Director Attendance at Annual Meetings

Although we do not have a formal policy regarding attendance at stockholder meetings, our directors are encouraged to attend the annual meeting of stockholders. ~~Two~~One of our directors attended our ~~2017~~2018 annual meeting of stockholders.

No Hedging Policy

Our insider trading policy precludes our officers and directors from engaging in transactions in publicly-traded options, such as puts and calls, and other derivative securities with respect to our securities. This prohibition extends to any hedging or similar transaction designed to decrease the risks associated with holding our securities.

Stockholder Communications with our Board of Directors

Our board of directors recommends that stockholders who wish to communicate directly with our board should do so in writing. Our board of directors has approved the following procedure for stockholders to communicate with our directors. Mail can be addressed to directors in care of Copart, Inc., Attention: General Counsel, 14185 Dallas Parkway, Suite 300, Dallas, Texas 75254. All mail received will be logged in, opened, and screened for security purposes. All mail, other than trivial or obscene items, will be forwarded. Trivial items will be delivered to our directors at the next scheduled board meeting. Mail addressed to a particular director will be forwarded or delivered to that director. Mail addressed to “Outside Directors” or “Non-Management Directors” will be forwarded or delivered to the chairman of our nominating and governance committee. Mail addressed to the “Board of Directors” will be forwarded or delivered to the chairman of our board. Our General Counsel may decide in the exercise of his judgment whether a response to any stockholder communication is necessary.

This procedure does not apply to stockholder proposals submitted pursuant to our bylaws and Rule 14a-8 of the Exchange Act, as discussed in this proxy statement under the caption “What is the deadline to propose actions for consideration at next year's annual meeting of stockholders or to nominate individuals to serve as directors?”

Environmental, Sustainability, and Governance

Through its governance and oversight of our business, our board of directors is responsible for setting our strategic corporate goals. Our goals are to generate sustainable profits for our stockholders, while also providing environmental and social benefits for the world around us.

We believe that our business model should be aligned with recognized environmental, sustainability, and governance standards when possible, with a broad awareness of the social, environmental, and human context in which we operate. Our nominating and governance committee is responsible for overseeing our business activities in this area. We believe that the 17 Sustainable Development Goals adopted by the United Nations General Assembly in 2015 represents a leading framework for environmental, sustainability, and governance standards for large companies. More detailed information on the 17 Sustainable Development Goals is available from the United Nations on its website at www.un.org/development/desa/disabilities/envision2030.html.

Our existing business model aligns favorably with one or more targets identified in over half of the 17 Sustainable Development Goals adopted by the United Nations General Assembly in 2015, and the following goals in particular:

Goal 1: No Poverty

Goal 2: Zero Hunger

Goal 3: Good Health and Well-Being

Goal 4: Quality Education

Goal 6: Clean Water and Sanitation

Goal 8: Decent Work and Economic Growth

Goal 9: Industry, Innovation and Infrastructure

Goal 10: Reduce Inequality Within and Among Countries

Goal 11: Sustainable Cities and Communities

Goal 12: Responsible Consumption and Production

Goal 13: Climate Action

Goal 16: Peace, Justice and Strong Institutions

Environmental Sustainability: Enabling Efficient Materials Recycling Through Technology and Innovation

With respect to our environmental stewardship, we believe our business is a critical enabler for the global re-use and recycling of vehicles, parts, and raw materials, which aligns with one or more targets contained in the UN Sustainable Development Goals 12 and 13.

Many of the vehicles we process and remarket are subsequently restored to drivable condition, reducing the carbon emissions costs associated with new car manufacturing. Furthermore, many of the vehicles assigned to us for sale are purchased by dismantlers, who recycle and refurbish parts for vehicle repairs, again reducing the carbon emissions associated with new and aftermarket parts manufacturing. Lastly, some of the vehicles we handle are returned to their raw material inputs through scrapping, reducing the environmental impact from new minerals mining and processing. In each case, our business has reduced adverse carbon emissions and other environmental impacts of the global transportation industry.

Our business model enables efficient resource processing through innovation and technology, which aligns with UN Sustainable Development Goal 9. We were the first salvage pool operator to move to a pure online auction format in 2003, which dramatically increased the number of potential buyers at our auctions and raised average sales prices for our vehicles listed for sale. As a result of these technology innovations, we were able to consolidate the fragmented salvage pool industry in the United States and achieve significant economies of scale, making our yard network and auction platform an even more efficient conduit for materials re-use

and recycling. Our strategy is to replicate and expand our business model and online auction platform in geographies with less efficient models for recovering, storing, and monetizing salvage vehicles, including in developing countries such as Brazil.

Environmental Protection: Responsible Land Use and Operations

In addition to the positive external impact that our business activities have on the environment, our internal business operations and responsible land use activities are another example of our environmental stewardship, which aligns with one or more targets in the UN Sustainable Development Goal 6.

Without our careful management, the salvage vehicles that we recover and store in our facilities contain motor oil and other chemicals that may threaten the environment. However, our business operations take into account vehicles that pose an unreasonable risk of contamination, and we proactively manage and mitigate those risks. Our commitment to environmental protection is evidenced by our long history of storing salvage vehicles in our facilities without any material environmental contamination events attributed to our operations. We believe that our business activities reduce the environmental risks that the salvage vehicles would otherwise impose on the communities we serve.

Environmental Resilience and Community Involvement: Weather Catastrophe Response, Clean-Up and Recovery

Beyond our environmental stewardship, we also support the world’s communities by strengthening resilience and adaptive capacity to weather catastrophes in the geographies we serve, which aligns with one or more targets contained in the UN Sustainable Development Goals 3, 6, 9, 11 and 13.

Weather catastrophe clean-up and recovery services is an integral part of our business model, and contributes to the public health and safety of the communities we serve. As evidence of our strategic commitment to promoting community resilience in the aftermath of weather-related natural disasters, over the past three years we have invested tens of millions of dollars in land, equipment, and logistics resources to enhance our ability to respond to weather-related natural disasters.

For example, we mobilized our people, entered into emergency leases, and engaged with a multitude of service providers to timely retrieve, store, and remarket tens of thousands of flood-damaged vehicles in the Houston, Texas metropolitan area in the wake of Hurricane Harvey in the summer of 2017. Our commitment to disaster relief and promoting community resilience has been a longstanding part of our business strategy. We provided similar disaster recovery services following Hurricane Sandy in 2012 and Hurricane Katrina in 2005, and numerous smaller weather-related events during the last 15 years in the ordinary course of our business.

Our commitments to weather catastrophe response, clean-up and recovery are more than a component of our corporate business strategy. These commitments also represent our leading form of corporate charitable contributions to the communities we serve. This is because we generally lose money in our weather catastrophe response activities. For example, we incurred economic losses in the millions of dollars in our disaster response efforts relating to Hurricane Harvey.

Economic Development and Poverty Reduction: Promoting Affordable Transportation in Developing Countries

We believe that our business model promotes economic development and poverty reduction, which in turn helps to lessen economic inequality. These aspects of our business model align with one or more targets contained in the UN Sustainable Development Goals 1, 2, 3, 4, 8, 9 and 10.

Many of the vehicles sold through our auction platform are purchased for use in developing countries where affordable transportation is a critical enabler of economic development, agriculture production, education, health care, and well-being more generally. The linkage between affordable transportation and economic development and poverty reduction is documented by the United Nations in the 2014 article Poverty and Sustainable Transport: How Transport Affects Poor People with Policy Implications for Poverty Reduction, by Paul Starkey and John Hine.

In an effort to expand our beneficial impact on economic development in developing countries, we have begun new marketing initiatives to educate potential buyers on our auction model and facilitate increased international buyer representation in our auctions, with pilot programs in central Asia and Sub-Saharan Africa.

Social Responsibility and Human Rights: Commitment to Ethical Business Practices

We are committed to conducting our business in a legal and ethical manner in all of the geographies in which we operate. To this end, we have adopted an enterprise-wide code of business conduct, which applies to all of our personnel. Among other things, our code of business conduct expressly prohibits business activities that involve bribery, human trafficking and slavery. We have also established a whistleblower hotline that enables anonymous reporting of violations. These features of our business operations align with one or more targets identified in UN Sustainable Development Goal 16.

Data Protection and Cybersecurity

We are committed to protecting the data that we use in our business operations, including personal data that may identify individuals. Our audit committee is responsible for oversight of our data protection and cybersecurity activities.

In fiscal 2019, we named a chief information security officer to lead our cybersecurity efforts, and we have implemented an information security management system. We have also made substantial investments in both the number of our cybersecurity professionals and the technologies we use to protect the data that we use in our business.

COMPENSATION OF DIRECTORS AND EXECUTIVE CHAIRMAN

Our directors play a critical role in guiding our strategic direction and overseeing our management. In connection therewith, our non-employee directors are eligible to receive cash and equity compensation. ~~As described below in Proposal 3, based on~~At the ~~recommendation of~~2018 annual meeting, our ~~compensation committee, our board of directors has~~stockholders approved a new director compensation program for our executive chairman and non-employee ~~directors. If this new program is approved by the stockholders at the annual meeting, the compensation~~directors, consisting of ~~our non-employee directors will be as described in Proposal 3. Under our current program, each non-employee director receives~~ an annual director’s fee of $70,000, payable in quarterly installments. Mr. Cohan, who serves as chairman of our audit committee, receives an additional annual fee of $10,000 for his services as chairman of our audit committee, payable in quarterly installments. In addition to cash compensation, pursuant to procedures previously adopted by our board of directors, each non-employee director (other than newly appointed non-employee directors) receivesinstallments, and an annual option grant of ~~40,000~~25,000 shares under our 2007 Equity Incentive Plan, as amended and restated, ~~(2007 Equity Incentive Plan),~~ which grant takes place ~~on the date of~~at our annual meeting of stockholders each year. ~~Newly~~Under procedures adopted by our board, newly appointed non-employee directors are awarded an initial grant of 25,000 shares at the time of appointment and are not eligible for an additional grant until the fiscal year following their appointment. The directors are also eligible for reimbursement of reasonable and necessary expenses incurred in connection with their attendance at board and committee meetings.

From April 2009 to April 2014, Willis J. Johnson, our executive chairman, received no cash compensation in consideration of his services to Copart (other than a $1.00 annual payment). Instead, in April 2009, we granted Mr. Johnson (our chief executive officer at the time) an option to acquire shares of our common stock, vesting over five years. This option became fully vested in April 2014. In September 2014, our compensation committee reconsidered Mr. Johnson’s compensation as our executive chairman and approved annual cash compensation to Mr. Johnson of $70,000, payable in quarterly installments commencing in April 2014, for his services as executive chairman. Additionally, under our current program, our ~~compensation committee~~stockholders approved an annual option grant to Mr. Johnson of ~~40,000~~25,000 shares under our 2007 Equity Incentive Plan, as amended and restated, which grant takes place on the date of our annual meeting of stockholders each year. As described below in Proposal 3, based on the recommendation of our compensation committee, our board of directors has approved a new cash and equity director compensation program for our executive chairman and non-employee directors. If this new program is approved by the stockholders at the annual meeting, the compensation of our executive chairman will be as described in Proposal 3. In his role as executive chairman, Mr. Johnson is also provided with (i) use of a company owned automobile, (ii) use of Copart's corporate aircraft for business use, as well as personal use for up to 100 hours per year, and (iii) the following benefits, generally on the same basis provided to our other employees: health, dental, and vision insurance; dependent care; flexible spending account; short- and long-term disability insurance, accidental death and dismemberment insurance. The compensation committee has adopted a policy permitting corporate-owned or leased aircraft to be available for the personal use of Mr. Johnson for up to 100 flight hours per year. The compensation committee approved personal use of the corporate-owned or leased aircraft by Mr. Johnson in fiscal 2017. We determine the value of personal use of corporate-owned or leased aircraft based on the aggregate incremental cost to us for such use. We calculate the incremental cost to the company for personal use of company aircraft based on the average variable operating costs to the company. Variable operating costs include fuel, certain maintenance costs, navigation fees, on-board catering, landing fees, crew travel expenses and other miscellaneous variable costs. The total annual variable costs are divided by the annual number of hours the company aircraft flew to derive an average variable cost per hour. This average variable cost per hour is then multiplied by the hours flown for personal use. Incremental costs do not include fixed costs that do not change based on usage, such as pilots' salaries, the purchase costs of company-owned aircraft, insurance, scheduled maintenance and non-trip related hangar expenses.

