EX-10.6 7 xpo2023q110-qexx106.htm EX-10.6
Exhibit 10.6
4/17/2023
David Bates
Delivered via email to [redacted]
Hello David,
On behalf of XPO, Inc., I’m happy to offer you the position of Chief Operating Officer. I know I speak for the rest of our team when I say how pleased we are to make you this offer.
In this role, you’ll report directly to Mario Harik, Chief Executive Officer, and you’ll be based out of our Charlotte, NC office, beginning on 5/3/2023.
Your salary and compensation
We’d like to offer you the following compensation package:
•Base Salary: You’ll receive $14,423.08, paid on a weekly basis, or $750,000 annually, less all applicable withholdings and deductions, and pro-rated for any partial period worked.
•Profit-Sharing Cash Incentive Program: You will be eligible to participate in a profit-sharing cash incentive program, with a participation factor of 0.56% of the Company’s LTL adjusted operating income. Your incentive will be paid quarterly in cash, less all applicable withholdings and deductions, as soon as practicable after the Company’s quarterly earnings are publicly announced. The first incentive payment for which you will be eligible will be based upon the Company’s Q2 2023 LTL adjusted operating income, prorated for your start date of employment. You must be employed through the date on which the Company’s quarterly earnings are publicly announced in order to receive an incentive payment for such quarter. Incentive payments will be subject to the terms and conditions of the profit-sharing cash incentive program approved by the Compensation Committee.
•Long-term Incentive: You will be eligible for an annual long-term incentive award with a target grant date value of $1,500,000, with the form, structure, timing, vesting conditions and schedule determined annually by the Compensation Committee. The underlying number of stock units will be determined based on XPO’s closing stock price on date of grant (subject to variation from time-to-time), in the form as follows:
o Time-Based Restricted Stock Units (RSUs): $525,000 of grant date value will be awarded to you in the form of RSUs, with vesting to occur on March 15th over a three-year schedule, or as otherwise determined annually by the Compensation Committee subject to your continuing employment with the Company through each applicable vest date.

o Performance-Based Restricted Stock Units (PRSUs): $975,000 of target grant date value will be awarded to you in the form of PRSUs, which will cliff vest on March 6th, 2026, or as otherwise determined annually by the Compensation Committee subject to achievement of the applicable performance goals and continued service through each applicable vest date.
•Profit-sharing cash incentives and long-term incentive awards will be reflective of your individual performance and contributions, Company and/or business unit performance, as applicable, and the scope and expectations of your position/role in the Company. As an at-will employee, profit-sharing cash incentives and long-term incentives are subject to change at the sole discretion of the Company.
•Cash Sign-On: You’ll receive a $1,500,000 sign-on bonus, which is taxable income. If you voluntarily leave the Company before 24 months of continuous employment, you’re required to repay 100% of the bonus. The sign on bonus will be paid in accordance with the Company’s payroll procedures and no later than May 26, 2023.
•Payment of Forfeited Bonus: In connection with your separation of employment from your current employer, if your current employer does not pay you any portion of the bonus that you earned in March 2023 that is payable to you April 28 (the “March bonus”), the Company will provide you with a cash payment equivalent to the value of the forfeited bonus, less applicable taxes and withholding, up to $225,000. Payment of the forfeited bonus is contingent upon you providing the Company, within ten (10) business days following your start date, satisfactory proof that you (a) forfeited the payout of some or all of the March bonus and (b) the amount of March bonus you forfeited. If eligible, payment of the forfeited bonus will be made in the payroll cycle following 30 days of your continuous employment.
•Equity Buyout Incentive: You will be granted a one-time long-term incentive award of $7,150,000 on your start date in the form of $2,650,000 RSUs and $4,500,000 PRSUs. The underlying number of stock units will be determined based on XPO’s closing stock price on date of grant (subject to variation from time-to-time), in the form as follows:
o RSUs: $2,650,000 of grant value will be awarded to you in the form of RSUs and will vest at 50% on the first anniversary of the grant date and 50% on the second anniversary, subject to your continuing employment with the Company through the vest date.
o PRSUs: $4,500,000 of grant value will be awarded to you in the form of PRSUs and will vest on a 5-year cliff schedule, subject to achievement of the applicable performance goals (as detailed in the respective award agreement) and continued employment with the Company through the vest date.
