April ~~24, 2019~~

22, 2022

Dear Fellow Stockholder:

Thank you for your continued investment in and support of KAR Auction Services, Inc. ~~("KAR"~~d/b/a KAR Global (“KAR Global” or the ~~"Company"~~“Company”). You are cordially invited to attend ~~KAR's 2019~~KAR Global’s 2022 annual meeting of stockholders, which will be hosted virtually. ~~A virtual meeting provides expanded access, improved communication and cost savings for our stockholders and the Company.~~ You will be able to attend the ~~2019~~2022 annual meeting online, vote your shares electronically and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/~~KAR2019.~~

KAR2022.

As a KAR Global stockholder, your vote is important. The matters to be acted upon are described in the notice of annual meeting of stockholders and the proxy statement. Even if you are planning to attend the virtual meeting, you are strongly encouraged to vote your shares in advance through one of the methods described in the proxy statement.

~~I am pleased~~

The semi-conductor shortage and continuing impacts of the COVID-19 pandemic significantly challenged the wholesale used vehicle marketplace. Despite the unexpected headwinds, KAR Global continued to ~~report that KAR had a very successful 2018.~~advance our digital transformation. We ~~grew revenue, adjusted EBITDA and gross profit and~~are proud to have sold approximately ~~6.0~~2.6 million ~~vehicles. As an established market leader with an experienced management team,~~vehicles and generated strong cash flow from operations of $413.2 million while extending our leadership position in digital used vehicle marketplaces in 2021. Notably, we ~~believe we are well-positioned for continued growth with solid operating performance~~completed our integration of BacklotCars and ~~disciplined capital investments.~~

~~We have a comprehensive capital allocation plan for increasing stockholder value. We are focused on return of capital to our stockholders and accretive investments~~TradeRev in the ~~business, including~~U.S., expanded our digital dealer-to-dealer footprint with the acquisition of ~~auctions~~CARWAVE, grew dealer-consigned vehicles sold 37% and complementary capabilities in North America and internationally, expanding our data analytic capabilities, and enhancing our technology platform. We are proud that through share buybacks and dividends, in 2018 we returned approximately $338 millionincreased gross profit per vehicle sold 19% to ~~stockholders and invested approximately $243 million in our business through capital expenditures and strategic acquisitions.~~

$277.

Thank you again for your continued support of KAR Global, our Board of Directors, our employees and our future.

Sincerely,

~~James P. Hallett~~

~~Chairman of the Board and~~
~~Chief Executive Officer~~


	James P. Hallett Executive Chairman and Chairman of the Board			Peter Kelly Chief Executive Officer

This proxy statement is dated April ~~24, 2019~~22, 2022 and is first being distributed to stockholders on or about April ~~24, 2019.~~

~~Table of Contents~~

~~13085 Hamilton Crossing Boulevard~~
~~Carmel, Indiana 46032~~

22, 2022.

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11299 North Illinois Street
Carmel, Indiana 46032

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS


	Date and Time:			9:00 a.m., Eastern Daylight Time, on June ~~4, 2019~~2, 2022

	Place:			Online atwww.virtualshareholdermeeting.com/~~KAR2019~~KAR2022

	Admission:			To attend the ~~2019~~2022 annual meeting, visitwww.virtualshareholdermeeting.com/~~KAR2019~~KAR2022. You will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card or on the instructions that accompanied your proxy materials.

	Items of Business:			The holders of shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”), voting as a separate class, are being asked to vote on:
				Proposal No. 1: To elect the director nominee designated by Ignition Parent LP (“Apax Investor”) to the Board of Directors.
				The holders of shares of common stock and shares of Series A Preferred Stock, voting together as a single class, are being asked to consider and vote on the following items:
				Proposal No. 2: To elect each of the other nine director nominees to the Board of Directors.
				Proposal No. 2:3: To approve, on an advisory basis, executive compensation.
				Proposal No. 3:4: To ratify the appointment of KPMG LLP as our independent registered public accounting firm for ~~2019.~~2022.
				To transact any other business as may properly come before the meeting or any adjournments or postponements thereof.

	Record Date:			You are entitled to vote at the ~~2019~~2022 annual meeting and at any adjournments or postponements thereof if you were a stockholder of record at the close of business on April ~~11, 2019.~~8, 2022. A list of stockholders entitled to vote at the 2022 annual meeting will be available for examination during ordinary business hours for 10 days prior to the meeting at the address listed above, and the list will also be available online during the meeting.

	Voting by Proxy:			Whether or not you plan to virtually attend the ~~2019~~2022 annual meeting, please vote at your earliest convenience by following the instructions in the Notice of Internet Availability of Proxy Materials or the proxy card you received in the mail so that your shares can be voted at the ~~2019~~2022 annual meeting in accordance with your instructions. For specific instructions on voting, please refer to the instructions on your enclosed proxy card.


	On Behalf of the Board of Directors,


April ~~24, 2019~~22, 2022 Carmel, Indiana		Charles S. Coleman ~~Rebecca C. Polak~~ EVP, Chief Legal Officer and Secretary

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~~Table of Contents~~

Notice of Internet Availability of Proxy Materials for the Annual Meeting

The proxy statement for the ~~2019~~2022 annual meeting and the annual report to stockholders for the fiscal year ended December 31, ~~2018,~~2021, each of which is being provided to stockholders prior to or concurrently with this notice, are also available to you electronically via the Internet. We encourage you to review all of the important information contained in the proxy materials before voting. To view the proxy statement and annual report to stockholders on the Internet, visit our website,~~www.karauctionservices.com~~www.karglobal.com, and click on “Investors” and then the ~~"Financials" tab under "Investor Relations"~~“Financials” tab. The information on our ~~homepage.~~website is not part of this proxy statement and is not deemed incorporated by reference into this proxy statement or any other public filing made with the SEC.

TABLE OF CONTENTS


PROXY STATEMENT SUMMARY			1		1
~~ANNUAL MEETING OF STOCKHOLDERS~~	Annual Meeting of Stockholders			1
~~ITEMS TO BE VOTED ON AT ANNUAL MEETING OF STOCKHOLDERS~~	Items to be Voted on at Annual Meeting of Stockholders			1
~~BOARD NOMINEES~~	Board Nominees			2
~~2018 BUSINESS HIGHLIGHTS~~	2021 Business Highlights			3
~~CORPORATE GOVERNANCE HIGHLIGHTS~~	Corporate Governance Highlights			4
~~EXECUTIVE COMPENSATION~~	Executive Compensation			5
	PROPOSALS NO. 1 & 2: ELECTION OF ~~DIRECTORS: PROPOSAL NO. 1~~DIRECTORS			6		6
~~DIRECTORS ELECTED ANNUALLY~~	Directors Elected Annually			6
~~DIRECTOR INDEPENDENCE~~	Director Independence			6
~~BOARD NOMINATIONS AND DIRECTOR NOMINATION PROCESS~~	Board Nominations and Director Nomination Process			6
~~BOARD QUALIFICATIONS AND DIVERSITY~~	Board Qualifications and Diversity			7
~~INFORMATION REGARDING THE NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS~~	Information Regarding the Nominees for Election to the Board			7
	BOARD ~~OF DIRECTORS~~ STRUCTURE AND CORPORATE GOVERNANCE			14		13
	Role of the Board			14 ~~ROLE OF THE BOARD OF DIRECTORS~~		13
	Board Leadership			14 ~~BOARD LEADERSHIP~~		13
	Executive Sessions			15 ~~BOARD OF DIRECTORS MEETINGS AND ATTENDANCE~~		14
	Board Meetings and Attendance			15 ~~COMMITTEES OF THE BOARD OF DIRECTORS~~		14
	Board Committees			15 ~~BOARD OF DIRECTORS' RISK OVERSIGHT~~		16
~~CORPORATE GOVERNANCE DOCUMENTS~~	Board and Committee Evaluation Process			17
~~COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION~~	Board’s Risk Oversight			17
	Corporate Governance Documents			18 ~~STOCKHOLDER COMMUNICATIONS WITH THE BOARD~~		17
	Compensation Committee Interlocks and Insider Participation			19 ~~EXECUTIVE SESSIONS~~		18
	Stockholder Communications with the Board			~~DIRECTOR COMPENSATION~~19		19
	DIRECTOR COMPENSATION			20 ~~CASH AND STOCK RETAINERS~~		19
~~DIRECTORS DEFERRED COMPENSATION PLAN~~	Cash and Stock Retainers			20
	Director Deferred Compensation Plan			21 ~~DIRECTOR STOCK OWNERSHIP AND HOLDING GUIDELINES~~		20
	Director Stock Ownership and Holding Guidelines			21 ~~DIRECTOR COMPENSATION PAID IN 2018~~		20
~~OUTSTANDING DIRECTOR RESTRICTED STOCK AWARDS~~	Director Compensation Paid in 2021			21
	Outstanding Director Restricted Stock Awards			22
	BENEFICIAL OWNERSHIP OF ~~THE COMPANY'S COMMON~~COMPANY STOCK			23		22
~~SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE~~		23
PROPOSAL NO. 3: ADVISORY VOTE TO APPROVE EXECUTIVE ~~COMPENSATION: PROPOSAL NO. 2~~COMPENSATION			25		24
	Proposal			25 ~~PROPOSAL~~		24


COMPENSATION DISCUSSION AND ANALYSIS	26	25
Overview	26 ~~OVERVIEW~~	25
Executive Summary	28 ~~EXECUTIVE SUMMARY~~	26
Compensation Philosophy and Objectives	30 ~~COMPENSATION PHILOSOPHY AND OBJECTIVES~~

	28The Role of the Compensation Committee and the Executive Officers in Determining Executive Compensation			30
	Elements Used to Achieve Compensation Philosophy and Objectives			32 ~~THE ROLE OF THE COMPENSATION COMMITTEE AND THE EXECUTIVE OFFICERS IN DETERMINING EXECUTIVE COMPENSATION~~	28
	Compensation Policies and Other Information			42 ~~ELEMENTS USED TO ACHIEVE COMPENSATION PHILOSOPHY AND OBJECTIVES~~	30
	Results of Say On Pay Vote at 2021 Annual Meeting			43 ~~COMPENSATION POLICIES AND OTHER INFORMATION~~	38
~~RESULTS OF SAY ON PAY VOTES AT 2018 ANNUAL MEETING~~		40
COMPENSATION COMMITTEE REPORT			4044
	ANALYSIS OF RISK IN THE ~~COMPANY'S~~COMPANY’S COMPENSATION STRUCTURE			4145
	SUMMARY COMPENSATION TABLE FOR ~~2018~~2021			46	42
	GRANTS OF PLAN-BASED AWARDS FOR ~~2018~~2021			47	43
	OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END ~~2018~~2021			49	44
	OPTION EXERCISES AND STOCK VESTED DURING FISCAL YEAR ~~2018~~2021			52	46
	POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL			53	47
	Equity-Based Awards — Omnibus Plan			53 ~~EQUITY-BASED AWARDS—OMNIBUS PLAN~~	47
	Annual Cash Incentive Awards — Omnibus Plan			54 ~~ANNUAL CASH INCENTIVE AWARDS—OMNIBUS PLAN~~	49
	POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE			5055
	Employment Agreements with Named Executive Officers			58 ~~EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVE OFFICERS~~	53
	CEO PAY RATIO			61	56
	PROPOSAL NO. 4: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING ~~FIRM: PROPOSAL NO. 3~~FIRM			62	57
	Proposal			62 ~~PROPOSAL~~	57
	Report of the Audit Committee			63 ~~REPORT OF THE AUDIT COMMITTEE~~	58
	~~FEES PAID TO~~Fees Paid to KPMG LLP			5964
	Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm			64 ~~POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~	59
	~~CERTAIN~~ RELATED ~~PARTY RELATIONSHIPS~~PERSON TRANSACTIONS			65	60
	Review and Approval of Transactions with Related Persons			65 ~~REVIEW AND APPROVAL OF TRANSACTIONS WITH RELATED PERSONS~~	60
	REQUIREMENTS, INCLUDING DEADLINES, FOR SUBMISSION OF PROXY PROPOSALS			67	61
	Nomination of Directors and Other Business of Stockholders			67 ~~NOMINATION OF DIRECTORS AND OTHER BUSINESS OF STOCKHOLDERS~~	61
	QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING			6268

Forward-Looking Statements: This proxy statement contains information that may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and which are subject to certain risks, trends and uncertainties. In particular, statements made that are not historical facts may be forward-looking statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and similar expressions identify forward-looking statements. Such statements are based on management’s current expectations, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include those uncertainties regarding the impact of the COVID-19 pandemic on our business and the economy generally, and those other matters disclosed in the Company’s SEC filings. The Company does not undertake any obligation to update any forward-looking statements.

~~Table of Contents~~

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PROXY STATEMENT SUMMARY

~~PROXY STATEMENT SUMMARY~~

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement before voting. For more complete information regarding the 2021 performance of KAR Auction Services, Inc.'s (the ~~"Company," "KAR"~~“Company,” “KAR,” “KAR Auction Services” or ~~"KAR Auction Services"~~“KAR Global”) ~~2018 performance,~~, please review the ~~Company's~~Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018.~~

2021.


ANNUAL MEETING OF STOCKHOLDERS


	Date and Time:			9:00 a.m., Eastern Daylight Time, on June ~~4, 2019~~2, 2022

	Location:			Online atwww.virtualshareholdermeeting.com/~~KAR2019~~KAR2022

	Record Date:			Stockholders of record as of the close of business on the record date, April ~~11, 2019~~8, 2022, are entitled to ~~vote. Each share of common stock is entitled to one~~ vote ~~for each director nominee and for each of the other proposals to be voted on~~ at the ~~2019~~2022 annual meeting of stockholders. On the record date, ~~KAR Auction Services~~the Company had ~~133,271,194~~121,532,564 shares of common stock issued and outstanding and 623,397 shares of Series A Preferred Stock issued and outstanding.

	NYSE Symbol:			KAR

	Registrar and Transfer Agent:			American Stock Transfer & Trust Company, LLC

ITEMS TO BE VOTED ON AT
ANNUAL MEETING OF STOCKHOLDERS

Proposal	Our Board’s Recommendation	Page
1. Election of the director nominee designated by the Apax Investor.	FOR the director nominee	6

2. Election of each of the other nine director nominees.	FOR each director nominee	6

3. Approval, on an advisory basis, of executive compensation.	FOR	25

4. Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2022.	FOR	62

Proposal Our Board's
Recommendation Page
1. Election of each of the nine director nominees. FOR
each director nominee
6
2. Approval, on an advisory basis, of executive compensation. FOR 24

3. Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2019. FOR 57

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		1

~~Table of Contents~~

BOARD NOMINEES (PAGES 7–~~12)~~13)

Name

Age

Director
Since

Independent

Primary Occupation

Committee
Membership*

Roy Mackenzie

2020

Yes

Partner of Apax Partners, LP

Carmel Galvin

2020

Yes

Chief People Officer at Stripe, Inc.

CC (Chair), NCGC

James P. Hallett

2007

Executive Chairman and Chairman of the Board of KAR Auction Services, Inc.

—

Mark E. Hill

2014

Yes

Managing Partner of Collina Ventures, LLC

NCGC (Chair), RC

J. Mark Howell

2014

Yes

Managing Director of Mintaka Ventures, LLC

RC (Chair), AC

Stefan Jacoby

2019

Yes

Non-Executive Director of McLaren Group

CC, NCGC

Peter Kelly

2021

Chief Executive Officer of KAR Auction Services, Inc.

—

Michael T. Kestner**

2013

Yes

Building Products and Automotive Industry Consultant

AC (Chair), RC

Sanjeev Mehra

2021

Yes

Managing Partner of Periphas Capital, LP

—***

Mary Ellen Smith

2019

Yes

Corporate Vice President of Worldwide Business Operations of Microsoft Corporation

AC, RC

Name
Age
Director
Since
Independent
Primary Occupation
Committee
Membership**
Donna R. Ecton 72 2013 Yes Chairman and Chief Executive
Officer of EEI Inc.
CC (Chair), AC
James P. Hallett 66 2007 No Chairman of the Board and
Chief Executive Officer of KAR
Auction Services, Inc. —
Mark E. Hill 63 2014 Yes Managing Partner of Collina
Ventures, LLC and Chairman
and Chief Executive Officer of
Lumavate LLC

NCGC (Chair), RC
J. Mark Howell 54 2014 Yes President and Chief Executive
Officer of Conexus Indiana RC (Chair), AC
Stefan Jacoby 61 — Yes Automotive Industry Consultant —
Lynn Jolliffe 67 2014 Yes Human Capital and Talent Management Consultant CC, NCGC
Michael T. Kestner 65 2013 Yes Building Products and
Automotive Industry Consultant
AC (Chair), RC
John P. Larson* 56 2014 Yes Chief Executive Officer of
Bestop, Inc. CC, RC
Stephen E. Smith 70 2013 Yes Automotive Industry Consultant AC, NCGC

* Lead Independent Director
**AC=Audit ~~Committee;~~Committee
CC=Compensation ~~Committee;~~CommitteeRC~~=Risk Committee;~~
NCGC=Nominating and Corporate Governance Committee

RC=Risk Committee

Lead Independent Director

***

If Mr. Mehra is re-elected by the stockholders, we expect Mr. Mehra to join the Compensation Committee immediately following the 2022 annual meeting.

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		2

~~Table of Contents~~

~~2018~~2021 BUSINESS HIGHLIGHTS

For the year ended December 31, ~~2018,~~2021, the Company ~~again delivered solid growth in volume of total vehicles sold, revenues, adjusted EBITDA and gross profit.~~continued to advance its digital transformation. Specific highlights for fiscal ~~2018~~2021 included:

				Grew dealer-consigned vehicles37% with approximately 550,000 vehicles sold via North American digital dealer-to-dealer marketplaces on a proforma basis (including CARWAVE pre-acquisition volumes)
		~~Net revenue was up 9% to~~ ~~approximately $3.8 billion.~~


		~~+ 7%~~		~~Total vehicles sold by ADESA, Inc. ("ADESA") and Insurance Auto~~ ~~Auctions, Inc. ("IAA") rose approximately 7% to 6.0 million units.~~

Generated


	strong cash flow from operations ~~Achieved net income~~ of ~~$328.0 million.~~	$413.2 million
an increase of 7%

Increased operating profit54%

to $210.6 million

Grew gross profit per vehicle sold19%

to $277

exclusive of depreciation and amortization

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				~~Adjusted EBITDA* rose 7%~~ ~~to $893.9 million.~~ * Adjusted EBITDA is a non-GAAP measure and is defined and reconciled to the most comparable GAAP measure, net income, in our Annual Report on Form 10-K for the year ended December 31, 2018 in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—EBITDA and Adjusted EBITDA."



		3

~~Table of Contents~~

CORPORATE GOVERNANCE HIGHLIGHTS (PAGES ~~13–~~14–18)

We are committed to high standards of ethical and business conduct and strong corporate governance practices. This commitment is highlighted by the practices described below as well as the information contained on our website,~~www.karauctionservices.com~~www.karglobal.com, which can be accessed by clicking on ~~"Governance" under~~“Investors” and then the ~~"Investor Relations"~~“Governance” tab.


		Annual Elections: Our directors are elected annually for one-year terms.
				Majority Voting: We maintain a majority voting standard for uncontested director elections with a policy for directors to tender their resignation ~~should~~if less than a majority of the votes cast ~~not be~~are in their favor.
				Director and Committee Independence: Eight of our ~~nine~~ten director nominees are independent, and all committees of our Board of Directors (the ~~"Board"~~“Board”) are comprised entirely of independent directors.
				Executive Sessions: Our independent directors meet in executive session at each regularly scheduled Board meeting.
				Lead Independent Director: We have a lead independent director who presides over the executive sessions of the independent directors and serves as the principal liaison between the independent directors and the ~~Company's CEO~~Company’s Executive Chairman and Chairman of the ~~Board.~~Board and the CEO.
				~~Gender~~ Diversity: ~~More than twenty percent~~Female and minority directors compromise 30% of our ~~Board is comprised of women.~~Board.
				Annual Board and Committee Evaluations: The Board and its committees each ~~committee~~ evaluates its performance each year.
				Robust Equity Ownership Requirements for Non-Employee Directors: The stock ownership guideline for our non-employee directors is five times their annual cash retainer.
				Robust Equity Retention Requirements for Non-Employee Directors: All shares of our common stock granted to non-employee directors must be held for three years after vesting while serving as a director.
				Robust Equity Ownership Requirements for Executive Officers: We have stock ownership guidelines that are applicable to our executive officers. The stock ownership guideline for our CEO is five times his annual base salary and, ~~our CEO currently holds over 20~~for the remaining named executive officers, three times ~~his~~ annual base salary. Executive officers are required to hold 60% of vested shares, net of taxes, until stock ownership guidelines are met.
				Anti-Hedging and Pledging Policies: Our directors and executive officers are prohibited from hedging or pledging Company stock.
				Annual ~~management~~Management and CEO ~~evaluation~~Evaluation and ~~succession planning review:~~Succession Planning Review: Our Board conducts an annual evaluation and review of our CEO and each executive ~~officer's~~officer’s performance, development and succession plan.
				Board Risk Oversight: The Risk Committee assists the Board in its oversight of: (i) the principal business, financial, technology, operational and regulatory risks and other material risks and exposures of the Company; and (ii) the actions, activities and initiatives of the Company to mitigate such risks and exposures. The Risk Committee provides oversight with respect to risk practices implemented by management, except for the oversight of risks that have been specifically delegated to another committee of the Board (in which case the Risk Committee may maintain oversight over such risks through the receipt of reports from such committees).

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		4

~~Table of Contents~~

EXECUTIVE COMPENSATION (PAGES 25–~~55)~~57)

We maintain a compensation program structured to achieve a close connection between executive pay and Company performance. We believe that this strong pay-for-performance orientation has served us well in recent years. For more information regarding our named executive officer compensation, see ~~"Compensation~~“Compensation Discussion and ~~Analysis"~~Analysis” and the compensation tables that follow such section.

Executive Compensation Best Practices

WHAT WE DO

✔

~~Stockholder alignment:~~Pay for performance: ~~We have demonstrated a trend of alignment between~~Our annual incentive program is 100% performance based and our ~~total stockholder return ("TSR")~~equity incentive program is 90% performance ~~and the compensation~~based, with 50% of our ~~CEO, as shown~~equity awards in the ~~chart on page 27.~~form of PRSUs and 40% of our equity awards being performance-based stock options.

✔

Independent Compensation Committee: All of the members of our Compensation Committee are independent under ~~New York Stock Exchange ("NYSE")~~NYSE rules.

✔

Independent compensation consultant: The Compensation Committee retains its own independent compensation consultant to evaluate and review our executive compensation program and practices.

✔

~~Pay for performance:~~“Double-trigger” equity vesting: Our annual incentive program is 100% performance-based and our equity incentive program is heavily performance-based with 75% of our equity awards in the form of performance restricted stock units ("PRSUs").

✔

~~"Double-trigger"~~ ~~vesting provisions in equity award agreements: Beginning with the 2017 equity grants, accelerated~~Accelerated vesting of assumed or replaced equity awards upon a change in control of the Company is only permitted if an executive experiences a qualifying termination of employment in connection with or following such change in control.

✔

Robust equity ownership requirements: The stock ownership guideline for our CEO is five times his annual base salary, and three times annual base salary for the other executive officers. Executive officers are required to hold 60% of vested shares, net of taxes, until stock ownership guidelines are met.

Maximum payout caps: The Compensation Committee sets maximum amounts that may be payable for annual cash incentive compensation and PRSUs.

✔

Annual compensation risk assessment: Each year we perform an assessment of any risks that could result from our compensation programs and practices.

Clawback ~~policy for financial misconduct:~~policy: Our clawback policy provides for the recovery and cancellation of incentive compensation of an executive officer in the event we are required to prepare an accounting restatement due to such executive ~~officer's~~officer’s intentional misconduct.

✔

~~Moderate change in control benefits:~~ ~~Change in control severance benefits are two times base salary and target bonus for our CEO and one times base salary and target bonus for our other executive officers.~~

✔

~~Robust equity ownership requirements:~~Stockholder alignment: We ~~have stock ownership guidelines~~reward performance that are applicable to our executive officers. The stock ownership guideline for our CEO is five times his annual base salary, and our CEO currently holds over 20 times his annual base salary. Executive officers are required to hold 60%meets or exceeds the performance goals that the Compensation Committee establishes with the objective of ~~vested shares, net of taxes, until stock ownership guidelines are met.~~increasing stockholder value.

WHAT WE ~~DON'T~~DON’T DO

✘

~~Allow~~Pay dividends ~~or dividend equivalents to be paid~~ on unvested ~~PRSUs:~~equity awards: Dividend equivalents and cash are accrued ~~but not paid~~ on PRSUs ~~until (i)~~and RSUs, respectively, but are only paid out if and to the ~~performance conditions are satisfied;~~extent the underlying PRSUs and ~~(ii) the PRSUs vest after the performance measurement period.~~RSUs vest.

✘

Provide excise tax gross-ups: We do not provide “golden parachute” excise tax gross-ups.

Provide excessive perquisites: We provide a limited number of perquisites that are designed to ~~attract~~support a competitive total compensation package.

Guarantee incentive compensation: Our annual incentive program is 100% performance-based and ~~retain highly qualified executives.~~our equity incentive program is 90% performance-based, without guaranteeing any minimum levels of payment.

✘

Allow hedging or pledging of the ~~Company's~~Company’s securities: We prohibit hedging, pledging and short sales of Company stock by our directors and executive officers.

✘

Reprice stock options: Stock option exercise prices are set equal to the grant date market price and cannot be repriced or discounted without stockholder approval.

✘

~~Maintain a defined benefit~~

Provide pension ~~plan:~~benefits or supplemental retirement plans: We do not maintain a defined benefit pension ~~plan~~or supplemental retirement plans for our executive officers.

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		5

~~Table of Contents~~

~~ELECTION OF DIRECTORS:~~
~~PROPOSAL NO. 1~~

DIRECTORS ELECTED ANNUALLY

~~Our~~

The Apax Investor has designated, and our Board has nominated, Roy Mackenzie, to stand for election to the Board at the 2022 annual meeting. In addition, our Board has nominated the nine individuals named below to stand for election to the Board at the ~~2019~~2022 annual meeting. The ~~Company's~~Company’s directors are elected each year by ~~the~~our stockholders at the annual ~~meeting.~~meeting (with one member of the Board being elected solely by the holders of Series A Preferred Stock). We do not have a staggered or classified board. Each ~~director's~~director’s term will last until the ~~2020~~2023 annual meeting of stockholders and until such ~~director's~~director’s successor is duly elected and qualified, or such ~~director's~~director’s earlier death, resignation or removal. ~~Each~~The director nominee designated by the Apax Investor must receive the affirmative vote of a majority of the votes cast by the holders of Series A Preferred Stock (voting as a separate class), and the nine other director nominees must receive the affirmative vote of a majority of the votes cast by the holders of common stock and Series A Preferred Stock, voting together as a single class, in the election of directors at the ~~2019~~2022 annual meeting to be elected (i.e., the number of shares voted ~~"FOR"~~“FOR” a director nominee must exceed the number of votes cast ~~"AGAINST"~~“AGAINST” such nominee).

DIRECTOR INDEPENDENCE

The Board is responsible for determining the independence of our directors. Under the NYSE listing standards, a director qualifies as independent if the Board affirmatively determines that the director has no material relationship with ~~us.~~the Company. While the focus of the inquiry is independence from management, the Board is required to broadly consider all relevant facts and circumstances in making an independence determination. In making independence determinations, the Board complies with NYSE listing standards and considers all relevant facts and circumstances. Based upon its evaluation, our Board has affirmatively determined that the following ~~current~~ directors ~~and director nominees~~ meet the standards of ~~"independence"~~“independence” established by the NYSE: ~~Todd F. Bourell, Donna R. Ecton,~~Carmel Galvin, Mark E. Hill, J. Mark Howell, Stefan Jacoby, ~~Lynn Jolliffe,~~ Michael T. Kestner, ~~John P. Larson~~Roy Mackenzie, Sanjeev Mehra and Mary Ellen Smith. With respect to the portion of fiscal 2021 during which they served on the Board, the Board also determined that David DiDomenico and Stephen E. ~~Smith.~~Smith met the standards of “independence” established by the NYSE. James P. Hallett, our ~~CEO~~Executive Chairman and Chairman of the Board, isand Peter J. Kelly, our CEO, are not an independent ~~director.~~

directors.

BOARD NOMINATIONS AND DIRECTOR NOMINATION PROCESS

The Board is responsible for nominating members for election to the Board and for filling vacancies on the Board that may occur between the annual meetings of stockholders. The Nominating and Corporate Governance Committee is responsible for identifying, screening and recommending candidates to the Board for Board membership. When formulating its Board membership recommendations, the Nominating and Corporate Governance Committee may also consider advice and recommendations from others, including third-party search firms, current Board members, management, stockholders and other persons, as it deems appropriate. ~~The Nominating and Corporate Governance Committee has retained a third-party search firm to assist with identifying, screening and evaluating potential candidates.~~

The Nominating and Corporate Governance Committee uses a variety of methods to identify and evaluate potential candidates. Consideration of candidates typically involves a series of internal discussions, review of candidate information, and interviews with selected candidates. The Nominating and Corporate Governance Committee will consider the candidate against the criteria it has adopted, as further discussed below, in the context of the ~~Board's~~Board’s then-current composition and the needs of the Board and its committees, and will ultimately recommend qualified candidates for election to the Board. Though the Nominating and Corporate Governance Committee does not have a formal policy regarding consideration of director candidates recommended by stockholders, the Nominating and Corporate Governance Committee generally evaluates such candidates in the same manner by which it evaluates director candidates recommended by other sources.