The following table presents information relating to total compensation paid or accrued for services rendered to us in all capacities by our executive chairman of the board and our non-employee directors for the fiscal year ended July 31, ~~2018.~~2019. The table excludes A. Jayson Adair and Vincent W. Mitz, who are named executive officers and do not receive any additional compensation for services provided as a director. See the section below entitled “Executive Compensation” for information about the compensation of Messrs. Adair and Mitz.


Name	Fees Earned or Paid in Cash ($)		Option Awards ($)(1)	All Other Compensation ($)			Totals ($)	Fees Earned or Paid in Cash ($)		Option Awards ($)(1)	All Other Compensation ($)			Totals ($)
Willis J. Johnson		70,000	434,948		264,747	(2)	769,695		70,000	258,925		53,648	(2)	382,573
Matt Blunt		70,000	434,948		—		504,948		70,000	258,925		—		328,925
Steven D. Cohan		80,000	434,948		—		514,948		80,000	258,925		—		338,925
Daniel J. Englander		70,000	434,948		—		504,948		70,000	258,925		—		328,925
James E. Meeks		70,000	434,948		—		504,948		70,000	258,925		—		328,925
Thomas N. Tryforos		70,000	434,948		—		504,948		70,000	258,925		—		328,925
Diane M. Morefield									2,109	403,160		—		405,269
Stephen Fisher									2,109	403,160		—		405,269

Recommendation of our Board of Directors

Our board of directors unanimously recommends that stockholders vote FOR the approval, on an advisory (non-binding) basis, of the compensation of our named executive officers as disclosed in this proxy statement.

* * * * *

PROPOSAL NUMBER THREE

RATIFICATION OF ~~CASH AND EQUITY DIRECTOR COMPENSATION PROGRAM FOR OUR EXECUTIVE CHAIRMAN AND NON-EMPLOYEE DIRECTORS~~

~~General~~

On October 12, 2018, our board of directors approved, upon the recommendation of our compensation committee, a cash and equity director compensation program for our executive chairman and non-employee directors for the fiscal year ending July 31, 2019 through and including the fiscal year ending July 31, 2022. Our executive chairman and founder, Willis J. Johnson, will participate in the program but will be entitled to receive certain additional perquisites approved by the compensation committee, in its sole discretion, that the non-employee directors are not eligible to receive. These additional perquisites for Mr. Johnson are not part of this compensation program for which stockholder ratification is being sought. Although our board of directors is not required to seek or receive stockholder approval, it is submitting this proposal to stockholders for approval and ratification in the interest of good corporate governance. Our board of directors has agreed to abide by the stockholder vote. If stockholders do not approve this proposal, the proposed changes in director compensation for our executive chairman and non-employee directors will not go into effect, and the board of directors will re-evaluate its director compensation practices.

~~Copart’s Director Compensation Philosophy~~

Since Copart’s initial public offering in 1994, our compensation committee and board have maintained a consistent compensation philosophy intended to align directly the interests of our stockholders and those of our executive officers and outside directors. In particular, our compensation committee and board have placed substantial relative weight on equity compensation in the form of stock options. Since the beginning of fiscal 2010, our chief executive officer, A. Jayson Adair, has foregone any material cash compensation in exchange for two separate stock option award packages vesting over five years, each of which was approved by our stockholders.¹

In addition, since 2012, our outside directors have each received a stock option to purchase 40,000 shares (without giving effect to subsequent stock splits) of our common stock granted at each annual meeting with a vesting period of two years as well as an annual cash stipend of $70,000 (with an additional $10,000 annual stipend for the chair of our audit committee). The number of shares subject to these annual stock options remained at 40,000 following a two-for-one forward stock split effected in the form of a stock dividend in April 2017. Typically, non-discretionary annual equity awards would have automatically adjusted, in this case to 80,000 shares, to reflect the stock dividend. In this case, our compensation committee and board revised our current program such that the option grant size remained fixed at 40,000 shares. Since 2012, the term of our option grants to our executive chairman and non-employee directors has been 10 years, with a two-year vesting period from the date of grant.

In the first quarter of fiscal 2019, our compensation committee undertook a comprehensive review of our director compensation philosophy and practices. As part of that process, which is described in greater detail below, the compensation committee engaged Compensia, Inc., an independent compensation consulting firm, to assist the committee in developing a peer group of comparable companies and in evaluating Copart’s levels and types of director compensation relative to competitive market practice.

While the compensation review resulted in the specific changes to director compensation that are the subject of this proposal, Copart and our board of directors continue to believe that the most effective method to align stockholder interests and management/director interests is through the grant of stock options that have value only if and to the same extent that our stockholders benefit from increases in the value of our common stock. Other increasingly common forms of equity incentives such as restricted stock units and restricted stock grants are “full value awards,” meaning that they compensate executives and outside directors even in circumstances where the value of the stock has not increased or has in fact decreased from the time the grant was made. Consistent with this philosophy, the director compensation program being submitted to stockholders continues to give substantial weight to equity compensation in the form of stock options.

¹At our special meeting of stockholders held in April 2009, stockholders approved a grant to Mr. Adair of an option to acquire 2,000,000 shares (without giving effect to subsequent stock splits) of common stock as part of an equity-in-lieu of cash compensation program. In anticipation of the complete vesting of the initial stock option, stockholders approved a second equity-in-lieu of cash program at our 2013 annual meeting. Mr. Adair’s second option grant was with respect to 2,000,000 shares (without giving effect to subsequent stock splits) of our common stock. Other executive officers who have forfeited cash compensation in lieu of a substantial stock option grant were Vincent Mitz, our retiring president, and prior to his becoming our executive chairman, Willis J. Johnson.

~~Compensation Analysis~~

The following section describes the methodology, processes, and analysis used by our compensation committee and board for purposes of structuring the proposed cash and equity director compensation program for our executive chairman and non-employee directors. The specific details of the final program are set out below under the caption “Proposed Cash and Equity Director Compensation Program for our Executive Chairman and Non-Employee Directors.”

~~Peer Group Determination Methodology~~

Compensia and our compensation committee worked collaboratively to develop a compensation peer group based principally on factors relating to similarity of business and operating models, market capitalization, and revenues. Initially, Compensia and our compensation committee noted that peer groups referenced by the major proxy advisory firms when commenting on Copart’s executive compensation programs compared Copart to a group of industrial companies based on the Global Industry Classification Standard (GICS) code classification system, and that these companies, while comparable based on revenues, were materially dissimilar when compared to metrics such as business model, market capitalization, operating income, and stockholder return.

~~Following these discussions, Compensia presented our compensation committee a proposed peer group chosen based on the following selection criteria:~~

~~Industry: online auction marketplaces in different vertical markets, technology and technology-enabled product platforms, and technology and technology service companies generally;~~

Revenue: companies with four-quarters trailing revenue between approximately $700 million and $4.3 billion at the time of selection, which approximates 0.4 to 2.5 times Copart's four-quarters trailing revenues at that time; and

Market Capitalization: companies with a market capitalization of approximately $5.8 billion to $73 billion at the time of selection, which approximates 0.3 to 4.0 times Copart's market capitalization at that time.

Our compensation committee determined that Compensia’s proposed peer group consisted of companies with appropriately similar operating models or a comparable reliance on proprietary product and service technologies and that the peer group was also comparable in terms of revenues and market capitalization. The median four-quarters trailing revenue for this proposed peer group was $1.56 billion, compared to Copart’s $1.74 billion. The median market capitalization of the proposed peer group as of September 14, 2018 was $13.7 billion, compared to Copart’s $14.6 billion.

Given its concern that the GICS-based peer group referenced by the major proxy advisory firms had failed to evaluate comparability based on key financial metrics, our compensation committee requested that Compensia further validate the proposed peer group by providing additional data with respect to revenue growth, operating income growth, and total stockholder return over the prior five years. Compensia’s subsequent review indicated that Copart fell approximately at the median of the peer group with respect to operating income growth, in the 66^th ~~percentile with respect to total stockholder return, and in the 22~~^nd percentile with respect to revenue growth. Based on this additional data, our compensation committee determined that the proposed peer group reflected a list of comparable companies based on operating models and financial metrics. Accordingly, our compensation committee made no changes to Compensia’s initial proposal.

~~Peer Group~~

The peer group used by our compensation committee to set director compensation consisted of 20 technology-enabled online marketplaces and service providers such as CoStar Group, Inc. and Zillow Group, Inc.; medical device companies with technology-enabled products and product platforms such as Illumina, Inc. and Align Technology, Inc.; and technology companies such as Synopsys, Inc. and Red Hat, Inc. The complete compensation peer group was as follows:



Ÿ ~~Align Technology, Inc.~~	Ÿ ~~GrubHub Inc.~~	Ÿ ~~Synopsys, Inc.~~
Ÿ ~~ANGI Homeservices Inc.~~	Ÿ ~~Illumina, Inc.~~	Ÿ ~~The Ultimate Software Group, Inc.~~
Ÿ ~~ANSYS, Inc.~~	Ÿ ~~Intuitive Surgical, Inc.~~	Ÿ ~~TripAdvisor, Inc.~~
Ÿ ~~Cognex Corporation~~	Ÿ ~~KAR Auction Services, Inc.~~	Ÿ ~~Tyler Technologies, Inc.~~
Ÿ ~~CoStar Group, Inc.~~	Ÿ ~~Match Group, Inc.~~	Ÿ ~~Workday, Inc.~~
Ÿ ~~Fair Isaac Corporation~~	Ÿ ~~Red Hat, Inc.~~	Ÿ ~~Zillow Group, Inc.~~
Ÿ ~~Fortinet, Inc.~~	Ÿ ~~ServiceNow, Inc.~~

~~Director Cash Compensation Analysis~~

With respect to total cash compensation, Copart’s existing cash compensation program fell near the median of our peer group. As a result, our compensation committee recommended no changes to the current program consisting of a $70,000 annual retainer with an additional $10,000 annual retainer for the chair of the audit committee of our board of directors.

~~Director Equity Compensation Analysis~~

The evaluation of equity compensation focused principally on the levels and structure of equity incentive awards for outside directors, including a review of the types of equity awards granted by the peer group companies as well as the valuation methodologies used for determining the amount of those awards. A majority of the peer companies awarded restricted stock units only, three companies granted a mix of stock options and restricted stock units, and three companies granted only stock options. Based on input from Compensia relating to market practice and relevant SEC disclosures, our compensation committee noted that most companies use the same valuation methodologies for purposes of compensation decision-making as required for financial reporting purposes and SEC disclosure (~~e.g., the Black-Scholes option pricing model).~~

In crafting the final proposed compensation program, our compensation committee and board came to the following specific conclusions with respect to our director compensation philosophy and our proposal relative to market practices:

Copart continues to believe that stock options are the most effective means to align stockholder returns and director compensation. With an all stock option equity package, directors will realize no economic benefit unless the stock price increases above the exercise price of the options on the date of grant. In addition, the economic benefit realized is entirely aligned with returns realized by stockholders after the date of grant - stock price declines result in no benefit to directors, and the benefit realized by directors in connection with stock price increases is equivalent to the return realized by stockholders.

