisition strategy; the expected impact of the acquisitions,
Empiric Asset Management, LLC Mailing address - regular mail:
including the expected impact on XPO’s results of operations; XPO’s ability to successfully integrate
P.O. Box 30170
and realize anticipated synergies and cost savings with respect to acquired companies; XPO’s ability
College Station, TX 77842-3170
to raise capital; XPO’s ability to attract and retain key employees to execute its growth strategy, Oren G. Shaffer
including acquired companies’ management teams; the ability to develop and implement a suitable Vice Chairman and Chief Financial
information technology system; litigation, including litigation related to alleged misclassification of Officer (retired), Qwest Communications INDEPENDENT REGISTERED
independent contractors; the ability to maintain positive relationships with XPO’s networks of third- International, Inc. PUBLIC ACCOUNTING FIRM:
party transportation providers; the ability to retain XPO’s and acquired companies’ largest customers;
KPMG LLP, Chicago, IL
rail and other network changes; weather and other service disruptions; and governmental regulation.
All forward-looking statements set forth in this document are qualified by these cautionary
statements and there can be no assurance that the actual results or developments anticipated will be COMMON STOCK:
CORPORATE EXECUTIVE OFFICE:
realized or, even if substantially realized, that they will have the expected consequences to, or effects The company’s common stock is traded on
on, XPO or its businesses or operations. Forward-looking statements set forth in this document Five Greenwich Office Park NYSE under the symbol “XPO.”
speak only as of the date hereof, and XPO undertakes no obligation to update forward-looking Greenwich, Connecticut 06831
statements to reflect subsequent events or circumstances, changes in expectations or the Tel. [phone]
occurrence of unanticipated events except to the extent required by law. As of April 2, 2015, there were
252 stockholders of record.
XPO LOGISTICS, INC.
Five Greenwich Office Park
Greenwich, Connecticut 06831
ToOur Shareholders
2014wasan exciting inflection point for us.We more than tripled the size ofthe company and
began positioning ourservices under the single brand ofXPOLogistics. Ouremployees are
united asone organization, committed to providing world-class service to ourcustomers and
carriers.
We drove outstanding organic revenue growthof45% for the year and completed four
acquisitions that further differentiated oursupplychain offering. InApril, we became the third
largest provider ofintermodal services in NorthAmerica. InJuly,we strengthened ourlast
mile presence in the high growthe-commerce sector. Andin September, we achieved critical
masswhen we acquired a leadership position in technology-enabled contract logistics.
Contract logistics isattractive to usdue to its highly customized nature and longstanding
customer relationships.
The addition of contract logistics wastransformational for usin terms ofboth scale and
capability. XPOisnowa highly integrated platform ofmore than 200locations and
approximately 10,000employees, focused onserving customers with freight brokerage,
intermodal, last mile, expedite, contract logistics and global forwarding services.
Our2014results kept usona robusttrajectory of30%revenue CAGRquarter-over-quarter for
the first 36months ofourgrowthstrategy. It’sa strongnumber, but it’s not the sole goalpost.
We’re building XPOto help companies operate their supplychains aseffectively as possible.
Ourbroad resources, deep capacity and ingrained service culture, aswell asthe $125million
we’ll spendontechnology this year, are all evidence ofhowstrongly we’re committed to our
customers’ success.
Ourdisciplined execution wasinstrumental in attracting over $1.6billion ofcapital to the
company last year. InFebruary, we realized $413million in net proceeds from a public
offering ofourcommon stock. InAugust,we completed the private placement offering of
$500million ofsenior notes. Andin September, we closed ona $700million private
placement ofour equity. The equity investment wasmade bythree highly regarded
institutional investors: Public Sector PensionInvestment Board (PSPInvestments), GIC,
which isSingapore’s sovereign wealth fund,and Ontario Teachers’ PensionPlan (OTPP).We
believe that these capital raises are strongendorsements ofourplan for value creation.
