What changed in this filing

/stocks — the workspaceLOADING

Item 5. Other Information

2020-08-03 compared with 2020-05-05 · 83 added, 12 removed, 12 unchanged (89% of the section changed)

Other Information.

Employment Agreement, effective as of February 3, 2020, and Amendment to Employment Agreement, dated April 7, 2020, between the registrant and Kurt M.

Employment Agreement, effective as of March 2, 2020, between the registrant and David B.

Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020.

Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020.

Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020.

Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020.

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

XBRL Taxonomy Extension Schema.

XBRL Taxonomy Extension Calculation Linkbase.

XBRL Taxonomy Extension Definition Linkbase.

XBRL Taxonomy Extension Label Linkbase.

XBRL Taxonomy Extension Presentation Linkbase.

Employment Agreements

On July 31, 2020, XPO entered into employment agreements (the “Employment Agreements”) with each of Bradley S.

Jacobs, Troy A.

Cooper, and Mario A.

Harik (collectively, the “Executives”).

The Employment Agreements replace prior employment agreements with the Executives that expired on February 9, 2020.

The principal terms of the Employment Agreements are described below.

Each Employment Agreement provides for a four-year term, commencing on July 31, 2020.

Under the Employment Agreements, Mr.

Jacobs will continue to serve as XPO’s Chairman and Chief Executive Officer, reporting to XPO’s Board of Directors, Mr.

Cooper will continue to serve as XPO’s President, reporting to the Chief Executive Officer, and Mr.

Harik will continue to serve as XPO’s Chief Information Officer, reporting to the President.

Target Annual Bonus .

The Employment Agreements provide that the annual base salary for each of Messrs.

Jacobs, Cooper, and Harik will be $1,000,000, $650,000, $500,000, respectively, and that the target annual bonus will be 200% of base salary for each of Messrs.

Jacobs and Cooper and 125% of base salary for Mr.

Termination Events .

Each of the Employment Agreements provides that XPO may terminate the Executive’s employment during the term with or without cause and each of the Executives may terminate his employment on 30 days prior written notice to XPO.

The severance payments described below are subject to and conditioned upon the Executive (i) signing an irrevocable waiver and general release in favor of XPO and (ii) complying with the restrictive covenants contained in the Employment Agreement.

Non-CIC Termination .

In the event that either prior to a change of control of XPO or more than two years after a change of control of XPO occurs, XPO terminates the Executive’s employment without cause, the Executive will be entitled to receive:

• a cash payment equal to 12 months of base salary;

• medical and dental coverage for a period of six months from the date of termination, or, if earlier, until the Executive secures other employment.

CIC Termination .

In the event that upon or within the two-year period following a change of control of XPO, the Executive’s employment is terminated by XPO without cause or he resigns for good reason, the Executive will receive:

• Two (or 2.99, in the case of Mr.

Jacobs) times the sum of the Executive’s annual base salary and target bonus;

• A pro rata target bonus for the year of termination;

• Medical and dental coverage for a period of 24 months from the date of termination.

In the event that any benefits due or amounts payable to the Executive in connection with a change of control of XPO constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then any such amounts will be reduced to avoid triggering the excise tax imposed by Section 4999 of the Code, if it would be more favorable to the Executive on a net after-tax basis.

The Executives are not

entitled to a gross-up payment for excise taxes imposed by Section 4999 of the Code on “excess parachute payments,” as defined in Section 280G of the Code.

Under the Employment Agreements, in the event XPO terminates the Executive’s employment for cause or if the Executive violates the restrictive covenants in the Employment Agreement, the Executive’s long-term incentive compensation is subject to certain forfeiture and clawback provisions.

In addition, if the Executive engages in fraud or willful misconduct that contributes materially to any financial restatement or material loss to XPO or any of its affiliates, then the Executive’s long-term incentive compensation and annual bonus payments are subject to certain forfeiture and clawback provisions.

Restrictive Covenants .

Under the Employment Agreements, each of the Executives is generally subject to the following restrictive covenants:

employee and customer non-solicitation covenants during his employment and for a period of two years thereafter;

confidentiality and mutual non-disparagement covenants during his employment and thereafter;

and non-competition covenants during his employment and for a period of three years thereafter, except that, other than following a change of control of XPO, XPO will have the right to extend the non-compete for an additional year so long as XPO pays the Executive his base salary for the additional one-year period.

The foregoing summary of certain terms and conditions of the Employment Agreements does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreements, which are filed with this report as Exhibits 10.5, 10.6, and 10.7, respectively, and are incorporated herein by reference.