With respect to the director to be elected by the holders of shares of Series A Preferred Stock, such nominee is required to have been designated by the Apax Investor pursuant to the Apax Investment Agreement.

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As detailed in both the Nominating and Corporate Governance Committee Charter and the Corporate Governance Guidelines, ~~Board~~director candidates are selected based upon various criteria, including experience, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest and such other relevant factors that the Nominating and Corporate Governance Committee considers appropriate in the context of the needs of the Board.



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~~All~~ Director candidates are considered in light of the needs of the Board with due consideration given to the foregoing criteria. Board members are expected to prepare for, attend and participate in all Board and applicable committee meetings and the ~~Company's~~Company’s annual meetings of stockholders.

In addition, a stockholder may nominate candidates for election as a director, provided that the nominating stockholder follows the procedures set forth in Article II, Section 5 of the ~~Company's~~Company’s Second Amended and Restated By-Laws for nominations by stockholders of persons to serve as directors, including the requirements of timely notice and certain information to be included in such notice. Deadlines for stockholder nominations for next ~~year's~~year’s annual meeting are included in the ~~"Requirements,~~“Requirements, Including Deadlines, for Submission of Proxy ~~Proposals"~~Proposals” section on page ~~61.~~

An67.

Pursuant to our employment ~~agreement entered into on February 27, 2012 between the Company and~~agreements with James P. Hallett, ~~the Company's CEO~~our Executive Chairman and Chairman of the Board, ~~provides that Mr.~~and Peter J. Kelly, our Chief Executive Officer, the Company will nominate each of Messrs. Hallett ~~shall be entitled~~and Kelly to serve as a member of the Board ~~for so long as the~~during his respective period of employment ~~agreement is in effect.~~

under such agreement.

BOARD QUALIFICATIONS AND DIVERSITY

The Nominating and Corporate Governance Committee and the Board believe that diversity along multiple dimensions, including opinions, skills, perspectives, personal and professional experiences, and other differentiating characteristics, is an important element of its nomination recommendations. The Nominating and Corporate Governance Committee has not identified any specific minimum qualifications which must be met for a person to be considered as a candidate for director. However, Board candidates are selected based upon various criteria including experience, skills, expertise, diversity, personal and professional integrity, character, business judgment, time availability in light of other commitments, dedication, conflicts of interest and such other relevant factors that the Nominating and Corporate Governance Committee considers appropriate in the context of the needs of the Board. Although the Board does not have a formal diversity policy, the Nominating and Corporate Governance Committee and Board review these factors, including diversity of gender, race, ethnicity, age, cultural background and professional experience, in considering candidates for Board membership.

INFORMATION REGARDING THE NOMINEES FOR ELECTION
TO
THE BOARD ~~OF DIRECTORS~~

The following information is furnished with respect to each nominee for election as a director. All of the nominees ~~with the exception of Stefan Jacoby, are currently directors and~~ were elected by the stockholders at last ~~year's~~year’s annual ~~meeting.~~meeting, except for Mr. ~~Jacoby~~Mehra, who joined the Board effective October 27, 2021. Mr. Mehra was ~~initially identified and~~ recommended tofor consideration by the Nominating and Corporate Governance Committee as a potential nominee by current independent directors. For so long as the Apax Investor meets certain beneficial ownership conditions as detailed in the Apax Investment Agreement, the Apax Investor has the right to designate one director to the Board. The Apax Investor has designated Roy Mackenzie for election in 2022 for a ~~third-party search firm.~~term expiring at the 2023 annual meeting. Consistent with the Apax Investment Agreement, our Board now nominates, and recommends, Mr. ~~Jacoby was subsequently recommended~~Mackenzie for election in 2022 for a term expiring at the 2023 annual meeting. The appointment of the Apax Investor designee will be voted on by the ~~Nominating and Corporate Governance Committee~~holders of Series A Preferred Stock at each annual meeting until the Apax Investor ceases to meet certain beneficial ownership conditions as detailed in the ~~Board for election as a director and the Board has nominated Mr. Jacoby to stand for election as a director at the 2019 annual meeting.~~ Apax Investment Agreement.

Each of the nominees has consented to being named in this proxy statement and to serve as a director if elected. If Roy Mackenzie shall not be available for election as a director at the 2022 annual meeting, it is intended that shares represented by the accompanying proxy will be voted for the election of a substitute nominee designated by the Apax Investor. If any of the other nine nominees is unavailable to stand for election as a director, your ~~proxies~~proxy holders will have the authority and discretion to vote for another nominee proposed by the Board or the Board may reduce the number of directors to be elected at the ~~2019~~2022 annual meeting. The ages of the nominees are as of the date of the ~~2019~~2022 annual meeting, June ~~4, 2019.~~

2, 2022.

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Nominees for Election as Directors to Be Elected by Holders of Series A Preferred Stock		7

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~~Donna R. Ecton~~

	Roy Mackenzie
							Independent Director since ~~December 2013~~June 2020 Age: 72 50 Current Board Committees: Compensation Committee ~~(Chair)~~ ~~and Audit Committee~~

~~James P. Hallett~~


	Career Highlights							~~Director~~ ~~since April 2007~~ ~~Age:~~66 ~~Chairman of the Board and~~ ~~Chief Executive Officer~~


	~~Career Highlights~~
• ~~Chairman~~ Partner at Apax Partners, LP (“Apax”), a private equity advisory firm, since January 2003, and ~~Chief Executive Officer~~also serves on the Investment Committees for the Apax Buyout Funds and Apax Global Alpha. • Director of ~~EEI~~Trade Me Ltd, Vyaire Medical, Inc., ~~a management consulting firm she founded in July 1998 to provide private equity firms with due diligence~~ and ~~market and operational assessments of companies being considered for acquisition, as well as turnaround management of troubled portfolio companies.~~
• ~~Director (1994 to 1998) and Chief Operating Officer (1996 to 1998) of PetsMart, Inc.~~
• ~~Chief Executive Officer of a number of companies, including Business Mail Express, Inc. (1995 to 1996) and Van Houten North America Inc./Andes Candies Inc. (1991 to 1994).~~
• ~~Held senior corporate management positions at Nutri/System,~~Duck Creek Technologies, Inc., ~~Campbell Soup Company~~each in connection with investments by funds advised by Apax. • Previously served as a director of several companies in connection with investments by funds advised by Apax, including Sophos Group plc, King Digital Entertainment plc, Exact Software NV, Epicor Software, Inc., and ~~Nordemann Grimm, Inc.~~
NXP Semiconductors NV. • ~~Began career in banking at Chemical Bank and Citibank N.A. in New York City, running the Upper Manhattan middle market lending business and midtown Manhattan's retail banks.~~
• ~~Previous public company board of director positions have included Mellon Bank Corporation and Mellon Bank N.A., Mellon PSFS, H&R Block, Inc., Tandy Corporation, Barnes Group Inc. and Vencor, Inc.~~
• ~~Elected to and served on the Harvard University's Board of Overseers.~~
• ~~Member of the Council on Foreign Relations in New York City.~~
• ~~Graduate of Wellesley College (BA) and the Harvard~~ Holds an MBA from Stanford Graduate School of Business ~~Administration (MBA).~~ and a M.Eng in Electrical Engineering from Imperial College, London.
~~Other Current Public Company Directorships:~~ ~~Director of CVR GP, LLC, the general partner of CVR Partners, LP, a nitrogen fertilizer business, since March 2008.~~
Other Public and Registered Investment Company Directorships in Last Five Years:Director of Duck Creek Technologies, Inc. since April 2016. Partner at Apax since 2003. Director of Sophos Group PLC from May 2015 to March 2020.
	Skills and Qualifications
		Extensive experience working closely with management teams to build successful technology companies.
		Substantial experience in evaluating companies’ strategies, operations and financial performance, which provides important perspectives and insights.
		Deep technology expertise.
		Current and prior public board service brings valuable skills and perspectives to our Board.
	Mr. Mackenzie is a director who was designated by the Apax Investor under the terms of the Apax Investment Agreement. Only the holders of Series A Preferred Stock may vote on the election of Mr. Mackenzie as a director at the 2022 annual meeting.

The Board of Directors recommends a vote FOR ~~Former~~the election of the foregoing nominee to the Board of Directors.

Proxies solicited by the Board of Directors will be voted “FOR” the election of the director nominee named in this proxy statement and on the proxy card unless stockholders specify a contrary vote.

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Nominees for Election as Directors to Be Elected by Holders of Common Stock and Series A Preferred Stock, Voting Together as a Single Class

Carmel Galvin
		Independent Director since February 2020 Age: 53 Current Board Committees: Compensation Committee (Chair) and ~~Non-Executive~~Nominating and Corporate Governance Committee
Career Highlights
• Chief People Officer at Stripe, Inc., a payment software services and solutions company, since January 2021. • Chief Human Resources Officer (“CHRO”) and Senior Vice President, People and Places, at Autodesk, Inc., a multinational software corporation, from March 2018 to January 2021. • CHRO and Senior Vice President at Glassdoor, Inc., a job listing platform, from April 2016 to February 2018. • CHRO and Senior Vice President at Advent Software, Inc., an investment management software company, from October 2014 to April 2016. • Vice President of Talent & Culture Development for Deloitte New-venture Accelerator (DNA), from May 2013 to October 2014. • Provided human resources consulting services from January 2011 to April 2013 at Front Arch, Inc. and from September 2009 to December 2011 at Corporate Leadership Council (CLC), Corporate Executive Board. • Managing Director, Global Head of Human Resources at Moody’s Analytics (formerly Moody’s KMV) from November 2004 to March 2008 and Vice President, Global Head of Human Resources at Barra, Inc. from September 1995 to June 2002. • Graduate of Trinity College Dublin (BA) and University College Dublin (MBS).
Skills and Qualifications
	More than 25 years of talent and culture leadership experience with global organizations in the technology and online sectors.
	Extensive experience in helping transform global companies, including leading diversity and inclusion, employee engagement and culture management efforts at companies with varied locations, languages and cultures.
	Significant experience with executive compensation programs and practices, including working directly with boards and compensation committees on compensation, talent and succession planning initiatives.
	Provides diverse international perspective.

	James P. Hallett
		Director since April 2007 Age: 69 Executive Chairman and Chairman of the Board
	Career Highlights
	• Executive Chairman of the Company since April 2021 and Chairman of the Board of ~~Body Central Corp. (2011 to 2014).~~
~~Skills and Qualifications~~
✓ More than 40 years of operational and management experience, including as a CEO, with established companies allows Ms. Ecton to provide to our Board insight into operations, marketing, finance, human resources and strategic planning.
✓ ~~Experience in running multiple location businesses not only in the U.S., but also in Canada, the U.K. and Australia.~~
✓ ~~Significant strategy and risk assessment experience developed in her roles as a management consultant and as a senior executive of multiple companies.~~
✓ ~~Substantial financial experience gained in her roles as CEO, COO and other senior executive positions.~~
✓ ~~Current and prior service on the board of directors of public companies, including several committee chair roles, provides additional perspective to our Board.~~


~~Career Highlights~~
• ~~Chairman of~~ the Company since December ~~2014 and~~2014. Chief Executive Officer ~~since~~of the Company from September ~~2009.~~
2009 to March 2021. • Chief Executive Officer and President of ADESA from April 2007 to September 2009, a wholly owned subsidiary of the Company.
• President of Columbus Fair Auto Auction, a large independent automobile auction located in Columbus, Ohio, from May 2005 to April 2007.
• After selling his auctions to ADESA in 1996, Mr. Hallett held various senior executive leadership positions with ADESA between 1996 and 2005, including President and Chief Executive Officer of ADESA.
• Founded and owned two automobile auctions in Canada from 1990 to 1996.
• ~~Graduate of Algonquin College.~~
• Managed and then owned a number of new car franchise dealerships for 15 years.
• Winner of multiple industry awards, including NAAA Pioneer of the Year in 2008 and the Ed Bobit Industry Icon award in 2018.
• Recognized as the EY Entrepreneur of the Year 2014 National Services Award Winner and one of Northwood ~~University's~~University’s 2015 Outstanding Business Leaders. • Graduate of Algonquin College.
	Skills and Qualifications
✓		Committed and deeply engaged leader with over 20 years of experience in key leadership roles throughout the Company and over 40 years of experience in the industry.
✓		As the former Chief Executive Officer and now Executive Chairman, Mr. Hallett has a thorough and in-depth understanding of the ~~Company's~~Company’s business and industry, including its employees, business units, customers and investors, which provides an additional perspective to our Board.
✓		Utilizes strong communication skills to guide Board discussions and keep our Board apprised of significant developments in our business and industry; including our risk management practices, strategic planning and development.

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	Mark E. Hill

		8

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~~Mark E. Hill~~


		Independent Director since June 2014 Age: 63 66 Current Board Committees: Nominating and Corporate Governance Committee (Chair) and Risk Committee

~~J. Mark Howell~~


	Career Highlights							~~Independent Director~~ ~~since December 2014~~ ~~Age:~~ 54 ~~Current Board Committees:~~ ~~Risk Committee (Chair) and~~ ~~Audit Committee~~


��	~~Career Highlights~~
• Managing Partner of Collina Ventures, LLC, a private investment company that invests in software and technology companies, since ~~2006; and~~ 2006. • Chairman and Chief Executive Officer of Lumavate LLC, a company that provides a platform for building cloud-based mobile applications, ~~since~~from November ~~2017.~~
2017 to April 2021 and Executive Chairman from May 2021 to December 2021. • Co-founder and Chairman of Bluelock, LLC, a privately held infrastructure-as-a-service company, from 2006 to March 2018.
• Co-Founder, President and Chief Executive Officer of Baker Hill Corporation, a banking industry software and services business, from 1985 to 2006. Baker Hill Corporation was acquired by Experian PLC, a global information solutions company, in 2005.
• Graduate of the University of Notre Dame (BBA) and Indiana University (MBA).
~~Other Public Company Directorships in Last Five Years:~~ ~~Lead Independent Director of Interactive Intelligence Group, Inc., a global software business, from 2005 to 2016.~~
Skills and Qualifications
✓		Significant executive leadership and management experience leading and owning a software and technology-based business provides our Board with expertise in technology, innovation, and strategic investments.
✓		Extensive experience as an investor and mentor to numerous early stage software and technology companies provides entrepreneurial perspective to the Board.
✓		Key leadership experience in numerous central Indiana business and community service organizations, including ~~TechPoint, the~~ Central Indiana ~~Community Foundation,~~Corporate Partnership, Ascend Indiana, the Orr Fellowship and the local Teach For America board.
✓		Public company board experience, including serving as a lead independent director.

	J. Mark Howell
			~~Career Highlights~~Independent Director since December 2014 Age: 57 Current Board Committees: Risk Committee (Chair) and Audit Committee
	Career Highlights
	• Managing Director of Mintaka Ventures, LLC, a firm focused on private investments, since August 2021. • President and Chief Executive Officer of Conexus Indiana, ~~Indiana's~~Indiana’s advanced manufacturing and logistics initiative sponsored by Central Indiana Corporate Partnership, Inc., ~~since~~from January ~~2018.~~
2018 to August 2021. • Chief Operating Officer of ~~Angie's~~Angie’s List, Inc., a ~~publicly-traded, United States-based, leading~~national local services consumer ~~web services business connecting more than three million consumers to highly-rated local~~review service ~~providers via its online~~and marketplace, from March 2013 to September 2017.
Angie’s List, Inc. was acquired in 2017 and merged into ANGI Homeservices Inc. • President, Ingram Micro North America Mobility of Ingram Micro Inc., a technology distribution company, from 2012 to 2013.
• President, BrightPoint Americas of BrightPoint, Inc., a distributor of mobile devices for phone companies, including Chief Operating Officer, Executive Vice President and Chief Financial Officer, from 1994 to 2012. BrightPoint, Inc. was sold to Ingram Micro Inc. in 2012.
• Vice President and Corporate Controller of ADESA from August 1992 to July 1994, now a wholly owned subsidiary of the Company.
• Audit Staff and Senior Staff at Ernst & Young LLP.
• Graduate of the University of Notre Dame (BBA in Accounting).
	Skills and Qualifications
✓		Extensive senior leadership experience at internet-based and technology-driven companies provides valuable insight as an increasing amount of the ~~Company's~~Company’s consigned vehicles are sold online.
✓		Significant executive leadership experience in the public company sector.
		Provides unique, in-depth knowledge of ~~ADESA~~the Company and its industry as a former employee of ADESA.
✓		Substantial financial experience.
✓		Certified Public Accountant with experience in public accounting and public companies.

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	Stefan Jacoby

		9

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~~Stefan Jacoby~~


		Independent Director ~~Nominee~~ since June 2019 Age: 61 64

~~Lynn Jolliffe~~


		~~Independent Director~~ ~~since June 2014~~ ~~Age:~~ 67 Current Board Committees: Compensation Committee and Nominating and Corporate Governance Committee


	Career Highlights
	• ~~Consultant~~ Non-Executive Director of McLaren Group, a UK automotive, motorsport, and technology company, since September 2021; and consultant in the automotive industry since January 2018.
• Executive Vice President of General Motors Company, a multinational company that designs, manufactures and markets vehicles worldwide, and President of GM International Operations, from August 2013 to January 2018.
• Chief Executive Officer and President of Volvo Car Corporation, a multinational vehicle manufacturer and marketer, from August 2010 to October 2012.
• Served in several capacities at Volkswagen AG, a multinational automotive manufacturing company, between 2004 and 2010, most recently serving as Chief Executive Officer and President of Volkswagen Group of America from 2007 to 2010 and as Executive Vice President of Group Marketing and Sales at Volkswagen AG from 2004 to 2007.
• Chief Executive Officer and President of Mitsubishi Motors Europe, the European headquarters of automotive manufacturer Mitsubishi Motors, from 2001 to 2004.
• Served in a variety of finance and leadership roles at Volkswagen AG from 1985 to 2001.
• Graduate of the University of Cologne, Germany.
	Skills and Qualifications
✓		More than 30 years of broad international experience in the automotive industry, including senior management positions with global automakers in Germany, Japan, the Netherlands, Sweden, Singapore and the United States.
✓		Deep insights and understanding of the macro trends and technologies rapidly transforming the automotive industry, including mobility as a service and autonomous vehicles.
✓		Extensive knowledge of customer experience and retail structures. Expansive experience in finance, sales and marketing has given him a deep understanding of the impact of both areas on profitability and successful market growth.
✓		Strong leadership skills in managing and motivating people for establishing momentum for growth and change, building high performance teams in transformative periods and recruiting and retaining senior management.

	Peter Kelly
			~~Career Highlights~~Director since April 2021 Age: 53 Chief Executive Officer
	Career Highlights
	• Chief Executive Officer of ~~Jolliffe Solutions, providing consulting in human capital~~the Company since April 2021. • President of the Company from January 2019 to March 2021. • President of Digital Services of the Company from December 2014 to January 2019 and ~~talent management since June 2015.~~
• ~~Executive Vice President, Global Human Resources~~Chief Technology Officer of ~~Ingram Micro Inc., a technology distribution company,~~the Company from June ~~2007~~2013 to January 2019. • President and Chief Executive Officer of OPENLANE, a subsidiary of the Company, from February 2011 to June ~~2015.~~
2013. – ~~Vice President, Human Resources for the North America region from October 2006 to May 2007.~~
– ~~Served as Regional Vice President, Human Resources and Services for Ingram Micro European Coordination Center from August 1999 to October 2006.~~
• ~~Served in various capacities, including Vice~~ President and Chief Financial Officer of OPENLANE from February 2010 to February 2011. • Co-founded OPENLANE in 1999, and served in a number of executive roles at OPENLANE from 1999 to 2010. • Prior to his work with ~~responsibility~~OPENLANE, managed engineering, construction and procurement projects for ~~human resources, at two Canadian retailers, including Holt Renfrew,~~Taylor Woodrow, a U.K.-based construction and development firm, from ~~1985~~1989 to ~~1999.~~1997. • Graduate of the University College Dublin (Engineering) and Stanford University (MBA).
• ~~Began career at Bell Canada and then moved to Bank of Montreal.~~
• ~~Graduated from Queens University and University of Toronto (MBA).~~
Skills and Qualifications
✓ ~~Extensive functional and leadership~~		More than 20 years of experience in ~~finance, human resources~~the Company’s industry, with unique insights gained as a co-founder and ~~general management.~~ executive of a digital auction start-up and subsequently as a senior executive of the Company, leading our digital services and technology teams and offerings.
✓ ~~Deep~~		As former President and now Chief Executive Officer, Mr. Kelly has a thorough and in-depth understanding of the Company’s business ~~drivers from~~and industry, including its employees, business units, customers and digital opportunities, which provides an additional perspective to the ~~financial, operational and people perspective gained from experience in multiple industries across three continents.~~ Board. Mr. Kelly’s entrepreneurial mindset provides further unique perspective.
✓ ~~Diversity in viewpoint~~		Deep insights into the businesses and ~~international~~technologies rapidly transforming the Company’s business ~~experience as she has lived~~ and ~~worked in the U.S., Canada and abroad.~~ industry.
✓ ~~Significant experience with executive compensation decisions, strategies~~		Strong leadership skills and ~~policies for the acquisition and development of employee talent.~~ technology expertise.

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	Michael T. Kestner

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~~Michael T. Kestner~~


		Independent Director since December 2013 Lead Independent Director since July 2019 Age: 65 68 Current Board Committees: Audit Committee (Chair) and Risk Committee

~~John P. Larson~~


	Career Highlights							~~Lead Independent Director~~ ~~since June 2014~~ ~~Age:~~ 56 ~~Current Board Committees:~~ ~~Compensation Committee and~~ ~~Risk Committee~~


	~~Career Highlights~~
• Consultant in the building products and automotive industry since December 2015.
• Chief Financial Officer of Building Materials Holding Corporation, a building products company, from August 2013 to December 2015.
• Partner in FocusCFO, LLC, a consulting firm providing part time CFO services, from April 2012 to August 2013.
• Executive Vice President, Chief Financial Officer and a director of Hilite International, Inc., an automotive supplier of powertrain parts, from October 1998 to July 2011.
• Chief Financial Officer of Sinter Metals, Inc., a supplier of powder metal ~~power~~ precision components, from 1995 to 1998.
• Served in various capacities at Banc One Capital Partners, Wolfensohn Ventures LP and as a senior audit manager at KPMG LLP.
• Graduated from Southeast Missouri State University.
	Skills and Qualifications
✓		Over 20 years as a CFO provides valuable experience and perspective as Chair of the Audit Committee.
✓		Brings experience as the former CFO of a large, United States based company which includes experience with complex capital structures and mergers and acquisitions.
✓		Extensive experience in financial analysis and financial statement preparation.
✓		Management experience in the automotive industry both domestically and internationally provides him with additional insight into financial and business matters that are important to the Company.
✓		Certified Public Accountant with experience in public accounting and public companies.

	Sanjeev Mehra
				~~Career Highlights~~Independent Director since October 2021 Age: 63
	Career Highlights
	• Managing Partner of Periphas Capital, LP, a private equity investing firm focused on making investments in technology-enabled businesses, business services, industrials and consumer industries, since founding the firm in 2017. • Chief Executive Officer and a member of ~~Bestop, Inc.,~~the Board of Directors of Periphas Capital Partnering Corporation, a ~~leading manufacturer~~special purpose acquisition company, since September 2020. • Previously served in a variety of ~~soft tops~~positions at Goldman, Sachs & Co. (“Goldman”) from 1986 to 2017, including Partner from 1998 to 2016, and ~~accessories for Jeep vehicles, since August 2015.~~
• ~~Chief Executive Officer~~held a range of ~~Escort Inc., an automotive electronics manufacturer, from January 2008 to January 2014~~other senior positions, including vice chairman of the global private equity business, and prior to that, ~~as President~~co-head of the Americas private equity business. • Founding member of Goldman’s Principal Investment Area (“PIA”), the firm’s private investing arm of its Merchant Banking Division, and ~~Chief Operating Officer~~served on the PIA Investment Committee from ~~June~~1998 to 2017. • Has served on the board of directors of over 25 companies, including on the Board of the Company from 2007 until 2013. • Received his MBA from Harvard Business School and a BA from Harvard College. Other Public and Registered Investment Company Directorships in Last Five Years: Director of Periphas Capital Partnering Corporation since September 2020. Director of Aramark from 2007 to ~~January 2008.~~2019.
• Served in a number of capacities at General Motors Company from 1986 to 2007, most recently serving as General Manager overseeing operations for the Buick, Pontiac and GMC Divisions from January 2005 to May 2007 and as General Director of Finance (CFO) for U.S. Sales, Service and Marketing Operations from 2001 to 2004.
• ~~Led General Motors Company's used car remarketing activity from 1999 to 2000.~~
• ~~Graduated from Northern Illinois University and Purdue University (M.S., Management).~~
Skills and Qualifications
✓ Extensive business, management and operational experience as CEO in the automotive aftermarket and as a senior executive at one of the world's largest automakers, General Motors Company, provides him with perspective into the Company's challenges, operations, and strategic opportunities.
✓		Extensive experience in ~~automotive remarketing, captive finance (GMAC), rental car program design~~advising companies and ~~automotive dealer activities, as well as an~~working closely with management teams to foster growth, transformational change and operational efficiency.
			Substantial experience in evaluating companies’ strategies, operations and financial performance, which provides important perspectives and insights.
			Former service on the Company’s Board provides unique, in depth ~~understanding~~knowledge of the ~~overall automotive business, provide him a broad perspective on our industry~~Company and ~~key customers.~~ its industry.
✓ ~~Extensive experience~~			Current and prior public board service brings valuable skills and perspectives to our Board, including extensive time serving as a ~~senior leader in corporate finance has provided him with key skills, including financial reporting, accounting~~lead independent director and ~~control, business planning and analysis and risk management, that are valuable to the oversight~~chairman of ~~our business.~~ board committees.

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	Mary Ellen Smith

		11

~~Table of Contents~~

~~Stephen E. Smith~~


		Independent Director since ~~December 2013~~October 2019 Age: 70 62 Current Board Committees: Audit Committee and ~~Nominating and Corporate~~ ~~Governance~~ Risk Committee


	Career Highlights
	• ~~Consultant in the automotive industry since October 2012.~~
• ~~Senior~~ Corporate Vice President ~~Financial Services~~ of ~~American Honda Finance~~Worldwide Business Operations of Microsoft Corporation ~~(AHFC)~~(“Microsoft”), a ~~provider~~technology company, since July 2013. • Vice President, Worldwide Operations of ~~financial services~~Microsoft from 2011 to ~~automobile, motorcycle, marine~~July 2013, General Manager, Worldwide Commercial Operations of Microsoft from 2010 to 2011, and ~~power equipment product dealers~~General Manager and ~~their customers,~~President of Microsoft Licensing, GP from ~~1985~~2006 to October 2012 (including various other positions). Financial services included commercial lending, consumer lending and financing and vehicle service contracts. Started the consumer finance organization2010. • Served in several roles at ~~AHFC.~~
• ~~Served two terms as Chair of the Vehicle Finance Division for the American Financial Services Association. Member of the Financial Services Roundtable.~~
• ~~Began career at Bullock's Dept. Stores, a division of Federated Department Stores. Held senior level positions in the credit card division and in store management.~~
• ~~Member of the board of the directors of Carecredit Corporation, a privately-held consumer credit healthcare company,~~Hewlett-Packard Company from 1996 to ~~2002.~~2006, including Vice President, Volume Direct and Teleweb, Americas Region, from 2004 to 2006, and Vice President, Worldwide Customer Operations from 2002 to 2004. • Graduate of Bowling Green State University (BS) and Wright State University (MBA). Earned certificates of completion from Stanford University’s Executive Program and Directors’ Consortium Program.
• Interim President of the California Council on Economic Education, a not-for-profit organization that provides training and educational materials to California teachers relating to economics and personal finance, from July 2013 to February 2014.
• ~~Graduated from California State University, Northridge (BA, MBA).~~


Skills and Qualifications
✓				Over 2530 years of broad and extensive operational and ~~management~~leadership experience in the ~~automotive~~technology industry with ~~particular insight into the financing~~a deep focus on global operations strategy and ~~leasing of vehicles.~~ execution, business transformation change management, global manufacturing, supply chain and logistics.
✓ ~~Significant~~				Deep expertise in ~~creating,~~digital business transformation, change management in transforming business processes from physical to digital supply chain and operations delivering highly impactful business model and cost improvements
				Extensive knowledge in leading through growth and expansion by building future operating performance models for new businesses in emerging markets and ~~developing consumer~~more broadly, worldwide.
				Extensive knowledge and ~~commercial~~broad business skills supporting customer experience enhancements, compliance enhancements, oversight, risk mitigation and management. Highly skilled in finance, ~~business. Expertise in strategy development,~~ sales and marketing ~~operating efficiency~~support with a deep understanding of business model operations and ~~performance improvement, customer satisfaction and loyalty, and talent management.~~ drivers of profitability.
✓ ~~Extensive experience~~				Significant leadership skills leading highly impactful and performing teams and managing people. A proven leader championing diversity and inclusion in ~~managing lease residual setting, vehicle remarketing, dealer inventory financing and vehicle service contracts.~~ corporate culture for all dimensions of diversity.
✓ ~~Considerable financial skill and expertise.~~


✓		The Board of Directors recommends a vote ~~"FOR"~~FOR the election of each of the foregoing nine nominees to the Board of Directors.

		~~Proxies solicited by the Board of Directors will be voted "FOR"~~

Proxies solicited by the Board of Directors will be voted “FOR” the election of each of the nine director nominees named in this proxy statement and on the proxy card unless stockholders specify a contrary vote.