Financial Performance
We set a high bar in 2014,and exceeded expectations. We grew full year total revenue to
$2.4billion –more than 235%higher than the prior year –with both ofourreporting
segments generating strongfourth quarter tailwinds going into 2015.OurTransportation
segment, which includes freight brokerage, intermodal, last mile, expedite and global
forwarding, grew revenue byover 204%and more than tripled operating income year-over-
year. OurLogistics segment, comprised ofourcontract logistics operations, exceeded plan for
both revenue and operating income primarily based onhigher volumes from retailers.
The impact ofourM&Atransaction and integration costsand non-cash charges can be seen in
the full year 2014GAAPnet lossavailable to common shareholders of$107.4million. Our
adjusted EBITDA –which we believe isthe most meaningful measure ofourprogress–
improved dramatically year-over-year to a gain of$81.4million.1
Our2014performance accelerated uspast ouryear-end target runrates of$3billion of
revenue and $150million ofadjusted EBITDA.
Outlook
I’m very proudthat we’ve delivered onevery target we’ve set since we began executing our
strategy in September of2011.Ouracquired operations are performing exceedingly well.
We’re driving outsized organic growth. We’re attracting quality carriers with the capacity to
take onourcustomers’ freight. Ouremployees have more career options in ourmuch larger
company. Andourintense commitment to customer satisfaction isnowreflected across the
industry’smost comprehensive range ofsupplychain solutions. Mostimportant, the
substantial investments we’ve made in infrastructure over the past three years have created the
foundation for a much larger company –we can growand integrate ouroperations at a rapid
pace with seamless service to customers.
We’re confident in our2015outlook for an annual EBITDA runrate ofat least $300million
and an annual revenue runrate ofat least $5.25billion byyear-end. We plan to acquire at least
$1.5billion ofhistorical annual revenue to meet orexceed these targets.
Looking to the longer term, we see a clear path to growthe businessfar beyond our
achievements to date. We’ve reaffirmed our2017targets ofapproximately $9billion of
revenue and approximately $575million ofEBITDA. Andwe’re moving forward from a
position ofstrength: a highly scalable foundation, numerous avenues for growth,and leading
positionsin the fastest growingareas of logistics.
April 8,2015
Bradley S.Jacobs
Chairman and Chief Executive Officer
1 AdjustedEBITDAisanon-GAAPmeasure.AreconciliationofadjustedEBITDAtonetlossavailabletocommonshareholdersis
providedinthefinancialtablesetforthoppositetheinsidebackcoverpageofthisannualreport.
XPOLOGISTICS,INC.
FiveGreenwichOfficePark
Greenwich,Connecticut06831
NOTICEOFANNUALMEETINGOFSTOCKHOLDERS
ToBeHeldonMay19,2015
TotheStockholdersofXPOLogistics,Inc.:
NoticeisherebygiventhattheannualmeetingofstockholdersofXPOLogistics,Inc.willbeheldon
Tuesday,May19,2015at10:00a.m.,EasternDaylightTime(EDT),attheStamfordMarriottHotel&Spa,
locatedat243TresserBoulevard,Stamford,Connecticut06901,forthefollowingpurposesasmorefully
describedintheproxystatement:
• Toelecttwo(2)membersofourBoardofDirectorsforatermtoexpirein2018oruntiltheir
successorsaredulyelectedandqualifiedor,ifProposal2todeclassifyourBoardofDirectorsis
approvedbyourstockholders,foratermtoexpireatthe2016annualmeetingofstockholders;
• Toapproveanamendmenttoouramendedandrestatedcertificateofincorporationtodeclassifyour
BoardofDirectorsandtoprovidefortheannualelectionofdirectors;
• ToratifytheappointmentofKPMGLLPasourindependentregisteredpublicaccountingfirmfor2015;
• Toconductanadvisoryvotetoapproveexecutivecompensation;and
• Toconsidersuchotherbusinessasmayproperlycomebeforetheannualmeetingoranyadjournment
orpostponementoftheannualmeeting.