While a majority of our peer companies use restricted stock units as the only form of equity compensation, with a few using them in tandem with stock options, restricted stock units provide material economic benefit to directors in scenarios where stockholders have realized no gain or have even experienced losses. This result is fundamentally inconsistent with Copart’s philosophy that directors realize an economic benefit commensurate with returns realized by stockholders.

Copart believes that using option pricing methodologies such as Black-Scholes for the purpose of determining the size (or “value”) of long-term equity incentives is highly imperfect, given the substantial sensitivity of these valuations to the underlying assumptions and required data inputs. Black-Scholes is an effective valuation tool for short-term, tradable options, but in the context of a long-term, non-transferable equity incentive intended to compensate service as a director, many of the assumptions and inputs driving “stock option value” under Black-Scholes bear no relationship to whether or the extent to which or when or if a director realizes actual value from the stock option award. Stock price, option term, stock price volatility, and vesting terms will all affect Black-Scholes value. For example, reducing the term of an option will understandably reduce the “value” of a stock option award as it reduces the holder’s “option” period to exercise, but decreasing the vesting term (~~i.e.~~, reducing the period of time the director is required to provide services to realize the underlying value) will also decrease the value of the option because it reduces the expected life, even though it disincentives continued service. Significantly, increases in the underlying stock price will, over time, increase the Black-Scholes and accounting “value” of a continuing, annual stock option grant program for an equivalent nominal number of shares, notwithstanding the fact that the exercise price of each annual grant has also increased.

Copart believes that an annual stock grant option program with exercise prices based on prevailing prices at the time of each grant is an appropriate, continuously forward-looking incentive structure for directors. If stock prices increase over time, directors can realize actual value on new grants only to the extent of further increases in stock price. If the stock price falls due to operating performance or non-systemic market risks, new director grants again only realize value to the extent the company can overcome the factors resulting in the decline. Again, our compensation committee and board believe strongly in the direct alignment of

director compensation and stockholder return. For these reasons, the compensation and committee and board have maintained as part of this proposal the all-stock-option element of Copart’s director equity compensation program.

•

Notwithstanding our compensation committee’s and board’s concerns about the inability of standard valuation methodologies to measure option value for a long-term equity incentive award, as part of their consideration of this proposal, the compensation committee and board reviewed peer group proxy disclosures of equity value based typically on Black-Scholes. For informational purposes, the proposed equity compensation program subject to this proposal, consisting of an annual stock option grant to acquire 25,000 shares, had an estimated Black-Scholes value of $286,700²~~based on Copart’s ten-day trailing trading average stock price through (and including) October 3, 2018, and this estimated Black-Scholes value fell within approximately the 57~~^th percentile of our peer group (based on disclosed equity grant values disclosed in the most recent peer group proxy statements). In connection with structuring the proposal, our compensation committee and board reduced the term and vesting period of the proposed options to seven years and one year, respectively, relative to ten years and two years historically, which had the effect of reducing the Black-Scholes value of the proposed options. If stockholders approve the proposal as presented, the value of a stock option award for 25,000 shares as disclosed in future annual meeting proxy statements may vary substantially from the Black-Scholes value of a similarly sized stock option grant at the time of board of directors approval of the program.

~~Total Compensation Analysis~~

~~Based on the cash and equity compensation analyses described above, average compensation under the proposed program, including cash and equity, was valued at $358,700, between the 50~~^th ~~percentile ($340,700) and 75~~^th percentile ($384,800) of our peer group. Of this amount, $286,700 reflects the Black-Scholes value (using the assumptions disclosed above) of the proposed annual grant to our executive chairman and continuing non-employee directors of an option to purchase 25,000 shares of our common stock.

As noted above, during the anticipated four year term of this cash and equity director compensation program for our executive chairman and non-employee directors, the actual Black-Scholes value of the stock option awards will change based on, among other factors, changes in the market price of our common stock. If our stock price declines, the Black-Scholes value will be expected to decline, and if the stock price increases, the Black-Scholes value will be expected to increase. Other factors may also influence the Black-Scholes calculation. In all cases, stock options will be granted with an exercise price equal to the closing trading price of our common stock on the date the option grant is made. Until the expiration of the term of this program as discussed below, Copart will not make any adjustments in the size or material terms (~~e.g.,~~ option term, vesting period, etc.) of either the cash or equity components of director compensation, notwithstanding subsequent changes in the value of equity or total compensation resulting from the application of Black-Scholes.

²The Black-Scholes value of the proposed option at the time of board of directors approval was based on the following assumptions: (i) an exercise price of $52.26 per share (the average closing stock price of our common stock on NASDAQ for the ten trading days through and including October 3, 2018); (ii) an expected life of 3.95 years; (iii) a risk-free rate of 2.98%; (iv) estimated volatility of 21.2%; and (v) an estimated dividend yield of zero.

~~Proposed Cash and Equity Director Compensation Program for our Executive Chairman and Non-Employee Directors~~

Subject to stockholder approval at the annual meeting, Copart’s compensation committee has recommended and its board of directors has approved the following annual director compensation program for our executive chairman Mr. Johnson; for outside directors Mr. Blunt, Mr. Cohan, Mr. Englander, Mr. Meeks, and Mr. Tryforos; and for any individuals who may become non-employee directors of Copart during the term of this program. Copart intends to maintain this annual director compensation program through the fiscal year ending July 31, 2022, after which time it will re-evaluate director compensation and again seek stockholder approval of our director compensation program at the annual meeting of stockholders that we expect will be held in December 2022.

~~Cash Compensation~~

The directors identified above will receive an annual cash retainer, payable in equal quarterly installments, of $70,000. In addition, the individual serving as chair of the audit committee of the board of directors (currently Mr. Cohan) will receive an additional annual retainer of $10,000.

~~Equity Compensation~~

With respect to (i) our executive chairman and continuing non-employee directors, on the date of each annual meeting of stockholders and (ii) with respect to any individual who first becomes a director during the term of this program, on the later of the date he or she first becomes a director or the first open trading day under a regular quarterly trading window under our insider trading policy, each such director will receive a stock option to acquire 25,000 shares of our common stock under our 2007 Equity Incentive Plan, or the Equity Plan. The exercise price for each such stock option will equal the closing market price of our common stock in trading on the date specified in (i) or (ii), as applicable. Each such option will have a term of seven years, will vest monthly over one year from the annual meeting date (or in the case of a new director, from the date of appointment or election), and will otherwise be subject to the terms and conditions of the Equity Plan and the standard form of stock option agreement approved for use under the Equity Plan.

~~Additional Perquisites for Mr. Johnson~~

As indicated above, the foregoing proposed director compensation program will apply to all non-employee directors. In addition, Willis J. Johnson, our executive chairman, will participate in the director compensation program and will not otherwise receive any equity or cash compensation from Copart. In addition, our compensation committee may, in its sole discretion, approve certain perquisites for Mr. Johnson or authorize his participation in benefit programs. These additional perquisites for Mr. Johnson are not part of this compensation program for which stockholder ratification is being sought. For information about perquisites and other benefits previously received by Mr. Johnson in his capacity as executive chairman, please review the information under the caption "Compensation of Directors and Executive Chairman" on page 14 of this proxy statement. Mr. Johnson is an employee and provides services in addition to those as a member of our board of directors, but receives no additional compensation. Because of this, and because of Mr. Johnson's vast insight and experience with the company, the compensation committee believes such perquisites are reasonable.

~~Summary of U.S. Federal Income Tax Consequences~~

The following summary is intended only as a general guide to the U.S. federal income tax consequences of the non-statutory stock options that would be granted under the proposed cash and equity director compensation program for our executive chairman and non-employee directors. The summary is based on existing U.S. laws and regulations as of the record date, and there can be no assurance that those laws and regulations will not change in the future. The summary does not purport to be complete and does not discuss the tax consequences upon a participant’s death, or the provisions of the income tax laws of any municipality, state or foreign country in which the participant may reside. As a result, tax consequences for any particular participant may vary based on individual circumstances.

A non-employee director generally will not recognize any taxable income as the result of the grant of such an option. However, upon exercising the option, the non-employee director normally will recognize ordinary income equal to the amount that the fair market value of the shares exercised on such date exceeds the exercise price. Upon the sale of the shares acquired upon the exercise of a nonstatutory stock option, any gain or loss (based on the difference between the sale price and the fair market value on the exercise date) will be taxed as capital gain or loss. We would be entitled to receive a tax deduction equal to the amount of ordinary income recognized by a non-employee director upon exercise of a nonstatutory stock option.

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF U.S. FEDERAL INCOME TAXATION UPON NON-EMPLOYEE DIRECTORS AND THE COMPANY WITH RESPECT TO STOCK OPTIONS THAT WOULD BE GRANTED UNDER THE PROPOSED CASH AND EQUITY DIRECTOR COMPENSATION PROGRAM FOR OUR EXECUTIVE CHAIRMAN AND NON-EMPLOYEE DIRECTORS. IT DOES NOT PURPORT TO BE COMPLETE AND DOES NOT DISCUSS THE IMPACT OF EMPLOYMENT OR OTHER TAX REQUIREMENTS, THE TAX CONSEQUENCES OF A NON-EMPLOYEE DIRECTOR’S DEATH, OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE, OR FOREIGN COUNTRY IN WHICH THE NON-EMPLOYEE DIRECTOR MAY RESIDE.

~~New Plan Benefits~~

No cash or equity compensation has yet been issued under the proposed cash and equity director compensation program for our executive chairman and non-employee directors. If the cash and equity director compensation program for our executive chairman and non-employee directors is approved by stockholders as set forth herein, the directors specified will receive a stock option grant on the terms indicated above beginning on the date of the 2018 annual meeting of stockholders and on the date of each annual meeting through and including the 2021 annual meeting of stockholders. In addition, director cash compensation will continue on the terms described, which remain unchanged from prior practice.

~~Required Vote~~

The votes cast "FOR" must exceed the votes cast "AGAINST" to approve the cash and equity director compensation program for our executive chairman and non-employee directors. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on this proposal. Abstentions and broker non-votes are not counted as votes "FOR" or "AGAINST" and will not affect the outcome of this proposal. In addition, Copart only intends to treat the proposal as having received stockholder approval if it also receives approval by the majority of the affirmative votes cast at the annual meeting, ~~excluding votes cast by or represented by proxy with respect to members of our board of directors~~. As of the record date, members of our board of directors held approximately 37,891,398 shares of our common stock, representing approximately 15.55% of the shares that were outstanding and entitled to vote at the annual meeting.

~~Recommendation of our Board of Directors~~

Our board of directors believes that the cash and equity director compensation program for our executive chairman and non-employee directors is in the best interests of Copart and its stockholders and unanimously recommends that stockholders vote FOR the ratification of our cash and equity director compensation program for our executive chairman and non-employee directors.

~~* * * * *~~

~~PROPOSAL NUMBER FOUR~~

~~RATIFICATION OF~~ APPOINTMENT OF INDEPENDENT PUBLIC REGISTERED ACCOUNTING FIRM

General

Our audit committee has appointed Ernst & Young LLP as our independent registered public accounting firm to audit our consolidated financial statements for the current fiscal year ending July 31, ~~2019.~~2020. A representative of Ernst & Young LLP is expected to be present at the annual meeting, will have the opportunity to make a statement if he or she desires to do so, and will be available to respond to appropriate questions. Stockholder ratification of the appointment of Ernst & Young LLP is not required by our bylaws or otherwise. Our audit committee is submitting the appointment of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate practice.