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~~BOARD OF DIRECTORS STRUCTURE AND~~
~~CORPORATE GOVERNANCE~~

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BOARD STRUCTURE AND CORPORATE GOVERNANCE

ROLE OF THE BOARD ~~OF DIRECTORS~~

The Board oversees the ~~Company's~~Company’s Executive Chairman, CEO and other members of senior management in the competent and ethical operation of the Company and assures that the long-term interests of the stockholders are being served. The ~~Company's~~Board serves as the ultimate decision-making body of the Company, except for those matters reserved to or shared with the stockholders. The Company’s Corporate Governance Guidelines are available on our website,~~www.karauctionservices.com~~www.karglobal.com, by clicking on ~~"Governance" under~~“Investors” and then the ~~"Investor Relations"~~“Governance” tab. The information on our website is not part of this proxy statement and is not deemed incorporated by reference into this proxy statement or any other public filing made with the Securities and Exchange Commission (the ~~"SEC"~~“SEC”).

BOARD LEADERSHIP

~~Neither the Company's Second Amended and Restated By-Laws nor the Company's~~

The Company’s Corporate Governance Guidelines ~~require~~provide that the Board shall be free to choose its Chairman in any way it deems best for the Company ~~separate~~at any given point in time. If the ~~roles of~~ Chairman ofis not an independent director, the ~~Board and CEO, and the Board does not have~~independent directors are to annually appoint a ~~policy on whether the same person should serve as both the CEO and Chairman of the Board, or if the roles must remain separate.~~Lead Independent Director. The Board believes that it should have the flexibility to make these determinations from time to time in the way that it believes best to provide appropriate leadership for the Company under then-existing circumstances.

~~At present, the Board has chosen to combine the positions of CEO~~

James P. Hallett currently serves as Executive Chairman and Chairman of the Board, ~~and to appoint a~~with Michael T. Kestner serving as the Lead Independent Director. Our Board believes that having ~~the same person~~Mr. Hallett serve inas the ~~roles of~~ Chairman of the Board ~~and CEO~~ is appropriate for the Company at this time, as it fosters clear accountability, effective decision making and alignment on corporate strategy. Given Mr. ~~Hallett's~~Hallett’s unparalleled knowledge of the industry and the Company, the Board believes Mr. Hallett is in the best position to focus the independent ~~directors'~~directors’ attention on critical business matters and to speak for and ~~lead~~provide leadership to both the Company and the Board. In addition, the Board believes that the appointment of a Lead Independent Director helps ensure that the Company benefits from effective oversight by its independent directors. Our Lead Independent Director presides over the executive sessions of the independent directors and serves as the principal liaison between the independent directors and the ~~Company's CEO~~Company’s Executive Chairman and Chairman of the ~~Board.~~Board and the CEO. Our Lead Independent Director, Mr. ~~Larson,~~Kestner, has served on the Board since ~~2014~~2013 and ~~has strong communication and leadership skills,~~ as ~~well as extensive knowledge about the Company's strategic objectives, the industry in which we operate, and the areas of strategic importance to the Company.~~

~~In connection with the appointment of a~~ Lead Independent Director ~~the~~since July 2019. Mr. Kestner is a highly-engaged Lead Independent Director empowered with robust authority and responsibilities, as discussed below.

The Board has adopted a Lead Independent Director Charter, which sets forth a clear mandate with significant authority and responsibilities for the Lead Independent Director, including:


Board Meetings and Executive Sessions			• Has the authority to call meetings of the independent ~~members of the Board,~~directors, and calls and develops the agenda for executive sessions of the independent directors.
		• Presides at all meetings of the Board at which the Chairman of the Board is not present, including executive sessions of the independent ~~members of the Board.~~ directors.
	Meeting Agendas, Schedules and Materials			• Reviews, in consultation with the Chairman and the CEO: • agendas for Board meetings; • meeting schedules to assure there is sufficient time for discussion of all agenda items; and • information sent to the Board, including the quality, quantity, appropriateness and timeliness of such information.
~~Communications~~	Board/Director Communications			• Serves as principal liaison on Board-wide issues among the independent directors and the Chairman and the CEO and facilitates communication generally among directors.

~~Agendas~~		• ~~Reviews, in consultation with the Chairman and CEO, the agenda for Board meetings.~~

~~Meeting Schedules~~		• ~~Reviews, in consultation with the Chairman and CEO, the meeting schedules to assure there is sufficient time for discussion of all agenda items.~~
		• ~~Reviews, in consultation with the Chairman and CEO, information sent to the Board, including the quality, quantity, appropriateness and timeliness of such information.~~
	Stockholder Communications
~~Communicating with Stockholders~~		• If requested by stockholders, ensures that he or she is available, when appropriate, for consultation and direct communication.

Chairman and CEO Performance ~~Evaluation and Board Governance~~Evaluations			• Together with the Compensation Committee, conducts an annual evaluation of the Chairman and the CEO, including an annual evaluation of his or her respective interactions with the independent directors.

Outside Advisors and Consultants			• Recommends to the independent directors the retention of advisors and consultants who report directly to the Board, and, upon approval by the independent directors, retains such advisors and consultants.

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		EXECUTIVE SESSIONS
		13

~~Table~~The independent directors of ~~Contents~~the Company meet in executive session at every regularly scheduled Board meeting. The Company’s Corporate Governance Guidelines state that the Chairman of the Board (if an independent director) or the Lead Independent Director (if the Chairman of the Board is not an independent director) shall preside at such executive sessions, or in such director’s absence, another independent director designated by the Chairman of the Board or the Lead Independent Director, as applicable. Currently, Mr. Kestner, our Lead Independent Director, presides at the executive sessions of our independent directors.

BOARD ~~OF DIRECTORS~~ MEETINGS AND ATTENDANCE

The Board held ~~ten~~eight meetings during ~~2018.~~2021. All of the incumbent directors attended at least 75% of the meetings of the Board and Board committees on which they served during ~~2018.~~2021. As stated in our Corporate Governance Guidelines, each director is expected to attend all annual meetings of stockholders. All of our directors attended last ~~year's~~year’s annual meeting of stockholders.

~~COMMITTEES OF THE~~ BOARD ~~OF DIRECTORS~~COMMITTEES

In ~~2018,~~2021, the Board maintained four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee and the Risk Committee. Each of our committees operates pursuant to a written charter. Copies of the committee charters are available on our website,~~www.karauctionservices.com~~www.karglobal.com, by clicking on “Investors” and then the ~~"Governance" tab under "Investor Relations" on our homepage.~~“Governance” tab. The information on our website is not part of this proxy statement and is not deemed incorporated by reference into this proxy statement or any other public filing made with the SEC. The following table sets forth the current membership of each committee:

Name

~~Audit Committee~~

~~Compensation~~
~~Committee~~

~~Nominating and~~
~~Corporate~~
~~Governance~~
~~Committee~~

~~Risk Committee~~

Todd F. Bourell*

~~Donna R. Ecton~~

~~(Chair)~~

Audit Committee

Compensation
Committee

Nominating and
Corporate
Governance
Committee

Risk Committee

James P. Hallett**

~~Mark E. Hill~~

Carmel Galvin

~~(Chair)~~

~~J. Mark Howell~~

~~(Chair)~~

~~Lynn Jolliffe~~

(Chair)

James P. Hallett(1)

Mark E. Hill

(Chair)

J. Mark Howell

(Chair)

Stefan Jacoby

Peter Kelly(1)

Michael T. Kestner

(2)~~(Chair)~~

John P. Larson***

(Chair)

~~Stephen E.~~

Roy Mackenzie

Sanjeev Mehra

Mary Ellen Smith

* (1)

Mr. ~~Bourell~~Hallett is ~~not standing for re-election at the 2019 annual meeting.~~
** Chiefour Executive ~~Officer~~Chairman and Chairman of the ~~Board~~Board. Mr. Kelly is our CEO.

(2)
~~***~~

Mr. Kestner is our Lead Independent ~~Director~~

Director.

A description of each Board committee is set forth below.

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Audit Committee

Meetings Held in ~~2018:~~2021: ~~Nine~~5

Primary Responsibilities: Our Audit Committee assists the Board in its oversight of the integrity of our financial statements, our independent registered public accounting ~~firm's~~firm’s qualifications and independence and the performance of our independent registered public accounting firm. The Audit Committee (i) reviews the audit plans and findings of our independent registered public accounting firm and our internal audit team and tracks ~~management's~~management’s corrective action plans where necessary; (ii) reviews our financial statements, including any significant financial items and changes in accounting policies or practices, with our senior management and independent registered public accounting firm; (iii) reviews our financial risk and control procedures, compliance programs (including our Code of Business Conduct and Ethics) and significant tax, legal and regulatory matters; (iv) reviews and approves related person transactions; and (v) has the sole discretion to appoint annually our independent registered public accounting firm, evaluate its independence and performance and set clear hiring policies for employees or former employees of the independent registered public accounting firm.

Independence: Each member of the Audit Committee is ~~"financially literate"~~“financially literate” under the rules of the NYSE, and each of Messrs. Howell and Kestner ~~and Ms. Ecton~~ has been designated as an ~~"audit~~“audit committee financial ~~expert"~~expert” as that term is defined by the SEC. In addition, the Board has determined that each member of the Audit Committee meets the standards of ~~"independence"~~“independence” established by the NYSE and is ~~"independent"~~“independent” under the independence standards for audit committee members adopted by the SEC.



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Compensation Committee

Meetings Held in ~~2018:~~2021: ~~Eight~~9

Primary Responsibilities: The Compensation Committee reviews and recommends policies relating to the compensation and benefits of our executive officers and employees. The Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of our CEO and other executive officers, evaluates the performance of these officers in light of those goals and objectives, and approves the compensation of these officers based on such evaluations. The Compensation Committee also administers the issuance of equity and other awards under our equity plans.

Independence: All of the members of the Compensation Committee are independent under the NYSE rules (including the enhanced independence requirements for compensation committee members).

Nominating and Corporate Governance Committee

Meetings Held in ~~2018:~~2021: ~~Four~~6

Primary Responsibilities: The Nominating and Corporate Governance Committee is responsible for making recommendations to the Board regarding candidates for directorships and the size and composition of the Board. The Nominating and Corporate Governance Committee also reviews non-employee director compensation on an annual basis and makes recommendations to the Board. In addition, the Nominating and Corporate Governance Committee is responsible for overseeing our Corporate Governance Guidelines and reporting and making recommendations to the Board concerning governance matters.

The Nominating and Corporate Governance Committee also assists the Board in the general oversight of the Company’s environmental, social and governance (ESG) strategy, including diversity and inclusion matters. As required by the ~~Company's~~Company’s Corporate Governance Guidelines, the Nominating and Corporate Governance Committee oversees an annual evaluation process of the Board and each committee of the ~~Board. The evaluation process includes a self-evaluation by the~~ Board, as discussed in more detail under “Board and each committee. Once the evaluation process is complete, the results are discussed by the full Board and each committee, as applicable, and changes in practices or procedures are considered and implemented as appropriate. The Nominating and Corporate Governance Committee also utilizes the results of this self-evaluation process in assessing and determining the characteristics and critical skills required of prospective candidates for election to the Board and making recommendations to the Board with respect to assignments of Board members to various committees. The Lead Independent Director also conducts a personal interview with each Board member to gather in-depth perspectives and candid insight about Board, committee and individual director performance and suggestions for improvement. In addition, each Board member completes an evaluation of each other Board member.

The Nominating and Corporate Governance Committee periodically reviews the format of the evaluation process to ensure that actionable feedback is solicited on the operation of the Board and director performance.

Evaluation Process” below.

Independence: All of the members of the Nominating and Corporate Governance Committee are independent under the NYSE rules.

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Risk Committee

Meetings Held in ~~2018:~~2021: ~~Four~~4

Primary Responsibilities: The Risk Committee assists the Board in its oversight of (i) the principal business, financial, technology, operational and regulatory risks, and other material risks and exposures of the Company and (ii) the actions, activities and initiatives of the Company to mitigate such risks and exposures. The Risk Committee also provides oversight for matters specifically relating to cyber security and other risks related to information technology systems and ~~procedures.~~procedures, including but not limited to data security and privacy. The Risk Committee receives quarterly reports from the Company’s Chief Information Security Officer on information security matters, including, among other things, the Company’s cyber risks and threats, the status of projects to strengthen the Company’s information security systems, assessments of the Company’s security program and the emerging threat landscape. The Risk Committee also oversees the ~~Company's~~Company’s enterprise risk management ~~("ERM"~~(“ERM”) program and has direct oversight over certain risks within the ERM framework.

Independence: All of the members of the Risk Committee are independent under the NYSE rules.


		BOARD AND COMMITTEE EVALUATION PROCESS
		15

~~Table~~The Nominating and Corporate Governance Committee oversees the annual evaluation process of ~~Contents~~the Board and each of its committees. The evaluation process includes a self evaluation by the Board, a self evaluation by each committee of the Board, and a peer evaluation by each director of each other Board member. The Lead Independent Director also conducts a personal interview with each Board member to gather in depth perspectives and candid insight about Board, committee and individual director effectiveness and suggestions for improvement. Once the evaluation process is complete, the Nominating and Corporate Governance Committee reports to the full Board the results, including any recommendations, which are discussed by the full Board and each committee, as applicable, and changes in practices or procedures are considered and implemented as appropriate.

The Nominating and Corporate Governance Committee periodically reviews the format of the evaluation process to ensure that actionable feedback is solicited on the operation and effectiveness of the Board, the Board committees and each Board member. The Nominating and Corporate Governance Committee also utilizes the results of this self evaluation process in assessing and determining the characteristics and critical skills required of prospective candidates for election to the Board and making recommendations to the Board with respect to assignments of Board members to various committees.

~~BOARD OF DIRECTORS'~~BOARD’S RISK OVERSIGHT

~~Our management~~

Management is responsible for ~~the management~~assessing and ~~assessment of~~managing risk at the Company, including ~~communication of~~communicating the most material risks to the Board and its committees. The Board has primary responsibility for risk oversight, with a focus on the most significant risks facing the Company. Oversight of the ~~Company's~~Company’s risks is carried out by the Board as a whole and by each of its ~~various~~ committees.

The Board’s leadership structure, through its committees, supports its role in risk oversight. In general, the committees oversee the following risks:

•

Audit Committee: The Audit Committee maintains initial oversight over risks related to (i) the integrity of the Company’s financial statements; (ii) internal control over financial reporting and disclosure controls and procedures (including the performance of the Company’s internal audit function); (iii) the performance of the independent registered public accounting firm; and (iv) ethics and related issues arising from the Company’s whistleblower hotline. The Audit Committee meets with the Company’s Chief Financial Officer, the Company’s head of Internal Audit and representatives of KPMG in separate executive sessions on a quarterly basis.

•

Compensation Committee: The Compensation Committee maintains oversight over risks related to the Company’s compensation programs and practices.

•

Nominating and Corporate Governance Committee: The Nominating and Corporate Governance Committee monitors potential risks relating to the effectiveness of the Board, notably director succession, composition of the Board and the principal policies that guide the Company’s governance.

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•

Risk Committee: The Risk Committee maintains oversight over the Company’s enterprise-level risks, including with respect to cyber security and information technology systems and procedures as noted above. The Risk Committee provides oversight with respect to risk practices implemented by management, except for the oversight of risks that have been specifically delegated to another committee of the Board. Even when the oversight of a specific area of risk has been delegated to another committee, the Risk Committee may maintain oversight over such risks through the receipt of reports from the committee ~~chairs to the Risk Committee.~~ chairs.

The Board maintains oversight over such risks through the receipt of reports from the ~~Chairman of the Risk Committee and from the other committees~~committee chairs at each regularly scheduled Board meeting.

As part of the risk management process, an annual risk assessment is conducted by management to identify and prioritize the most significant enterprise risks to the Company. This risk assessment is reviewed with the Risk Committee and helps guide the focus and selection of risks that are brought to the Risk Committee for review or covered by the full Board or its other committees. The reviews by the Risk Committee and other ~~committee reviews~~committees occur principally through the receipt of reports from management and third parties on ~~these~~applicable areas of risk, and discussions with management and third parties regarding risk assessment and risk management.

At its regularly scheduled meetings, the Board generally receives a number of reports which include information relating to risks faced by the Company. The ~~Company's~~Company’s Chief Financial Officer provides a report on the ~~Company's~~Company’s results of operations, its liquidity position, including an analysis of prospective sources and uses of funds, and the implications to the ~~Company's~~Company’s debt covenants and credit rating, if any. The Company’s Chief Legal Officer provides a privileged report which provides information regarding the status of the Company’s material litigation and related matters, if any, including environmental updates and the Company’s continuing compliance with applicable laws and regulations. Further, the president of each primary business unit provides information relating to strategic, operational and competitive risks. Finally, the Company's Chief Legal Officer provides a privileged report which provides information regarding the status of the Company's material litigation and related matters, if any, including environmental updates and the Company's continuing compliance with applicable laws and regulations. At each regularly scheduled Board meeting, the Board also receives reports from the ~~Chairman~~Chair of the Risk Committee as well as other committee chairs, which may include a discussion of risks initially overseen by the committees for discussion and input from the Board. As noted above, in addition to these regular reports, the Risk Committee receives reports on specific areas of risk, such as regulatory, cyclical or other risks, and reports to the Board on these matters.

~~The Board's leadership structure, through its committees, also supports its role in risk oversight. In general, the committees oversee the following risks:~~

•: ~~Audit Committee:~~ The Audit Committee maintains initial oversight over risks related to (i) the integrity of the Company's financial statements; (ii) internal controls over financial reporting and disclosure controls and procedures (including the performance of the Company's internal audit function); (iii) the performance of the independent registered public accounting firm; and (iv) ethics and related issues arising from the Company's whistleblower hotline.
•: ~~Compensation Committee:~~ ~~The Compensation Committee maintains oversight over risks related to the Company's compensation programs and practices.~~
•: ~~Nominating and Corporate Governance Committee:~~ The Nominating and Corporate Governance Committee monitors potential risks relating to the effectiveness of the Board, notably director succession, composition of the Board and the principal policies that guide the Company's governance.
•: ~~Risk Committee:~~ The Risk Committee maintains oversight over the Company's enterprise-level risks generally and specifically with respect to cyber security and information technology systems and procedures as noted above.



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CORPORATE GOVERNANCE DOCUMENTS

The Board has adopted the following corporate governance documents:

~~Document~~		~~Purpose/Application~~
	Document			Purpose/Application
	Code of Business Conduct and Ethics			Applies to all of the ~~Company's~~Company’s employees, officers and directors, including those officers responsible for financial reporting.
	Code of Ethics for Principal Executive and Senior Financial Officers			Applies to the ~~Company's~~Company’s principal executive officer, principal financial ~~and~~officer, principal accounting officer and such other persons who are designated by the Board.
	Corporate Governance Guidelines			Contains general principles regarding the functions of the Board and its committees.
	Committee Charters			Apply to the following Board committees, as applicable: Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Risk Committee.
	Lead Independent Director Charter			Sets forth a clear mandate and significant authority and responsibilities for the Lead Independent Director.

We expect that any amendment to or waiver of the codes of ethics that apply to executive officers or directors will be disclosed on the ~~Company's~~Company’s website. The foregoing documents are available on our website,~~www.karauctionservices.com~~www.karglobal.com, by clicking on “Investors” and then the ~~"Governance"~~“Governance” tab ~~under "Investor Relations" on our homepage~~ and in print to any stockholder who requests them. Requests should be made to KAR Auction Services, Inc., Investor Relations, ~~13085 Hamilton Crossing Boulevard,~~11299 North Illinois Street, Carmel, Indiana 46032. ~~The information on our website is not part of this proxy statement and is not deemed incorporated by reference into this proxy statement or any other public filing made with the SEC.~~

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COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION

During fiscal year ~~2018,~~2021, each of Messrs. ~~Bourell~~Jacoby, Mackenzie and ~~Larson~~Smith and Mmes. ~~Ecton~~Galvin and ~~Jolliffe~~Smith served as members of the Compensation Committee. None of our executive officers serve, or in fiscal year ~~2018 has~~2021 served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or our Compensation Committee. None of the individuals serving as members of the Compensation Committee during fiscal year ~~2018~~2021 are now or were previously an officer or employee of the Company or its subsidiaries.

STOCKHOLDER COMMUNICATIONS WITH THE BOARD

Any stockholder or other interested parties desiring to communicate with the Board, the Chairman of the Board, a committee of the Board or any of the independent directors individually or as a group regarding the Company may directly contact such directors by delivering such correspondence to the ~~Company's~~Company’s Chief Legal Officer at KAR Auction Services, Inc., ~~13085 Hamilton Crossing Boulevard,~~11299 North Illinois Street, Carmel, Indiana 46032. Our Chief Legal Officer reviews all such correspondence and forwards to the applicable director(s) copies of all such applicable correspondence.

The Audit Committee has established procedures for employees, stockholders and others to submit confidential and anonymous reports regarding accounting, internal accounting controls, auditing or any other relevant matters.



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~~EXECUTIVE SESSIONS~~

The independent directors of the Company meet in executive session at every regularly scheduled Board meeting. The Company's Corporate Governance Guidelines state that the Chairman of the Board (if an independent director) or the Lead Independent Director (if the Chairman of the Board is not an independent director) shall preside at such executive sessions, or in such director's absence, another independent director designated by the Chairman of the Board or the Lead Independent Director, as applicable. Currently, Mr. Larson, our Lead Independent Director, presides at the executive sessions of our independent directors.

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~~Table of Contents~~

~~DIRECTOR COMPENSATION~~

We use a combination of cash and ~~stock based~~stock-based incentive compensation to attract and retain independent, qualified candidates to serve on the Board. The Board makes all director compensation determinations after considering the recommendations of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee reviews director compensation annually, assisted periodically by an independent compensation consultant (most recently by ClearBridge Compensation Group LLC ~~("ClearBridge"~~(“ClearBridge”) in October 2018). Based in part on the independent compensation consultant's most recent review of our director compensation program and those of the 17 companies in our proxy comparator group (also used in executive compensation benchmarking), the Nominating and Corporate Governance Committee recommended, and the Board approved, the following changes to our director compensation program to better align it with market practices: (i) annual stock retainer increased to $130,000, effective June 2019 (and will vest after one year as opposed to one-fourth vesting quarterly); (ii) Audit Committee chair fee increased to $25,000, effective February 2019; and (iii) Audit Committee membership fee of $7,500 implemented, effective February 2019. There previously had been no increases in compensation paid to our directors since 2016.

In setting director compensation, we consider various factors including market comparison studies and trends, ~~(such as the most recent review in October 2018),~~ the responsibilities of directors generally, including committee chairs, and the significant amount of time that directors expend in fulfilling their duties. In establishing the non-employee director compensation recommendations, the Nominating and Corporate Governance Committee utilized a balance of cash and equity, with the majority of the compensation delivered through equity grants. Pursuant to the Omnibus Plan, non-employee directors are not eligible to receive aggregate compensation, including equity awards and cash fees, exceeding $750,000 in total value in any calendar year. Directors who also serve as employees of the Company do not receive payment for service as directors.

Messrs. Mackenzie and Mehra have each agreed not to receive compensation for their service as directors.

Based in part on ClearBridge’s October 2018 review of our director compensation program and those of the Company’s then current proxy comparator group (which was also used in executive compensation benchmarking), in October 2018 the Nominating and Corporate Governance Committee recommended, and the Board approved, our current director compensation program, which became effective in 2019. Based on its most recent review and in light of the demanding role of the Lead Independent Director, the Nominating and Corporate Governance Committee recommended, and the Board agreed, that the Lead Independent Director fee should be increased from $30,000 to $37,500 effective in the fourth quarter of 2021. There have been no other increases in compensation paid to our directors since those approved in October 2018.

CASH AND STOCK RETAINERS

Non-employee directors who served for the entirety of ~~2018 received:~~

2021 were entitled to receive:

	~~Annual Amount~~	~~Form of Payment(1)~~

	Annual Amount		Form of Payment(1)
Annual Cash ~~Retainer(2)~~Retainer(2)		$85,000		Cash
Annual Stock ~~Retainer(3)~~Retainer(3)		$~~115,000~~130,000		Restricted Stock
Lead Independent Director Fee(4)		$~~30,000~~31,875		Cash
Audit ~~and~~ Committee Chair Fee		$25,000		Cash
Compensation Committee Chair Fee		$20,000		Cash
Nominating and Corporate Governance and Risk Committee Chair Fee		$10,000		Cash
Audit Committee Membership Fee		$7,500		Cash

(1)

May elect to receive annual cash retainer in shares of our common stock.

(2)

~~(2)~~

One-fourth of the annual cash retainer is paid at the end of each quarter, provided that the director served as a director in such fiscal quarter.

(3)

~~(3)~~

Pursuant to our Policy on Granting Equity Awards, unless specifically provided otherwise by the Compensation Committee or the Board, annual grants for directors are effective on the date of the annual meeting at which the director was elected or re-elected. ~~One-fourth of the~~The annual restricted stock grant vests ~~quarterly following~~after one year (i.e., on the ~~date~~anniversary of the ~~grant.~~annual meeting), and is subject to forfeiture until vested. The number of shares of our common stock received is based on the value of the shares on the date of the restricted stock grant.

(4)

The Lead Independent Director fee was increased from $30,000 to $37,500 effective in the fourth quarter of 2021.

Annual cash and stock retainers and any applicable fees described above are prorated for non-employee directors who begin such service on a date other than the date of the Company’s annual meeting of stockholders. Directors

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do not receive fees for attending Board or committee meetings. All of our directors are reimbursed for reasonable expenses incurred in connection with attending Board meetings, committee meetings and ~~Board~~director education events.



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~~DIRECTORS~~DIRECTOR DEFERRED COMPENSATION PLAN

Our Board adopted the KAR Auction Services, Inc. Directors Deferred Compensation Plan (the ~~"Director~~“Director Deferred Compensation ~~Plan"~~Plan”) in December 2009. Pursuant to the terms of the Director Deferred Compensation Plan, each non-employee director may elect to defer the receipt of his or her cash director fees into a pre-tax interest-bearing deferred compensation account, which account accrues interest as described in the Director Deferred Compensation Plan. Amounts under the Director Deferred Compensation Plan may also be invested in the same investment choices as are available under our 401(k) plan. Non-employee directors also may choose to receive all or a portion of their annual stock retainer in the form of a deferred share ~~account.~~account that tracks shares of our common stock. The Director Deferred Compensation Plan provides that the amount of cash in a ~~director's~~director’s deferred cash account, plus the number of shares of our common stock equal to the number of shares in the ~~director's~~director’s deferred share account, will be delivered to a director in installments over a specified period or within 60 days following the date of the ~~director's~~director’s departure from the Board, with cash being paid in lieu of any fractional shares.

DIRECTOR STOCK OWNERSHIP AND HOLDING GUIDELINES

The ~~Company's~~Company’s non-employee directors are subject to the ~~Company's~~Company’s director stock ownership and holding guidelines. The stock holding guideline requires each non-employee director to hold any shares of the ~~Company's~~Company’s common stock granted by the Company for at least three years post-vesting while serving as a director, subject to certain exceptions approved by the Nominating and Corporate Governance Committee.

The ~~Company's~~Company’s stock ownership guideline requires each non-employee director to own a minimum of five times his or her annual cash retainer amount in shares of Company stock. All non-employee directors are in compliance with this stock ownership ~~guideline.~~

guideline, except for Ms. Galvin who joined the Board in 2020. These guidelines did not apply to Messrs. Mackenzie and Mehra, who each agreed to waive all non-employee director compensation in 2021.

DIRECTOR COMPENSATION PAID IN ~~2018~~2021

The following table provides information regarding the fiscal ~~2018~~2021 compensation paid to our non-employee directors:

Name	Fees Earned or Paid in Cash(1)	Stock Awards(2)	Total
David DiDomenico(3)	$39,643	—	$39,643
Carmel Galvin	$105,000	$130,016	$235,016
Mark E. Hill	$95,000	$130,016	$225,016
J. Mark Howell	$102,500	$130,016	$232,516
Stefan Jacoby	$85,000	$130,016	$215,016
Michael T. Kestner	$141,875	$130,016	$271,891
Roy Mackenzie(4)	—	—	—
Sanjeev Mehra(4)	—	—	—
Mary Ellen Smith	$89,306	$130,016	$219,322
Stephen E. Smith(3)	$39,643	—	$39,643

Name
Fees Earned
or Paid in
Cash(1)
Stock
Awards(2)
Total
Todd F. Bourell $85,000 $115,025 $200,025
Donna R. Ecton $105,000 $115,025 $220,025
Mark E. Hill $95,000 $115,025 $210,025
J. Mark Howell $95,000 $115,025 $210,025
Lynn Jolliffe $85,000 $115,025 $200,025
Michael T. Kestner $105,000 $115,025 $220,025
John P. Larson $115,000 $115,025 $230,025
Stephen E. Smith $85,000 $115,025 $200,025

(1)

~~(1)~~: The amounts represent the $85,000 annual cash retainer paid to each non-employee director, plus an additional ~~$30,000~~$31,875 paid to the Lead Independent Director, an additional $25,000 paid to the Chair of the Audit Committee, an additional $20,000 paid to the ~~Chairman of the Audit Committee and the Chairman~~Chair of the Compensation Committee, ~~and~~ an additional $10,000 paid to the ~~Chairman~~Chair of the Nominating and Corporate Governance Committee and the ~~Chairman~~Chair of the Risk ~~Committee.~~Committee, and an additional $7,500 paid to members of the Audit

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Committee (other than the Chair). Mr. Jacoby and Ms. Smith each elected to receive his or her annual cash retainer (and for Ms. Smith, her Audit Committee membership fee) in shares of the Company’s common stock.