OnlystockholdersofrecordasofthecloseofbusinessonApril2,2015,therecorddate,areentitledto
receivenoticeof,andtovoteat,theannualmeetingoranyadjournmentorpostponementoftheannualmeeting.
Pleasenotethat,ifyouplantoattendtheannualmeetinginperson,youwillneedtoregisterinadvanceand
receiveanadmissioncardtobeadmitted.Pleasefollowtheinstructionsonpage4oftheproxystatement.
Yourvoteisimportant.Whetherornotyouplantoattendtheannualmeetinginperson,itis
importantthatyoursharesberepresented.Weaskthatyouvoteyoursharesassoonaspossible.
BYORDEROFTHEBOARD,
GordonE.Devens
SeniorVicePresident,
GeneralCounselandSecretary
Greenwich,Connecticut
April8,2015
TableofContents
QUESTIONSANDANSWERSABOUTOURANNUALMEETING ............................. 1
BOARDOFDIRECTORSANDCORPORATEGOVERNANCE................................. 6
Directors .......................................................................... 6
RoleoftheBoardandBoardStructure ................................................... 8
BoardRiskOversight ................................................................ 9
CommitteesoftheBoardandCommitteeMembership ...................................... 10
DirectorCompensation ............................................................... 11
CompensationCommitteeInterlocksandInsiderParticipation ................................ 12
CorporateGovernanceGuidelinesandCodesofEthics ...................................... 12
DirectorIndependence ............................................................... 13
DirectorSelectionProcess ............................................................ 13
StockholderCommunicationwiththeBoard .............................................. 14
StockholderProposalsforNextYear’sAnnualMeeting ..................................... 14
CERTAINRELATIONSHIPSANDRELATEDPARTYTRANSACTIONS ........................ 15
SECURITYOWNERSHIPOFCERTAINBENEFICIALOWNERSANDMANAGEMENT ........... 16
SECTION16(a)BENEFICIALOWNERSHIPREPORTINGCOMPLIANCE ....................... 19
EXECUTIVECOMPENSATION .......................................................... 20
CompensationDiscussionandAnalysis .................................................. 20
CompensationCommitteeReport ....................................................... 30
CompensationTables ................................................................ 31
EmploymentAgreementswithNamedExecutiveOfficers ................................... 38
AUDIT-RELATEDMATTERS ............................................................ 42
ReportoftheAuditCommittee......................................................... 42
PolicyRegardingPre-ApprovalofServicesProvidedbytheOutsideAuditors ................... 44
ServicesProvidedbytheOutsideAuditors ............................................... 44
PROPOSALSTOBEPRESENTEDATTHEANNUALMEETING .............................. 45
PROPOSAL1:ELECTIONOFDIRECTORS ............................................ 45
PROPOSAL2:APPROVALOFANAMENDMENTTOOURAMENDEDANDRESTATED
CERTIFICATEOFINCORPORATIONTODECLASSIFYOURBOARDOFDIRECTORSAND
TOPROVIDEFORTHEANNUALELECTIONOFDIRECTORS ......................... 46
PROPOSAL3:RATIFICATIONOFTHEAPPOINTMENTOFKPMGLLPASOUR
INDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRMFOR2015 ................. 48
PROPOSAL4:ADVISORYVOTETOAPPROVEEXECUTIVECOMPENSATION ............ 49
OTHERMATTERS ..................................................................... 50
AVAILABILITYOFANNUALREPORTANDPROXYSTATEMENT ........................... 50
AnnexACertificateofAmendmenttoAmendedandRestatedCertificateofIncorporation ............. A-1
AnnexBTextofAmendmentstothe2ndAmendedandRestatedBylaws............................ B-1
ImportantNoticeRegardingtheAvailabilityofProxyMaterialsfortheAnnual
MeetingofStockholderstobeHeldonMay19,2015
ThisProxyStatementandourAnnualReportonForm10-KfortheYearEndedDecember31,2014
areavailableatwww.edocumentview.com/XPO.
XPOLOGISTICS,INC.