In the event our stockholders fail to ratify the appointment of Ernst & Young LLP, our audit committee will reconsider its selection. Even if the selection of the independent registered public accounting firm is ratified by our stockholders, our audit committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time during the year if it feels that such a change would be in the best interests of the company and our stockholders.

Required Vote

The votes cast “FOR” must exceed the votes cast “AGAINST” to ratify the appointment by the audit committee of our board of directors of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending July 31, ~~2019.~~2020. You may vote “FOR,” “AGAINST,” or “ABSTAIN” on this proposal. Abstentions are not counted as votes “FOR” or “AGAINST” and will not affect the outcome of this proposal.

Recommendation of our Board of Directors

Our board of directors unanimously recommends that stockholders vote FOR the ratification of the appointment by the audit committee of our board of directors of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending July 31, ~~2019.~~2020.

* * * * *

Auditor Fees and Services

The following table sets forth the aggregate fees for professional services rendered for the audit of our consolidated annual financial statements by our independent registered public accounting firm, Ernst & Young LLP, for fiscal years ended July 31, ~~2018~~2019 and ~~2017.~~2018. The table also includes fees billed for audit services, audit-related services, tax services, and all other services rendered by Ernst & Young LLP for fiscal years ended July 31, ~~2018~~2019 and ~~2017:~~2018:


	Fiscal Year		Fiscal Year		Fiscal Year		Fiscal Year
Nature of Service	2018		2017		2019		2018
Audit Fees (1)		$2,322,700		$1,948,500		$2,491,000		$2,322,700
Audit-Related Fees (2)		—		$293,000		$103,000		—
Tax Fees (3)		$512,200		$768,400		$217,900		$512,200
All Other Fees (4)		$2,000		$2,000		$4,600		$2,000
Total Fees		$2,836,900		$3,011,900		$2,816,500		$2,836,900

____________________


(1)	Audit fees consist of fees billed for professional services rendered for the audit of our consolidated financial statements and review of our interim consolidated financial statements included in quarterly reports and services that are normally provided in connection with statutory and regulatory filings or engagements.

(2)

Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and that are not reported under “Audit Fees.” These services include employee benefit plan audits, accounting consultations in connection with acquisitions, attest services that are not required by statute or regulation, and consultations concerning financial accounting and reporting standards.


(3)	Tax fees consist of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state, and international tax compliance, tax audit defense, customs and duties, mergers and acquisitions, and international tax planning.


(4)	Consists of fees for products and services other than the services reported above.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Our audit committee’s policy is to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm (or subsequently approving audit and permitted non-audit services in those circumstances where a subsequent approval is necessary and permissible). These services may include audit services, audit-related services, tax services, and other services. Pre-approval is generally provided for up to one year. Our independent registered public accounting firm and management are required to periodically report to our audit committee regarding the extent of services provided by our independent registered public accounting firm in accordance with this pre-approval. Our audit committee may also pre-approve particular services on a case-by-case basis. In addition, the charter of our audit committee provides that our audit committee may delegate to one or more designated members the authority to pre-approve audit and permissible non-audit services, provided such pre-approval decision is presented to our audit committee at its scheduled meetings.

All of the services of Ernst & Young LLP for fiscal years ~~2017~~2018 and ~~2018~~2019 described above were pre-approved by the audit committee.

Report of the Audit Committee

The audit committee of Copart’s board of directors consists of Messrs. Cohan ~~Englander,~~ and ~~Blunt.~~Blunt, and Ms. Morefield. The audit committee has reviewed and discussed with management and Ernst & Young LLP our audited consolidated financial statements and financial reporting processes. Our management has the primary responsibility for our financial statements and financial reporting processes, including the system of internal controls. Ernst & Young LLP, our current independent registered public accounting firm, is responsible for performing an independent audit of our consolidated financial statements and for expressing an opinion on the conformity of those financial statements with generally accepted accounting principles. The audit committee reviews and monitors these processes and receives reports from Ernst & Young LLP and management. The audit committee also discusses with Ernst & Young LLP the overall scope and plans of their audits, their evaluation of our internal controls, and the overall quality of our financial reporting processes.

The audit committee has discussed with management and the independent registered public accounting firm the matters required to be discussed by ~~Auditing Standard No. 1301,~~ ~~Communications with Audit Committees, as adopted by~~the applicable requirements of the Public Company Accounting Oversight Board (PCAOB). and the Securities and Exchange Commission. These discussions included the clarity of the disclosures made therein, the underlying estimates and assumptions used in the financial reporting, and the reasonableness of the significant judgments and management decisions made in developing the financial statements. In addition, the audit committee has discussed with the independent registered public accounting firm their independence from us and our management and the independent registered public accounting firm provided the written disclosures and the letter required by the Public Company Accounting Oversight Board Rule 3526, “Communication with Audit Committees Concerning Independence” and considered the compatibility of non-audit services with the independent registered public accounting firm’s independence.

On an annual basis, the audit committee obtains from the independent registered public accounting firm a written communication delineating all their relationships and professional services as required by PCAOB Rule 3526, “Communication with Audit Committees Concerning Independence.” In addition, the audit committee reviewed with the independent registered public accounting firm the nature and scope of any disclosed relationships or professional services and took, or recommended that our board of directors take, appropriate action to ensure the continuing independence of the independent registered public accounting firm.

Based upon the reviews, discussions and considerations referred to above, the audit committee has recommended to the board of directors that our audited consolidated financial statements be included in our Annual Report on Form 10-K for fiscal year ~~2018,~~2019, and that Ernst & Young LLP be appointed as our independent registered public accounting firm for the fiscal year ending July 31, ~~2019.~~

2020.

Respectfully submitted by:

The audit committee of the board of directors

Steven D. Cohan (chairman)

~~Daniel J. Englander~~Matt Blunt

~~Matt Blunt~~Diane M. Morefield

The preceding report of the audit committee shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C (17 CFR 240.14a-1 through 240.14b-2 or 240.14c-1 through 240.14c-101), other than as provided in Item 407(d) of Regulation S-K, or to the liabilities of section 18 of the Exchange Act (15 U.S.C. 78r), except to the extent we specifically request that the information be treated as soliciting material or specifically incorporate it by reference into a document filed under the Securities Act or the Exchange Act. Such information will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference.

~~PROPOSAL NUMBER FIVE~~

~~APPROVAL TO ADJOURN THE ANNUAL MEETING~~

~~General~~

If, at the annual meeting, the company determines it is necessary or appropriate to adjourn the annual meeting, we intend to move to adjourn the annual meeting. If the company determines that it is necessary or appropriate, we will ask our stockholders and proxies to vote only upon the proposal to adjourn the annual meeting, and not the other proposals.

In this proposal, we are asking you to authorize the company to adjourn the annual meeting to another place, date or time if we believe adjournment is necessary or appropriate. If the stockholders approve the proposal to adjourn the annual meeting, we would expect to adjourn the annual meeting and use the additional time to solicit additional votes, including the solicitation of votes from stockholders that have previously voted, if necessary to approve Proposals 1, 2, 3 and 4.

~~Required Vote~~

Whether or not a quorum is present, the votes cast “FOR” at the annual meeting must exceed the votes cast “AGAINST” the adjournment of the annual meeting to another place, date or time. You may vote “FOR”, “AGAINST” or “ABSTAIN” on this proposal. Abstentions and broker non-votes are not counted as votes “FOR” or “AGAINST” and will not affect the outcome of this proposal.

~~Recommendation of our Board of Directors~~

~~Our board of directors unanimously recommends that stockholders vote FOR the approval to adjourn the annual meeting to a later date or dates, if necessary or advisable.~~

~~* * * * *~~

EXECUTIVE OFFICERS

Our executive officers and their ages as of November ~~16, 2018~~4, 2019 were as follows:



Name	Age	Position
A. Jayson Adair	4950	Chief Executive Officer and Director
~~Vincent W. Mitz~~	55	~~President and Director~~
~~William E. Franklin~~	62	~~Executive Vice President, U.S. Operations and Shared Services~~
Jeffrey Liaw	4142	~~Senior Vice~~ President, Chief Financial Officer

A. Jayson Adair has served as our chief executive officer since February 2010. From November 1996 to February 2010, Mr. Adair served as our president. From 1995 until 1996, Mr. Adair served as our executive vice president. From 1990 until 1995, Mr. Adair served as our vice president of sales and operations, and from 1989 to 1990, Mr. Adair served as our manager of operations.

~~Vincent W. Mitz~~Jeffrey Liaw has served as our president since February 2010. From August 2007 to February 2010, Mr. Mitz served as our executive vice president. From May 1995 until July 2007, Mr. Mitz served as our senior vice president of marketing. Previously, Mr. Mitz was employed by NER Auction Systems Inc. (NER), an automotive auction company, from 1981 until its acquisition by Copart in 1995. At NER, Mr. Mitz held numerous positions, most recently as vice president of sales and operations for NER’s New York region from 1990 to 1993 and vice president of sales & marketing from 1993 to 1995. Mr. Mitz is retiring as our President effective on December 31, 2018.

~~William E. Franklin~~ ~~has served as our executive vice president, U.S. operations and shared services since March 2014. From March 2014 until January 2016, Mr. Franklin served as our executive vice president~~ and chief financial ~~officer. From March 2004 until March 2014, Mr. Franklin served as our senior vice president~~officer since September 3, 2019 and chief financial officer. Mr. Franklin has over 30 years of international finance and executive management experience. From October 2001 to March 2004, Mr. Franklin served as the chief financial officer of Ptek Holdings, Inc., an international telecommunications company. Prior to that he was the president and chief executive officer of Clifford Electronics, an international consumer electronics company. Mr. Franklin received an M.B.A. from the University of Southern California and a B.S. in finance from California State University, Bakersfield. Mr. Franklin is a certified public accountant.

~~Jeffrey Liaw~~ ~~has served~~ as our senior vice president and chief financial officer ~~since~~between January 4, ~~2016.~~2016 and September 3, 2019. Mr. Liaw has served as the Chief Financial Officer of FleetPride, Inc., a privately held company that distributes truck and trailer parts nationwide, since January 2013. From August 2005 to December 2012, Mr. Liaw was a principal of TPG Capital Management, L.P., a private equity firm. Mr. Liaw earned his B.A. and B.B.A. from the University of Texas in 1999, and he earned his M.B.A. from Harvard University in 2005. He currently serves as a director, as a member of the audit committee, and as the finance committee chairman for Armstrong Flooring Incorporated.

EXECUTIVE COMPENSATION

Forward-Looking Statements

This proxy statement, including the section entitled “Compensation Discussion and Analysis” set forth below, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These statements are based on our current expectations and involve risks and uncertainties that may cause our actual results to differ materially from those anticipated by forward-looking statements. These forward-looking statements may include statements regarding actions to be taken by us in the future. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements should be evaluated together with the many uncertainties that affect our business, particularly those mentioned in the section on forward-looking statements and in the risk factors in Item 1A of our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2018~~2019 and in our periodic reports on Form 10-Q and current reports on Form 8-K as filed with the SEC.