Cash Long-Term Incentive Awards

Grant of Cash LTI Awards .

On July 31, 2020, in connection with the execution of the Employment Agreements, XPO entered into award agreements (the “Award Agreements”) with each Executive providing for the grant of cash long-term incentive awards (the “Cash LTI Awards”) and setting forth the terms and conditions applicable to each Cash LTI Award.

Performance Periods .

Each Cash LTI Award is divided into four tranches (each, a “Tranche”), with each Tranche relating to one of four annual performance periods:

2020, 2021, 2022, and 2023, except that for the 2020 Tranche the financial goals described below are based on a performance period commencing on July 1, 2020 and ending on December 31, 2020.

Target Value;

Performance Goals .

The target value of each of the four Tranches of each Cash LTI Award is $10,000,000 for Mr.

Jacobs, $3,350,000 for Mr.

Cooper, and $2,250,000 for Mr.

Each Tranche may be earned at a level ranging from 0-200% of the target value, depending upon the degree of achievement of performance goals relating to XPO’s absolute adjusted cash flow per share (weighted 50%), XPO’s growth in adjusted cash flow per share relative to that of a specified group of XPO’s peers (weighted 25%), and XPO’s achievement of performance initiatives and metrics in an ESG scorecard encompassing the categories of workforce/talent, employee and community safety, diversity and inclusion, data security, environment and sustainability, and/or governance (weighted 25%).

Each Tranche will vest, if and to the extent earned based on achievement of the applicable performance goals, as follows:

on the first anniversary of the grant date, in the case of the 2020 Tranche, on January 15, 2022, in the case of the 2021 Tranche, on January 15, 2024 in the case of the 2022 Tranche, and on January 15, 2026 in the case of the 2023 Tranche, in each case, subject to the Executive’s continued employment with XPO through the applicable vesting date.

The vesting of the Cash LTI Awards may, in certain circumstances, be accelerated, including full acceleration upon a change of control of XPO or the Executive’s death and partial acceleration in the event of the termination of the Executive’s employment by XPO without cause.

The foregoing summary of certain terms and conditions of the Cash LTI Awards does not purport to be complete and is qualified in its entirety by reference to the full text of the Award Agreements, the form of which is filed with this report as Exhibit 10.8 and is incorporated herein by reference.

Number Description

4.1 Indenture, dated April 28, 2020, between the registrant, the guarantors party thereto and Wells Fargo Bank, National Association, as Trustee (incorporated herein by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K filed with the SEC on April 28, 2020).

10.1 * Amendment No.

4 to Second Amended and Restated Revolving Loan Credit Agreement, dated April 3, 2020, by and among the registrant, certain subsidiaries signatory thereto, the lenders party thereto and Morgan Stanley Senior Funding Inc., as agent.

10.2 + Amendment No.

2 to the XPO Logistics, Inc.

2016 Omnibus Incentive Compensation Plan (incorporated herein by reference to Annex B to the registrant’s definitive proxy statement on Schedule 14A filed with the SEC on April 21, 2020).

10.3 + Separation Agreement, dated May 4, 2020, between the registrant and Sarah J.S.

Glickman (incorporated herein by reference to Exhibit 99.1 to the registrant’s current report on Form 8-K filed with the SEC on May 8, 2020).

10.4 * Amendment No.

5 to Second Amended and Restated Revolving Loan Credit Agreement, dated June 29, 2020, by and among the registrant, certain subsidiaries signatory thereto, the lenders party thereto and Morgan Stanley Senior Funding Inc., as agent.

10.5 +* Employment Agreement, effective as of July 31, 2020, between the registrant and Bradley S.

10.6 +* Employment Agreement, effective as of July 31, 2020, between the registrant and Troy A.

10.7 +* Employment Agreement, effective as of July 31, 2020, between the registrant and Mario A.

10.8 +* Form of Cash Long-Term Incentive Award Agreement (2016 Omnibus Incentive Compensation Plan).

31.1 * Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 3 0 , 2020.

31.2 * Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 3 0 , 2020.

32.1 ** Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 3 0 , 2020.

32.2 ** Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 3 0 , 2020.

101.INS * XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH * XBRL Taxonomy Extension Schema.

101.CAL * XBRL Taxonomy Extension Calculation Linkbase.

101.DEF * XBRL Taxonomy Extension Definition Linkbase.

101.LAB * XBRL Taxonomy Extension Label Linkbase.

101.PRE * XBRL Taxonomy Extension Presentation Linkbase.

Number Description

104 * Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

9 unchanged sentences

(Principal Financial Officer)

August 3, 2020

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 5. Other Information