(2)

~~(2)~~

The amounts represent the aggregate grant date fair value, computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718 ("(“ASC ~~718"~~718”), of shares of restricted stock awarded to each non-employee director as an annual stock retainer. ~~All~~Each non-employee ~~directors~~director who was serving as a director after June 4, 2021, the date of our 2021 annual meeting, received ~~2,140~~7,132 shares of restricted stock as an annual stock retainer in June ~~2018.~~2021. Pursuant to the Director Deferred Compensation Plan, Messrs. ~~Bourell,~~DiDomenico, Hill, Howell, Jacoby, Kestner and ~~Larson~~Smith, and ~~Ms. Ecton~~Mmes. Galvin and Smith each elected to receive 100% of his or her annual stock retainer in a deferred share account. Please see “Outstanding Director Restricted Stock Awards” below for the aggregate number of stock awards outstanding at fiscal year-end for each non-employee director.

~~Mr.~~

(3)

Messrs. DiDomenico and Smith each served as a director until June 4, 2021, the date of our 2021 annual meeting.

(4)

Messrs. Mackenzie and Mehra each agreed to waive all non-employee director compensation in 2021.

Each of Messrs. Hallett ~~was~~and Kelly were not entitled to receive any fees or other compensation for serving as a member of our Board in ~~2018~~2021 because heeach was employed by the Company.



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OUTSTANDING DIRECTOR RESTRICTED STOCK AWARDS

The following table sets forth information regarding the number of unvested or deferred shares of our common stock held by each non-employee director as of December 31, ~~2018:~~

2021:

Name	Unvested Shares and Dividend Equivalents(1)	Deferred Phantom Shares and Dividend Equivalents(2)
David DiDomenico(3)	—	—
Carmel Galvin	7,132	10,258
Mark E. Hill	7,132	54,641
J. Mark Howell	7,132	23,584
Stefan Jacoby	7,132	10,540
Michael T. Kestner	7,132	40,239
Roy Mackenzie	—	—
Sanjeev Mehra	—	—
Mary Ellen Smith	7,132	8,228
Stephen E. Smith(3)	—	15,561

Name
Unvested Shares
and Dividend
Equivalents(1)
Deferred Phantom
Shares and
Dividend
Equivalents(2)
Todd F. Bourell 1,082 9,837
Donna R. Ecton 1,082 15,369
Mark E. Hill 1,082 13,446
J. Mark Howell 1,082 11,249
Lynn Jolliffe 1,070 6,498
Michael T. Kestner 1,082 12,603
John P. Larson 1,082 9,736
Stephen E. Smith 1,070 8,421

(1)

~~(1)~~: This number represents unvested shares of restricted stock and, for those directors who deferred, unvested phantom ~~stock and dividend equivalents.~~stock.

(2)

~~(2)~~

This number represents vested phantom stock and dividend equivalents which are deferred in each ~~director's~~director’s account pursuant to the Director Deferred Compensation Plan. These shares will be settled for shares of our common stock on a
one-for-one basis.

(3)

Messrs. DiDomenico and Smith each served as a director until June 4, 2021, the date of our 2021 annual meeting.



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BENEFICIAL OWNERSHIP OF COMPANY STOCK

~~BENEFICIAL OWNERSHIP OF THE COMPANY'S~~
~~COMMON STOCK~~

The following table sets forth certain information with respect to the beneficial ownership of our common stock and Series A Preferred Stock as of April ~~11, 2019~~8, 2022 of: (1) each person or entity who ~~owns of record or~~ beneficially owns more than 5% ~~or more~~ of any class of the ~~Company's~~Company’s voting ~~securities of which 133,271,194 shares of common stock were outstanding as of April 11, 2019;~~securities; (2) each of our directors, director nominees and named executive officers; and (3) all of our directors, director nominees and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC. To our knowledge, each stockholder will have sole voting and investment power with respect to the shares indicated as beneficially owned, unless otherwise indicated in a footnote to the following table. The percentage calculations below are based on ~~133,271,194~~121,532,564 shares of our common stock and 623,397 shares of Series A Preferred Stock outstanding as of April ~~11, 2019,~~8, 2022, rather than the percentages set forth in any ~~stockholder's~~stockholder’s Schedule 13D or Schedule 13G filing. Unless otherwise indicated in a footnote, the business address of each person is our corporate address, c/o KAR Auction Services, Inc., ~~13085 Hamilton Crossing Boulevard,~~11299 North Illinois Street, Carmel, Indiana 46032.

	Common Stock Beneficially Owned		Series A Preferred Stock Beneficially Owned
Name of Beneficial Owner	Number of Shares(1)	Percent of Class(2)	Number of Shares	Percent of Class
5% BENEFICIAL OWNERS
Ignition Acquisition Holdings LP(3)	—(4)	—(4)	566,728	90.91%
Periphas Kanga Holdings, LP(5)	—(4)	—(4)	56,669	9.09%
BlackRock, Inc.(6)	20,141,635	16.57%
The Vanguard Group(7)	12,636,169	10.40%
Snyder Capital Management, L.P.(8)	6,578,317	5.41%
NAMED EXECUTIVE OFFICERS, DIRECTORS AND DIRECTOR NOMINEES
James Coyle	—	*
Justin Davis(9)	414,221	*
Carmel Galvin	17,390	*
James P. Hallett(9)	757,481	*
John C. Hammer(9)	64,468	*
Mark E. Hill(10)	110,774	*
J. Mark Howell	30,716	*
Stefan Jacoby	24,136	*
Peter J. Kelly(9)	302,695	*
Michael T. Kestner	53,293	*
Eric M. Loughmiller(9)	394,108	*
Roy Mackenzie(3)	—	—	566,728	90.91%
Sanjeev Mehra(5)	—	—	56,669	9.09%
Mary Ellen Smith	31,033	*
Executive officers, directors and director nominees as a group (18 persons)(11)	2,442,360	2.00%

Shares Beneficially Owned
Name of Beneficial
Owner

Number of
Shares(1)
Percent of
Class(2)
5% BENEFICIAL OWNERS

The Vanguard Group(3)
13,295,682 9.98%
T. Rowe Price Associates, Inc.(4)
8,391,117 6.30%
BlackRock, Inc.(5)
7,337,570 5.51%
NAMED EXECUTIVE OFFICERS, DIRECTORS AND DIRECTOR NOMINEES

Todd F. Bourell
11,074 *
Donna R. Ecton
16,684 *
Donald S. Gottwald
38,604 *
James P. Hallett(6)
517,837 *
John C. Hammer
1,830
Mark E. Hill(7)
45,234 *
J. Mark Howell
12,506 *
Stefan Jacoby
— —
Lynn Jolliffe
14,280 *
Michael T. Kestner
19,802 *
John P. Larson
10,971 *
Eric M. Loughmiller(6)
274,046 *
Rebecca C. Polak(6)
92,364 *
Stephen E. Smith
16,230 *
Executive officers, directors and director nominees as a group (20 persons)(8)
1,472,050 1.10%

* Less than one percent

(1)

The number of shares includes shares of our common stock subject to vesting requirements and options exercisable within 60 days of April ~~11, 2019.~~8, 2022.

(2)

~~(2)~~

Shares subject to options exercisable within 60 days of April ~~11, 2019~~8, 2022 are considered outstanding for the purpose of determining the percent of the class held by the holder of such option, but not for the purpose of computing the percentage held by others.

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(3)

Based solely on information disclosed in a Schedule 13D filed with the SEC on July 2, 2020, as amended on September 14, 2020, reflects securities beneficially owned by Ignition Acquisition Holdings LP. In this filing, it was disclosed that Ignition Acquisition Holdings GP, LLC, as the general partner of Ignition Acquisition Holdings LP, Ignition Parent LP, as the sole member of Ignition Acquisition Holdings GP, LLC, Ignition GP LLC, as the general partner of Ignition Parent LP, Ignition Topco Ltd, as the sole member of Ignition GP LLC, Apax X GP Co. Limited, as investment manager of the relevant investment vehicles in the fund known as Apax X which is the sole shareholder of Ignition Topco Ltd, and Apax Guernsey (Holdco) PCC Limited Apax X Cell, as the sole parent of Apax X GP Co. Limited, may be deemed to be the beneficial owners having shared voting and investment power with respect to the securities. Based on information provided by the security holder and information disclosed in a Registration Statement on Form S-3 filed with the SEC on February 18, 2021, Apax X GP Co. Limited is controlled by its board of directors that is comprised of the following persons: Simon Cresswell, Andrew Guille, Martin Halusa, Jeremy Latham, Paul Meader and David Staples. The address of Ignition Acquisition Holdings LP, Ignition Acquisition Holdings GP, LLC, Ignition Parent LP and Ignition GP LLC is c/o Apax Partners US, LLC, 601 Lexington Avenue, New York, NY 10022. The address of Ignition Topco Ltd is P.O. Box 656, East Wing, Trafalgar Court, Les Banques, St. Peter Port, Guernsey GY1 3PP, Place of Organization: Guernsey. The address of Apax X GP Co. Limited is Third Floor, Royal Bank Place, 1 Glategny Esplanade, St. Peter Port, Guernsey, GY1 2HJ. Mr. Mackenzie is a partner at Apax and is also our director. Mr. Mackenzie disclaims beneficial ownership of the shares of common stock beneficially owned by Ignition Acquisition Holdings LP.

(4)

~~(3)~~

At the close of business on April 8, 2022, the record date, (i) Ignition Acquisition Holdings LP held in the aggregate voting power equivalent to 31,977,408 shares of our common stock, approximately 20.83% of our common stock on an as converted basis, and (ii) Periphas held in the aggregate voting power equivalent to 3,197,521 shares of our common stock, approximately 2.56% of our common stock on an as converted basis.

(5)

Periphas Kanga Holdings GP, LLC as the general partner of Periphas Kanga Holdings, LP, SKM Periphas GP LLC, as the Managing Member of Periphas Kanga Holdings, GP, LLC and Mr. Mehra, as the Manager of SKM Periphas GP LLC, may be deemed to be the beneficial owners having shared voting and investment power with respect to the securities. The principal business address of each of the individuals and entities identified in this paragraph is 667 Madison Avenue, 15th Floor, New York, NY 10065.

(6)

Based solely on information disclosed in a Schedule 13G/A filed by ~~The Vanguard Group~~BlackRock, Inc. on ~~March 11, 2019.~~January 10, 2022. According to this Schedule 13G/A, The Vanguard Group has sole voting power with respect to 73,904 shares, sole dispositive power with respect to 13,218,488 shares, shared voting power with respect to 16,581 shares and shared dispositive power with respect to 77,194 shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.



		22

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~~(4)~~: Based solely on information disclosed in a Schedule 13G/A filed by T. Rowe Price Associates, Inc. on February 14, 2019. According to this Schedule 13G/A, T. Rowe Price Associates, Inc. has sole voting power with respect to 3,132,887 shares, sole dispositive power with respect to 8,391,117 shares, and no shared voting or dispositive power. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202.
~~(5)~~

(7)

Based solely on information disclosed in a Schedule 13G/A filed by The Vanguard Group on January 10, 2022. According to this Schedule 13G/A, The Vanguard Group has sole voting power with respect to zero shares, sole dispositive power with respect to 12,425,150 shares, shared voting power with respect to 111,683 shares and shared dispositive power with respect to 211,019 shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.

(8)

~~(6)~~

Based solely on information disclosed in a Schedule 13G filed by Snyder Capital Management, L.P. on February 10, 2022. According to this Schedule 13G, Snyder Capital Management, L.P. has shared voting power with respect to 6,578,317 shares, shared dispositive power with respect to 6,578,317 shares, and no sole voting or dispositive power. The address of Snyder Capital Management, L.P. is 101 Mission Street, Suite 1400, San Francisco, California 94105.

(9)

Includes the following shares of our common stock issuable pursuant to options that are exercisable within 60 days of April ~~11, 2019:~~8, 2022: Mr. Davis, 9,784; Mr. Hallett, ~~194,404;~~231,338; Mr. Hammer, 24,558; Mr. Kelly, 73,675; and Mr. Loughmiller, ~~97,204; and Ms. Polak, 34,996.~~117,518.

(10)

~~(7)~~

Includes 800 shares held in a family ~~member's~~member’s brokerage account, over which Mr. Hill holds a power of attorney. Mr. Hill disclaims beneficial ownership of these ~~shares except to the extent of his pecuniary interest therein.~~shares.

(11)

~~(8)~~

Includes an aggregate of ~~496,604~~502,450 shares of our common stock issuable pursuant to options that are exercisable within 60 days of April ~~11, 2019.~~8, 2022.

~~SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE~~24

Section 16(a) of the Securities Exchange Act of 1934, as amended ("Exchange Act"), requires KAR Auction Services' directors and executive officers and persons who own more than 10% of the issued and outstanding shares of the Company's common stock to file reports of initial ownership of common stock and other equity securities and subsequent changes in that ownership with the SEC and the NYSE. Based solely on a review of such reports and written representations from the directors and executive officers, the Company believes that all such filing requirements were met during 2018, except that (1) due to a clerical error, Mr. Hallett filed one Form 4 late to report two tax withholding transactions that occurred on December 5, 2018, and (2) due to a technical issue with filing codes caused by a third-party clerical error, Ms. Ecton filed one Form 4 late to report one stock acquisition transaction resulting from the reinvestment of dividends that occurred on October 3, 2018.

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		23

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~~ADVISORY VOTE TO APPROVE~~
~~EXECUTIVE COMPENSATION:~~
PROPOSAL ~~NO. 2~~

~~PROPOSAL~~

In accordance with Section 14A of the Exchange Act and related SEC rules, the Company seeks a non-binding advisory vote from its stockholders to approve the compensation of its named executive officers as described in the ~~"Compensation~~“Compensation Discussion and ~~Analysis"~~Analysis” section beginning on page 2526 and the compensation tables that follow such section. The Company seeks this non-binding advisory vote from its stockholders annually, pursuant to the results of the ~~stockholders'~~stockholders’ vote at the ~~Company's~~Company’s 2017 annual meeting of stockholders selecting such frequency.

At the 2021 annual meeting, over 98% of the votes cast were in favor of the advisory vote to approve executive compensation.

Our executive compensation program includes certain ~~"best practices"~~“best practices” in governance and executive compensation, including the following:

•

~~Stockholder alignment:~~Pay for performance: ~~We have demonstrated a trend of alignment between~~Our 2021 annual incentive program is 100% performance-based and our ~~TSR performance and the compensation~~equity incentive program is heavily performance-based with 50% of our ~~CEO.~~equity awards in the form of PRSUs and 40% in the form of performance-based stock options (time-based RSUs were eliminated for 2021).

•

Independent Compensation Committee: All of the members of our Compensation Committee are independent under NYSE rules.

•

Independent compensation consultant: The Compensation Committee retains its own independent compensation consultant to review our executive compensation program and practices.

•

~~Pay for performance:~~ ~~Our annual incentive program is 100% performance-based and our equity incentive program is heavily performance-based with 75% of our equity awards in the form of PRSUs.~~

•

Maximum payout caps: The Compensation Committee sets maximum amounts that may be payable for annual cash incentive compensation and PRSUs.

•

Clawback policy for financial misconduct: Our clawback policy provides for the recovery and cancellation of an executive ~~officer's~~officer’s incentive compensation in the event we are required to prepare an accounting restatement due to such executive ~~officer's~~officer’s intentional misconduct.

•

No excise tax gross-ups:

•

~~Moderate change~~ The Company and Mr. Hallett entered into a new employment agreement in ~~control benefits:~~ ~~Change~~2021 eliminating the legacy tax gross-up provision contained in ~~control severance benefits are two times base salary and target bonus for the CEO and one times base salary and target bonus for the other executive officers.~~Mr. Hallett’s prior agreement.

•

Double-trigger vesting provisions in equity award agreements: ~~Beginning with the 2017 equity grants, our~~Our equity awards permit accelerated vesting of assumed or replaced equity awards upon a change in control ~~of the Company~~ only if an executive experiences a qualifying termination of employment in connection with or following such change in control.

•

Robust equity ownership requirements: We have stock ownership guidelines that are applicable to our ~~named~~ executive officers. The stock ownership guideline for our CEO is five times his annual base ~~salary, and~~salary.

•

Stockholder alignment: We reward performance that meets or exceeds the ~~CEO currently holds over 20 times his annual base salary.~~performance goals that the Compensation Committee establishes with the objective of increasing stockholder value.

In deciding how to vote on this proposal, the Board encourages you to read the ~~"Compensation~~“Compensation Discussion and ~~Analysis"~~Analysis” section and the compensation tables that follow. Because this vote is advisory, it will not be binding upon the Board; however, the Board and the Compensation Committee value our ~~stockholders'~~stockholders’ opinions, and the Compensation Committee will take into account the outcome of the advisory vote when considering future executive compensation decisions.

The affirmative vote of the holders of a majority of the shares present and entitled to vote at the 2022 annual meeting is required to approve this proposal.


✓		The Board of Directors recommends that you vote ~~"FOR"~~FOR the advisory vote to approve executive compensation.

		~~Proxies solicited by the Board of Directors will be voted "FOR"~~

Proxies solicited by the Board of Directors will be voted “FOR” the advisory vote to approve executive compensation unless stockholders specify a contrary vote.



		24

~~Table of Contents~~

~~COMPENSATION DISCUSSION AND ANALYSIS~~

~~OVERVIEW~~25

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COMPENSATION DISCUSSION AND ANALYSIS

OVERVIEW

The following discussion and analysis of our compensation program for named executive officers should be read in conjunction with the tables and text elsewhere in this proxy statement that describe the compensation awarded and paid to the named executive officers.

Named Executive Officers

Our named executive officers for the last completed fiscal year were (i) ~~our~~the two chief executive ~~officer;~~officers who served during the last completed fiscal year; (ii) ~~our~~the chief financial officer; and (iii) each of the three other most highly compensated executive officers who were serving as executive officers at the end of the last completed fiscal year. Our named executive officers are:

	~~Name~~	~~Title~~
Name
	Title
Peter J. (“Peter”) Kelly
	~~James P. ("Jim") Hallett~~	Chief Executive Officer
James P. (“Jim”) Hallett*		Executive Chairman and Chairman of the Board
	Eric M. ~~("Eric"~~(“Eric”) Loughmiller		Executive Vice President and Chief Financial Officer
	~~John C. ("John") Hammer~~	~~President of ADESA~~
	~~Donald S. ("Don") Gottwald~~	Chief Operating Officer and Chief Strategy Officer*
John C. (“John”) Hammer	~~Rebecca C. ("Becca") Polak~~	Chief ~~Legal~~Commercial Officer ~~and Secretary~~ for KAR and President of TradeRev**ADESA
Justin T. (“Justin”) Davis		President of BacklotCars
James P. (“James”) Coyle		Executive Vice President and Chief Digital Officer

*: ~~Effective February 18, 2019,~~ Mr. ~~Gottwald began serving~~Hallett served as the ~~Company's~~Company’s Chief ~~Strategy~~Executive Officer ~~and President of Digital, Data and Mobility Solutions.~~
**: ~~"TradeRev" is~~until Mr. Kelly assumed the ~~assumed name for Nth Gen Software Inc.~~

position on April 1, 2021.

This Compensation Discussion and Analysis is organized into six sections:


			Executive Summary (pages ~~26–27)~~28–29)
				Compensation Philosophy and Objectives (page ~~28)~~30)
				The Role of the Compensation Committee and the Executive Officers in Determining Executive Compensation (pages ~~28–29)~~30–31)
				Elements Used to Achieve Compensation Philosophy and Objectives (pages ~~30–38)~~32–41)
				Compensation Policies and Other Information (pages ~~38–40)~~42–43)
				Results of Say on Pay Votes at ~~2018~~2021 Annual Meeting (page ~~40)~~43)

~~2018~~2021 Executive Compensation Highlights

•

~~Payouts based on~~A combination of the Company’s Adjusted EBITDA performance ~~in 2018~~(50%), total volume of vehicles sold goals (25%) and strategic volume of vehicles sold goals (25%) were utilized as performance objectives under our Annual Incentive Program (as subsequently defined) ~~were~~. Despite the unanticipated industry-wide vehicle volume decline in 2021, the Compensation Committee did not adjust the targets or potential payouts of any 2021 annual incentive program award, resulting in payouts at ~~92.83%~~26.67% of the target award amount for the named executive officers whose payout is based on the performance of KAR and 46.42% of the target award amount for the remaining named executive officer whose payout is based on the performance of KAR and ADESA. The Compensation Committee applied the MBO modifier (as subsequently defined) to the Annual Incentive Program 2018 payout, based on the Compensation Committee's review of the named executive officers' level of achievement of certain pre-established departmental, strategic or operational initiatives and objectives, which resulted in varying increases in payouts for each named executive officer based on their respective performance.officers.

•

~~The 2016 PRSUs paid out at 117.1% of target based on strong Cumulative Operating Adjusted Net Income Per Share performance.~~

•

We continued our heavy focus on performance-based equity awards with ~~75%~~90% of the target long-term incentive grants tied to pre-established financial and stock price performance goals. For our ~~2018~~2021 executive compensation program, 50% of the equity awards were granted in the form of PRSUs ~~that will pay out based on our Cumulative Operating Adjusted Net Income Per Share~~tied to three-year financial performance ~~over a three-year measurement period.~~

goals, and 40% of the equity awards were granted in the form of performance-based stock options with vesting tied to stock price performance goals (a separate performance condition relating to achieving and maintaining threshold stock price appreciation above the exercise price).

These compensation highlights are discussed in more detail below.

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IAA Spin-Off

In 2019, we completed the spin-off of our former salvage auction business, IAA, Inc. (“IAA”), to our stockholders, resulting in KAR and IAA being two independent, publicly-traded companies (the “IAA Spin-Off”). In connection with the IAA Spin-Off, KAR stockholders received one share of IAA stock for every one share of KAR stock held as of June 18, 2019. All equity awards outstanding as of the IAA Spin-Off were adjusted to preserve the economic value of the awards in accordance with the Employee Matters Agreement, dated June 27, 2019, between KAR and IAA. The adjusted KAR awards and adjusted IAA awards are generally subject to the same terms and conditions, and will continue to vest on the same schedule, except as noted below. For purposes of award vesting, continued employment with KAR is treated as continued employment for both KAR and IAA awards. The following summarizes the adjustments to each type of award:

•

RSUs: Holders of outstanding KAR RSUs retained such KAR RSUs and also received an RSU relating to IAA common stock in respect of each KAR RSU held.

•

PRSUs Granted in 2018: KAR 2018 PRSUs were converted into time-based RSUs relating to KAR common stock at the target performance level, and each holder retained such KAR RSUs and received a corresponding RSU relating to IAA common stock for each KAR RSU held.

•

PRSUs Granted in 2019: Holders of KAR 2019 PRSUs retained such PRSUs and received a PRSU relating to IAA common stock in respect of each KAR PRSU held. The PRSUs were subject to adjusted performance criteria for the period from January 1, 2019, through December 31, 2019, which performance criteria was determined by the KAR and IAA compensation committees following the IAA Spin-Off. For both the KAR PRSUs and the IAA PRSUs, the performance-based vesting criteria applied to the 2019 performance year only, with only time-based vesting being applicable through the third anniversary of the applicable grant date for KAR PRSUs and through December 31, 2021 for IAA PRSUs.

•

Stock Options: Each KAR stock option was converted into two separate options, an adjusted option to purchase KAR common stock and an option to purchase IAA common stock, with the number and exercise prices of both options adjusted to maintain economic value. A conversion formula based on the pre-spin closing price of KAR and IAA was used to determine the exercise prices of the adjusted options.

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		25

~~Table of Contents~~

EXECUTIVE SUMMARY

				Grew dealer-consigned vehicles37% with approximately 550,000 vehicles sold via North American digital dealer-to-dealer marketplaces on a proforma basis (including CARWAVE pre-acquisition volumes)
		~~Net revenue was up 9% to~~ ~~approximately $3.8 billion.~~


		~~+ 7%~~		~~Total vehicles sold by ADESA, Inc. ("ADESA") and Insurance Auto~~ ~~Auctions, Inc. ("IAA") rose approximately 7% to 6.0 million units.~~

Generated


	strong cash flow from operations ~~Achieved net income~~ of ~~$328.0 million.~~	$413.2 million
an increase of 7%

Increased operating profit54%

to $210.6 million

Grew gross profit per vehicle sold19%

to $277

exclusive of depreciation and amortization

				28
				~~Adjusted EBITDA* rose 7%~~ ~~to $893.9 million.~~ * Adjusted EBITDA is a non-GAAP measure and is defined and reconciled to the most comparable GAAP measure, net income, in our Annual Report on Form 10-K for the year ended December 31, 2018 in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—EBITDA and Adjusted EBITDA."



		26

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~~Table of Contents~~

Our Executive Compensation Practices are Aligned with ~~Stockholders'~~Stockholders’ Interests

We maintain a compensation program structured to achieve a close connection between executive pay and Company performance. We believe that this strong pay for performance orientation has served us well in recent years.

WHAT WE DO

✓

Pay for performance: Our annual incentive program is 100% performance-based and our equity incentive program is ~~heavily~~90% performance-based, with ~~75%~~50% of our equity awards in the form of ~~PRSUs.~~PRSUs and 40% of our equity awards being performance-based stock options.

✓

Independent Compensation Committee: All of the members of our Compensation Committee are independent under NYSE rules.

✓

Independent compensation consultant: The Compensation Committee retains its own independent compensation consultant to evaluate and review our executive compensation program and practices.

✓

~~Stockholder alignment:~~“Double-trigger” equity vesting: ~~We have demonstrated a trend of alignment between our TSR performance and the compensation of our CEO, as shown in the chart below.~~

Fiscal Year 2013
YE 2014 2015 2016 2017 2018

CEO Pay ($000) $4,808 $4,824 $5,078 $5,812 $6,138

Indexed TSR 100 121 133 158 193 187

✓: ~~Maximum payout caps:~~ ~~The Compensation Committee sets maximum amounts that may be payable for annual cash incentive compensation and PRSUs.~~
✓: ~~Clawback policy for financial misconduct:~~ Our clawback policy provides for the recovery and cancellation of incentive compensation of an executive officer in the event we are required to prepare an accounting restatement due to such executive officer's intentional misconduct.
✓: ~~Moderate change in control benefits:~~ ~~Change in control severance benefits are two times base salary and target bonus for the CEO and one times base salary and target bonus for the other executive officers.~~
✓: ~~"Double-trigger" vesting provisions in equity award agreements:~~ ~~Beginning with the 2017 equity grants, accelerated~~Accelerated vesting of assumed or replaced equity awards upon a change in control of the Company is only permitted if an executive experiences a qualifying termination of employment in connection with or following such change in control.

✓

Robust equity ownership requirements: ~~We have stock ownership guidelines that are applicable to our executive officers.~~ The stock ownership guideline for our CEO is five times his annual base salary, and ~~the CEO currently holds over 20~~three times ~~his~~ annual base ~~salary.~~salary for the other named executive officers. Executive officers are required to hold 60% of vested shares, net of taxes, until stock ownership guidelines are met.

Maximum payout caps: The Compensation Committee sets maximum amounts that may be payable for annual cash incentive compensation and PRSUs.

Annual compensation risk assessment: Each year we perform an assessment of any risks that could result from our compensation programs and practices.

Clawback policy: Our clawback policy provides for the recovery and cancellation of incentive compensation of an executive officer in the event we are required to prepare an accounting restatement due to such executive officer’s intentional misconduct.

Stockholder alignment: We reward performance that meets or exceeds the performance goals that the Compensation Committee establishes with the objective of increasing stockholder value.

WHAT WE ~~DON'T~~DON’T DO

✗

Provide excise tax gross-ups:

We do not provide “golden parachute” excise tax gross-ups.

✗

Provide excessive perquisites: We provide a limited number of perquisites that are designed to ~~attract~~support a competitive total compensation package.

✗

Allow hedging or pledging of the ~~Company's~~Company’s securities: We prohibit hedging, pledging and short sales of Company stock by our directors and executive officers.

✗

Reprice stock options: Stock option exercise prices are set equal to the grant date market price and cannot be repriced or discounted without stockholder approval.

✗

~~Maintain a defined benefit~~Provide pension ~~plan:~~benefits or supplemental retirement plans: We do not maintain a defined benefit pension ~~plan~~or supplemental retirement plans for our executive officers.

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COMPENSATION PHILOSOPHY AND OBJECTIVES

We design and administer our executive pay programs to help ensure the compensation of our named executive officers is (i) closely aligned with our performance on both a short-term and long-term basis; (ii) linked to specific, measurable results intended to create value for stockholders; and (iii) competitive in attracting and retaining key executive ~~talent into the vehicle remarketing and auto finance industry.~~talent. Each of the compensation programs that we have developed and implemented is intended to satisfy one or more of the following specific objectives:

•

align the interests of our executive officers with the interests of our stockholders so that our executive officers manage from the perspective of owners with an equity stake in the Company;

•

motivate and focus our executive officers through incentive compensation programs directly tied to our business objectives and financial results;

•

support a one-company culture and encourage synergies among all business units by aligning rewards with long-term, overall Company performance and stockholder value;

•

provide a significant percentage of total compensation through variable pay based on pre-established, measurable goals and objectives;

•

provide competitive upside opportunity without encouraging excessive risk-taking;

•

enhance our ability to attract and retain skilled and experienced executive officers; and

•

provide rewards commensurate with performance and with competitive market practices.