Your benefits
At XPO, we’re committed to hiring the best talent. That’s why we offer a competitive benefits package—including healthcare coverage, personal time off, life/disability insurance, retirement planning and more. Additional details related to our benefits package are included with your new hire materials.
Severance benefits
You will be eligible for severance payments and other benefits upon certain qualifying termination events, subject to the terms and conditions of the attached Change in Control and Severance Agreement (the “Severance Agreement”), provided that you timely return a signed copy of the Severance Agreement.
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Legal considerations
In your work for the Company, you are expected not to use or disclose any confidential information, including trade secrets, of any former employer or other person to whom you have a confidentiality obligation. You are expected to use only generally known information which is used by persons with training and experience comparable to your own, which is common in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company. As a condition of your continued employment, you are expected to abide by the Company’s rules and policies as may be published from time to time. During our discussions about your proposed job duties, you assured us that you would be able to perform those duties within the guidelines just described.
You confirm that you have carefully reviewed your files (including emails, computer files and hard copies, whether personal or business) and deleted, and not retained copies of, any files prepared, generated or used during any prior employment that could contain confidential information or trade secrets of your current or former employer. You agree not to bring onto Company premises any unpublished documents or property belonging to any former employer or other person to whom you owe a confidentiality obligation.
Your employment with the Company will be “at-will.” This means that either you or the Company may terminate the employment relationship at any time and for any reason, with or without cause or advance notice. We request that, in the event of your resignation, you give the Company at least 30 days advance notice.
Confidential Information Protection Agreement
Your acceptance of this offer and commencement of employment with the Company is contingent upon your acceptance of the Company’s Confidential Information Protection Agreement (“CIPA”), which prohibits unauthorized use or disclosure of the Company’s confidential and proprietary information and includes an 18-month non-competition provision and a two-year non-solicitation provision following the termination of your employment with XPO.
Pre-Hire Screening and Work Authorization
This employment offer is contingent on the satisfactory conclusion of appropriate background check and a pre-employment drug screen as applicable. Although your employment at XPO may begin prior to the completion of the background check or drug screen at the Company’s discretion, your continued employment remains subject to the satisfactory completion of the background check and drug screen. As required by law, this offer is subject to satisfactory proof of your right to work in the United States.
Entire Offer
This letter, along with the CIPA and Severance Agreement, contains the entire agreement and understanding between you and the Company regarding the employment relationship and supersedes any prior or contemporaneous agreements, understandings, communications, offers, representations, warranties, or commitments by or on behalf of the Company (oral or written). Neither this offer letter nor any other written materials issued by the Company constitute a contract between you and the Company for employment, express or implied, for any specific duration.
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Taking the next step
As you know, XPO has generated tremendous momentum, thanks to the efforts of our people. With you on our team, we’re sure to continue along this trajectory and move forward to greater success. Please make sure you’ve read the offer letter completely, including all enclosures. Then sign and return the offer letter, CIPA and Severance Agreement by e-mail to[redacted] within ten (10) business days of the same being sent to you. This offer will terminate if it is not accepted, signed, and returned by that date, unless otherwise mutually agreed between the parties.
If you have any questions, please reach out to me at [redacted] or [redacted].
Best regards,
/s/ Carolyn Roach
Carolyn Roach
Chief Human Resources Officer
XPO
Enclosures: Confidential Information Protection Agreement; Severance Agreement
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EMPLOYMENT ACCEPTANCE
I accept employment with XPO, Inc., as Chief Operating Officer reporting to work on 5/3/2023.
/s/ David Bates
David Bates
4/17/2023
Date
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