Compensation Discussion and Analysis

Overview of Executive Compensation Programs

This section of our proxy statement provides an overview of our executive compensation programs, the material decisions we have made with respect to each element of our executive compensation programs, and the material factors we considered when making those decisions. Following this discussion, you will find further information in the executive compensation tables about the compensation earned by or paid to each of our “named executive officers,” including details of fiscal ~~2018~~2019 compensation of our named executive officers in the Fiscal Year ~~2018~~2019 Summary Compensation Table. For fiscal ~~2018,~~2019, our named executive officers determined in accordance with the rules of the Securities and Exchange Commission consisted of (i) A. Jayson Adair, our chief executive officer, (ii) Jeffrey Liaw, who served during fiscal 2019 as our senior vice president and chief financial officer, (iii) Vincent W. Mitz, who served as our president until his retirement on December 31, 2018, and (iv) William E. Franklin, who served during fiscal 2019 as our executive vice president, U.S. operations and shared services.

Role of Our Compensation Committee

The compensation committee of our board of directors administers our executive compensation programs. The compensation committee seeks to ensure that the total compensation paid to our executive officers is fair and reasonable and that it serves the best interests of Copart and our stockholders. In carrying out its responsibilities, the committee:

Participates in the continuing development of, and reviews and approves changes in, our compensation policies;

Reviews and approves each element of executive compensation, taking into consideration management recommendations; and

Administers our equity incentive plans, for which it retains authority to approve grants of awards to any of our executive officers.

In addition, the charter of our compensation committee provides that our compensation committee may form and delegate authority to subcommittees when appropriate.

Our compensation committee consisted of Messrs. Englander, Cohan, ~~Englander,~~ and Tryforos during fiscal ~~2018.~~ 2019. Effective October 16, 2019, Mr. Englander, Mr. Tryforos, and Mr. Fisher serve as the members of our compensation committee.

Mr. Englander serves as the chair of our compensation committee. Our board of directors has determined that each of the foregoing members of the compensation committee was, and is, an independent director under NASDAQ rules, ~~an “outside director” for purposes of Section 162(m) of the Internal Revenue Code,~~ and a “non-employee director” for purposes of Rule 16b-3 under the Exchange Act.

Our compensation committee operates according to a charter that details its specific duties and responsibilities. A copy of the charter is available in the Investor Relations section of our corporate website at http://www.copart.com/Content/US/EN/Investor-Relations/Compensation-Committee-Charter.

Role of Management in Compensation Process

Our chief executive officer, president and chief financial officer, and human resources department support our compensation committee’s work by providing our compensation committee with information related to our financial plans, performance assessments of our executive officers, and other personnel-related data.

Each executive officer participates in our annual goal-setting and performance measurement process applicable to all employees. As part of this annual process, each executive officer proposes qualitative, individual goals and objectives for the coming fiscal year that are intended to promote continuing organizational and process improvements and to contribute to our operating results and financial condition. These proposed goals are then reviewed with each executive officer and are subsequently approved following that review by our chief executive officer and our president. Our compensation committee does not participate in the setting of qualitative goals and objectives for our executive officers. Each officer’s goals are specifically tailored to his function and may vary from year to year. Our chief executive officer, as the person to whom our other officers directly report, is responsible for evaluating individual officers’ contributions to corporate objectives as well as their performance relative to individual objectives. Assessment of individual performance may include objective criteria, such as the execution of projects in a timely manner, but is largely subjective.

Following the end of each fiscal year and after the completion of the performance measurement process described above, our chief executive officer makes recommendations to our compensation committee with respect to all elements of compensation for each of our executive officers other than himself. While we review all elements of compensation on an annual basis (i.e., base salary, cash incentive, and equity), we do not operate on a specific compensation calendar under which we would be expected to make adjustments to each element on a cyclical annual basis. For example, we may make equity incentive awards to individual officers only every two or three years but may also approve awards in consecutive years. Our chief executive officer makes recommendations with respect to any adjustments based on numerous quantitative and qualitative factors that may vary from officer to officer. Factors such as recent corporate performance, individual performance relative to assigned responsibilities and objectives, and our assessment of competitive and retention considerations may influence our chief executive officer's recommendations with respect to our senior management team. Following receipt of these recommendations, our compensation committee discusses them first with the chief executive officer present and then in executive session without members of management present. Members of management do not participate in final determinations of their own compensation. Our compensation committee is solely responsible for the final approval of all forms of executive compensation. While the compensation committee considers the recommendations of management, in particular Mr. Adair as they relate to our senior management team, it does not always follow those recommendations.

Our compensation committee has the authority under its charter to engage the services of outside advisors for assistance. Our compensation committee ~~has~~engaged Compensia, Inc., an external compensation consulting firm, in designing the new compensation package for Jeffrey Liaw in connection with his promotion to president. Except for this decision, our compensation committee neither relied on nor has it retained outside advisors for purposes of making determinations with respect to executive ~~compensation.~~compensation during fiscal 2019.

Compensation Philosophy and Program Design

The principal objectives of our compensation and benefits programs for executive officers are to:

Attract and retain senior executive management;

Motivate their performance toward corporate objectives; and

Align their long-term interests with those of our stockholders.

Our compensation committee believes that maintaining and improving the quality and skills of our management team and appropriately providing incentives for their performance are critical factors that will affect the long-term value realized by our stockholders.

As further described below, compensation for our executive officers has historically consisted of four main elements: base salary, cash bonus, equity-based incentive awards, and benefits and perquisites. Since fiscal 2009, Mr. Adair, and since fiscal 2013, Mr. Mitz, ~~has~~ agreed to forego cash compensation in favor of an all-equity compensation program together with participation in employee benefit plans and certain perquisites described in the Summary Compensation Table. Other than Mr. Adair’s and Mr. Mitz's all-equity program, our compensation committee has not adopted any formal or informal policies or guidelines for allocating compensation between cash and equity compensation or among different forms of non-equity compensation for our named executive officers. Our compensation committee believes that a substantial portion of an executive officer’s compensation should be performance-based, whether in the form of cash bonus or equity compensation. We consider “performance-based” compensation to be the portion of an executive’s total compensation that is determined based on the executive’s individual contribution to our strategic goals and operating results, as in the case of discretionary cash bonuses and equity awarded in recognition of individual performance. As discussed below, the compensation program for Messrs. Adair and Mitz isduring fiscal 2019 was entirely performance-based as their ability to realize any material compensation from us since fiscal 2013 depends on the market price performance of our common stock. Our other executive officers also participate in our equity compensation programs, and we have typically paid discretionary cash bonuses based principally on the recommendation of our chief executive officer and largely subjective reviews by our compensation committee of corporate and individual performance.

Historically, we have not determined our compensation levels for our executive officers based on specific peer company benchmarks or analyses prepared by outside compensation consultants. Rather, our compensation committee has based its determinations on the committee’s collective assessment of quantitative, as well as subjective, factors relating to corporate and individual performance and on the committee’s experience and view of appropriate levels of compensation in light of our size and operating budgets; the increasing geographic and operational scope of our business; the specific responsibilities of the individual officer; and the committee’s assessment of the performance of the individual officer. However, our compensation did consult with Compensia, Inc., an external compensation consulting firm, in connection with the new compensation package for Jeffrey Liaw as our president.

Our compensation committee traditionally makes its determinations concerning base salary, cash bonuses, and additional equity incentive awards annually after the end of each fiscal year based on a review of our financial performance during the prior fiscal year as measured against the operating plan approved by the board of directors for the applicable fiscal year; the committee’s quantitative assessment of corporate performance and its qualitative assessment of each individual officer’s contribution toward corporate performance; and the recommendations of our chief executive officer. Although the committee has historically not identified specific financial performance targets, its annual analysis has focused on quantitative factors including trends in our revenues and earnings per share. Our compensation committee does not take a formulaic approach to setting compensation for our executive officers but does consider whether we met or exceeded our operating plan for a particular fiscal year when making its determinations of appropriate levels of compensation for our executive officers. The committee also reviews subjective factors such as the growth in the scope of our operations, our performance in effectively integrating acquisitions, and our performance in implementing key corporate strategic initiatives.

Our compensation committee believes that our historical levels of executive compensation have been reasonable and appropriate in light of the size of our business, both financially and operationally, the substantial contribution of our long-tenured executive team

in contributing to our historical growth, and the need to retain our key executive officers who have substantial levels of industry and Copart-specific experience.

Response to ~~2017~~2018 Advisory Stockholder Vote on Executive Compensation

We value the opinions of our stockholders, and, as noted above, our compensation committee considers whether our executive compensation serves the best interests of our stockholders. In that respect, as part of its ongoing review of our executive compensation, the compensation committee considered the results of our ~~2017~~2018 say-on-pay vote. At our ~~2017~~2018 annual meeting of stockholders, approximately ~~98%~~85% of the votes cast on the say-on-pay proposal were in favor of the executive compensation of our named executive officers described in last year’s proxy statement.

All Equity Compensation Program for Mr. Adair and Mr. Mitz

At the beginning of fiscal 2014, Mr. Adair, our chief executive officer, and Mr. Mitz, our president at the time, presented our compensation committee with a proposal to grant to each of them a sizable stock option in lieu of cash and additional equity. Mr. Adair and Mr. Mitz agreed to forego all salary and bonus compensation, other than $1.00 per year, in exchange for such stock option grant. With respect to Mr. Adair, this proposal continued the all-equity compensation program that he proposed and our stockholders approved in fiscal 2009. In addition to agreeing to forego any cash compensation in excess of $1.00, Mr. Adair and Mr. Mitz also agreed to forego any additional equity incentive awards until the newly granted options are fully vested. Our compensation committee believed the proposal demonstrated an extraordinary commitment by Mr. Adair and Mr. Mitz to continue to grow our business and increase our stockholder value as well as their strong belief in our business model and future prospects. Finally, our compensation committee believes this compensation program serves to align the individual interests of Mr. Adair and Mr. Mitz with those of our stockholders to the maximum extent possible.

Following extensive analysis and discussions among our compensation committee members, our compensation committee met and approved a stock option in lieu of cash or additional equity compensation program for Mr. Adair and Mr. Mitz on October 2, 2013. Specifically, subject to stockholder approval, our compensation committee and board of directors, excluding Mr. Adair and Mr. Mitz, approved the grant of a non-qualified stock option to each of Mr. Adair and Mr. Mitz on the following terms (adjusted to reflect the company's 2-for-1 stock split implemented in the form of a stock dividend effective as of April 10, 2017 to stockholders of record on April 3, 2017):



Number of Shares Subject to Option		4,000,000 shares of our common stock for Mr. Adair. 3,000,000 shares of our common stock for Mr. Mitz.

Exercise Price		Equal to the closing price of our common stock in trading on NASDAQ on the date of grant.

Vesting		Mr. Adair: twenty percent (20%) of the shares ~~become~~became exercisable on April 15, 2015; the balance of the shares ~~become~~became exercisable on a monthly basis over forty-eight months at the rate of 66,667 shares per month.
		Mr. Mitz: twenty percent (20%) of the shares ~~become~~became exercisable on the first anniversary of the date of grant; the balance of the shares ~~become~~became exercisable on a monthly basis over forty-eight months at the rate of 49,998 shares per month.

Vesting Acceleration Triggers		Upon a termination of the officer’s employment by us without cause (as defined) before or following a change in control or resignation for good reason (as defined) following a change in control, the option would become fully vested.
		As discussed below in this section, this provision was amended in June 2015 to remove the provision allowing for vesting upon a termination of the officer’s employment without cause before a change in control.

Option Term		Ten years; provided that in the event of a voluntary termination (other than for good reason following a change-in-control) or involuntary termination for cause at any time, to the extent vested, within twelve (12) months of the date of termination.

