2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 148 J. C. PENNEY COMPANY, INC. JOHNSON & JOHNSON JPMORGAN CHASE & CO. KANSAS CITY SOUTHERN CorporateGovernance preserveandenhancetheinclusiveenvironmentinwhichtheBoardcurrentlyfunctions.Additional informationontheexperiencesandbackgroundsofthedirectornomineescanbefoundunder “Proposal1-ElectionofDirectors”beginningonpage14.Thedirectornomineesidentifiedinthis ProxyStatementreflecttheimportanceofdiversitytotheBoard. TheBoardalsoaimstomaintainanappropriatebalanceoftenureacrossourdirectors.Inthelast threeyears,theBoardhasappointedsixnewdirectorstotheBoardwhilesevendirectorshaveretired fromorlefttheBoardduringthesameperiod.Further,ourCorporateGovernanceGuidelinesprovide thatitistheBoard’spolicythatnoindividualwhowouldbeage73orolderatthetimeofhisorher electionorre-electionwillbeeligibletostandforelectionorre-electiontotheBoard.TheBoardmay waivetheagelimitationifitdeemsawaivertobeinthebestinterestsoftheCompanyandits stockholders. Thechartsbelowreflectthegendercompositionandboardtenureofthedirectornominees. Gender Women 36% Men 64% <2Years 2-7Years >7Years 0 3 4 5 1 2 Board Tenure Averagetenure:5.7years AsprovidedintheGuidelines,nomineesfordirector,includingthosedirectorswhoareeligibleto standforre-election,areselectedbasedon,amongotherthings,considerationofthefollowingfactors: • characterandintegrity; • businessandmanagementexperience; • demonstratedcompetenceindealingwithcomplexproblems; • familiaritywiththeCompany’sbusiness; • diversetalents,backgroundsandperspectives; • freedomfromconflictsofinterest; • regulatoryandstockexchangemembershiprequirementsfortheBoard; • sufficienttimetodevotetotheaffairsoftheCompany;and • reputationinthebusinesscommunity. Inconsideringwhethertonominatedirectorswhoareeligibletostandforre-election,theCorporate GovernanceCommitteealsoconsidersthequalityofpastdirectorservice,attendanceatBoardand committeemeetings,compliancewiththeGuidelines(includingsatisfyingtheexpectationsfor individualdirectors),aswellasinputfromotherBoardmembersconcerningthedirector’sperformance andindependence. AlthoughtheBoardretainsultimateresponsibilityforapprovingcandidatesforelection,the CorporateGovernanceCommitteeconductstheinitialscreeningandevaluationprocess.Indoingso, 2018 Proxy Statement 7 BOARDNOMINEECOMPOSITIONANDREFRESHMENT (seepage18) DIRECTORNOMINEES (seepages11-16) Name Age Director Since PrimaryOccupation MaryC.Beckerle I 63 2015 ChiefExecutiveOfficerandDirector,HuntsmanCancerInstitute; DistinguishedProfessorofBiology,CollegeofScience,UniversityofUtah D.ScottDavis I 66 2014 FormerChairmanandChiefExecutiveOfficer,UnitedParcelService,Inc. IanE.L.Davis I 67 2010 Chairman,Rolls-RoyceHoldingsplc;FormerChairmanandWorldwide ManagingDirector,McKinsey&Company JenniferA.Doudna I 54 Nominee ProfessorofChemistry;ProfessorofBiochemistryandMolecularBiology; LiKaShingChancellor'sProfessorinBiomedicalandHealth;Universityof California,Berkeley AlexGorsky CH 57 2012 Chairman,BoardofDirectors;ChiefExecutiveOfficer,Johnson&Johnson MarkB.McClellan I 54 2013 Director,Duke-RobertJ.Margolis,MD,CenterforHealthPolicy AnneM.Mulcahy LD I 65 2009 FormerChairmanandChiefExecutiveOfficer,XeroxCorporation WilliamD.Perez I 70 2007 RetiredPresidentandChiefExecutiveOfficer ,Wm.W rigleyJr.Company CharlesPrince I 68 2006 RetiredChairmanandChiefExecutiveOfficer,CitigroupInc. A.EugeneWashington I 67 2012 DukeUniversity’sChancellorforHealthAffairs;PresidentandChiefExecutive Officer,DukeUniversityHealthSystem RonaldA.Williams I 68 2011 FormerChairmanandChiefExecutiveOfficer,AetnaInc. ChairmanoftheBoard: CH LeadDirector: LD IndependentDirector: I 2018ProxyStatement-9 Diverse Backgrounds 5.64 AverageYears ofServiceon theBoard Range of Tenure Multidisciplinary Skills 10–12years 0–2years 6–9years 3–5years Academia/ Government CEO/Senior Executive Financial Healthcare Industry Intl.Business Strategy Marketing/ Sales Regulatory Science/ Technology 3 out of 11 nomineesareHispanic orAfrican-American nomineesarewomen 3 out of 11 Total of 02 pages in section KANSAS CITY SOUTHERN Proposals for 2018 Annual Meeting 1. Election of Directors Tenure 0 1 2 3 4 5 6 11+ years 6-10 years 0-5 years Number ofDirectorNominees Age Diversity of Board 0 1 2 3 4 71+ 66-70 