FiveGreenwichOfficePark
Greenwich,Connecticut06831
PROXYSTATEMENT
ThisproxystatementsetsforthinformationrelatingtothesolicitationofproxiesbytheBoardofDirectors
ofXPOLogistics,Inc.(“XPOLogistics”orour“company”)inconnectionwithourcompany’s2015annual
meetingofstockholdersoranyadjournmentorpostponementoftheannualmeeting.Theannualmeetingwill
takeplaceonTuesday,May19,2015attheStamfordMarriottHotel&Spa,locatedat243TresserBoulevard,
Stamford,Connecticut06901,at10:00a.m.,EasternDaylightTime.
ThisproxystatementandformofproxyarefirstbeingsentonoraboutApril8,2015,toourstockholdersof
recordasofthecloseofbusinessonThursday,April2,2015,therecorddate.
QUESTIONSANDANSWERSABOUTOURANNUALMEETING
Whatisthepurposeoftheannualmeeting?
Our2015annualmeetingwillbeheldforthefollowingpurposes:
• Toelecttwo(2)membersofourBoardofDirectorsforatermtoexpirein2018oruntiltheir
successorsaredulyelectedandqualifiedor,ifProposal2todeclassifyourBoardofDirectorsis
approvedbyourstockholders,foratermtoexpireatthe2016annualmeetingofstockholders
(Proposal1);
• Toapproveanamendmenttoouramendedandrestatedcertificateofincorporationtodeclassifyour
BoardofDirectorsandtoprovidefortheannualelectionofdirectors(Proposal2);
• ToratifytheappointmentofKPMGLLP(“KPMG”)asourindependentregisteredpublicaccounting
firmfor2015(Proposal3);
• Toconductanadvisoryvotetoapproveexecutivecompensation(Proposal4);and
• Toconsidersuchotherbusinessasmayproperlycomebeforetheannualmeetingoranyadjournment
orpostponementoftheannualmeeting.
Inaddition,seniormanagementofXPOLogisticsandrepresentativesofouroutsideauditor,KPMGwillbe
availabletorespondtoyourquestions.
Whocanvoteattheannualmeeting?
Youcanvoteattheannualmeetingif,asofthecloseofbusinessonThursday,April2,2015,therecord
date,youwereaholderofrecordofourcompany’scommonstockorSeriesAConvertiblePerpetualPreferred
Stock(the“preferredstock”).Asoftherecorddate,therewereissuedandoutstanding79,659,071sharesof
commonstock,eachofwhichisentitledtoonevoteoneachmattertocomebeforetheannualmeeting.
Inaddition,asoftherecorddatetherewereissuedandoutstanding73,335sharesofpreferredstock.Each
shareofpreferredstockisentitledtovotetogetherwithourcommonstockoneachmattertocomebeforethe
annualmeetingasiftheshareofpreferredstockwereconvertedintosharesofcommonstockasoftherecord
date,meaningthateachshareofpreferredstockisentitledtoapproximately143votesoneachmattertocome
beforetheannualmeeting.Asaresult,atotalof90,135,500votesareeligibletobecastattheannualmeeting
basedonthenumberofoutstandingsharesofcommonstockandpreferredstock,votingtogetherasasingle
class.
1
Howmanysharesmustbepresenttoconductbusinessattheannualmeeting?
Aquorumisnecessarytoholdavalidmeetingofstockholders.Foreachoftheproposalstobepresentedat
theannualmeeting,theholdersofsharesofourcommonstockorpreferredstockoutstandingonApril2,2015,
therecorddate,representing45,067,751votesmustbepresentattheannualmeeting,inpersonorbyproxy.If
youvote–includingbyInternet,telephoneorproxycard–yoursharesvotedwillbecountedtowardsthe
quorumfortheannualmeeting.Abstentionsandbrokernon-votesarecountedaspresentforthepurposeof
determiningaquorum.
HowdoIvote?