On December 16, 2013, our stockholders (with Mr. Adair and Mr. Mitz abstaining from the vote) approved the equity grants for Mr. Adair and Mr. Mitz described above. Mr. Adair was granted an option to purchase 4,000,000 shares of our common stock, and

Mr. Mitz was granted an option to purchase 3,000,000 shares of our common stock, each on the terms and conditions set forth above with an exercise price of $17.81 per share, which equaled the fair market value of our common stock on the date of grant. As a result,

neither Mr. Adair nor Mr. Mitz iswas eligible to be considered for any additional compensation other than their salaries of $1.00 per year and appropriate benefits and perquisites during the five year vesting term of their respective stock options.

On June 2, 2015, following a recommendation from Mr. Adair, our compensation committee amended the Stock Option Agreements for each of Mr. Adair and Mr. Mitz, to remove the provision permitting the acceleration of the shares underlying the stock option in the event such officer is terminated without cause other than in connection with a change in control.

Mr. Mitz's stock option fully vested in 2018, and he retired from Copart on December 31, 2018. Mr. Adair's stock option fully vested in March 2019, and he has continued to work for a annual salary of $1.00 per year since then. Although our compensation committee has met to discuss new potential compensation arrangements for Mr. Adair, no decision has yet been made. Any new compensation arrangement with Mr. Adair will be disclosed on Form 8-K.

Principal Components of Executive Compensation

Base Salary

We pay an annual base salary to our executive officers in order to provide them with a fixed rate of cash compensation during the year. Base salary for our executive officers reflects the scope of their respective responsibilities, seniority, and competitive market factors. Salary adjustments are determined by our compensation committee, generally following its review of recommendations from the chief executive officer. Any adjustments are made following consideration of competitive factors, our overall financial results, our budget requirements, and the committee’s assessment of individual performance. As noted previously, we do not necessarily adjust base salaries on a fixed annual cycle, and the timing of base salary adjustments may depend on a number of factors that vary among individual executives.

Fiscal ~~2018~~2019 Base Salary. In October ~~2017,~~2018, following the completion of our ~~2017~~2018 fiscal year, our compensation committee reviewed base salaries for our named executive officers. Based in part on the recommendation of Mr. Adair and in part on their consideration of other subjective factors, including their views of competitive levels of compensation for a company of our size, scale, and market capitalization, our compensation committee approved an increase in the base salaries for Messrs. Franklin and Liaw for fiscal ~~2018~~2019 by 5.3% and 10%, respectively. The base salaries were made effective in October 2017. The percentage increases in base salary relative to fiscal 2017 for Messrs. Franklin and Liaw reflect, among other things, the compensation committee's view of their relative contributions to Copart's performance.

~~Fiscal 2019 Base Salary~~. In October 2018, following the completion of our 2018 fiscal year, our compensation committee again reviewed base salaries for our named executive officers. Based in part on the recommendation of Mr. Adair and in part on their consideration of other subjective factors, including their views of competitive levels of compensation for a company of our size, scale, and market capitalization, our compensation committee approved an increase in the base salaries for Messrs. Franklin and Liaw for fiscal 2019 by 10% and 3.5%, respectively. The base salaries were made effective in October 2018. The percentage increases in base salary relative to fiscal 2018 for Messrs. Franklin and Liaw reflect, among other things, the compensation committee's view of their relative ~~responsibilities, the degree to which those responsibilities increased during fiscal 2018, and their relative~~ contributions to Copart's performance.

The compensation committee did not rely on any formal compensation survey data in making its assessments regarding fiscal ~~2018 or~~ 2019 base salaries.

Fiscal 2020 Base Salary. On September 3, 2019, following the completion of our 2019 fiscal year, our Board promoted Mr. Liaw to president, and he continues to serve as our chief financial officer on an interim basis until we name a new chief financial officer. At the same time, we announced that Mr. Franklin would transition from his role as executive vice president to a new non-executive officer role as senior advisor to the chief executive officer.

In connection with Mr. Liaw's promotion to president, our compensation committee and Board increased Mr. Liaw's base salary to $650,000 per year. As part of its decision making process, our compensation committee relied on compensation survey data prepared by Compensia, Inc., an independent compensation consultant retained for the purpose of evaluating and making recommendations on Mr. Liaw's executive compensation as president.

The following table presents base salary information for the named executive officers for fiscal years ~~2017,~~ 2018, 2019, and ~~2019:~~2020:


Named Executive Officer	Fiscal 2017 Base Salary		Fiscal 2018 Base Salary		Fiscal 2018 Base Salary % Increase		Fiscal 2019 Base Salary		Fiscal 2019 Base Salary % Increase		Fiscal 2018 Base Salary		Fiscal 2019 Base Salary		Fiscal 2019 Base Salary % Increase		Fiscal 2020 Base Salary		Fiscal 2020 Base Salary % Increase
A. Jayson Adair	$	1	$	1	—		$	1	—		$	1	$	1	—		$	1	—
Jeffrey Liaw	$	300,000	$	330,000	10	%	$	341,550	3.5	%	$	330,000	$	341,550	3.5	%	$	650,000	90	%
Vincent W. Mitz	$	1	$	1	—		$	1	—		$	1	$	1	—		$	—	—
William E. Franklin	$	475,000	$	500,000	5.3	%	$	550,000	10	%	$	500,000	$	550,000	10	%	$	—	—

Discretionary Cash Bonuses

Our annual discretionary cash bonus program for officers and other employees is designed to reward performance that has furthered key corporate objectives, including financial objectives, and to recognize individual contributions to strategic initiatives.

We did not adopt a formal bonus plan for or during fiscal ~~2018~~2019 and do not expect to adopt any formal program for fiscal ~~2019.~~2020.

As a result, for fiscal ~~2019,~~2020, our bonus program will continue to consist of discretionary bonuses as determined by our compensation committee.

We believe the use of a discretionary bonus program provides our compensation committee with the flexibility needed to address pay-for-performance as well as recruiting and retention goals. The amount of a discretionary bonus, if any, to be awarded to an executive officer is based on our compensation committee’s review of individual and corporate performance and the recommendations of our chief executive officer.

In October ~~2018,~~2019, as part of its annual review of executive compensation, our compensation committee met to consider cash bonus awards for our named executive officers. In determining fiscal ~~2018~~2019 cash bonus awards for Jeffrey Liaw, our only named executive ~~officers~~officer continuing to serve in an executive officer role (other than Mr. Adair ~~and Mr. Mitz),~~), our compensation committee considered individual contributions to corporate financial and business performance during the applicable fiscal year, including our operating results, expense management initiatives and corporate business development projects. Additionally, for the benefit of the committee, Mr. Adair reviewed ~~each individual officer’s~~Mr. Liaw's performance relative to the categories, with specific discussion of how individual functional areas contributed to the larger corporate strategic objectives.

Mr. ~~Franklin’s annual bonus remained unchanged between fiscal 2017 and 2018. Mr.~~ Liaw’s annual bonus ~~increased~~decreased by ~~11.7%~~9% between fiscal ~~2017~~2018 and ~~2018.��~~2019. The amount was determined based on the committee’s consideration of his strong performance as our chief financial officer, ~~particularly regarding his effective leadership~~and also taking into account the amount of ~~our finance organization, and our efforts~~equity compensation that he received in ~~investor relations and corporate development.~~fiscal 2019.

Based on its review of these factors with our chief executive officer, the compensation committee approved the following cash bonuses for our named executive officers:


Named Executive Officer	Fiscal 2017 Cash Bonus Amount		Fiscal 2018 Cash Bonus Amount		Fiscal 2018 Cash Bonus Amount		Fiscal 2019 Cash Bonus Amount
A. Jayson Adair	$	—	$	—	$	—	$	—
Jeffrey Liaw	$	325,000	$	363,000	$	363,000	$	330,000
Vincent W. Mitz	$	—	$	—	$	—	$	—
William E. Franklin	$	600,000	$	600,000	$	600,000	$	600,000

Potential Post-Employment Payments upon Termination or Change in Control

Employment Contracts and Severance Arrangements with Named Executive Officers

We are a party to written employment agreements with William E. Franklin, who served during fiscal 2019 as our executive vice president, U.S. operations and shared services, before transitioning in September 2019 to a non-executive role as senior advisor to the chief executive officer, and Jeffrey Liaw, our ~~senior vice~~ president and chief financial officer. These employment agreements set forth the base salary, bonus opportunity, benefits and the responsibilities of the position, as applicable, in effect at the time of execution of the agreement. In addition, the executive employment agreements require us to provide compensation to the executive in the event of termination of employment under certain circumstances.

Mr. Franklin’s employment agreement provides that in the event his employment is involuntarily terminated without cause or he resigns from his employment for “good reason,” and conditioned on his executing a severance agreement and release of claims, he will be entitled to payment of twelve months of his then-current base salary payable after the date of termination according to a schedule that complies with section 409A of the Internal Revenue Code. His employment agreement also provides that in the event his employment is terminated for any reason other than as previously described, including by reason of death or disability or “cause,” then he shall be entitled to receive severance benefits as provided under our then-existing severance and benefit plans and policies at the time of termination.

Mr. Liaw’s employment agreement provides that in the event his employment is involuntarily terminated without cause or he resigns from his employment for “good reason,” and conditioned on his executing a severance agreement and release of claims, he will be entitled to payment of six months of his then-current base salary payable after the date of termination according to a schedule that complies with section 409A of the Internal Revenue Code. His employment agreement also provides that in the event his employment is terminated for any reason other than as previously described, including by reason of death or disability or “cause,” then he shall be entitled to receive severance benefits as provided under our then-existing severance and benefit plans and policies at the time of termination.

In the executive employment agreements, “cause” means any of the following: (i) willful or grossly negligent failure to substantially perform his duties; (ii) commission of gross misconduct which is injurious to us; (iii) breach of a material provision of the employment agreement or agreements incorporated therein; (iv) material violation of a federal or state law or regulation applicable to our business; (v) misappropriation or embezzlement of our funds or an act of fraud or dishonesty upon us made by the executive; (vi) conviction of, or plea of nolo contendere to, a felony; or (vii) continued failure to comply with directives of senior management.

In the executive employment agreements, “good reason” means the executive’s resignation, if one or more of the following events shall have occurred without his consent (and following any applicable cure period): without the executive’s prior written

consent, (i) the assignment to the executive of any duties or the reduction of the executive’s duties, either of which results in a material diminution in the executive’s position or responsibilities in effect immediately prior to such assignment, or the removal of the executive from such position and responsibilities; (ii) a material reduction by us in his base salary as in effect immediately prior to such reduction; or (iii) any material breach by us of any material provision of the employment agreement.

Change in Control Provisions

Neither our 2001 Stock Option Plan nor our 2007 Equity Incentive Plan, as amended and restated, provides for the acceleration of outstanding options or other equity incentive awards in the event of a change in control (as defined in the plans), except in the limited circumstance where the successor corporation does not assume our outstanding options. When a successor corporation does not assume our options in the event of an acquisition or merger, the optionee will have the right to exercise the option or stock purchase right as to all the shares underlying the applicable options, including shares not otherwise vested or exercisable. The right to exercise the option or stock purchase right applies to all of our employees, including our named executive officers.