While the Company does not target any specific percentile positioning versus the market, the market median is used as a reference point but is not the sole determinant when making compensation decisions. Compensation decisions are made considering a number of factors including experience, ~~tenure,~~retention, sustained performance, specific requirements of roles relative to the market and individual and Company performance.

THE ROLE OF THE COMPENSATION COMMITTEE AND
THE EXECUTIVE OFFICERS IN DETERMINING
EXECUTIVE COMPENSATION

~~Composition of the Compensation Committee.~~ ~~The Compensation Committee of our Board is comprised of Mmes. Ecton (Chairman) and Jolliffe and Messrs. Bourell and Larson.~~

Role of the Compensation Committee. The Compensation Committee has primary responsibility for all compensation decisions relating to our named executive officers. The Compensation Committee reviews the aggregate level of our executive compensation, as well as the mix of elements used to compensate our named executive officers on an annual basis.

Compensation ~~Committee's~~Committee’s Use of Market and Survey Data. Although ~~KAR Auction Services~~the Company is comprised of a unique mix of businesses and lacks directly comparable public companies, the Compensation Committee understands that most companies consider pay levels at comparably-sized, peer companies when setting named executive officer compensation levels. With assistance from its independent compensation consultant, ClearBridge, the Compensation Committee has developed a meaningful comparator group for the Company.

In order to confirm competitiveness of compensation, the Compensation Committee uses a combination of ~~(i) survey data (cuts from the Aon Hewitt and Mercer general industry and service industry surveys); and (ii)~~ proxy compensation data of a ~~"proxy~~“proxy comparator ~~group"~~group” and survey data (including surveys published by Willis Tower Watson and Radford) in setting and adjusting compensation levels. The Compensation Committee, with assistance from ClearBridge, annually reviews the composition of our proxy comparator group. As part of such reviews, the Compensation Committee considers specific criteria and recommendations regarding companies to add or remove from the group. In light of the lack of directly comparable companies for ~~KAR Auction Services'~~the Company’s business, as noted above, companies in the proxy comparator group utilized in 2021 were selected based on (i) a focus on service-oriented ~~industries;~~companies in related industries and business areas as the Company, considering the Company’s digital transformation and go-forward strategy; (ii) similarly-sized revenue and market capitalization levels; (iii) comparable ~~growth,~~ profitability and/or market valuation profiles; and (iv) companies with which ~~KAR Auction Services~~the Company competes for executive talent. Where



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possible, the Compensation Committee included companies that are in related or similar industries to the ~~Company. Our~~Company, with an additional focus on technology companies that offer online marketplaces and digital intermediary services in light of the Company’s digital transformation and go-forward strategy.

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The proxy comparator group ~~for 2018 has not changed from the comparator group we~~ used in ~~2017.~~

~~Based on the recommendation of ClearBridge, the Compensation Committee used a proxy comparator group consisting~~2021 consisted of the following 17 ~~companies in making 2018 compensation decisions:~~

companies:*


~~2018~~2021 Proxy Comparator Group
	Allison Transmission Holdings, Inc.		~~GATX Corp.~~		~~Stericycle,~~ CarMax, Inc.
~~Cintas Corporation~~		~~LKQ Corp.~~		~~Total System Services, Inc.~~
Copart, ~~Inc.~~Inc		~~MSC Industrial Direct Co. Inc.~~		~~Werner Enterprises, Inc.~~
CDK Global, Inc.		~~Old Dominion Freight Line~~ CoStar Group, Inc.		~~Westinghouse Air Brake Technologies Corporation~~
~~ebay Inc.~~		~~Pitney Bowes Inc.~~		~~Worldpay, Inc. (formerly known as Vantiv, Inc.)~~
Equifax Inc.		~~Sotheby's~~	Etsy, Inc. Fair Isaac Corporation Gentex Corporation Grubhub Inc. IAA, Inc. Lithia Motors, Inc.			LKQ Corporation Ritchie Bros. Auctioneers Incorporated Rush Enterprises, Inc. TripAdvisor, Inc. Vroom, Inc.

The 2021 proxy comparator group was initially approved by the Compensation Committee in December 2020 and consisted of 15 companies, with IAA, Inc. and Vroom, Inc. being approved by the Compensation Committee and added to the proxy comparator group in April 2021 and June 2021, respectively.

Consistent with the Company’s compensation philosophy, the Compensation Committee viewed the proxy comparator group and market data as an important guide, but not as the sole determinant in making its decisions regarding ~~2018~~2021 compensation ~~levels. The Compensation Committee also considered experience, tenure, sustained performance, specific requirements of roles relative to market and individual and Company performance.~~

levels (as discussed below).

Role of the Independent Compensation Consultant. The Compensation Committee used ClearBridge as its independent compensation consultant in ~~2018.~~2021. ClearBridge provided ~~(i) advice to~~ the Compensation Committee advice and guidance with respect to (i) the assessment of the ~~Company's~~Company’s executive compensation programs and practices; (ii) ~~advice regarding~~ the evaluation of long-term incentive compensation practices; (iii) advice and guidance regarding the design of new long-term equity awards; (iv) advice regarding related compensation matters; (v) advice to the Compensation Committee with respect to annual and long-term incentive compensation plan ~~design;~~design and ~~(vi) guidance on~~practices; (iii) the selection of a proxy comparator group; and (iv) the competitiveness of the executive ~~officers'~~officers’ elements of compensation. ClearBridge regularly attends Compensation Committee meetings and attends executive sessions as requested by the ~~Chairman~~Chair of the Compensation Committee. The Compensation Committee has reviewed the independence of ClearBridge in light of SEC rules and NYSE listing standards regarding compensation consultants and has concluded that the work of ClearBridge for the Compensation Committee does not raise any conflict of interest. All work performed by ClearBridge is and was subject to review and approval of the Compensation Committee.

Role of ~~the~~ Executive Officers. ~~Mr. Hallett~~Our Chief Executive Officer regularly participates in meetings of the Compensation Committee at which compensation actions involving our named executive officers are ~~discussed. Mr. Hallett~~discussed (recusing himself and not participating in portions of meetings where his compensation is discussed). Our Chief Executive Officer assists the Compensation Committee by making recommendations regarding compensation actions for the executive officers other than himself. ~~Mr. Hallett recuses himself and does not participate in any portion of any meeting of the Compensation Committee at which his compensation is discussed.~~

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ELEMENTS USED TO ACHIEVE COMPENSATION PHILOSOPHY
AND OBJECTIVES

Elements of ~~2018~~2021 Executive Compensation Program Design

The following table lists the elements of compensation for our ~~2018~~2021 executive compensation program. The program uses a mix of fixed and variable compensation elements and provides alignment with both short- and long-term business goals through annual and long-term incentives. Our incentives are designed to drive overall corporate performance and business ~~unit~~ strategies that correlate to stockholder value and align with our strategic vision. In order to confirm competitiveness of compensation, the Compensation Committee reviews survey data and proxy compensation data of our proxy comparator group.

~~Element~~

~~Key~~
~~Characteristics~~

~~Why We Pay~~
~~This Element~~

~~How We~~
~~Determine Amount~~

~~2018~~
~~Decisions~~

Element

Key
Characteristics

Why We Pay
This Element

How We
Determine Amount

2021
Decisions

Fixed

Base salary

Fixed compensation component payable in cash.

Reviewed annually and adjusted when appropriate.

~~Reward the named executive officers for their past performance~~

Attract and ~~facilitate the attraction and retention of a~~retain skilled and experienced ~~executive management team.~~executives. Compensate for performance of daily job responsibilities.

~~Company performance,~~

Base salaries are based on individual performance, experience, skills, job scope, tenure, review of competitive pay practices and base salary as a percentage of total compensation.

~~Three~~

Two named executive officers received a salary increase in ~~2018.~~2021. See ~~pages 31–32.~~page 34.

Variable

Annual cash incentive awards

Variable compensation component payable in cash based 100% on performance against annually established targets.

No payouts if a threshold level of performance is not achieved; payouts are capped at a maximum level of performance.

Motivate and reward for the successful achievement of pre-determined ~~financial~~performance objectives ~~at the Company.~~aligned with our key annual objectives.

Award opportunities are based on individual performance, experience, job scope and review of competitive pay practices.

Target annual incentive amount is set as a percentage of base salary.

Actual award payouts were based on a combination of the achievement of ~~2018~~2021 Adjusted EBITDA (50%), strategic volume of vehicles sold goals (25%) and ~~an MBO modifier (as defined below on page 34) relating to certain pre-established departmental, strategic or operational initiatives~~total volume of vehicles sold goals (25%).

KAR’s Adjusted EBITDA performance and ~~objectives for each executive.~~

~~KAR's~~the Company’s performance against its volume of vehicles sold goals resulted in ~~92.83%~~a payout of 26.67% of the target award for certain named executive officers of KAR and ADESA's performance resulted in 0% of the target award for the remaining named executive officer based on Adjusted EBITDA performance in 2018. The application of the MBO modifier (as defined below) resulted in varying increases in the total payout for each named executive officer ~~based on her/her respective performance. See page 35.~~(no adjustments were made to targets or potential payouts despite industry-wide vehicle volume challenges).

~~Variable~~

Performance-based restricted stock units (PRSUs)

PRSUs vest at the end of a three-year performance period.

No PRSUs earned if a threshold level of performance is not achieved; PRSUs are capped at a maximum level of performance.

Motivate and reward executives for performance on key long-term measures.

Align the interests of executives with long-term stockholder ~~value and serve to retain executive talent.~~

value.

Award opportunities are based on ~~individual's~~individual’s ability to impact future results, job scope, individual performance and review of competitive pay practices.

~~2018~~

PRSU awards ~~earned based on 3-year Cumulative Operating Adjusted Net Income Per Share performance through December 31, 2020.~~

made up 50% of the value of the aggregate long term incentives granted to the named executive officers under the 2021 executive compensation program.

The Compensation Committee granted PRSUs to all of the named executive officers in ~~2018.~~2021. See page ~~35.~~

38.

KAR 2021 PRSU awards ~~made up 75% of the value of the aggregate long-term incentives granted to the named executive officers in 2018.~~

are earned based on three-year Cumulative Operating Adjusted Net Income Per Share performance through December 31, 2023.

Performance-based stock options

The performance-based hurdles require achieving and maintaining a minimum stock price appreciation threshold as an additional vesting condition.

~~Restricted stock units (RSUs)~~

~~RSUs~~Become eligible to vest ~~ratably on~~and become exercisable in 25% increments, each upon the later to occur of (i) the first ~~three~~four anniversaries of the grant date, ~~subject to~~respectively, and (ii) the ~~named executive officer's continued employment with~~attainment of a closing price of the ~~Company.~~Company’s common stock at or above, for each respective 25% increment, $5, $10, $15, and $20 over the exercise price, for twenty consecutive trading days.

Align the interests of executives with long term stockholder value; further incentivizes our executives to drive long-term stockholder value creation; no options will vest and ~~serve to retain executive talent.~~become exercisable without achievement of pre-established performance goals.

~~Awards~~

Award opportunities are based on ~~individual's ability to impact future results,~~individual performance, experience, job scope ~~individual performance~~ and review of competitive pay practices.

~~RSU awards~~

Performance-based stock options made up ~~25%~~40% of the value of the aggregate ~~long-term~~long term incentives granted to named executives under the ~~named~~2021 executive ~~officers in 2018.~~

compensation program.

The Compensation Committee granted ~~RSUs~~performance-based stock options to all of the named executive officers in ~~2018.~~2021. See page ~~35.~~38.

Time-based stock options

Vest and become exercisable in equal installments on each of the first four anniversaries of the grant date.

Incentivizes performance by linking realized compensation over long-term appreciation in stock price.

Award opportunities are based on individual performance, experience, job scope and review of competitive pay practices.

Time-based stock options made up 10% of the value of the aggregate long term incentives granted to named executives under the 2021 compensation program.

The Compensation Committee granted time-based stock options to all of the named executive officers in 2021. See page 38.



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Compensation Structure and Goal Setting

Our executive compensation program is designed to deliver compensation in accordance with ~~corporate and business unit~~our performance, with a large percentage of the compensation at risk through long-term equity awards and annual cash incentive awards. These awards are linked to actual performance, consistent with our belief that a significant amount of executive compensation should be in the form of equity and that a greater percentage of compensation should be tied to performance for executives who bear higher levels of responsibility for our performance. The mix of target direct compensation awarded ~~in 2018~~under our 2021 executive compensation program for our CEO and the average of our other named executive officers is shown in the charts below. Approximately ~~84%~~85% of our ~~CEO's~~CEO’s total compensation, and approximately ~~72%~~79% of the average total compensation of our other named executive officers, is at-risk, consisting of PRSUs, performance-based stock options, time-based stock options, restricted stock units ~~("RSUs"~~(“RSUs”) (for Mr. Davis), and ~~other~~ performance-based annual cash incentives.


CEO Compensation	Other Named Executive Officer Average Compensation*

		* Mr. Davis’s one-time BacklotCars PRSU award has been excluded from this chart.

*: The amounts reported in the "Other Named Executive Officer Average Compensation" chart for Mr. Hammer have been annualized, due to Mr. Hammer's February 19, 2018 hire date. In addition, Mr. Hammer's special sign-on awards (cash and equity) have been excluded from this chart.

Base Salary

General. Annual salary levels for our named executive officers are based upon various factors, including the amount and relative percentage of total compensation that is derived from base salary, ~~when setting the compensation of our executive officers, Company performance,~~ individual performance, current roles and responsibilities, skills, experience and job ~~scope and tenure.~~scope. In view of the wide variety of factors considered by the Compensation Committee in connection with determining the base salary of each of our named executive officers, the Compensation Committee has not attempted to rank or otherwise assign relative weights to the factors that it considers. A description of how these factors were applied in ~~2018~~2021 is described below.

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Base Salaries for ~~2018.~~2021. In late ~~2017~~2020 and the first quarter of ~~2018 (and~~2021 (but for Mr. ~~Loughmiller, again in the third quarter of 2018)~~Coyle, prior to hire), the Compensation Committee reviewed the base salaries of each of our named executive officers for ~~2018.~~2021. After considering multiple factors as noted above, the following base salaries were approved for 2021:

Name	Base Salary	% Change	Effective Date
Peter Kelly	$600,000	0%	N/A
	$750,000	25%	April 1, 2021
Jim Hallett	$975,000	0%	N/A
	$725,000	(26%)	April 1, 2021
Eric Loughmiller	$550,000	0%	N/A
John Hammer	$550,000	1%	January 1, 2021
Justin Davis	$300,000	0%	N/A
James Coyle	$500,000	N/A	October 26, 2021

The Compensation Committee ~~approved~~did not initially approve a 2021 base salary adjustment for Messrs. Davis, Hallett, and Loughmiller and Ms. Polak. The Compensation Committee did not approve a base salary adjustment for Mr. Gottwald because the Compensation Committee determined that his base salary was already set at a competitive level. Mr. Hammer became an employee of the Company effective February 19, 2018, and his base salary was set as part of his initial compensation package.



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~~The following base salaries were in effect for 2018:~~

Name
Base Salary
Increase %
Effective Date
Jim Hallett
$975,000 8% January 1, 2018
Eric Loughmiller
$525,000 5% January 1, 2018
$550,000 5% July 29, 2018
John Hammer
$500,000 N/A February 19, 2018
Don Gottwald
$583,495 0% N/A
Becca Polak
$515,000 8% January 1, 2018

The base salary increases effective January 1, 2018 for Mr. Hallett and Ms. Polak were based on both a merit review and a market adjustment and for Mr. Loughmiller was based on a merit review. Mr. Loughmiller's salary was further increased effective July 29, 2018 based on a variety of factors, including market positioning, individual performance and the criticality of his role.

~~Base Salaries for 2019.~~ In late 2018, the Compensation Committee reviewed the base salaries of each of our named executive officers for 2018. After considering multiple factors as noted above, the Compensation Committee approved the following base salaries for 2019:

~~Name~~	~~Base Salary~~	~~Effective Date~~

~~Jim Hallett~~	~~$975,000~~	~~N/A~~
~~Eric Loughmiller~~	~~$550,000~~	~~N/A~~
~~John Hammer~~	~~$525,000~~	~~March 1, 2019~~
~~Don Gottwald~~	~~$500,000~~	~~January 28, 2019~~
~~Becca Polak~~	~~$515,000~~	~~N/A~~

~~The Compensation Committee did not approve a 2019 base salary adjustment for Messrs. Hallett~~Kelly or Loughmiller ~~or Ms. Polak~~ because the Compensation Committee determined that their base salaries were already set at competitive levels. The base salary increase for Mr. Hammer was a minor salary increase to reflect an internal pay equity adjustment. The Compensation Committee approved the base salary ~~increase~~adjustments for Messrs. Hallett and Kelly effective April 1, 2021, to reflect their new roles as Executive Chairman and Chief Executive Officer, respectively. Mr. ~~Hammer as a market adjustment~~Coyle became an employee of the Company effective October 26, 2021, and ~~to support engagement during a transformative period at ADESA and the~~his base salary ~~adjustment for Mr. Gottwald to reflect~~was set as part of his ~~new role. In~~initial compensation package. As discussed above, in order to confirm competitiveness of compensation, the Compensation Committee reviews survey data and proxy compensation data of our proxy comparator group.

Base Salaries for 2022. In late 2021 and the first quarter of 2022, the Compensation Committee reviewed the base salaries of each of our named executive officers for 2022. After considering multiple factors as noted above, the Compensation Committee approved the following base salaries for 2022:

Name	Base Salary	% Change	Effective Date
Peter Kelly	$773,000	3%	March 20, 2022
Jim Hallett	$725,000	0%	N/A
Eric Loughmiller	$550,000	0%	N/A
John Hammer	$572,000	4%	March 20, 2022
Justin Davis	$312,000	4%	March 20, 2022
James Coyle	$500,000	0%	N/A

The base salary increases effective March 20, 2022 for Messrs. Davis, Hammer and Kelly were based on a merit review. The Compensation Committee determined that the base salaries for Messrs. Coyle, Hallett and Loughmiller and were already set at competitive levels. As discussed above, in order to confirm competitiveness of compensation, the Compensation Committee reviews survey data and proxy compensation data of our proxy comparator group.

Annual Cash Incentive Program

General. ~~Named executive officers with greater job responsibilities have a significant proportion of their annual cash compensation tied to Company performance through their annual incentive opportunity.~~

~~The KAR Auction Services, Inc. Annual Incentive Program.~~ Under the KAR Auction Services, Inc. Annual Incentive Program (the ~~"Annual~~“Annual Incentive ~~Program"~~Program”), which is part of the KAR Auction Services, Inc. Amended and Restated 2009 Omnibus Stock and Incentive Plan ~~as amended~~ (the ~~"Omnibus Plan"~~“Omnibus Plan”), the grant of cash-based awards to eligible participants is contingent upon the achievement of certain pre-established ~~corporate~~ performance goals as determined by the Compensation Committee. The Annual Incentive Program is designed so that a significant proportion of our named executive officers’ annual cash compensation is variable and directly tied to key performance goals.

2021 ANNUAL INCENTIVE PROGRAM

As described below, the 2021 Annual Incentive Program was tied 100% to pre-established, objective performance metrics, specifically a combination of the Company’s Adjusted EBITDA performance (50%), total volume of vehicles sold goals (25%) and strategic volume of vehicles sold goals (25%).

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Use of ~~2018~~2021 Adjusted EBITDA

In ~~2018,~~2021, the Compensation Committee used ~~"2018~~“2021 Adjusted ~~EBITDA" for KAR Auction Services and/or ADESA, depending upon~~EBITDA” of the ~~named executive officer,~~Company as the relevant financial performance metric for determining awards under the Annual Incentive Program.

" For the named executive officers, 50% of the award’s total payout was weighted on achievement of 2021 Adjusted ~~EBITDA"~~EBITDA.

“Adjusted EBITDA” is equal to EBITDA (earnings before interest expense, income taxes, depreciation and amortization) adjusted to exclude, among other things:

•: gains and losses from asset sales;
•: unrealized foreign currency translation gains and losses in respect of indebtedness;
•: certain non-recurring gains and losses;
•: stock based compensation expense;
•: certain other non-cash amounts included in the determination of net income;



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•: charges and revenue reductions resulting from purchase accounting;
•: minority interest;
•: ~~expenses associated with the consolidation of salvage operations;~~
•: consulting expenses incurred for cost reduction, operating restructuring and business improvement efforts;
•: expenses realized upon the termination of employees and the termination or cancellation of leases, software licenses or other contracts in connection with the operational restructuring and business improvement efforts;
•: expenses incurred in connection with permitted acquisitions;
•: any impairment charges or write-offs of intangibles; and
•: any extraordinary, unusual or non-recurring charges, expenses or losses.

~~Using these measures,~~

Use of Volume of Vehicles Sold

In 2021, the Compensation Committee utilized volume of vehicles sold operational and strategic performance goals in the Annual Incentive Program. For the named executive officers, 25% of the award’s total payout was weighted on achievement of “2021 Total Volume,” with the remaining 25% of the award’s total payout weighted on “2021 Strategic Volume.”

“2021 Total Volume” is comprised of the total volume of vehicles sold through our marketplaces in 2021.

“2021 Strategic Volume” is comprised of certain vehicles sold through our off-premise marketplaces and Simulcast+.

Annual Incentive Opportunity

In 2021, each of our named executive officers was eligible to earn a cash-based incentive award under the Annual Incentive Program. The Compensation Committee establishes, on an annual basis, specific targets that determine the size of payouts under the Annual Incentive Program. In ~~2018,~~2021, the annual incentive opportunity based on achievement of ~~2018~~2021 Adjusted EBITDA, 2021 Total Volume and 2021 Strategic Volume for each named executive officer was as follows:

		Bonus Opportunity			Bonus Goal Weighting %
Name	Base Salary	Threshold % of Base Salary	Target % of Base Salary	Superior % of Base Salary	2021 Adjusted EBITDA	2021 Total Volume	2021 Strategic Volume
Peter Kelly(1)	$750,000	59	119	178	50	25	25
Jim Hallett(1)	$725,000	53	106	159	50	25	25
Eric Loughmiller	$550,000	50	100	150	50	25	25
John Hammer	$550,000	50	100	150	50	25	25
Justin Davis(1)	$300,000	32	65	97	50	25	25
James Coyle(2)	$500,000	50	100	150	50	25	25

Bonus Opportunity Bonus Goal Weighting %
2018 Adjusted EBITDA
Name
Base
Salary
Threshold
% of
Base
Salary
Target
% of
Base
Salary
Superior
% of
Base
Salary
KAR
Auction
Services
ADESA
Jim Hallett $975,000 62.5 125 187.5 100
Eric Loughmiller(1) $535,417 42.5 85 127.5 100
John Hammer(2) $500,000 50 100 150 50 50
Don Gottwald $583,495 50 100 150 100
Becca Polak $515,000 37.5 75 112.5 100
(1)

~~(1)~~: Mr. ~~Loughmiller's base salary and~~Hallett’s target annual incentive opportunity ~~were~~was decreased from 125% to 100% of base salary and Mr. Kelly’s target annual incentive opportunity was increased from ~~$525,000~~100% to ~~$550,000~~125% of base salary effective April 1, 2021, to reflect their new roles as Executive Chairman and Chief Executive Officer, respectively. In connection with Mr. Davis joining the Company’s executive management team, Mr. Davis’s target annual incentive opportunity was increased from 50% to 75% ~~to 100%, respectively,~~of base salary as of ~~the end~~June 4, 2021. The 2021 target annual incentive opportunities of ~~July 2018~~Messrs. Davis, Hallett and ~~the figures shown in the table~~Kelly reflect ~~the prorated, blended amounts applied to his award. These increases were based on a variety of factors, including market positioning, individual performance and the criticality of his role.~~these mid-year adjustments.

(2)

~~(2)~~

Mr. ~~Hammer's~~Coyle’s 2021 annual incentive award payout was prorated based on his ~~February 19, 2018 start date.~~

The chart below reflects Adjusted EBITDA performance metrics and achieved results for 2018. The payout percentages are based on the achievement of the performance metrics set forth below, with payment amounts prorated for performance between the established levels.

October 26, 2021 hire date, as described below.


~~Achieved Results~~

~~Target Incentive Opportunity:~~ ~~Base Pay multiplied by Individual Target Opportunity~~ ~~Business Performance Factor:~~ ~~2018 Adjusted EBITDA of KAR (50% or 100%) and 2018 Adjusted EBITDA of Business Unit (0% to 50%)~~



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~~Use of Management by Objectives~~

In 2018, the Compensation Committee could also, in its discretion, apply the Management by Objectives ("MBO") modifier to increase or reduce the annual incentive awards by up to plus or minus 10% based on the Compensation Committee's review of each named executive officer's achievement of two or more pre-established objectives, which are tailored to each executive depending on departmental, strategic or operational initiatives and objectives with respect to such executive's role.

Based on each named executive officer's level of achievement of his or her objectives, the Compensation Committee applied the MBO modifier to increase the annual incentive award of each of the named executive officers, as shown below. For 2019, the Compensation Committee has decided to rely on Company performance exclusively and has not included an MBO modifier in the 2019 Annual Incentive Program.

Performance Targets ~~for the Annual Incentive Program~~

The Compensation Committee reviews the ~~Company's~~Company’s business plan approved by the Board and determines the level of performance required to receive threshold, target and superior annual incentive payouts. The Compensation

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Committee established the performance objectives in amounts which it believed would increase stockholder value and be achievable given a sustained performance on the part of the named executive officers and which would require increasingly greater results to achieve the target and superior objectives. ~~The~~Consistent with the terms of the Omnibus Plan, the Compensation Committee may ~~decrease~~adjust performance goals to reflect unforeseen, unusual or extraordinary events or circumstances. Despite the ~~potential payouts at each performance target if,~~unanticipated industry-wide vehicle volume decline in ~~the discretion of the Compensation Committee, the circumstances warrant such an adjustment. In 2018,~~2021, the Compensation Committee did not increase or decrease the ~~performance~~ targets or potential payouts of any ~~2018~~2021 annual incentive program award. ~~As described elsewhere in this proxy statement, the~~

The Compensation Committee ~~applied~~established the ~~MBO modifier to the 2018~~following 2021 annual incentive program payout, based on the Compensation Committee's review of the named executive officers' achievement of certain pre-established departmental, strategic or operational initiatives and objectives, which resultedtargets:

		2021 Targets			Performance Leverage (% of Target Goal)			Payout Leverage (% of Target Payout)
	Weighting	Threshold	Target	Superior	Threshold	Target	Superior	Threshold	Target	Superior
2021 Adjusted EBITDA	50%	$420.0	$525.0	$630.0	80%	100%	120%	50%	100%	150%
2021 Total Volume	25%	2,715	3,393	4,072	80%	100%	120%	50%	100%	150%
2021 Strategic Volume	25%	736	920	1,104	80%	100%	120%	50%	100%	150%

($ in ~~varying increases~~millions; # in ~~payouts for~~thousands)

2021 Annual Incentive Program Payouts

The actual annual incentive award earned by each named executive officer ~~based on their respective performance.~~

~~2018 Performance Targets.~~ ~~The chart which follows provides~~for 2021 was determined by the ~~2018~~Company’s achievement of the Adjusted EBITDA, Total Volume and Strategic Volume performance ~~targets established~~goals, as determined by the Compensation ~~Committee for 2018 as well as the actual level of performance achieved (dollars in millions):~~Committee.

Threshold
Target
Superior
Achieved
Results(1)
Percentage of Target
Award Earned (Adjusted
EBITDA)
KAR Auction Services
$841.75 $910.00 $955.50 $900.22 92.83%
ADESA

$454.00
$478.53
$526.39
$448.76
0.00%

~~(1)~~: KAR's reported Adjusted EBITDA for the year ended December 31, 2018 was approximately $893.9 million, but for Annual Incentive Program purposes, certain acquisitions consummated in 2018 were excluded, which resulted in Adjusted EBITDA of $900.22 million.

~~2018 Annual Incentive Program Payouts.~~Under the Annual Incentive Program, threshold performance objectives must be met in order for any payout to occur. Payouts can range from 50% of target awards for performance at threshold, up to a maximum of 150% of target awards ~~(165% with the MBO modifier)~~ for superior performance, or no payout if performance is below threshold. ~~The table below shows the annual incentive opportunities for our named executive officers for 2018.~~ Because KAR ~~Auction Services~~ achieved at least the threshold level of Adjusted EBITDA performance in ~~2018,~~2021, each of our named executive officers was eligible to receive an award under the Annual Incentive Program in ~~2018,~~2021 for the Adjusted EBITDA portion of the program, which amounts are set forth in the ~~"Summary~~“Summary Compensation Table for ~~2018"~~2021” on page ~~42.~~ 46.

The following chart provides the actual level of Adjusted EBITDA, Total Volume and Strategic Volume performance achieved in 2021.