60-65 Under60 Number ofDirectorNominees Gender and Ethnic Diversity of Board 50% Diverse 6 of 12 Directors areGender or Ethnically Diverse Gender Diversity of Board 3 of 12 Directors are Women 25% Gender Diverse The Board of Directors of KCS (the “Board”) is currently composed of twelve members. Our directors have a wide array of skills, background, and senior leadership experience, including overseeing companies in regulated industries, both in the U.S. and Mexico, multi-national business operations, and the responsibilities and obligations that result from being a publicly-traded company, all ofwhicharenecessarytohelpguideourCompany. The Board believes these skills and qualifications represent the right blend of experience and knowledge to oversee the execution of the Company’s strategy to consistently be the fastest growing, best- performing, most customer-focused transportation provider in North America. 50% 67% 25% 33% 50% 58% 83% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Skills and Qualifications Publicly Traded Company CEO Experience* International/Global Expertise Legal/Corporate Governance Government/ Regulatory Risk Management Economic/Finance * IncludesCEOsofdivisionsofpubliclyheldcompanies. The following twelve individuals are being nominated by the Board for election as directors at the Annual Meeting to serve a one-year term. Their biographies are set forth below. Each nominee has indicatedtheyarewillingandableto serveasadirector ifre-electedandhaveconsentedto beingnamedas nominees in this Proxy Statement. If any nominee should become unable or unwilling to serve, the Proxy CommitteeintendstovoteforoneormoresubstitutenomineeschosenbytheBoardinitssolediscretion. 2018NOTICEOFANNUALMEETINGANDPROXYSTATEMENT 7 Tenure0-5years6-10years11+years0123456NumberofDirectorNomineesAgeDiversityofBoardUnder6060-6566-7071+01234GenderandEthnicDiversityofBoard6of12DirectorsareGenderorEthnicallyDiverse50%DiverseGenderDiversityofBoard3of12DirectorsareWomen25%GenderDiverseSkillsandQualificationsPubliclyTradedCompany83%CEOExperience*58%International/GlobalExpertise50%Legal/CorporateGovernance33%Government/Regulatory25%RiskManagement67%Economic/Finance50%0%10%20%30%40%50%60%70%80%90% Proposal 1 — Election of Directors TableofContents 10 JPMORGANCHASE&CO. • 2018PROXYSTATEMENT Directornominees Thepersons listedon the followingpageshavebeen nominated forelectionbecause theypossess the skills, experience,andpersonalattributesneeded toguide theFirm’s strategy,and tooversee its riskmanagement frameworkandmanagement’sexecutionof its responsibilities. In thebiographical informationaboutourdirector nomineeswhich follows, theages indicatedareasof May15,2018,and theother information isasof the dateof thisproxy statement.Thereareno family relationshipsamong thedirectornominees.Unless otherwise stated,allnomineeshavebeen continuously employedby theirpresentemployers formore than five years. Inaddition to thebiographical informationwhich follows, reference ismade to thedescriptionofour nominees’personalandprofessionalattributesand skillsonpage17of thisproxy statement. Allof thenomineesare currentlydirectorsof theFirm. Other thanMs.Hobson,whowaselected to theBoard inMarch2018,eachwaselected to theBoardbyour shareholdersatour2017annualmeeting,eachwith the supportofmore than95%of the votes cast.For more informationabout the recruitmentofMs.Hobson, seepage19of thisproxy statement. Ms.Bowles,whohas servedasadirectorof theFirm since2006,hasdecided to retire from theBoardand is not standing for re-electionwhenher termexpireson theeveof this year’sannualmeeting. Eachnomineehasagreed tobenamed in thisproxy statementand, ifelected, to serveaone-year term expiringatour2019annualmeeting. Directorsareexpected toattendourannual shareholdermeetings.Allof the then currentnominees werepresentat theannualmeetingheld inMay2017. Allof the currentnomineesareexpected toattendour 2018annual shareholdermeeting,other thanMr.Bell, who isunable toattenddue toapriorprofessional obligation. Profile of Nominees (excluding our CEO) Two new directors joined the Board in the last three years Average tenure of 8.7 years 100% Independent 2 Women 2 African- Americans Average age of directors is 64 CORPORATEGOVERNANCE