~~As described in the section captioned “Executive Compensation - Compensation Discussion and Analysis - All Equity Compensation Program for Mr. Adair and Mr. Mitz~~,” Mr. Adair and Mr. Mitz were granted non-qualified stock options to purchase 4,000,000 shares and 3,000,000 shares of our common stock, respectively. If upon or following a change in control either we or a successor entity terminate either of Messrs. Adair’s or Mitz’s service without cause, or the executive resigns for good reason, then one hundred percent (100%) of the shares subject to his stock option will immediately vest. Under the terms of these stand-alone stock option award agreements, “cause” means any of the following: (i) any act of dishonesty made by the executive in connection with executive’s responsibilities as a service provider; (ii) the executive’s conviction of, or plea of nolo contendere to, a felony or any crime involving fraud, embezzlement or any other act of moral turpitude; (iii) the executive’s gross misconduct; (iv) willful and continued failure of the executive to substantially perform his principal duties and/or obligations of employment to Copart; or (v) the executive’s unauthorized use or disclosure of any proprietary information or trade secrets of Copart or any other party to whom

the executive owes an obligation of nondisclosure as a result of the executive’s relationship with Copart, and “good reason” means within thirty (30) days following the expiration of any company cure period following the occurrence of one or more of the following without the executive’s consent: (i) the assignment, reduction or removal of the executive’s duties or position, either of which results in a material diminution in the executive’s authority, duties or responsibilities with Copart in effect immediately prior to such assignment, reduction or removal; (ii) a material reduction by the Copart of the executive’s base salary as in effect immediately prior to such reduction; or (iii) the material change in geographic location of the executive’s principal place of performing his duties as a service provider of the company by more than fifty (50) miles.

Potential Payments upon Termination or Change in Control

~~Assuming~~On the assumption that the involuntary termination of employment (including resignation for “good reason”) of the named executive officers took place on July 31, ~~2018,~~2019, whether before or after a change in control, Mr. Franklin would behave been entitled to receive severance payments and benefits totaling ~~$500,000,~~$550,000, the equivalent of twelve months of his fiscal ~~2018~~2019 base salary, less applicable tax withholding; and Mr. Liaw would behave been entitled to receive severance payments and benefits totaling ~~$165,000,~~$170,775, the equivalent of six months of his fiscal ~~2018~~2019 base salary, less applicable tax withholding.

Assuming that on July 31, 2018, the executive’s employment was terminated for a reason other than for “cause” or by them for “good reason” upon or following a “change of control,” the value to Mr. Adair and Mr. Mitz of the acceleration of their equity awards would have been $23.8 million and $9.9 million, respectively, which represents: (i) 100% of the unvested portion of all outstanding equity awards held by the named executive officer on July 31, 2018 multiplied by (ii) the difference between the closing market price on July 31, 2018 of $39.58 per share and the exercise price of $17.81.

Equity Compensation Plan Information

The following table provides information as of July 31, ~~2018~~2019 with respect to shares of our common stock that may be issued upon the exercise of options and similar rights under ~~all of~~ our ~~existing equity compensation plans, including~~2014 Employee Stock Purchase Plan and our 2007 Equity Incentive Plan, ~~the Copart, Inc. stand-alone stock option award agreement dated April 14, 2009 (as~~as amended ~~on June 9, 2010) between Copart, Inc.~~ and Willis J. Johnson (the Johnson Option Agreement), the Copart, Inc. stand-alone stock option award agreement dated April 14, 2009 (as amended on June 9, 2010) between Copart, Inc. and A. Jayson Adair (the 2009 Adair Option Agreement), the Copart, Inc. stand-alone stock option award agreement dated December 16, 2013 (as amended on June 2, 2015) between Copart, Inc. and A. Jayson Adair (the 2013 Adair Option Agreement), and the Copart, Inc. stand-alone stock option agreement dated December 16, 2013 (as amended on June 2, 2015) between Copart, Inc. and Vincent W. Mitz (the Mitz Option Agreement).restated.


Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1)		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(1)			Number of Securities Remaining Available for Future Issuances Under Equity Compensation Plans (Excluding Securities Reflected in the First Column)		Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (1)		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(1)			Number of Securities Remaining Available for Future Issuances Under Equity Compensation Plans (Excluding Securities Reflected in the First Column)
Equity compensation plans approved by security holders	17,799,487	(2)		$20.29	(3)	7,823,728	(4)	10,030,450	(2)		$30.30	(3)	5,810,133	(4)
Equity compensation plans not approved by security holders	—		—			—		—		—			—
Total	17,799,487			$20.29		7,823,728		10,030,450			$30.30		5,810,133



¨	Preliminary Proxy Statement
¨	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
ý	Definitive Proxy Statement
¨	Definitive Additional Materials
¨	Soliciting Material under §240.14a-12



ý	No fee required.
¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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	(2)	Aggregate number of securities to which transaction applies:
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	(4)	Proposed maximum aggregate value of transaction:
	(5)	Total fee paid:

¨	Fee paid previously with preliminary materials.
¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Time and Date		8:00 a.m., Central ~~time,~~Daylight Time, on ~~Monday,~~Friday, December ~~17, 2018~~6, 2019

Place		Copart’s corporate headquarters located at 14185 Dallas Parkway, Suite 300, Dallas, Texas 75254

Items of Business	Ÿ	To elect the ~~seven~~nine nominees for director named in this proxy statement to hold office until our ~~2019~~2020 annual meeting of stockholders or until their respective successors have been duly elected and qualified.
	Ÿ	To approve, on an advisory (non-binding) basis, the compensation of our named executive officers for the fiscal year ended July 31, ~~2018.~~
	Ÿ	~~To ratify a cash and equity director compensation program for our executive chairman and non-employee directors.~~2019.
	Ÿ	To ratify the appointment by the audit committee of our board of directors of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending July 31, ~~2019.~~
	Ÿ	To approve adjournment of the meeting to a later date or dates, if necessary or desirable, to permit further solicitation and vote of proxies, in the event there are not sufficient votes to approve one or more of the above proposals.2020.
	Ÿ	To transact such other business as may properly come before the annual meeting or any adjournment or postponement of the annual meeting.



Record Date		You are entitled to vote only if you were a Copart stockholder of record as of the close of business on the record date, ~~November 9, 2018.~~October 15, 2019.

Meeting Admission		You are entitled to attend the annual meeting only if you were a Copart stockholder as of the close of business on the record date or otherwise hold a valid proxy for the annual meeting. If you are not a stockholder of record but hold shares through a broker, bank, trustee, or nominee (i.e., in street name), you should provide proof of beneficial ownership as of the record date, such as your most recent account statement reflecting ownership on the record date, a copy of the voting instruction card provided by your broker, bank, trustee, or nominee, or similar evidence of ownership.

		A complete list of stockholders entitled to vote at the meeting will be available and open to examination by any stockholder for any purpose germane to the meeting for a period of at least ten days prior to the meeting during normal business hours at our corporate headquarters.

Annual Report		Our ~~2018~~2019 annual report is enclosed with these materials as a separate booklet. You may also access our ~~2018~~2019 annual report by visiting www.edocumentview.com/CPRT.

Date of Mailing		This notice of our annual meeting of stockholders, proxy statement, proxy card, and ~~2018~~2019 annual report are being distributed and made available on or about November ~~16, 2018~~4, 2019 to all stockholders of record entitled to vote at the annual meeting.

Voting		Your vote is very important. Whether or not you plan to attend the annual meeting, we encourage you to read the proxy statement and submit your proxy or voting instructions as soon as possible. For specific instructions on how to vote your shares, please refer to the instructions in the section entitled “Questions and Answers About the Proxy Materials and Annual Meeting” beginning on page 1 of the proxy statement.



	All Equity Compensation Program for Mr. Adair and Mr. Mitz	3532
	Principal Components of Executive Compensation	3633
	Other Considerations	3835
COMPENSATION COMMITTEE REPORT		4037
	Pay Ratio	4138
	Fiscal Year ~~2018~~2019 Summary Compensation Table	4239
	Grants of Plan-Based Awards in Fiscal Year ~~2018~~2019	4441
	Outstanding Equity Awards at ~~2018~~2019 Fiscal Year End	4542
	Option Exercises in Fiscal Year ~~2018~~2019	4543
	Pension Benefits	4543
	Potential Post-Employment Payments upon Termination or Change in Control	4643
	Equity Compensation Plan Information	4845
RELATED PARTY TRANSACTIONS		4946
	Audit Committee Approval Policy	4946
	Related Person Transactions	4946
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE		5047
SECURITY OWNERSHIP		5148
OTHER MATTERS		5350
	Other Matters	5350
	Adjournment of the ~~2018~~2019 Annual Meeting	5350
	Annual Report	5350
	Site of the Copart, Inc. ~~2018~~2019 Copart Annual Stockholder Meeting	5451



		Page
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND ANNUAL MEETING		1
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS		98
	Board of Directors Composition	98
	Fiscal ~~2018~~2019 Board Meetings	9
	Board Leadership Structure	9
	Director Independence	9
	Oversight of Risk Management	10
	Board Committees	10
	Compensation Committee Interlocks and Insider Participation	12
	Considerations in Identifying and Evaluating Director Nominees	12
	Director Nomination Process	13
	Director Attendance at Annual Meetings	1314
	No Hedging Policy	1314
	Stockholder Communications with our Board of Directors	1314
COMPENSATION OF DIRECTORS AND EXECUTIVE CHAIRMAN		1418
PROPOSAL NUMBER ONE — ELECTION OF DIRECTORS		1620
	General	1620
	Nominees	1620
	Biographical Information	1620
	Family Relationships	1822
	Required Vote	1822
	Recommendation of our Board of Directors	1822
PROPOSAL NUMBER TWO — ADVISORY VOTE ON APPROVAL OF EXECUTIVE COMPENSATION		1923
	Compensation Program and Philosophy	1923
	Required Vote	2023
	Recommendation of our Board of Directors	2024
PROPOSAL NUMBER THREE — RATIFICATION OF ~~CASH AND EQUITY DIRECTOR COMPENSATION PROGRAM FOR EXECUTIVE CHAIRMAN AND NON-EMPLOYEE DIRECTORS~~APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		2125
	General	21
	~~Copart's Director Compensation Philosophy~~	21
	~~Compensation Analysis~~	22
	~~Proposed Cash and Equity Director Compensation Program for our Executive Chairman and Non-Employee Directors~~	25
	~~Additional Perquisites for Mr. Johnson~~	25
	~~Summary of U.S. Federal Income Tax Consequences~~	25
	~~New Plan Benefits~~	26
	Required Vote	2625
	Recommendation of our Board of Directors	2625
~~PROPOSAL NUMBER FOUR — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~		27
	~~General~~	27
	~~Required Vote~~	27
	~~Recommendation of our Board of Directors~~	27



	Auditor Fees and Services	2726
	Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm	2826
	Report of the Audit Committee	28
~~PROPOSAL NUMBER FIVE - APPROVAL TO ADJOURN THE ANNUAL MEETING~~		30
	~~General~~	30
	~~Required Vote~~	30
	~~Recommendation of our Board of Directors~~	3026
EXECUTIVE OFFICERS		3128
EXECUTIVE COMPENSATION		3229
	Forward-Looking Statements	3229
	Compensation Discussion and Analysis	3229
	Role of our Compensation Committee	3330
	Role of Management in our Compensation Process	3330
	Compensation Philosophy and Program Design	3431
	Response to ~~2017~~2018 Advisory Stockholder Vote on Executive Compensation	3532



		Discretionary Voting
Proposal	Vote Required	Allowed?
Election of directors	Majority of the votes cast	No

Advisory vote to approve executive compensation	Majority of the votes cast	No

Ratification of ~~a cash and equity director compensation program for our executive chairman and non-employee directors~~	~~Majority of the votes cast~~	No

~~Ratification of~~ appointment of Ernst & Young LLP	Majority of the votes cast	Yes

~~Approval of adjournment of annual meeting~~	~~Majority of the votes cast~~	No



	Industry Background and Specialized Expertise
Director	Salvage Vehicle Industry Executive Management Experience	Investment Management Industry Executive Management Experience	Technology Sector Executive Management Experience	Land Acquisition and Development Executive Management Experience	Government Executive Management Experience	Specialized Finance and Accounting Expertise	Certified Public Accountant	Other Publicly Traded Corporation Director Experience
Willis J. Johnson	ü		ü	ü
A. Jayson Adair	ü		ü	ü
Steven D. Cohan	ü		ü	ü		ü	ü
Daniel J. Englander		ü		ü		ü		ü
Diane M. Morefield			ü	ü		ü	ü	ü
James M. Meeks	ü		ü	ü
Thomas N. Tryforos		ü				ü		ü
Matt Blunt					ü	ü
Stephen Fisher			ü					ü



Director Name	Audit Committee	Compensation Committee	Nominating and Governance Committee
Matt Blunt	ü	—	ü
Steven D. Cohan	Chair	ü	—
Daniel J. Englander	ü	Chair	ü
Thomas N. Tryforos	—	ü	Chair


(2)	Includes $23,844 related to personal use of a company owned automobile, ~~and $240,903~~$17,467 relating to Mr. Johnson's personal use of the company's aircraft during fiscal ~~2018.~~2019, and $12,337 for medical, dental, and vision benefits.