RegisteredStockholders.Ifyouarearegisteredstockholder(i.e.,youholdyoursharesinyourownname
throughourtransferagent,ComputershareTrustCompany,N.A.,referredtohereinas“Computershare”),you
mayvotebyproxyviatheInternet,bytelephone,orbymailbyfollowingtheinstructionsprovidedontheproxy
card.Stockholdersofrecordwhoattendtheannualmeetingmayvoteinpersonbyobtainingaballotfromthe
inspectorofelections.
BeneficialOwners.Ifyouareabeneficialownerofshares(i.e.,yoursharesareheldinthenameofa
brokeragefirm,bankoratrustee),youmayvotebyproxybyfollowingtheinstructionsprovidedinthevote
instructionformorothermaterialsprovidedtoyoubythebrokeragefirm,bankorothernomineethatholdsyour
shares.Tovoteinpersonattheannualmeeting,youmustobtainalegalproxyfromthebrokeragefirm,bankor
othernomineethatholdsyourshares.
XPOLogistics,Inc.ESOPParticipants.IfyouparticipateintheXPOLogistics,Inc.EmployeeStock
OwnershipPlan(the“Plan”),youmayvotethenumberofsharesofcommonstockcreditedtoyourPlanaccount
asof5:00p.m.EDTonApril2,2015,therecorddate,inthesamemannerasaregisteredstockholder.Ifyou
holdsharesthroughthePlanandyoudonotprovideclearvotinginstructions,thePlan’strustee,HorizonTrust
andManagement,willvotesuchsharesinthesameproportionthatitvotessharesforwhichitreceivedvalidand
timelyinstructions.
WillmysharesbevotedifIdonotprovidevotinginstructions?
Ifyouareastockholderofrecordandyouproperlysign,dateandreturnaproxycard,butdonotindicate
howyouwishtovotewithrespecttoaparticularnomineeorproposal,thenyourshareswillbevotedFORthe
electionofthetwonomineesfordirectornamedin“Proposal1—Electionofdirectors,”FOR“Proposal2—
ApprovalofanamendmenttoouramendedandrestatedcertificateofincorporationtodeclassifyourBoardof
Directorsandtoprovidefortheannualelectionofdirectors,”FOR“Proposal3—Ratificationoftheappointment
ofKPMGLLPasourindependentregisteredpublicaccountingfirmfor2015,”andFOR“Proposal4—Advisory
votetoapproveexecutivecompensation.”
UndertherulesoftheNewYorkStockExchange(“NYSE”),brokeragefirmshavetheauthoritytovote
sharesheldforabeneficialowneron“routine”matters.Accordingly,ifyoursharesareheldofrecordbya
brokeragefirmandyoudonotprovidethefirmspecificvotinginstructions,thatfirmwillhavetheauthorityto
voteyoursharesonlywithrespectto“Proposal3—RatificationoftheappointmentofKPMGLLPasour
independentregisteredpublicaccountingfirmfor2015,”andyourshareswillnotbevotedandwillbe
consideredbrokernon-voteswithrespecttoallotherproposalsdescribedinthisproxystatement.Weurgeyouto
providevotinginstructionssothatyourshareswillbevoted.
CanIchangemyvoteafterIhavevoted?
Yes,youmayrevokeyourproxyandchangeyourvoteatanytimebeforethefinalvoteattheannual
meeting.YoumaychangeyourvotebyvotingagainonalaterdateontheInternetorbytelephone(onlyyour
latestInternetortelephoneproxysubmittedpriortotheannualmeetingwillbecounted),signingandreturninga
2
newproxycardwithalaterdate,orattendingtheannualmeetingandvotinginperson.However,yourattendance
attheannualmeetingwillnotautomaticallyrevokeanypriorproxyunlessyouvoteagainattheannualmeeting
orspecificallyrequestinwritingthatyourpriorproxyberevoked.
Whatisthedeadlinetovote?
Ifyouholdsharesasthestockholderofrecord,yourvotebyproxymustbereceivedbeforethepollscloseat
theannualmeeting.Ifyouarethebeneficialownerofshares,pleasefollowthevotinginstructionsprovidedby
yourbroker,trusteeorothernominee.