[MISSING IMAGE: tm223394d1-fc_adjebitdapn.jpg]

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Based on the ~~Company's~~Company’s performance during ~~2018,~~2021 and the accompanying payout percentages for the different performance goals set forth above, ~~and each named executive officer's resulting achievement level with respect to his or her MBO initiatives and objectives~~



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~~(described above),~~ our named executive officers earned the percentages and corresponding payout amounts of their target annual incentive awards as set forth ~~below based on the following formula:~~

~~Target Annual Incentive Award~~ below:× ~~Percentage of Target Award Earned~~ × ~~MBO Modifier~~ = ~~2018 Payout~~

	Target	Actual
Name	Target Annual Incentive Award(1)	% of Adjusted EBITDA Target Award Earned (50% Weighting)	% of Total Volume Target Award Earned (25% Weighting)	% of Strategic Volume Target Award Earned (25% Weighting)	% of Total Target Award Earned	2021 Payout (Actual Annual Incentive Award)
Peter Kelly	$890,625	53.35%	0%	0%	26.67%	$237,566
Jim Hallett	$770,313	53.35%	0%	0%	26.67%	$205,474
Eric Loughmiller	$550,000	53.35%	0%	0%	26.67%	$146,707
John Hammer	$550,000	53.35%	0%	0%	26.67%	$146,707
Justin Davis	$193,750	53.35%	0%	0%	26.67%	$51,681
James Coyle	$83,333	53.35%	0%	0%	26.67%	$22,228

(1)

Name
Target Annual
Incentive Award
Percentage of
Target
Award Earned
(Adjusted
EBITDA)
MBO Modifier
2018 Payout
Jim Hallett
$1,218,750 92.83% 107.75% $1,219,046
Eric Loughmiller
$458,854(1) 92.83% 108.20% $460,882
John Hammer
$416,667(2) 46.42%(3) 108.75% $210,318
Don Gottwald
$583,495 92.83% 108.80% $589,324
Becca Polak
$386,250 92.83% 105.00% $376,484

~~(1)~~: ~~Mr. Loughmiller's~~The target annual incentive award ~~reflects~~for Messrs. Davis, Hallett and Kelly reflect the ~~prorated, blended~~mid-year adjustments ~~to his base salary and target annual incentive opportunity as discussed above.~~
~~(2)~~: described on page 35. Mr. ~~Hammer's target~~Coyle’s annual incentive award was prorated based on his ~~February 19, 2018 start~~October 26, 2021 hire date.
~~(3)~~: ~~This amount is based~~

2022 ANNUAL INCENTIVE PROGRAM

In the first quarter of 2022, the Compensation Committee approved the performance objectives for our 2022 Annual Incentive Program. For 2022, the bonus opportunity for each named executive officer will be weighted on ~~the percentages~~a combination of the ~~target annual incentive awards earned for KAR~~Company’s financial performance (85%) and ~~ADESA.~~certain strategic objectives (15%).

Long-Term Incentive Opportunities

~~The~~

To further align our named executive officers’ interests with those of our stockholders, the Company provides long-term incentive compensation opportunities under the Omnibus Plan, as described below.

Omnibus Plan. The Company currently grants long-term incentive awards under the Omnibus Plan. Our Board adopted the Omnibus Plan on December 10, 2009, and it has since been amended and restated, as approved by our stockholders. Under the Omnibus Plan, participants are eligible to receive stock options, restricted stock, RSUs (with or without performance conditions), stock appreciation rights, other stock-based awards and/or cash-based awards, each as determined by the Compensation Committee.

In February 2021, the Compensation Committee approved changes to the components of our long-term incentive program, which is intended to apply for the 2021-2024 compensation periods. In prior years (2015-2020), named executive officers have been granted long-term incentive awards on an annual basis in the form of PRSUs and RSUs, ~~each as described below. Although we have granted stock options in the past, stock options are not currently part of the Company's long-term incentive program.~~

~~2018 Long-Term Incentive Awards.~~ On March 2, 2018, the Compensation Committee granted PRSUs and RSUs under its long-term incentive program to the Company's named executive officers, as described in the table below. Awards were based on the individual's ability to impact future results, job scope, individual performance and a review of competitive pay practices.

~~The aggregate target award value for each named executive officer was~~ allocated such that 75% of the value was in the form of PRSUs and 25% of the value was in the form of RSUs.

Name Target PRSUs
(Cumulative
Operating
Adjusted Net
Income Per
Share Goal)
Value of
Target Shares
at Grant
RSUs
Value of
RSUs at Grant
Jim Hallett
54,057 $2,925,024 18,019 $975,008
Eric Loughmiller
12,735 $689,091 4,245 $229,697
John Hammer(1)
15,594 $843,791 5,199 $281,318
Don Gottwald
14,154 $765,873 4,718 $255,291
Becca Polak
12,492 $675,942 4,164 $225,314

~~(1)~~: ~~$500,000~~ In connection with the Company’s digital transformation and go-forward strategy, the Compensation Committee approved changes to the structure of our long-term incentive program, including the elimination of RSUs for the executive management team, and the introduction of performance- and time-based stock options as part of the 2021 executive compensation program, as described below.

2021 LONG-TERM INCENTIVE AWARDS

On March 4, 2021 (but on June 4, 2021 for Mr. Davis and November 5, 2021 for Mr. Coyle), the Compensation Committee granted PRSUs and performance- and time-based stock options under its long-term incentive program to the Company’s named executive officers, as described in the table below. Awards were based on the individual’s ability to impact future results, job scope, individual performance, and a review of competitive pay practices.

The aggregate target award value for each named executive officer was allocated such that 50% of the value was in the form of PRSUs, 40% was in the form of performance-based stock options and 10% was in the form of time-based stock options (except for Mr. Davis, as described below).

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Name	Target PRSUs (Cumulative Operating Adjusted Net Income Per Share Goal)	Value of Target Shares at Grant	Number of Performance- Based Stock Options	Value of Performance- Based Stock Options at Grant	Number of Time-Based Stock Options	Value of Time-Based Stock Options at Grant
Peter Kelly	108,617	$1,500,001	474,309	$1,200,002	118,578	$300,002
Jim Hallett	90,515	$1,250,012	395,257	$1,000,000	98,815	$250,002
Eric Loughmiller	49,783	$687,503	217,392	$550,002	54,348	$137,500
John Hammer	36,206	$500,005	158,103	$400,001	39,526	$100,001
Justin Davis(1)	3,428	$62,492	60,650	$200,000	15,163	$50,000
James Coyle(2)	25,580	$375,003	70,756	$300,000	17,689	$75,000

(1)

Mr. Davis was granted RSUs on March 4, 2021 with a grant value of $187,512, prior to joining the Company’s executive management team on June 4, 2021. As part of joining the Company’s executive management team, Mr. ~~Hammer's equity awards~~Davis’s aggregate 2021 long-term incentive target opportunity was increased to $500,000, and on June 4, 2021 Mr. Davis was granted PRSUs with a target grant value of $62,492 (in recognition of the $187,512 in RSUs previously granted), along with performance- and time-based stock options valued at $200,000 and $50,000, respectively. The number and value of stock options depicted includes only the portion attributable to ~~a special sign-on award~~the 2021 long-term incentive program (see below for stock options attributable to ~~make up~~future years).

(2)

Mr. Coyle’s long-term incentive awards were granted on November 5, 2021, pursuant to the Company’s Policy on Granting Equity Awards. The number and value of stock options depicted includes only the portion attributable to the 2021 long-term incentive program (see below for stock options attributable to future years).

The Compensation Committee has adopted this approach for the 2021 long-term incentive program for our named executive officers in order to (i) increase the proportion of the grants tied to pre-established stock price and financial performance goals (i.e., 90% of the target long-term incentive grants, as described above); (ii) further align our named executive officers with the interests of our stockholders; and (iii) further incentivize our named executive officers to drive long-term stockholder value creation, as it puts an even greater portion of the executive’s total compensation ~~from his previous employer that was forfeited when he joined~~at risk if the Company ~~and is predominantly performance-based (i.e., 75%/25% allocation between PRSUs/RSUs).~~does not deliver growth to its stockholders.

~~2018~~2021 Performance-Based RSU Awards

The PRSUs will vest if and to the extent that the sum of the ~~Company's "Cumulative~~Company’s “Cumulative Operating Adjusted Net Income Per ~~Share"~~Share” exceeds certain levels over the three-year measurement period beginning on January 1, ~~2018~~2021 and ending on December 31, ~~2020.~~

"2023.

“Cumulative Operating Adjusted Net Income Per ~~Share"~~Share” for a fiscal year is calculated by dividing Operating Adjusted Net Income by the weighted average diluted common shares outstanding per year. ~~"Operating~~



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“Operating Adjusted Net ~~Income"~~Income” for a fiscal year is equal to the ~~Company's~~Company’s net income as reported in the Form 10-K filed by the Company with respect to such fiscal year, adjusted to (i) exclude gains/losses from certain non-recurring and unbudgeted capital transactions, including debt prepayment, debt refinancing, share repurchases and related financing costs not contemplated in the long term incentive targets; (ii) exclude amortization expense associated with acquired intangible assets recorded during purchase accounting of acquisitions; (iii) exclude acquisition contingent consideration; (iv) exclude the impact of significant acts of God or other events outside of the ~~Company's~~Company’s control that may affect the overall economic environment; (v) exclude significant asset impairments; (vi) exclude the impact of adoption of new accounting standards; and (vii) exclude the impact of tax rate changes caused by changes in tax legislation.

The amount of the target PRSUs actually earned and paid in shares of common stock in a lump sum following the performance period will be: 0% for below threshold performance, 50% for threshold performance, 100% for target performance and up to 200% for achieving the maximum performance level or higher. Linear interpolation will be used to calculate the percentage of PRSUs earned and paid if performance falls between the levels described ~~above.~~

above (and no PRSUs will be earned for performance below threshold performance).

~~2018~~2021 Performance-Based Stock Option Awards

The performance-based stock options will become eligible to vest and become exercisable in 25% increments, each upon the later to occur of (i) the first four anniversaries of the grant date, respectively, and (ii) the attainment

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of a closing price of the Company’s common stock at or above, for each respective 25% increment, $5, $10, $15, and $20 over the exercise price, for twenty consecutive trading days. The performance-based hurdles are designed to require a minimum stock price appreciation threshold as a vesting condition separate and apart from the stock option’s time-based vesting component.

2021 Time-Based ~~RSU~~Stock Option Awards

The time-based stock options will vest and become exercisable in equal installments on each of the first four anniversaries of the grant date, subject to the named executive officer’s continued employment with the Company through each such anniversary.

Other 2021 Long-Term Incentive Awards Granted to Mr. Davis

Mr. Davis, a co-founder and current President of BacklotCars, joined the Company on November 12, 2020 as part of the Company’s BacklotCars acquisition. Mr. Davis became eligible to participate in the 2021 executive compensation program upon joining the Company’s executive management team on June 4, 2021.

RSUs

On March 4, 2021, prior to Mr. Davis joining the Company’s executive management team, the Compensation Committee granted RSUs to Mr. Davis under the long-term incentive program applicable for non-executive participants.

	Name			RSUs			Value of RSUs at Grant
	Justin Davis			13,578			$187,512

One-third of the RSUs will vest and convert into shares of common stock of the Company on each of the first three anniversaries of the grant date, subject to ~~the named executive officer's~~Mr. Davis’s continued employment with the Company through each such anniversary.

PRSUs~~Prior Years' Awards.~~

~~2017~~On June 4, 2021, in recognition of the strategic importance of accelerating the Company’s growth in its dealer-to-dealer platforms, the Compensation Committee granted a one-time PRSU award to Mr. Davis to incentivize the achievement of certain volume-based milestones on the BacklotCars platform.

Name PRSUs Value of PRSUs at Grant
Justin Davis 54,855 $1,000,007
The PRSUs are tied to achieving volume-based goals on the BacklotCars platform, with 30% of the PRSUs vesting and converting into shares of common stock of the Company if and to the extent that a specified number of vehicles are sold on the BacklotCars platform during a one-month period between the grant date and December 31, 2024, and the remaining 70% vesting and converting into shares of common stock of the Company if and to the extent that a specified number of vehicles are sold on the BacklotCars platform during a 12-month period between the grant date and December 31, 2023. To the extent the 12-month volume objective is not met by December 31, 2023, 35% of the PRSUs (i.e., 50% of the PRSUs tied to the 12-month volume objective) are forfeited and the other 35% of the PRSUs remain eligible to vest if and to the extent that a specified number of vehicles are sold on the BacklotCars platform by December 31, 2024.
2022-2024 LONG-TERM INCENTIVE AWARDS
On June 4, 2021 (but November 5, 2021 for Mr. Coyle), following stockholder approval of our proposal to amend and restate our Omnibus Plan, the Compensation Committee granted named executive officers who are not retirement-eligible additional performance-based stock options and time-based stock options, intended to cover stock option grants that would otherwise be made in 2022, 2023 and 2024 (i.e., 50% of the grant value attributed to those years), and, for retirement-eligible named executive officers, additional performance-based stock options and time-based stock options intended to cover grants that would otherwise be made in 2022. As a result of the

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June 4, 2021 grants, in each of 2022, 2023 and 2024, the Compensation Committee intends to only grant PRSUs to our named executive officers with a target value equal to 50% of the long-term incentive grant value that our named executive officers would otherwise receive.

The Compensation Committee approved these stock option grants attributable to future years (i.e., 2022, 2023 and 2024), of which 80% are tied to stock price vesting hurdles, to motivate executives to achieve the Company’s go-forward business strategy, including our digital transformation; further align the executives’ interests with stockholders; reward the executive management team for meaningful stock price growth above the grant date stock price; and enhance the retentiveness of the compensation program in a highly competitive market environment for talent. The stock price vesting hurdles for the performance-based stock options have been set at levels that require significant growth, and, as of the date hereof, no performance-based hurdles have been achieved and all performance-based stock options remain unvested and unexercisable. Furthermore, the Compensation Committee intends to only grant PRSUs in 2022, 2023 and 2024, which would result in 100% of the executives’ long-term incentive grants to be delivered in performance-vested awards during those years.

Name
Number of
Performance-
Based Stock
Options

Value of
Performance-
Based Stock
Options
at Grant

Number of
Time-Based
Stock
Options

Value of
Time-Based
Stock
Options
at Grant

Peter Kelly 704,501 $3,600,000 176,125 $899,999
Jim Hallett 195,695 $1,000,001 48,924 $250,002
Eric Loughmiller 107,632 $550,000 26,908 $137,500
John Hammer 234,834 $1,200,002 58,708 $299,998
Justin Davis(1) 181,951 $600,000 45,488 $150,000
James Coyle(1) 212,264 $900,000 53,066 $225,001

(1)
The number and value of stock options depicted includes only the portion attributable to the 2022-2024 long-term incentive programs.

PRIOR YEARS’ LONG-TERM INCENTIVE AWARDS

2020 Performance-Based and Time-Based RSU Awards

As previously disclosed, on February ~~24, 2017,~~21, 2020, the Compensation Committee granted PRSUs and RSUs to ~~certain of~~ the ~~Company's~~Company’s named executive officers, some of which remained outstanding at fiscal year-end ~~2018.~~ 2021.

The amounts of PRSUs and RSUs that remain outstanding are disclosed in the ~~"Outstanding~~“Outstanding Equity ~~Awards"~~Awards” table below. The PRSU awards have terms substantially similar to those granted in 2021, and the RSU awards vest and convert into shares of common stock of the Company in one-third increments on each of the first three anniversaries of the grant date, subject to the named executive officer’s continued employment with the Company through each such anniversary. For the year ended December 31, 2021, one-third of the RSUs had vested, as disclosed in the “Option Exercises and Stock Vested” table below.

2019 Performance-Based and Time-Based RSU Awards

As previously disclosed, on February 22, 2019 (and for Mr. Hammer, again on March 1, 2019), the Compensation Committee granted PRSUs and RSUs to the Company’s named executive officers, some of which remained outstanding at fiscal year-end 2021.

The amounts of PRSUs and RSUs that remain outstanding are disclosed in the “Outstanding Equity Awards” table below. Other than certain adjustments made to the ~~condition that~~PRSUs granted in 2019 due to the ~~Company achieve $100 million in adjusted net income in its 2017 fiscal year (as reported by the Company and which condition was satisfied)~~IAA Spin Off (described below), these awards have terms substantially similar to those granted in ~~2018.~~2021. For the year ended December 31, ~~2018, one-third~~2021, two-thirds of the RSUs had vested, as disclosed in the ~~"Option~~“Option Exercises and Stock ~~Vested"~~Vested” table below.

At the time of grant, the PRSUs were to vest if and to the extent that the sum of the Company’s “Cumulative Operating Adjusted Net Income Per Share” exceeded certain levels over the three-year measurement period beginning on January 1, 2019 and ending on December 31, 2021. In connection with the IAA Spin-Off, the PRSUs

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~~2016~~granted in 2019 were subject to adjusted performance criteria and an adjusted performance period from January 1, 2019 to December 31, 2019. Following the completion of the adjusted performance period, based on the actual performance achieved, 71.1% of the target 2019 PRSUs were converted into time-based RSUs, and such RSUs will vest on the third anniversary of the grant of the 2019 PRSUs, subject to continued employment as required under the original 2019 PRSU award agreement.

2018 Performance-Based and Time-Based RSU Awards

As previously disclosed, on ~~February 22, 2016,~~March 2, 2022, the ~~Compensation Committee granted~~ PRSUs and RSUs to certain of the Company's named executive officers, some of which remained outstanding at fiscal year-end 2018. Other than with respect to the double-trigger vesting upon a change in control of the Company described above, these awards have terms substantially similar to those granted in ~~2017.~~

~~For~~2018 that were converted to time-based RSUs based on target level of performance in connection with the ~~year ended December 31, 2018, an additional~~IAA Spin-Off and the final one-third of the RSUs ~~had~~granted in 2018 each vested, as disclosed in the ~~"Option~~“Option Exercises and Stock ~~Vested"~~Vested” table below.

The number of PRSUs that vested on February 19, 2019 was determined based on the sum of the Company's Cumulative Operating Adjusted Net Income Per Share exceeding certain levels over the three-year period beginning on January 1, 2016 and ending on December 31, 2018. The amounts of PRSUs and RSUs are disclosed in the "Outstanding Equity Awards" table below.



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~~The number of PRSUs that vested based on Cumulative Operating Adjusted Net Income Per Share achieved was determined in accordance with the chart below:~~

~~Cumulative Operating Adjusted Net~~ ~~Income Per Share During the~~ ~~Measurement Period~~		~~Number of PRSUs Vesting~~

~~Below Threshold:~~
~~Below $6.22~~		~~0% of Target~~
~~Threshold:~~
~~$6.22~~		~~50% of Target~~
~~Target:~~
~~$6.72~~		~~100% of Target~~
~~Maximum:~~
~~Greater than or equal to $8.06~~		~~200% of Target~~

The Company achieved Cumulative Operating Adjusted Net Income Per Share of $6.95 versus a target of $6.72 for the three-year performance period ended December 31, 2018. As such, on February 19, 2019, based on the Cumulative Operating Adjusted Net Income Per Share achieved, 117.1% of the 2016 PRSUs vested above the target level but below the maximum level and resulted in the following number of PRSUs vesting:

Name
Number of PRSUs Vesting
(including dividend
equivalents)
2016 PRSU Payout(1)
Jim Hallett
83,528 $4,497,983
Eric Loughmiller
36,004 $1,938,815
John Hammer
N/A N/A
Don Gottwald
20,396 $1,098,325
Becca Polak
12,673 $682,441

~~(1)~~: ~~Based on a share price of $53.85, the February 19, 2019 market close price.~~

~~2015 Performance-Based RSU Awards~~

As previously disclosed, on February 6, 2018, the 2015 PRSUs vested above the target performance level but below the maximum performance level based on the sum of the Company's Cumulative Adjusted Net Income Per Share exceeding certain levels over the three-year period beginning on January 1, 2015 and ending on December 31, 2017.

~~Plan under which Long-Term Incentive Awards are Granted.~~ ~~The Company currently grants long-term incentive awards under the Omnibus Plan.~~

Our Board adopted the Omnibus Plan on December 10, 2009, and it has since been amended and restated, as approved by the stockholders. Under the Omnibus Plan, participants are eligible to receive stock options, restricted stock, RSUs (with or without performance conditions), stock appreciation rights, other stock-based awards and/or cash-based awards, each as determined by the Compensation Committee.

Retirement, Health and Welfare Benefits

We offer a variety of health and welfare and retirement programs to all eligible employees, including our named executive officers. As with all Company employees, our named executive officers are eligible to receive 401(k) employer matching contributions equal to 100% of the first 4% of compensation contributed by the named executive ~~officer.~~officer (subject to limits set by the Internal Revenue Service). The health and welfare programs are intended to protect employees against catastrophic loss and encourage a healthy lifestyle. Our health and welfare programs include medical, dental, vision, pharmacy, life, disability and accidental death and disability insurance. We also provide travel insurance to all employees who travel for business purposes.



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We ~~also~~ provide certain enhanced retirement vesting of equity-incentive awards as described in ~~"Potential~~“Potential Payments Upon Termination ofor Change in Control—Potential Payments Upon Termination ofor Change ofin Control ~~Table"~~Table”.

Perquisites

The Company provides the named executive officers a limited number of perquisites that the Compensation Committee believes are reasonable and consistent with the objective of attracting and retaining highly qualified ~~executive officers.~~executives. The perquisites which are currently available to certain of our named executive officers include an automobile allowance or use of a Company-owned automobile, an allowance for executive physicals, Company-paid group term life insurance premiums and relocation benefits under the ~~Company's~~Company’s mobility program. Please see footnote 46 to the ~~"Summary~~“Summary Compensation Table for ~~2018"~~2021” on page 4246 for more information regarding perquisites.

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COMPENSATION POLICIES AND OTHER INFORMATION

Employment and Severance Agreements

The Compensation Committee recognizes that, from time to time, it is appropriate to enter into agreements with our executive officers to ensure that we continue to retain their services and to promote stability and continuity within the Company. All of our current named executive officers have an employment agreement with the ~~Company or one of its subsidiaries.~~Company. A description of these agreements can be found in the section titled ~~"Potential~~“Potential Payments Upon Termination or Change in Control—Employment Agreements with Named Executive Officers."

”

Tax and Accounting Considerations

Employment Agreements. Section 280G of the Internal Revenue Code of 1986, as amended (the ~~"Code"~~“Code”) and related provisions impose substantial excise taxes under Section 4999 of the Code on so-called ~~"excess~~“excess parachute ~~payments"~~payments” payable to certain named executive officers upon a change in control and results in the loss of the compensation deduction for such payments by the Company.

Mr. ~~Hallett's~~Hallett’s prior employment agreement, which became effective as of February 27, 2012 ~~provides~~and has been superseded by his new employment agreement entered into on March 1, 2021 and effective as of April 1, 2021, provided for a potential ~~"gross-up payment"~~“gross-up payment” in the event that such excise taxes result from any excess parachute payments. Mr. ~~Hallett's~~Hallett’s new employment agreement ~~provides that in the event that~~eliminated his right to receive any ~~payment or benefit under such agreement in connection with Mr. Hallett's employment or termination of employment is or becomes subject to an~~ excise tax under Section 4999 of the Code, then the Company will make a cash payment to Mr. Hallett, which, after the imposition of all income, employment, excise and other taxes thereon, as well as any penalty and interest assessments associated therewith, will be sufficient to place Mr. Hallett in the same after-tax position as he would have been in had such excise tax not been applied. However, in the event that a reduction of the total payments to Mr. Hallett would avoid the application of the excise tax, then the total payments will be reduced to the extent necessary to avoid the excise tax, but in no event by more than 10% of the original amount of the totalgross-up payments.

None of the employment agreements entered into with Messrs. ~~Loughmiller,~~Coyle, Davis, Hammer, Kelly or ~~Gottwald, or Ms. Polak~~Loughmiller, contain excise tax gross-up provisions.

Tax Deductibility of Awards Under the Omnibus Plan. Section 162(m) of the Code ("(“Section 162(m)"”) generally disallows a federal tax deduction by the Company for compensation paid to Covered Employees (as defined in Section 162(m)) in excess of $1,000,000. Historically, compensation that qualified as ~~"performance-based compensation"~~“performance-based compensation” under Section 162(m) could be excluded from this limit. This exception has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to the Covered Employees in excess of $1,000,000 will not be deductible by the Company unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.

The Compensation Committee historically structured certain awards under the Omnibus Plan so that they could comply with the ~~"performance-based compensation"~~“performance-based compensation” exception for purposes of Section 162(m) and be



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deductible by the Company for federal income tax purposes. However, because of the continued development of the application and interpretation of Section 162(m) and the regulations issued thereunder, we cannot guarantee that compensation intended to satisfy the requirements for deductibility under Section 162(m), as in effect prior to 2018, would or will in fact be deductible.

Though tax deductibility is one of many factors considered by the Compensation Committee when determining executive compensation, the Compensation Committee believes that the tax deduction limitation should not ~~be permitted to~~ compromise our ability to design and maintain executive compensation arrangements that will attract and retain the executive talent to compete successfully. ~~For example,~~Therefore, in seeking to tie executive pay to company performance in a meaningful way, the Compensation Committee may make decisions in designing and approving pay programs that are not driven by tax consequences to the Company.

Accounting for Stock-Based Compensation. We account for stock-based compensation in accordance with the requirements of ASC 718.

Clawback Policy for Financial Restatements. The ~~Company's~~Company’s clawback policy provides for the recovery of incentive compensation in the event the Company is required to prepare an accounting restatement due to any current or former executive ~~officer's~~officer’s intentional misconduct. In such an event, the executive officer would be required to repay to the Company the excess amount of incentive compensation received under the inaccurate financial statement. The Company intends to revise this policy as needed to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act when such requirements become effective.

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~~Insider Trading Policy~~Anti-Hedging and Anti-Pledging Policies

Our insider trading policy expressly ~~prohibits:~~

prohibits our directors, officers and other employees from, among other things:

•

~~ownership of margin securities;~~

•

trading in options, warrants, puts and calls or similar instruments on ~~the Company's~~Company securities;

•

selling Company securities “short”;

•

holding Company securities in margin accounts; and

•

~~selling the Company's securities "short."~~

~~We also prohibit officers, directors and employees from:~~

•

pledging ~~the Company's~~Company securities as collateral for ~~loans; and~~loans.

•

~~purchasing or selling the Company's securities while in possession of material, non-public information, or otherwise using such information for their personal benefit.~~

Our executives and directors are permitted to enter into trading plans that are intended to comply with the requirements of Rule 10b5-1 of the Exchange Act so that they can prudently diversify their asset portfolios and exercise their stock options before their scheduled expiration dates.

~~Anti-Hedging Policy~~

In addition to the ~~Company's existing anti-pledging of Company stock~~Company’s insider trading policy, the Company ~~adopted~~has a formal anti-hedging ~~of Company stock~~policy. This policy ~~which~~ prohibits our officers and directors from ~~engaging in certain forms of~~entering into hedging or monetization transactions ~~with respect to the Company's~~involving Company stock, such as prepaid variable forward contracts, equity swaps, collars and exchange funds.

Stock Ownership Guidelines and Stock Holding Requirement

The Compensation Committee adopted the following stock ownership guidelines which are applicable to our named executive officers:

Title
~~Title~~			Stock Ownership Guideline
CEO			5 times annual base salary
Other Named Executive Officers			3 times annual base salary



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The named executive officers must hold 60% of the vested shares, net of taxes, of Company stock received under awards granted on or after January 1, 2015 until the applicable ownership guideline is met. All named executive officers own shares in excess of the stock ownership guidelines, except for ~~Mr.~~Messrs. Coyle and Hammer who each became an employee of the Company ~~on February 19,~~in 2021 and 2018, respectively, and is each subject to the aforementioned holding requirement.

RESULTS OF SAY ON PAY VOTES AT ~~2018~~2021 ANNUAL MEETING

At the ~~Company's 2018~~Company’s 2021 annual meeting of stockholders, the Company held a non-binding stockholder vote on executive compensation (commonly referred to as ~~"Say~~“Say on ~~Pay"~~Pay”). At the meeting, excluding broker non-votes, over ~~94%~~98% of the votes on the matter were cast to approve the ~~Company's~~Company’s executive compensation programs, less than 5%2% of the votes were cast against, and less than 1%0.5% abstained from voting.

The Compensation Committee considered the results of the vote, including the appropriateness of the compensation philosophy and objectives, the role of the Compensation Committee and executive officers in setting compensation, the elements used to achieve the compensation philosophy and objectives and the levels of compensation provided to the named executive officers. Following its review, the Compensation Committee decided to retain the Company's general approach to executive compensation in 2019, in part due to the significant majority of stockholders that voted to approve the Company's executive compensation programs at the 2018 annual meeting of stockholders.

In addition, at the ~~Company's~~Company’s 2017 annual meeting of stockholders, the Company held a non-binding stockholder vote on whether to hold a Say on Pay vote every one, two or three years. At that meeting, a majority of our stockholders voted in favor of holding a Say on Pay vote every year, and accordingly, the Company adopted an annual Say on Pay vote frequency. As described in more detail in Proposal No. 23 above, the Company is again holding an a Say on Pay vote to approve executive compensation at the ~~2019~~2022 annual meeting of stockholders.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed the Compensation Discussion and Analysis for executive compensation for ~~2018~~2021 and discussed that analysis with management. Based on its review and discussions with management, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the ~~Company's 2018~~Company’s 2021 Annual Report on Form 10-K. ~~This report is submitted by Donna R. Ecton, Todd F. Bourell, Lynn Jolliffe and John P. Larson.~~

~~Compensation Committee~~

~~Donna R. Ecton~~~~(Chairman)~~
~~Todd F. Bourell~~
~~Lynn Jolliffe~~
~~John P. Larson~~

COMPENSATION COMMITTEE



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ANALYSIS OF RISK IN THE COMPANY’S

COMPENSATION STRUCTURE

~~ANALYSIS OF RISK IN THE COMPANY'S~~
~~COMPENSATION STRUCTURE~~

The Compensation Committee considers the potential risks in our business when designing and administering the ~~Company's~~Company’s pay program, and the Compensation Committee believes its balanced approach to performance measurement and pay delivery works to avoid misaligned incentives for individuals to undertake excessive or inappropriate risk. Further, program administration is subject to considerable internal controls, and when determining the principal outcomes—performance assessments and pay decisions—the Compensation Committee relies on principles of sound governance and good business judgment. As part of its responsibilities to annually review all incentive compensation and equity-based plans, and evaluate whether the compensation arrangements of the ~~Company's~~Company’s employees incentivize unnecessary and excessive risk-taking, the Compensation Committee evaluated the risk profile of all of the ~~Company's~~Company’s compensation policies and practices for ~~2018.~~

2021.