Name	Aggregate Number of Shares Underlying Options
Willis J. Johnson		~~280,000~~305,000
Matt Blunt		~~110,000~~85,000
Steven D. Cohan		~~280,000~~305,000
Daniel J. Englander		~~680,000~~625,000
James E. Meeks		~~200,000~~225,000
Thomas N. Tryforos		~~440,000~~465,000
Diane M. Morefield		25,000
Stephen Fisher		25,000


Name	Age	Position	Director Since	Age	Position	Director Since
Willis J. Johnson	71	Executive Chairman of the Board of Directors	1982	72	Executive Chairman of the Board of Directors	1982
A. Jayson Adair	49	Chief Executive Officer and Director	1992	50	Chief Executive Officer and Director	1992
Matt Blunt	47	Director	2009	48	Director	2009
Steven D. Cohan	57	Director	2004	58	Director	2004
Daniel J. Englander	49	Director	2006	50	Director	2006
James E. Meeks	69	Director	1996	70	Director	1996
Thomas N. Tryforos	59	Director	2012	60	Director	2012
Diane M. Morefield				61	Director	2019
Stephen Fisher				55	Director	2019



	COMPENSATION COMMITTEE Daniel J. Englander (chairman) ~~Steven D. Cohan~~ Thomas N. Tryforos Stephen Fisher


Name and Principal Position	Fiscal Year	Salary($)	Bonus($)(1)	Option Awards($)(2)	All Other Compensation($)(3)			Total($)	Fiscal Year	Salary($)	Bonus($)(1)	Option Awards($)(2)	Stock Awards ($)(3)	All Other Compensation ($)(4)		Total($)
A. Jayson Adair	2018	1	—	—		203,004	(4)	203,005	2019	1	—	—	—	156,315	(5)	156,315
Chief Executive Officer	2017	1	—	—		34,690		34,691	2018	1	—	—	—	203,004		203,005
	2016	1	—	—		18,000		18,001	2017	1	—	—	—	34,690		34,691

Jeffrey Liaw	2018	323,076	325,000	959,440		9,000	(5)	1,616,516	2019	338,884	330,000	2,534,555	—	9,000	(6)	3,212,439
Chief Financial Officer	2017	290,385	325,000	751,880		9,000		1,376,265
President and Chief Financial Officer									2018	323,076	325,000	959,440	—	9,000		1,376,265
	2016	134,615	272,178	612,765		105,250		1,124,808	2017	290,385	325,000	751,880	—	9,000		1,124,808

Vincent W. Mitz	2018	1	—	—		23,844	(6)	23,845	2019	1	—	—	—	9,935	(7)	9,936
President	2017	1	—	—		23,844		23,845
Former President									2018	1	—	—	—	23,844		23,845
	2016	1	—	—		23,844		23,845	2017	1	—	—	—	23,844		23,845

William E. Franklin	2018	494,230	600,000	1,918,880		9,000	(7)	3,022,110	2019	538,461	600,000	—	2,000,000	9,000	(8)	3,147,461
Executive Vice President, U.S.	2017	470,192	600,000	—		9,000		1,079,192
Operations and Shared Services	2016	440,385	500,000	—		9,000		949,385
Former Executive Vice President									2018	494,230	600,000	1,918,880	—	9,000		3,022,110
									2017	470,192	600,000	—	—	9,000		1,079,192


(1)	The amounts in this column represent discretionary bonuses awarded for services performed during the applicable fiscal year. Annual bonuses earned during a fiscal year are generally paid in the first quarter of the subsequent fiscal year.


(4)	The amounts shown in this column equal the aggregate incremental cost to us of the particular benefit or perquisite provided. Amounts in this column include the aggregate incremental cost to us of a named executive officer’s (i) personal use of a company-owned automobile, and (ii) an automobile expense allowance.


~~(4)~~(5)	Includes ~~$42,228~~$40,728 related to personal use of a company-owned automobiles, and ~~$160,776~~$115,586 related to Mr. Adair's personal use of the company's aircraft during fiscal ~~2018.~~2019.


~~(5)~~(6)	Consists of $9,000 related to an automobile allowance.


~~(6)~~(7)	Consists of ~~$23,844~~$9,935 related to personal use of a company-owned automobile.


~~(7)~~(8)	Consists of $9,000 related to an automobile allowance.


Named Executive Officer	Grant Date	All Other Option Awards: Number of Securities Underlying Options (#)(1)		Exercise or Base Price of Option Awards ($/sh)		Grant Date Fair Value of Stock and Option Awards ($)(2)
								Grant Date	All Other Stock Awards: Number of Shares of Stock or Units (#)(1)	All Other Option Awards: Number of Securities Underlying Options (#)(2)	Exercise or Base Price of Option Awards ($/sh)	Grant Date Fair Value of Stock and Option Awards ($)(3)
A. Jayson Adair	—		—		—		—	—	—	—	—	—
Jeffrey Liaw	10/4/2017		100,000		34.78		959,440	3/7/2019	150,000	—	58.27	2,534,555
Vincent W. Mitz	—		—		—		—	—	—	—	—	—
William E. Franklin	10/4/2017		200,000		34.78		1,918,880	3/7/2019	—	34,322	—	2,000,000


(1)	~~All~~Represents an award of stock options. Mr. Liaw's option ~~grants vest~~award vests 20% on the one year anniversary of the grant date and 1.67% each month thereafter, subject to the executive officer’s continued service to us on each such vesting date.


(2)	Represents an award of restricted stock units. Mr. Franklin's restricted stock award vests one-half on the first anniversary of the date of grant, and the balance vests on the second anniversary of the date of grant.


	Option Awards					Option Awards
Named Executive Officer	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Grant Date(1)	Option Exercise Price ($)	Option Expiration Date	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Grant Date(1)	Option Exercise Price ($)	Option Expiration Date
A. Jayson Adair	3,400,000	600,000	12/16/2013	17.81	12/16/2023	4,000,000	—	12/16/2013	17.81	12/16/2023
Vincent W. Mitz	2,750,000	250,000	12/16/2013	17.81	12/16/2023
Jeffrey Liaw	20,000	50,000	1/4/2016	18.34	1/4/2026	40,000	30,000	1/4/2016	18.34	1/4/2026
						55,000	45,000	10/10/2016	27.10	10/10/2026
	35,000	65,000	10/10/2016	27.10	10/10/2026	35,000	65,000	10/4/2017	34.78	10/4/2027
	—	100,000	10/4/2017	34.78	10/4/2027	—	150,000	3/7/2019	58.27	3/7/2029
William E. Franklin	50,000	—	10/15/2010	8.55	10/15/2020	50,000	—	3/4/2011	10.28	3/4/2021
	240,000	—	3/4/2011	10.28	3/4/2021	100,000	—	1/14/2014	18.06	1/14/2024
	135,001	14,999	1/14/2014	18.06	1/14/2024	200,000	—	3/4/2014	18.32	3/4/2024
	173,333	26,667	3/4/2014	18.32	3/4/2024	173,333	26,667	3/9/2015	18.61	3/9/2025
	133,333	66,667	3/9/2015	18.61	3/9/2025	160,000	40,000	7/10/2015	17.73	7/10/2025
	120,000	80,000	7/10/2015	17.73	7/10/2025	70,000	130,000	10/4/2017	34.78	10/4/2027
	—	200,000	10/4/2017	34.78	10/4/2027


(1)	All option grants vest 20% on the one-year anniversary of the grant date and 1.67% each month thereafter, subject to the executive officer’s continued service to us on each such vesting date.



	Restricted Stock Units
Named Executive Officer	Number of Unvested Restricted Stock Units (1)	Market Value of Unvested Restricted Stock Units ($)(2)
William E. Franklin	34,322	2,660,985


(1)	One-half of Mr. Franklin's restricted stock units vest on the first anniversary of the date of grant, and the balance vest on the second anniversary of the date of grant, subject to Mr. Franklin’s continued service to us on each such vesting date.


(2)	Based on the closing price of $77.53 of Copart's common stock on July 31, 2019.


(2)	Reflects the number of shares of common stock to be issued ~~upon exercise of outstanding options~~ under the 2007 Equity Incentive Plan, ~~the Johnson Option Agreement, the 2009 Adair Option Agreement, the 2013 Adair Option Agreement,~~as amended and ~~the Mitz Option Agreement.~~restated, upon (i) exercise of outstanding options, and (ii) vesting of restricted stock units


(3)	Reflects weighted average exercise price of outstanding options under the 2007 Equity Incentive Plan, ~~the Johnson Option Agreement, the 2009 Adair Option Agreement, the 2013 Adair Option Agreement,~~as amended and ~~the Mitz Option Agreement.~~restated.


(4)	Consists entirely of securities available for future issuance under the 2007 Equity Incentive ~~Plan.~~Plan, as amended and restated.


Name and Address of Beneficial Owner(1)	Number of Shares Beneficially Owned		Percent of Total Shares Outstanding(2)			Number of Shares Beneficially Owned		Percent of Total Shares Outstanding(2)
5% or more beneficial owners, executive officers and directors:
The Vanguard Group (3)		17,398,534		7.43	%		23,006,596		9.90	%
BlackRock, Inc. (4)		16,320,194		6.97	%		14,852,890		6.39	%
Willis J. Johnson (5)		20,455,160		8.73	%		20,409,025		8.77	%
A. Jayson Adair (6)		11,663,955		4.91	%		10,441,221		4.46	%
Matt Blunt (7)		91,667		*			85,000		*
Steven D. Cohan (8)		261,691		*			305,024		*
Daniel J. Englander (9)		1,134,007		*			1,100,128		*
William E. Franklin (10)		985,248		*			436,591		*
Jeffrey Liaw (11)		99,966		*			157,114		*
James E. Meeks (12)		181,667		*			225,000		*
Vincent W. Mitz (13)		3,277,040		1.38	%		570,000		*
Thomas N. Tryforos (14)		826,211		*			869,544		*
All directors and executive officers as a group (10 persons) (15)		38,976,612		15.99	%
Diane M. Morefield (15)							10,417		*
Stephen Fisher (16)							10,417		*
All directors and executive officers as a group (12 persons) (17)							33,642,890		14.34	%


(1)	Unless otherwise set forth in these footnotes, the mailing address for each of the persons listed in this table is: c/o Copart, Inc., 14185 Dallas Parkway, Suite 300, Dallas, Texas 75254.


(2)	Based on ~~234,009,928~~232,353,721 shares outstanding as of ~~November 9, 2018.~~October 15, 2019.