Whatvoteisrequiredtoelectdirectorsortakeotheractionattheannualmeeting?
• Proposal1:Electionoftwo(2)directors.Theelectionofthetwo(2)directornomineesnamedinthis
proxystatementrequirestheaffirmativevoteofsharesofcommonstockorpreferredstock,voting
togetherasasingleclass,representingapluralityofthevotescastontheproposalattheannual
meeting.Thismeansthatthetwonomineeswillbeelectediftheyreceivemoreaffirmativevotesthan
anyotherperson.Youmaynotaccumulateyourvotesfortheelectionofdirectors.Brokersmaynotuse
discretionaryauthoritytovotesharesontheelectionofdirectorsiftheyhavenotreceivedspecific
instructionsfromtheirclients.Foryourvotetobecountedintheelectionofdirectors,youwillneedto
communicateyourvotingdecisionstoyourbank,brokerorothernomineebeforethedateoftheannual
meetinginaccordancewiththeirspecificinstructions.Becausetheelectionofdirectorsisdetermined
onthebasisofapluralityofthevotescast,abstentionsandbrokernon-voteswillhavenoeffectonthe
electionofdirectors.OurBoardhasapprovedamendmentstoour2ndAmendedandRestatedBylaws
(the“bylaws”)thatwillbeadoptedifProposal2isapprovedbythestockholdersattheannualmeeting
toprovideforamajorityvotingstandardinuncontestedfutureelectionsofdirectors,wherebyfor
electionsofdirectorsin2016andthereafterdirectorsmustreceiveover50%ofvotescastinordertobe
elected.
• Proposal2:Approvalofanamendmenttoouramendedandrestatedcertificateofincorporation
todeclassifyourBoardofDirectorsandtoprovidefortheannualelectionofdirectors.The
approvaloftheproposaltoadopttheamendmenttoouramendedandrestatedcertificateof
incorporationtodeclassifyourBoardofDirectorsandtoprovidefortheannualelectionofdirectors
requirestheaffirmativevoteoftheholdersofamajorityinvotingpowerofouroutstandingcommon
stockandSeriesAPreferredStockasoftherecorddate.Brokersmaynotusediscretionaryauthorityto
votesharesontheproposaltoadopttheamendmenttoouramendedandrestatedcertificateof
incorporationiftheyhavenotreceivedspecificinstructionsfromtheirclients.Foryourvotetobe
countedforthisproposal,youwillneedtocommunicateyourvotingdecisionstoyourbank,brokeror
othernomineebeforethedateoftheannualmeetinginaccordancewiththeirspecificinstructions.
Becausethevotestandardfortheapprovalofthisproposalistheaffirmativevoteoftheholdersofa
majorityinvotingpowerofouroutstandingcommonstockandSeriesAPreferredStockasofthe
recorddate,abstentionsandbrokernon-voteswillhavetheeffectofavoteagainstthisproposal.
• Proposal3:RatificationoftheappointmentofKPMGLLPasourindependentregisteredpublic
accountingfirmfor2015.RatificationoftheappointmentofKPMGasourindependentregistered
publicaccountingfirmfortheyearendingDecember31,2015requirestheaffirmativevoteofshares
ofcommonstockorpreferredstock,votingtogetherasasingleclass,representingamajorityofvotes
castontheproposalattheannualmeeting.Becausethevotestandardfortheratificationofour
independentregisteredpublicaccountingfirmisamajorityofthevotescast,abstentionswillhavethe
effectofavoteagainsttheratificationofKPMG.Wedonotexpectanybrokernon-votesasbrokers
havediscretionaryauthoritytovoteonthismatter.