In its evaluation, the Compensation Committee reviewed the ~~Company's~~Company’s employee compensation structures and noted numerous design elements that manage and mitigate risk without diminishing the incentive nature of the compensation. There is a balanced mix between cash and equity and between annual and longer-term incentives. In addition, annual incentive awards and long-term incentive awards granted to executives are generally tied to corporate performance goals, including Adjusted EBITDA, strategic and total volume of vehicles sold, Cumulative Operating Adjusted Net Income Per ~~Share.~~Share and stock price appreciation. These metrics encourage performance that supports the business as a whole. The executive annual incentive awards include a maximum payout opportunity equal to ~~165%~~150% of target, and the PRSUs granted as part of the long-term incentive program include a maximum payout opportunity equal to 200% of target. Our executives are also expected to meet share ownership guidelines in order to align the ~~executives'~~executives’ interests with those of our stockholders. Also, the ~~Company's~~Company’s clawback policy permits the Company to recover incentive compensation paid to an executive officer if the compensation resulted from any financial result or metric impacted by the executive ~~officer's~~officer’s intentional misconduct. This policy helps to discourage inappropriate risks, as executives will be held accountable for misconduct which is harmful to the ~~Company's~~Company’s financial and reputational health.

The Compensation Committee also reviewed the ~~Company's~~Company’s compensation programs for certain design features that may have the potential to encourage excessive risk-taking, ~~including:~~including over-weighting towards annual incentives, highly leveraged payout curves, unreasonable thresholds and steep payout cliffs at certain performance levels that may encourage short-term business decisions to meet payout thresholds. The Compensation Committee concluded that the ~~Company's~~Company’s compensation programs (i) do not include such elements; or (ii) have implemented features, steps and controls that are designed to limit risks of our compensation arrangements. In light of these analyses, the Compensation Committee concluded that the Company has a balanced pay and performance program that does not encourage excessive risk-taking that is reasonably likely to have a material adverse effect on the Company.



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SUMMARY COMPENSATION TABLE FOR 2021

~~SUMMARY COMPENSATION TABLE FOR 2018~~

The table below contains information concerning the compensation of ~~(i)~~ our ~~chief~~named executive ~~officer; (ii) our chief financial officer; and (iii) each of the three other most highly compensated executive officers who were serving as our executive officers~~officers.

Name and Principal Position(1)	Year(2)	Salary	Stock Awards(3)	Option Awards(4)	Non-Equity Incentive Plan Compensation(5)	All Other Compensation(6)	Total
Peter Kelly Chief Executive Officer	2021	$709,616	$1,500,001	$6,000,003	$237,566	$30,747	$8,477,933
	2020	$600,000	$1,350,019		$458,106	$19,592	$2,427,717
	2019	$576,923	$1,200,031		$300,000	$108,732	$2,185,686
Jim Hallett Executive Chairman and Chairman of the Board	2021	$792,308	$1,250,012	$2,500,005	$205,474	$43,763	$4,791,562
	2020	$975,000	$3,900,024		$930,529	$41,910	$5,847,463
	2019	$975,000	$3,900,050		$609,375	$45,003	$5,529,428
Eric Loughmiller Executive Vice President and Chief Financial Officer	2021	$550,000	$687,503	$1,375,002	$146,707	$17,540	$2,776,752
	2020	$550,000	$1,375,028		$419,931	$32,964	$2,377,923
	2019	$550,000	$1,375,046		$275,000	$20,335	$2,220,381
John Hammer Chief Commercial Officer for KAR and President of ADESA	2021	$550,000	$500,005	$2,000,002	$146,707	$32,362	$3,229,076
	2020	$546,000	$820,024		$416,877	$31,308	$1,814,209
	2019	$520,769	$1,287,644		$345,190	$30,585	$2,184,188
Justin Davis President of BacklotCars	2021	$278,077	$1,250,011	$1,000,001	$51,681	$10,933	$2,590,703
Justin Davis President of BacklotCars
James Coyle Executive Vice President and Chief Digital Officer	2021	$84,615	$375,003	$1,500,002	$22,228	$5,069	$1,986,917

(1)

Principal position reflects position held as of December 31, ~~2018.~~

2021. Mr. Hallett served as the Chief Executive Officer of the Company at the beginning of 2021 and, effective April 1, 2021, assumed the role of Executive Chairman. Mr. Kelly served as the President of the Company at the beginning of 2021 and, effective April 1, 2021, assumed the role of Chief Executive Officer.

Name and
Principal
Position
Year Salary Bonus(1) Stock
Awards(2) Non-Equity
Incentive Plan
Compensation(3) All Other
Compensation(4) Total
Jim Hallett
2018 $975,000 $3,900,032 $1,219,046 $44,148   $6,138,226

Chief Executive Officer
2017 $900,000 $3,514,776 $1,355,361 $41,739   $5,811,876

and Chairman of the Board
2016 $900,000 $3,040,091 $1,094,772 $43,220   $5,078,083
Eric Loughmiller
2018 $535,577 $918,788 $460,882 $27,045   $1,942,292

Executive Vice President
2017 $500,000 $854,324 $456,798 $25,862   $1,836,984

and Chief Financial Officer
2016 $450,000 $1,310,398 $410,540 $46,780   $2,217,718
John Hammer
2018 $432,692 $400,000 $1,125,109 $210,318 $294,981   $2,463,100

President of ADESA

Don Gottwald
2018 $583,495 $1,021,164 $589,324 $32,680   $2,226,663

Chief Strategy Officer and
2017 $583,495 $996,133 $702,974 $30,870   $2,313,472

President of Digital, Data
2016 $566,500 $742,354 $689,098 $32,454   $2,030,406
and Mobility Solutions(5)

Becca Polak
2018 $515,000 $901,256 $376,484 $30,350   $1,823,090

Chief Legal Officer and
2017 $475,000 $811,595 $436,338 $30,150   $1,753,083

Secretary for KAR and
2016 $440,000 $461,284 $401,416 $33,990   $1,336,690

President of TradeRev

~~(1)~~: ~~For Mr. Hammer, the bonus amount~~(2)

Compensation for Messrs. Davis and Coyle is provided only for 2021 because neither was ~~attributable to~~ a ~~special sign-on award, granted to make up~~named executive officer for ~~compensation that was forfeited from his previous employer upon joining the Company.~~2020 or 2019.

(3)

~~(2)~~

The amounts reported in this column for ~~2018~~2021 represent the grant date fair value of (i) PRSUs granted on March 4, 2021 to Messrs. Kelly, Hallett, Loughmiller and Hammer, (ii) RSUs granted on March ~~2, 2018,~~4, 2021 to Mr. Davis, (iii) PRSUs granted on June 4, 2021 to Mr. Davis, and (iv) PRSUs granted to Mr. Coyle on November 5, 2021, each computed in accordance with ASC 718. See Note 45 to our financial statements for ~~2018 regarding~~2021 for information about the assumptions made in determining the grant date fair value. ~~The~~Assuming, instead, that the maximum level of performance is achieved with respect to the 2021 PRSU awards, based on grant date value of our common stock, the award that ~~can~~could be earned at the end of the performance period (excluding dividends) ~~if maximum performance is achieved with respect to the 2018 PRSU awards, based on the grant date value of our common stock,~~ is as follows: Mr. Kelly – $3,000,002; Mr. Hallett – ~~$5,850,049;~~$2,500,024; Mr. Loughmiller – ~~$1,378,182;~~$1,375,006; Mr. Hammer – ~~$1,687,583;~~$1,000,010; Mr. ~~Gottwald~~Davis – ~~$1,531,746;~~$1,312,504; and ~~Ms. Polak~~Mr. Coyle – ~~$1,351,884.~~$750,006.

(4)

~~For Mr. Hammer, $500,000 of~~

The amounts reported in this column represent the ~~aggregate~~grant date fair value of ~~his equity~~option awards ~~(with~~granted to our named executive officers in 2021 computed in accordance with ASC 718. See Note 5 to our financial statements for 2021 for information about the ~~same 75%/25% allocation between PRSUs/RSUs) was attributable~~assumptions made in determining the grant date fair value. As further described in the section titled “Compensation Discussion and Analysis—Elements Used to ~~a special sign-on award.~~

~~(3)~~

Achieve Compensation Philosophy and Objectives—Long- Term Incentive Opportunities,” above, for Messrs. Kelly, Hammer, Davis and Coyle, who are not retirement-eligible, the option award is intended to also cover grants that would otherwise be made in 2022, 2023 and 2024 and for Messrs. Hallett and Loughmiller, who are or will become retirement-eligible, the option award is intended to also cover grants that would otherwise be made in 2022.

(5)

The amount reported is equal to the amount paid to the named executive officer under the Annual Incentive Program, which is governed by the Omnibus Plan.

(6)

~~(4)~~

The amounts reported for ~~2018~~2021 consist of the following:

•

•

Automobile allowance: Mr. Kelly – $23,385; Mr. Hallett – $25,000; Mr. Hammer – ~~$15,577;~~$18,692; Mr. ~~Gottwald~~Davis – ~~$18,000;~~$10,385; and ~~Ms. Polak~~Mr. Coyle – ~~$18,000.~~$3,462.

•

~~Incremental cost of Company car utilized during 2018: Mr. Loughmiller – $8,886.~~

•

401(k) matching contributions: Mr. Kelly – $3,462; Mr. Hallett – ~~$11,000;~~$11,600; Mr. Loughmiller – ~~$11,000;~~$11,600; Mr. Hammer – ~~$11,000;~~$11,600; Mr. ~~Gottwald~~Davis – ~~$11,000;~~$0; and ~~Ms. Polak~~Mr. Coyle – ~~$11,000.~~$1,538.

•

~~Company-paid~~Company paid group term life insurance premiums: Mr. Kelly – $2,070; Mr. Hallett – ~~$8,148;~~$7,163; Mr. Loughmiller – ~~$3,870;~~$5,940; Mr. Hammer – ~~$1,038;~~$2,070; Mr. ~~Gottwald~~Davis – ~~$2,070;~~$548; and ~~Ms. Polak~~Mr. Coyle – ~~$1,350.~~$69.

•

Executive physical: Mr. ~~Loughmiller~~Kelly – ~~$3,289; and Mr. Gottwald – $1,610.~~

•

~~Relocation expense reimbursement under the Company's mobility program: Mr. Hammer – $267,366 (which includes a tax gross up amount of $74,339).~~

~~(5)~~

~~Mr. Gottwald served as our Chief Operating Officer and Chief Strategy Officer during 2018 and, effective February 18, 2019, began serving in his current role.~~

$1,830.



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GRANTS OF PLAN-BASED AWARDS FOR 2021

~~GRANTS OF PLAN-BASED AWARDS FOR 2018~~

The following table summarizes the awards granted to, and the payouts ~~which~~that were achievable for, each of our named executive officers ~~could or may have received upon the achievement of certain performance objectives~~in 2021 under the Annual Incentive Program and the grants of PRSUs, RSUs, performance-based stock options and ~~RSUs~~time-based stock options made under the Omnibus ~~Plan in 2018.~~

Plan.

			Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)						Estimated Future Payouts Under Equity Incentive Plan Awards(2)
Name (a)	Grant Date (b)		Threshold ($)(c)(1)		Target ($)(d)(1)		Maximum ($)(e)(1)		Threshold (#)(f)(2)		Target (#)(g)(2)		Maximum (#)(h)(2)		All Other Stock Awards: Number of Shares of Stock or Units (#)(i)(3)		All Other Option Awards: Number of Securities Underlying Options (#)(j)(4)		Exercise Price of Option Awards ($)(k)(5)		Grant Date Fair Value of Stock and Option Awards ($)(l)(6)
Peter Kelly		—		445,313		890,625		1,335,938
		3/4/2021								54,309		108,617		217,234								1,500,001
		3/4/2021										474,309								13.81		1,200,002
		3/4/2021																118,578		13.81		300,002
		6/4/2021										704,501								18.23		3,600,000
		6/4/2021																176,125		18.23		899,999
Jim Hallett		—		385,157		770,313		1,155,470
		3/4/2021								45,258		90,515		181,030								1,250,012
		3/4/2021										395,257								13.81		1,000,000
		3/4/2021																98,815		13.81		250,002
		6/4/2021										195,695								18.23		1,000,001
		6/4/2021																48,924		18.23		250,002
Eric Loughmiller		—		275,000		550,000		825,000
		3/4/2021								24,892		49,783		99,566								687,503
		3/4/2021										217,392								13.81		550,002
		3/4/2021																54,348		13.81		137,500
		6/4/2021										107,632								18.23		550,000
		6/4/2021																26,908		18.23		137,500
John Hammer		—		275,000		550,000		825,000
		3/4/2021								18,103		36,206		72,412								500,005
		3/4/2021										158,103								13.81		400,001
		3/4/2021																39,526		13.81		100,001
		6/4/2021										234,834								18.23		1,200,002
		6/4/2021																58,708		18.23		299,998
Justin Davis		—		96,875		193,750		290,625
		3/4/2021														13,578						187,512
		6/4/2021										54,855										1,000,007
		6/4/2021								1,714		3,428		6,856								62,492
		6/4/2021										156,556								18.23		800,001
		6/4/2021																39,139		18.23		200,000
James Coyle		—		41,667		83,333		125,000
		11/5/2021								12,790		25,580		51,160								375,003
		11/5/2021										283,019								14.66		1,200,001
		11/5/2021																70,755		14.66		300,001

Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)

Name
(a)
Grant
Date
(b) Threshold
($)(c)(1) Target
($)(d)(1) Maximum
($)(e)(1) Threshold
(#)(f)(2) Target
(#)(g)(2) Maximum
(#)(h)(2) Number of
Securities
Underlying
Restricted
Stock
Units
(#)(3)(i) Grant Date
Fair Value
of Stock
Awards
($)(4)(j)
Jim Hallett
— 609,375 1,218,750 1,828,125

3/2/2018 27,029 54,057 108,114 2,925,024

3/2/2018 18,019 975,008
Eric Loughmiller
— 229,427 458,854(5) 688,281

3/2/2018 6,368 12,735 25,470 689,091

3/2/2018 4,245 229,697
John Hammer
— 208,333 416,667(6) 625,000

3/2/2018 7,797 15,594 31,188 843,791(7 )

3/2/2018 5,199 281,318(7 )
Don Gottwald
— 291,748 583,495 875,243

3/2/2018 7,077 14,154 28,308 765,873

3/2/2018 4,718 255,291
Becca Polak
— 193,125 386,250 579,375

3/2/2018 6,246 12,492 24,984 675,942

3/2/2018 4,164 225,314

(1)

~~(1)~~: Columns (c), (d) and (e) include the potential awards for performance at the threshold, target and maximum ~~("superior"~~(“superior”) levels, respectively, under the Annual Incentive ~~Program, excluding application of the MBO modifier which may cause an increase or decrease in the annual incentive awards by up to plus or minus 10%.~~Program. See ~~"Compensation~~“Compensation Discussion and Analysis—Elements Used to Achieve Compensation Philosophy and Objectives—Annual Cash Incentive ~~Program"~~Program” for further information on the terms of the Annual Incentive Program.

(2)

~~(2)~~

Columns (f), (g) and (h) include the potential number of PRSUs which may be earned for performance at the threshold, target and maximum levels, respectively. These awards vest if and to the extent that the sum of the ~~Company's~~Company’s Cumulative Operating Adjusted Net Income Per Share exceeds certain levels over the three-year period beginning on January 1, ~~2018~~

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2021 and ending on December 31, ~~2020.~~2023. For Mr. Davis, column (g) also includes the potential number of PRSUs Mr. Davis may earn to the extent the Company achieves certain predetermined volume-based goals on the BacklotCars platform. This one-time PRSU award granted to Mr. Davis does not have threshold or maximum payout levels, but instead portions of the PRSU award vests if and to the extent that the volume-based goals are achieved during predetermined time periods. For each of our named executive officers, column (g) also includes the number of performance-based stock options granted in 2021. The performance-based stock options will become eligible to vest and become exercisable in 25% increments, each upon the later to occur of (i) the first four anniversaries of the grant date, respectively, and (ii) the attainment and maintenance of the closing price of the Company’s common stock at or above, for each respective 25% increment, $5, $10, $15, and $20 over the exercise price, for twenty consecutive trading days. The performance-based stock options do not have threshold or maximum payout levels, but instead portions of the performance-based stock option award will vest to the extent that the stock price targets are achieved during the term of the stock option.

(3)

~~(3)~~

Column (i) includes the number of RSUs granted in ~~2018. These awards vest~~2021. This award vests ratably on each of the first three anniversaries of the grant date subject to ~~the executive's~~Mr. Davis’s continued employment with the Company through each such anniversary.

(4)

Column (j) includes the number of time-based stock options granted in 2021, which will vest and become exercisable in equal installments on each of the first four anniversaries of the grant date, subject to the named executive officer’s continued employment with the Company through each such anniversary.

(5)

~~(4)~~

The exercise price of the performance-based and time-based stock option awards is set as the closing price of the Company’s common stock on the grant date.

(6)

The amounts reported in this column represent the grant date fair value of awards granted ~~on March 2, 2018,~~to our named executive officers, computed in accordance with ASC ~~718 (for~~718. For PRSUs, the grant date fair ~~market~~ value is based on target ~~awards).~~performance. See Note 45 to our financial statements for ~~2018 regarding~~2021 for information about the assumptions made in determining the grant date fair value.

~~(5)~~

~~Mr. Loughmiller's target annual incentive award reflects the prorated, blended adjustments to his base salary and target annual incentive opportunity as discussed above.~~

~~(6)~~

~~Mr. Hammer's target annual incentive award was prorated based on his February 19, 2018 start date.~~

~~(7)~~

$500,000 of the aggregate value of Mr. Hammer's equity awards was attributable to a special sign-on award to make up for compensation from his previous employer that was forfeited when he joined the Company and is predominantly performance-based (i.e., 75%/25% allocation between PRSUs/RSUs).

Additional information concerning our cash and equity incentive awards and plans may be found in the sections titled ~~"Compensation~~“Compensation Discussion and Analysis—Elements Used to Achieve Compensation Philosophy and Objectives—Annual Cash Incentive ~~Program"~~Program” and ~~"Long-Term~~“Long-Term Incentive Opportunities,"” respectively.



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OUTSTANDING EQUITY AWARDS

AT FISCAL YEAR-END 2021

					Option Awards										Stock Awards
Name (a)	Grant Year		Security		Number of Securities Underlying Unexercised Options Exercisable (#)(b)		Number of Securities Underlying Unexercised Options Unexercisable (#)(c)		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(d)		Option Exercise Price ($)(e)		Option Expiration Date (f)		Number of Shares or Units of Stock That Have Not Vested (#)(g)		Market Value of Shares or Units of Stock That Have Not Vested ($)(h)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(i)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(j)
Peter Kelly		2019		KAR												2,125(1)		33,193(1)
		2019		IAA												2,125(1)		107,568(1)
		2019		KAR												13,997(2)		218,637(2)
		2020		KAR												10,113(3)		157,965(3)
		2020		KAR																23,208(4)		362,509(4)
		2021		KAR																54,309(5)		848,299(5)
		2021		KAR				118,578(6)				13.81		03/04/2031
		2021		KAR						474,309(7)		13.81		03/04/2031
		2021		KAR				176,125(8)				18.23		06/04/2031
		2021		KAR						704,501(9)		18.23		06/04/2031
Jim Hallett		2014		KAR		194,404						11.74		02/27/2024
		2019		KAR												6,676(1)		104,279(1)
		2019		IAA												6,676(1)		337,939(1)
		2019		KAR												45,490(2)		710,557(2)
		2020		KAR												28,244(3)		441,171(3)
		2020		KAR																67,045(4)		1,047,243(4)
		2021		KAR																45,258(5)		706,922(5)
		2021		KAR				98,815(6)				13.81		03/04/2031
		2021		KAR						395,257(7)		13.81		03/04/2031
		2021		KAR				48,924(8)				18.23		06/04/2031
		2021		KAR						195,695(9)		18.23		06/04/2031
Eric Loughmiller		2014		KAR		97,204						11.74		02/27/2024
		2019		KAR												2,353(1)		36,754(1)
		2019		IAA												2,353(1)		119,109(1)
		2019		KAR												16,038(2)		250,521(2)
		2020		KAR												9,986(3)		155,981(3)
		2020		KAR																23,638(4)		369,226(4)
		2021		KAR																24,892(5)		388,805(5)
		2021		KAR				54,348(6)				13.81		03/04/2031
		2021		KAR						217,392(7)		13.81		03/04/2031
		2021		KAR				26,908(8)				18.23		06/04/2031
		2021		KAR						107,632(9)		18.23		06/04/2031
John Hammer		2019		KAR												2,277(1)		35,566(1)
		2019		IAA												2,277(1)		115,261(1)
		2019		KAR												14,991(2)		234,173(2)
		2020		KAR												6,143(3)		95,954(3)
		2020		KAR																14,097(4)		220,195(4)
		2021		KAR																18,103(5)		282,769(5)
		2021		KAR				39,526(6)				13.81		03/04/2031
		2021		KAR						158,103(7)		13.81		03/04/2031
		2021		KAR				58,708(8)				18.23		06/04/2031
		2021		KAR						234,834(9)		18.23		06/04/2031
Justin Davis		2021		KAR				39,139(8)				18.23		06/04/2031
		2021		KAR						156,556(9)		18.23		06/04/2031
		2021		KAR												13,578(10)		212,088(10)
		2021		KAR																1,714(5)		26,773(5)
		2021		KAR																54,855(11)		856,835(11)
James Coyle		2021		KAR																12,790(5)		199,780(5)
		2021		KAR				70,755(12)				14.66		11/05/2031
		2021		KAR						283,019(13)		14.66		11/05/2031

~~OUTSTANDING EQUITY AWARDS~~
~~AT FISCAL YEAR-END 2018~~49

Option Awards Stock Awards
Name
(a)
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
(b) Option
Exercise
Price ($)
(e) Option
Expiration
Date
(f) Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(g) Market
Value
of Shares
or Units of
Stock That
Have Not
Vested
($)(h) Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)
(i)
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)
(j)
Jim Hallett
194,404 30.89 02/27/2024

7,065(1 ) 363,923(1 ) 83,528(2 ) 3,985,956(2 )

12,634(3 ) 634,142(3 ) 125,104(4 ) 5,969,963(4 )

17,298(5 ) 844,089(5 ) 55,478(6 ) 2,647,410(6 )
Eric Loughmiller
97,204 30.89 02/27/2024

3,144(1 ) 161,950(1 ) 36,004(2 ) 1,718,111(2 )

3,199(3 ) 160,568(3 ) 30,407(4 ) 1,451,022(4 )

4,245(5 ) 207,142(5 ) 13,069(6 ) 623,653(6 )
John Hammer
5,199(5 ) 253,695(5 ) 16,004(6 ) 763,711(6 )
Don Gottwald
1,781(1 ) 91,740(1 ) 20,396(2 ) 973,297(2 )

3,730(3 ) 187,221(3 ) 35,456(4 ) 1,691,960(4 )

4,718(5 ) 230,224(5 ) 14,526(6 ) 693,181(6 )
Becca Polak
34,996 30.89 2/27/2024

1,107(1 ) 57,022(1 ) 12,673(2 ) 604,756(2 )

3,039(3 ) 152,537(3 ) 28,886(4 ) 1,378,440(4 )

4,164(5 ) 203,190(5 ) 12,820(6 ) 611,770(6 )

TABLE OF CONTENTS (1)

The total amounts and values in columns (g) and (h) equal the total number of unvested RSUs granted on February 22, ~~2016~~2019 (and for Mr. Hammer, March 1, 2019), that vest ratably on each of the first three anniversaries of the grant date during the named executive ~~officer's~~officer’s continued employment with the Company through each such anniversary, ~~multiplied~~and the market value of such awards, determined by multiplying the number of unvested KAR RSUs by the market price of ~~Company~~KAR common stock at the close of the last trading day in ~~2018,~~2021, which was ~~$47.72~~$15.62 per ~~share. The total amount in column (h) includes accrued~~share, and ~~unpaid cash dividend equivalents in~~by multiplying the ~~following amounts:~~



		~~Name~~				~~Amount~~

		~~Jim Hallett~~				~~$26,781~~

		~~Eric Loughmiller~~				~~$11,918~~

		~~John Hammer~~				~~N/A~~

		~~Don Gottwald~~				~~$6,751~~

		~~Becca Polak~~				~~$4,196~~

~~(2)~~: ~~The total amounts and values in columns (i) and (j) equal the total~~ number of PRSUs granted on February 22, 2016 that may be earned and vest based on the Company's Cumulative Operating Adjusted Net Income Per Share performance over a three-year period, at the actual performance level, held by each named executive officer multipliedunvested IAA RSUs by the market price of ~~Company~~IAA common stock at the close of the last trading day in ~~2018,~~2021, which was ~~$47.72~~$50.62 per ~~share, including reinvested dividends~~share. The total amount in column (h) excludes accrued and unpaid cash dividend equivalents on ~~such PRSUs. Because~~ the ~~performance period for these PRSUs was completed as of~~KAR awards in the ~~end of 2018, we have reported these PRSUs at the level actually earned.~~following amounts: Mr. Kelly – $2,886; Mr. Hallett – $9,289; Mr. Loughmiller – $3,275; and Mr. Hammer – $3,092.

(2)

~~(3)~~

The total amounts and values in columns (g) and (h) equal the total number of unvested PRSUs granted on February 22, 2019 (and for Mr. Hammer, March 1, 2019), that, in connection with the IAA Spin-Off, were converted to RSUs based on KAR’s actual performance in 2019, that vest on the third anniversary of the grant date during the named executive officer’s continued employment with the Company through such anniversary, and the market value of such awards, determined by multiplying the number of unvested KAR RSUs by the market price of KAR common stock at the close of the last trading day in 2021, which was $15.62 per share. The total amount in column (h) excludes accrued and unpaid cash dividend equivalents on the KAR awards in the following amounts: Mr. Kelly – $2,681; Mr. Hallett – $8,713; Mr. Loughmiller – $3,072; and Mr. Hammer – $2,889.

(3)

The total amounts and values in columns (g) and (h) equal the total number of unvested RSUs granted on February ~~24, 2017~~21, 2020, that vest ratably on each of the first three anniversaries of the grant date during the named executive ~~officer's~~officer’s continued employment with the Company through each such anniversary, ~~multiplied~~and the market value of such awards, determined by multiplying the number of unvested KAR RSUs by the market price of ~~Company~~



		44

~~Table of Contents~~

KAR common stock at the close of the last trading day in ~~2018,~~2021, which was ~~$47.72~~$15.62 per share. The total amount in column (h) ~~includes~~excludes accrued and unpaid cash dividend equivalents in the following amounts:

Mr. Kelly – $1,921; Mr. Hallett – $5,551; Mr. Loughmiller – $1,957; and Mr. Hammer – $1,167.



		~~Name~~				~~Amount~~

		~~Jim Hallett~~				~~$31,248~~

		~~Eric Loughmiller~~				~~$7,912~~

		~~John Hammer~~				~~N/A~~

		~~Don Gottwald~~				~~$9,225~~

		~~Becca Polak~~				~~$7,516~~

(4)

~~(4)~~: The total amounts and values in columns (i) and (j) equal the total number of unvested PRSUs granted on February ~~24, 2017~~21, 2020, that may be earned and vest based on the ~~Company's~~Company’s Cumulative Operating Adjusted Net Income Per Share performance over a three-year period, at the ~~maximum~~threshold level, held by each named executive officer ~~multiplied~~and the market value of such awards, determined by multiplying the number of unvested PRSUs, at the threshold level, by the market price of ~~Company~~KAR common stock at the close of the last trading day in ~~2018,~~2021, which was ~~$47.72~~$15.62 per share, including reinvested dividends on such PRSUs. In calculating the number of PRSUs and their value, we are required by SEC rules to compare our performance through ~~2018~~2021 under the PRSU grants against the threshold, target and maximum performance levels for the grant and report in these columns the applicable potential share number and payout amount. If the performance is between levels, we are required to report the potential payout at the next highest level. Through December 31, ~~2018,~~2021, we ~~exceeded target~~were below threshold levels of Cumulative Operating Adjusted Net Income Per Share performance and have accordingly reported the PRSUs at the ~~maximum~~threshold award level.
~~(5)~~: The total amounts and values in columns (g) and (h) equal the total number of RSUs granted on March 2, 2018 that vest ratably on each of the first three anniversaries of the grant date during the named executive officer's continued employment with the Company through each such anniversary, multiplied by the market price of Company common stock at the close of the last trading day in 2018, which was $47.72 per share. The total amount in column (h) includes accrued and unpaid cash dividend equivalents in the following amounts:



		~~Name~~				~~Amount~~

		~~Jim Hallett~~				~~$18,628~~

		~~Eric Loughmiller~~				~~$4,571~~

		~~John Hammer~~				~~$5,599~~

		~~Don Gottwald~~				~~$5,081~~

		~~Becca Polak~~				~~$4,484~~

(5)

~~(6)~~: The total amounts and values in columns (i) and (j) equal the total number of unvested PRSUs granted on March ~~2, 2018~~4, 2021 (but for Mr. Davis, June 4, 2021, and for Mr. Coyle, November 5, 2021), that may be earned and vest based on the ~~Company's~~Company’s Cumulative Operating Adjusted Net Income Per Share performance over a three-year period, at the ~~target~~threshold level, held by each named executive officer ~~multiplied~~and the market value of such awards, determined by multiplying the number of unvested PRSUs, at the threshold level, by the market price of ~~Company~~KAR common stock at the close of the last trading day in ~~2018,~~2021, which was ~~$47.72~~$15.62 per ~~share, including reinvested dividends on such PRSUs.~~share. In calculating the number of PRSUs and their value, we are required by SEC rules to compare our performance through ~~2018~~2021 under the PRSU grants against the threshold, target and maximum performance levels for the grant and report in these columns the applicable potential share number and payout amount. If the performance is between levels, we are required to report the potential payout at the next highest level. Through December 31, ~~2018,~~2021, we ~~exceeded~~were below threshold levels of Cumulative Operating Adjusted Net Income Per Share performance and have accordingly reported the PRSUs at the ~~target~~threshold award level.