• Proposal4:Advisoryvotetoapproveexecutivecompensation.Advisoryapprovaloftheresolution
onexecutivecompensationrequirestheaffirmativevoteofsharesofcommonstockorpreferredstock,
votingtogetherasasingleclass,representingamajorityofvotescastontheproposalattheannual
3
meeting.Brokersmaynotusediscretionaryauthoritytovotesharesontheadvisoryvotetoapprove
executivecompensationiftheyhavenotreceivedspecificinstructionsfromtheirclients.Foryourvote
tobecountedintheadvisoryvotetoapproveexecutivecompensation,youwillneedtocommunicate
yourvotingdecisionstoyourbank,brokerorothernomineebeforethedateoftheannualmeetingin
accordancewiththeirspecificinstructions.Becausethevotestandardfortheapprovaloftheadvisory
voteonexecutivecompensationisamajorityofthevotescast,abstentionswillhavetheeffectofa
voteagainstandbrokernon-voteswillhavenoeffectonthatproposal.
Ingeneral,otherbusinessproperlybroughtbeforetheannualmeetingrequirestheaffirmativevoteofshares
ofcommonstockorpreferredstock,votingtogetherasasingleclass,representingamajorityofvotescaston
suchmatterattheannualmeeting.
HowdoestheBoardofDirectorsrecommendthatIvote?
OurBoardrecommendsthatyouvoteyourshares“FOR”eachdirectornomineenamedinthisproxy
statement,“FOR”approvalofanamendmenttoouramendedandrestatedcertificateofincorporationto
declassifyourBoardofDirectorsandtoprovidefortheannualelectionofdirectors,“FOR”ratificationof
KPMGasourindependentregisteredpublicaccountingfirmfor2015,and“FOR”advisoryapprovalofthe
resolutiontoapproveexecutivecompensation.
Howwillthepersonsnamedasproxiesvote?
Ifyoucompleteandsubmitaproxy,thepersonsnamedasproxieswillfollowyourinstructions.Ifyou
submitaproxybutdonotprovideinstructions,orifyourinstructionsareunclear,thepersonsnamedasproxies
willvoteasrecommendedbyourBoardor,ifnorecommendationisgiven,intheirowndiscretion.
WherecanIfindtheresultsofthevoting?
Weintendtoannouncepreliminaryvotingresultsattheannualmeetingandwillpublishfinalresults
throughaCurrentReportonForm8-KtobefiledwiththeSecuritiesandExchangeCommission(“SEC”)within
four(4)businessdaysaftertheannualmeeting.TheCurrentReportonForm8-KwillbeavailableontheInternet
atourwebsite,www.xpo.com.
DoIneedatickettoattendtheannualmeeting?
Yes,youwillneedanadmissioncardtoentertheannualmeeting.Youmayrequestticketsbyprovidingthe
nameunderwhichyouholdsharesofrecordor,ifyoursharesareheldinthenameofabank,brokerorother
holderofrecord,theevidenceofyourbeneficialownershipoftheshares,thenumberofticketsyouare
requestingandyourcontactinformation.Youcansubmityourrequestinthefollowingways:
• [email protected];or
• bycallingustoll-freeat(855)XPO-INFO(855-976-4636).
Stockholdersalsomustpresentaformofpersonalphotoidentificationinordertobeadmittedtotheannual
meeting.Ifyouplantoattendthe2015annualmeeting,youcanobtaindirectionstotheStamfordMarriott
Hotel&Spafromthehotel’swebsiteatwww.marriott.com/hotels/travel/stfct-stamford-marriott-hotel-and-spa.
Whowillpayforthecostofsolicitingproxies?
Wewillpayforthecostofsolicitingproxies.WehaveengagedInnisfreeM&AIncorporatedtoassistusin
solicitingproxiesinconnectionwiththeannualmeeting,andhaveagreedtopaythemapproximately$11,000,
plustheirexpensesforprovidingsuchservices.Ourdirectors,officersandotheremployees,withoutadditional
compensation,maysolicitproxiespersonally,inwriting,bytelephone,byemailorotherwise.Asiscustomary,
wewillreimbursebrokeragefirms,fiduciaries,votingtrustees,andothernomineesforforwardingourproxy
materialstoeachbeneficialownerofcommonstockorpreferredstockheldofrecordbythem.
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