(6)

Represents the number of time-based stock options granted on March 4, 2021, which vest and become exercisable in equal installments on each of the first four anniversaries of the grant date during the named executive officer’s continued employment with the Company through each such anniversary.

(7)

Represents the number of performance-based stock options granted on March 4, 2021, which will become eligible to vest and become exercisable in equal 25% increments, each upon the later of the occurrence of the first four anniversaries of the grant date during the named executive officer’s continued employment with the Company through each such anniversary, respectively, and the attainment and maintenance of the closing price of the Company’s common stock at or above, for each respective 25% increment, $18.81, $23.81, $28.81, and $33.81, for twenty consecutive trading days. The performance-based stock options do not have threshold or maximum payout levels, but instead portions of the performance-based stock option award will vest to the extent that the stock price targets are achieved during the term of the stock option.

(8)

Represents the number of time-based stock options granted on June 4, 2021, which vest and become exercisable in equal installments on each of the first four anniversaries of the grant date during the named executive officer’s continued employment with the Company through each such anniversary.



	50	45

TABLE OF CONTENTS

(9)

~~Table~~Represents the number of ~~Contents~~performance-based stock options granted on June 4, 2021, which will become eligible to vest and become exercisable in equal 25% increments, each upon the later of the occurrence of the first four anniversaries of the grant date during the named executive officer’s continued employment with the Company through each such anniversary, respectively, and the attainment and maintenance of the closing price of the Company’s common stock at or above, for each respective 25% increment, $23.23, $28.23, $33.23, and $38.23, for twenty consecutive trading days. The performance-based stock options do not have threshold or maximum payout levels, but instead portions of the performance-based stock option award will vest to the extent that the stock price targets are achieved during the term of the stock option.

(10)

The total amounts and values in columns (g) and (h) equal the total number of unvested RSUs granted to Mr. Davis on March 4, 2021, that vest ratably on each of the first three anniversaries of the grant date during Mr. Davis’ continued employment with the Company through each such anniversary, and the market value of such awards, determined by multiplying the number of unvested RSUs by the market price of KAR common stock at the close of the last trading day in 2021, which was $15.62 per share.

(11)

The total amounts and values in columns (i) and (j) equal the total number of PRSUs granted to Mr. Davis on June 4, 2021, that may be earned and vest to the extent the Company achieves certain predetermined volume-based goals on the BacklotCars platform, and the market value of such award, determined by multiplying the number of unvested PRSUs by the market price of KAR common stock at the close of the last trading day in 2021, which was $15.62 per share. This one-time PRSU award granted to Mr. Davis does not have threshold or maximum payout levels, but instead portions of the PRSUs vest if and to the extent that the volume-based goals are achieved during specified time periods.

(12)

Represents the number of time-based stock options granted to Mr. Coyle on November 5, 2021, which vest and become exercisable in equal installments on each of the first four anniversaries of the grant date during Mr. Coyle’s continued employment with the Company through each such anniversary.

(13)

Represents the number of performance-based stock options granted to Mr. Coyle on November 5, 2021, which will become eligible to vest and become exercisable in equal 25% increments, each upon the later of the occurrence of the first four anniversaries of the grant date during Mr. Coyle’s continued employment with the Company through each such anniversary, respectively, and the attainment and maintenance of the closing price of the Company’s common stock at or above, for each respective 25% increment, $19.66, $24.66, $29.66, and $34.66, for twenty consecutive trading days. The performance-based stock options do not have threshold or maximum payout levels, but instead portions of the performance-based stock option award will vest to the extent that the stock price targets are achieved during the term of the stock option.

Because this table shows outstanding equity awards held by our named executive officers as of December 31, 2021, the information is presented on an adjusted basis to reflect the IAA Spin-Off, as applicable. Please refer to the discussion in “Compensation Discussion and Analysis—IAA Spin-Off” above for details on the adjustments.

~~OPTION EXERCISES AND STOCK VESTED DURING~~
~~FISCAL YEAR 2018~~51

Option Awards Stock Awards
Name
(a)
Number of Shares
Acquired on
Exercise (#)
(b) Value Realized on
Exercise ($)
(c) Number of Shares
Acquired on Vesting
(#)
(d) Value Realized on
Vesting ($)
(e)
Jim Hallett 150,000 7,296,799 104,257 (1) 5,370,077 (2)
Eric Loughmiller — — 46,729 (1) 2,405,207 (2)
John Hammer — — — —
Don Gottwald 60,000 2,860,369 26,738 (1) 1,377,503 (2)
Becca Polak 176,720 8,231,664 16,063 (1) 828,199 (2)

TABLE OF CONTENTS OPTION EXERCISES AND STOCK VESTED DURING FISCAL YEAR 2021 Option Awards Stock Awards Name (a) Security Number of Shares Acquired on Exercise (#)(b) Value Realized on Exercise ($)(c) Number of Shares Acquired on Vesting (#)(d) Value Realized on Vesting ($)(e) Peter Kelly KAR — — 16,395(1) 246,043(2) IAA 30,000 1,510,575 33,590(1) 1,790,482 Jim Hallett KAR — — 80,876(1) 1,208,343(2) IAA — — 139,067(1) 7,553,182 Eric Loughmiller KAR — — 21,665(1) 324,886(2) IAA — — 42,011(1) 2,255,729 John Hammer KAR — — 23,286(1) 347,901(2) IAA — — 44,048(1) 2,385,643 Justin Davis KAR — — — — IAA — — — — James Coyle KAR — — — — IAA — — — — (1)

This amount includes shares vested with respect to the full amount of the ~~2015~~2018 PRSUs that were converted into RSUs at ~~133.5%~~the target performance level in connection with the IAA Spin Off, the full amount of ~~target,~~the IAA 2019 PRSUs that were converted to RSUs based on IAA’s actual performance in 2019 in connection with the IAA Spin Off, one-third of the ~~2015~~2018 RSUs, one-third of the ~~2016~~2019 RSUs and one-third of the ~~2017~~2020 RSUs.

(2)

~~(2)~~

This amount includes accumulated dividend equivalents paid in cash with respect to the ~~vested 2015, 2016~~2018 PRSUs that were converted into RSUs in connection with the IAA Spin-Off and ~~2017~~the 2018, 2019 and 2020 RSUs.



	52	46

~~Table of Contents~~

TABLE OF CONTENTS 

POTENTIAL PAYMENTS UPON TERMINATION OR

CHANGE IN CONTROL

~~POTENTIAL PAYMENTS UPON TERMINATION OR~~
~~CHANGE IN CONTROL~~

The following is a discussion of the treatment of equity-based awards held by our named executive officers and annual cash incentive awards due to our named executive officers upon certain types of employment terminations or the occurrence of a change in control of the Company. For a discussion of our named executive ~~officers'~~officers’ severance payments and the treatment of their annual cash incentive awards that may become due upon certain types of employment terminations pursuant to their employment agreements, see ~~"Employment~~“Employment Agreements with Named Executive ~~Officers"~~Officers” below.

EQUITY-BASED AWARDS—OMNIBUS PLAN

To the extent a named executive ~~officer's~~officer’s employment agreement does not provide otherwise, the Omnibus Plan (and the related award agreements thereunder) provide for the following treatment of stock options and other equity awards issued pursuant to the Omnibus Plan upon the termination of employment scenarios or a change in control, as set forth below. Since December 10, 2009, all grants of stock options and other equity awards have been and will be made pursuant to the terms of the Omnibus Plan.

Award
Type

Termination or Change in Control Scenario*

Options

Voluntary Termination or ~~Change in Control Scenario~~

~~Award Type~~

~~Voluntary~~
Termination

~~Termination~~
~~by the~~
~~Company~~
for ~~Cause~~

~~Death, Disability~~
~~or Retirement~~

~~Termination~~
~~without Cause or~~
~~for Good Reason~~

~~Effect of~~
~~Change in Control~~
~~or Exit Event~~

~~Options~~

~~Voluntary Termination~~Cause:: If voluntary, vested options remain exercisable for 90 days (or ~~until~~ earlier expiration date).

~~For~~; if for Cause,: all vested and unvested options are cancelled. (For the 2021 option awards, 90 days is specified as the 3 month anniversary.)

~~All vested options remain exercisable~~Termination Without Cause or for ~~one year (or until earlier expiration date).~~
Good Reason:
~~In the event of death or disability, all unvested options vest in full, with performance awards remaining subject to achievement of goals.~~

Unless otherwise specified in an award agreement, vested options remain exercisable for 90 days (or until earlier expiration date).

(For the 2021 option awards, 90 days is specified as the 3 month anniversary.)

Death or Disability: Vested options remain exercisable for 1 year (or until earlier expiration date). Unvested options vest in full, with performance awards remaining subject to performance achievement. For the 2021 option awards, performance must be achieved within 1 year of death/disability, with options remaining exercisable for the earlier of 1 year from death/disability and the original expiration date.

Retirement: Vested options remain exercisable for 1 year (or until earlier expiration date), except for the 2021 option awards which remain exercisable until the original expiration date. Unvested options are forfeited, except for the 2021 option awards which continue to vest in accordance with the applicable vesting schedule and remain subject to performance requirements.

Effect of Change in Control:Single trigger vesting with committee discretion to cash out or substitute with successor ~~company awards.~~awards, except for the 2021 option awards which have double trigger vesting for options assumed or replaced and single trigger vesting for options that are not assumed or replaced, with performance measured at the time of the change in control under each scenario.

2019



		47PRSUs

~~Table of Contents~~

2020
PRSUs

2021
PRSUs

Voluntary Termination or ~~Change in Control Scenario~~

~~Award~~
~~Type~~

~~Voluntary~~
Termination

~~Termination~~
~~by the Company~~
for ~~Cause~~

~~Death, Disability~~
~~or Retirement~~

~~Termination~~
~~without Cause or~~
~~for Good Reason~~

~~Effect of~~
~~Change in Control~~
~~or Exit Event~~

Cause:~~2016 PRSUs~~

~~2017 PRSUs~~

~~2018 PRSUs~~

Automatic forfeiture.

Without Cause or for Good Reason: Prorated portion of the PRSUs vest based on the ~~Company's~~Company’s actual performance during the performance period and the number of full months ~~he/she~~he was employed during such performance period.

Death or Disability: Full vesting of the ~~PRSU award~~PRSUs based on the ~~Company's~~Company’s actual performance during the performance period.

Retirement:

~~Retirement:~~2019: Prorated ~~potion~~portion of the PRSUs vest based on the ~~Company's~~Company’s actual performance during the performance period and the number of full months worked through the retirement date (including the ~~"early~~“early retirement ~~date"~~date” which is the date of ~~the executive's~~his voluntary termination of employment after attaining a combination of years of age and service with the Company and its affiliates of at least 70, with a minimum age of 60) plus a credit of an additional 12 months.

~~2016 PRSUs:~~2020/2021 ~~Single trigger~~: If attaining age 65 and at least 5 years of service with the Company and its affiliates (“normal retirement”), full vesting of the PRSUs based on the Company’s actual performance during the performance period. If attaining age 55 with at ~~target~~least 10 years of service with the Company and its affiliates (“early retirement”), prorated portion of the PRSUs based on the Company’s actual performance ~~level.~~during the performance period and the number of full months worked through the retirement date plus a credit of an additional 12 months.

~~2017/2018 PRSUs:~~Effect of Change in Control: Double trigger vesting at target performance level for ~~any~~ PRSUs that are assumed or ~~replaced in a Change in Control. Single~~replaced; single trigger vesting at the target performance level for ~~any~~ PRSUs that are not assumed or ~~replaced in a Change in Control.~~replaced.

2019
RSUs

2020
RSUs

2021
RSUs

~~2016 RSUs~~

~~2017 RSUs~~

~~2018 RSUs~~

Voluntary Termination ~~(with or without Good Reason),~~ or Termination ~~by the Company (for Cause or without Cause):~~for Cause: Forfeiture of any unvested RSUs.

Without Cause or for Good Reason: Forfeiture of any unvested RSUs, except for RSUs granted in 2020 which continue to vest in full as scheduled.

Death or Disability: Full, immediate vesting of any unvested RSUs.

Retirement:

~~Retirement:~~2019: Immediate vesting of any unvested RSUs scheduled to vest in the 12 months following the retirement date (including the ~~"early~~“early retirement ~~date"~~date”) and a prorated portion of such RSUs based on the number of full months ~~he/she~~he was employed since the most recent anniversary of the grant date (after giving 12 months post-retirement vesting credit).

2020/2021: If “normal retirement,” any unvested RSUs will continue to vest in full as scheduled. If “early retirement,” a prorated portion of any unvested RSUs scheduled to vest in the 12 months following the retirement date will continue to vest as originally scheduled, along with a prorated portion of such RSUs based on the number of full months he was employed since the most recent anniversary of the grant date (after giving 12 months vesting credit following the date of retirement).

~~2016 RSUs:~~ ~~Single trigger vesting.~~

~~2017/2018 RSUs:~~Effect of Change in Control: Double trigger vesting for any RSUs that are assumed or ~~replaced in a Change in Control. Single~~replaced; single trigger vesting for any RSUs that are not assumed or ~~replaced in a Change in Control. Operating adjusted net income goal is deemed attained.~~replaced.

Unless otherwise specified in an award agreement, all unvested equity-based awards under the Omnibus Plan will be forfeited upon a termination of employment for any reason (except in the case of disability or death, as described in the Omnibus Plan). Unvested portions of Mr. Davis’s one-time PRSU grant tied to volume-based goals the BacklotCars platform will be forfeited upon a termination of Mr. Davis’s employment for any reason.

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Unless specified otherwise in a named executive ~~officer's~~officer’s employment agreement, the termination of a named executive ~~officer's~~officer’s employment with the Company or any subsidiary shall be deemed to be for ~~"cause"~~“cause” under the Omnibus Plan upon any of the following events: (i) the refusal or neglect of the named executive officer to perform substantially ~~his/her~~his employment-related duties; (ii) the named executive ~~officer's~~officer’s personal dishonesty, incompetence, willful misconduct, or breach of fiduciary duty; (iii) the named executive ~~officer's~~officer’s indictment for, conviction of, or entering a plea of guilty ornolo contendere to a crime constituting a felony or ~~his/her~~his willful violation of any applicable law (other than certain exceptions set forth in the Omnibus Plan); (iv) the named executive ~~officer's~~officer’s failure to reasonably cooperate, following a request to do so by the Company, in any internal or governmental investigation of the Company or any subsidiary; (v) any other act or conduct that would constitute cause for the termination of the named executive officer’s employment under applicable law; (vi) the named executive officer’s material breach of any written policies or rules of the Company or its subsidiaries, including any sexual harassment policy; or (v) the named executive ~~officer's~~officer’s material breach of any written covenant or agreement not to disclose any information pertaining to the Company or a subsidiary or not to compete or interfere with the Company or a subsidiary.

The Omnibus Plan does not provide a default ~~"good reason"~~“good reason” definition in the event such term is not specified in a named executive ~~officer's~~officer’s employment agreement.



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ANNUAL CASH INCENTIVE AWARDS—OMNIBUS PLAN

Termination or Change in Control Scenario

~~Voluntary~~
~~Termination~~

~~Termination~~
~~by the Company~~
~~for Cause~~

~~Death, Disability~~
~~or Retirement~~

~~Termination~~
~~without Cause or~~
~~for Good Reason~~

~~Effect of~~
~~Change in Control~~
~~or Exit Event~~

Death, Disability, Voluntary Termination (with or without Good Reason) or Termination by the Company (for Cause or without Cause): Annual cash incentive awards are treated as described in the ~~executive's~~executive’s employment agreement with the Company, to the extent applicable. See ~~"Employment~~“Employment Agreements with Named Executive ~~Officers"~~Officers” below for more information.

Retirement: Unless otherwise specified in an employment agreement, an executive receives a prorated amount of the incentive award based on actual performance for the performance period.

Effect of Change in Control:Unless otherwise determined by the administrator of the Omnibus Plan or as evidenced in an award agreement, pro rata payment based on actual performance, in the ~~administrator's~~administrator’s discretion.

TABLE OF CONTENTS POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE

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~~POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE~~

The amounts in the table below are based on employment agreements that were in effect for each named executive officer on December 31, 2021, and assume that the termination and/or change in control, as applicable, was effective as of December 31, ~~2018,~~2021, the last business day of the prior fiscal year, and that the respective named executive officers exercised all options and/or received cash in exchange for vested PRSUs and RSUs at such time. The table is merely an illustrative example of the impact of a hypothetical termination of employment or change in control. The amounts that would actually be paid upon a termination of employment can only be determined at the time of such termination, based on the facts and circumstances then prevailing.

Named Executive Officer and Triggering Event	Cash Severance	Non-Equity Incentive Pay(1)	Options(2)	PRSUs(3)	RSUs(4)	Life Insurance(5)	Total
Peter Kelly
• Death	$42,028(8)	$237,566	$214,626	$2,640,249	$298,725	$800,000	$4,233,194
• Disability(6)	$42,028(8)	$237,566	$214,626	$2,640,249	$298,725	—	$3,433,194
• Retirement(7)	—	—	—	—	—	—	—
• Voluntary / for Cause	—	—	—	—	—	—	—
• Termination w/o Cause or for Good Reason	$3,323,278(9)	$237,566	—	$1,267,511	$157,965	—	$4,986,320
• CIC (single trigger)	—	$237,566	—	—	—	—	$237,566
• Termination after CIC (double trigger)	$3,323,278(10)	$237,566	$214,626	$2,640,249	$298,725	—	$6,714,444
Jim Hallett
• Death	—(8)	$205,474	$178,855	$4,218,884	$883,390	$800,000	$6,286,603
• Disability(6)	—(8)	$205,474	$178,855	$4,218,884	$883,390	—	$5,486,603
• Retirement(7)	—	$205,474	$178,855	$4,218,884	$883,390	—	$5,486,603
• Voluntary / for Cause	—	—	—	—	—	—	—
• Termination w/o Cause or for Good Reason	$3,738,283(9)	$205,474	—	$2,578,159	$441,171	—	$6,963,087
• CIC (single trigger)	—	$205,474	—	—	—	—	$205,474
• Termination after CIC (double trigger)	$3,738,283(10)	$205,474	$178,855	$4,218,884	$883,390	—	$9,224,886
Eric Loughmiller
• Death	$26,079(8)	$146,707	$98,370	$1,766,575	$311,844	$800,000	$3,149,575
• Disability(6)	$26,079(8)	$146,707	$98,370	$1,766,575	$311,844	—	$2,349,575
• Retirement(7)	—	—	—	$1,507,372	$298,807	—	$1,806,179
• Voluntary / for Cause	—	—	—	—	—	—	—
• Termination w/o Cause or for Good Reason	$1,676,079(9)	$146,707	—	$1,002,018	$155,981	—	$2,980,785
• CIC (single trigger)	—	$146,707	—	—	—	—	$146,707
• Termination after CIC (double trigger)	$2,226,079(10)	$146,707	$98,370	$1,766,575	$311,844	—	$4,549,575
John Hammer
• Death	$42,125(8)	$146,707	$71,542	$1,240,087	$246,782	$800,000	$2,547,243
• Disability(6)	$42,125(8)	$146,707	$71,542	$1,240,087	$246,782	—	$1,747,243
• Retirement(7)	—	—	—	—	—	—	—
• Voluntary / for Cause	—	—	—	—	—	—	—
• Termination w/o Cause or for Good Reason	$1,692,125(9)	$146,707	—	$716,266	$95,954	—	$2,651,052
• CIC (single trigger)	—	$146,707	—	—	—	—	$146,707
• Termination after CIC (double trigger)	$2,242,125(10)	$146,707	$71,542	$1,240,087	$246,782	—	$3,947,243
Justin Davis
• Death	—	$51,681	—	$53,545	$212,088	$600,000	$917,314
• Disability(6)	—	$51,681	—	$53,545	$212,088	—	$317,314
• Retirement(7)	—	—	—	—	—	—	—
• Voluntary / for Cause	—	—	—	—	—	—	—
• Termination w/o Cause or for Good Reason	$103,846(9)	—	—	$17,848	—	—	$121,694
• CIC (single trigger)	—	$51,681	—	—	—	—	$51,681
• Termination after CIC (double trigger)	$103,846(10)	$51,681	—	$53,545	$212,088	—	$421,160
James Coyle
• Death	$42,125(8)	$22,228	$67,925	$399,560	—	$800,000	$1,331,838
• Disability(6)	$42,125(8)	$22,228	$67,925	$399,560	—	—	$531,838
• Retirement(7)	—	—	—	—	—	—	—
• Voluntary / for Cause	—	—	—	—	—	—	—
• Termination w/o Cause or for Good Reason	$917,125(9)	$22,228	—	$133,187	—	—	$1,072,540
• CIC (single trigger)	—	$22,228	—	—	—	—	$22,228
• Termination after CIC (double trigger)	$1,208,791(10)	$22,228	$67,925	$399,560	—	—	$1,698,504

Named Executive Officer and
Triggering Event Cash
Severance Non-
Equity
Incentive
Pay(1) Stock
Options
(2) PRSUs
(3) RSUs
(4) Excise
Tax
Gross-
Up(5) Life
Insurance
(6) Total
Jim Hallett

• Death —(9) $1,219,046 — $9,618,430 $1,842,154 — $800,000 $13,479,630
• Disability(7) —(9) $1,219,046 — $9,618,430 $1,842,154 — — $12,679,630
• Retirement(8) — $1,219,046 — $8,735,946 $1,455,220 — — $11,410,212
• Voluntary / for Cause — — — — — — — —
• Termination w/o Cause or for Good Reason $4,387,500(10) $1,219,046 — $6,858,469 — — — $12,465,015
• CIC (single trigger) — $1,219,046 — $3,403,926 $363,923 — — $4,986,895
• Termination after CIC (double trigger) $4,387,500(10) $1,219,046 — $9,036,359 $1,842,154 — — $16,485,059

Eric Loughmiller

• Death $16,727(9) $460,882 — $3,067,341 $529,660 — $800,000 $4,874,610
• Disability(7) $16,727(9) $460,882 — $3,067,341 $529,660 — — $4,074,610
• Retirement(8) — — — — — — — —
• Voluntary / for Cause — — — — — — — —
• Termination w/o Cause or for Good Reason $1,116,727(10) $460,882 — $2,409,699 — — — $3,987,308
• CIC (single trigger) — $460,882 — $1,467,218 $161,950 — — $2,090,050
• Termination after CIC (double trigger) $1,116,727(10) $460,882 — $2,816,447 $529,660 — — $4,923,716

John Hammer

• Death $26,971(9) $210,318 — $763,719 $253,695 — $800,000 $2,054,703
• Disability(7) $26,971(9) $210,318 — $763,719 $253,695 — — $1,254,703
• Retirement(8) — — — — — — — —
• Voluntary / for Cause — — — — — — — —
• Termination w/o Cause or for Good Reason $1,026,971(10) $210,318 — $254,573 — — — $1,491,862
• CIC (single trigger) — $210,318 — — — — — $210,318
• Termination after CIC (double trigger) $1,026,971(10) $210,318 — $763,719 $253,695 — — $2,254,703

Don Gottwald

• Death $23,844(9) $589,324 — $2,512,506 $509,185 — $800,000 $4,434,859
• Disability(7) $23,844(9) $589,324 — $2,512,506 $509,185 — — $3,634,859
• Retirement(8) — — — — — — — —
• Voluntary / for Cause — — — — — — — —
• Termination w/o Cause or for Good Reason $1,190,834(10) $589,324 — $1,768,379 — — — $3,548,537
• CIC (single trigger) — $589,324 — $831,188 $91,740 — — $1,512,252
• Termination after CIC (double trigger) $1,190,834(10) $589,324 — $2,370,373 $509,185 — — $4,659,716

Becca Polak

• Death $26,805(9) $376,484 — $1,905,821 $412,749 — $800,000 $3,521,859
• Disability(7) $26,805(9) $376,484 — $1,905,821 $412,749 — — $2,721,859
• Retirement(8) — — — — — — — —
• Voluntary / for Cause — — — — — — — —
• Termination w/o Cause or for Good Reason $928,055(10) $376,484 — $1,268,209 — — — $2,572,748
• CIC (single trigger) — $376,484 — $516,466 $57,022 — — $949,972
• Termination after CIC (double trigger) $928,055(10) $376,484 — $1,817,505 $412,749 — — $3,534,793



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Footnotes to Potential Payments Upon Termination or Change in Control Table

(1)

~~(1)~~

The amounts reported are equal to the full amount of the named executive ~~officer's 2018~~officer’s 2021 annual bonus (a December 31, ~~2018~~2021 termination results in a 100% payout, whereas a termination on any other date would result in a prorated amount ~~assuming payment upon a change in control)~~to the extent applicable), payable under the terms of such ~~officer's~~officer’s employment agreement or the Omnibus Plan, as applicable.

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(2)

~~(2)~~

The amounts reported assume a ~~Company~~KAR common stock price of ~~$47.72,~~$15.62, which was the closing price on December 31, ~~2018. No named executive officer had any outstanding, unvested options as of such date.~~

~~(3)~~

2021. The amounts reported ~~assume~~reflect the intrinsic (“in-the-money”) value of shares underlying time-based options, calculated as the difference between $15.62 and the exercise price of such options. The amounts disclosed in this column do not include the value of the 2021 performance-based option awards because the performance conditions which are satisfied upon the attainment and maintenance of the Company’s stock price at or above a ~~Company~~certain level above the exercise price of the options, had not been satisfied based on the assumption of a KAR common stock price of ~~$47.72,~~$15.62, which was the closing price on December 31, ~~2018.~~2021. In the event of a termination of a named executive officer’s employment due to death or disability, the 2021 performance-based options will remain eligible to attain the performance conditions for one year following such termination of employment. In the event of a named executive officer’s retirement (if eligible), the 2021 performance-based options will continue to vest in accordance with the applicable vesting schedule and remain subject to performance requirements.

(3)

The amounts reported assume a KAR common stock price of $15.62, which was the closing price on December 31, 2021. In the event that a named executive officer terminates employment as a result of the named executive officer’s death, Disability, Retirement, Normal Retirement or Early Retirement (if eligible) (each as defined in the Omnibus Plan except for Normal Retirement and Early Retirement which are defined in the applicable award agreements) prior to a Change in Control (as defined in the Omnibus Plan) and as of December 31, 2021, each of the named executive officers would be entitled to, (i) immediate vesting of all of the 2019 PRSUs that converted into RSUs and (ii) immediate vesting of all of the 2020 and 2021 PRSUs in the case of death or Disability, or continued vesting of all of the 2020 and 2021 PRSUs on the case of Normal Retirement (if eligible) or all of the 2020 PRSUs and 24/36ths of the 2021 PRSUs in the case of Early Retirement (if eligible), in each case based on actual performance of the 2020 and 2021 PRSUs. In the event that a named executive officer is terminated without Cause or resigns for Good Reason (each as defined in the applicable employment agreement), or such officer terminates employment due to his/her death, Disability or Retirement (if eligible) (each as defined in the Omnibus Plan), prior to a Change in Control (as defined in the Omnibus Plan), he/she would be entitled to receive, at the same time as active Company employees, all or a prorated portion of the 2016, 2017 and 2018 PRSUs based on the Company's actual performance during each performance period and the number of full months he/she was employed during each such performance period (plus additional vesting in the case of Retirement, if eligible). Assuming a termination as a result of the named executive officer's death, Disability or Retirement (if eligible) prior to a Change in Control and as of December 31, ~~2018 and a full year of vesting,~~2021, each of the named executive officers would be entitled to, (i) immediate vesting of all of the ~~2016~~2019 PRSUs that converted into RSUs, and (ii) ~~all~~continued vesting of 24/36ths of the ~~2017~~2020 PRSUs and ~~(iii) all~~12/36ths of the ~~2018~~2021 PRSUs, based on actual performance in the case of ~~death or Disability or 24/36ths of~~ the ~~2018 PRSUs~~2020 and 2021 PRSUs. With respect to the events described above, the amounts disclosed in the ~~case~~table for the 2019 PRSUs reflect the actual number of ~~Retirement (if eligible); in each case,~~PRSUs that converted to RSUs based on actual ~~performance. Assuming~~performance, and the 2020 and 2021 PRSUs assume performance at the target level.

If a Change in Control occurs prior to the termination of such named executive officer’s employment, assuming a Change in Control date of December 31, 2021, he would be entitled to receive immediate vesting of the 2019 PRSUs that converted into RSUs and the target number of 2020 and 2021 PRSUs as of his termination date, without proration, with respect to any such awards that are not assumed or replaced in the Change in Control, each as of the Change in Control date. If awards are assumed or replaced in the Change in Control, and such named executive officer’s employment is terminated following the Change in Control as a result of a termination without Cause or a resignation for Good Reason, assuming a Change in Control date of December 31, 2021, he would be entitled to receive immediate vesting of the 2019 PRSUs that converted into RSUs and the target number of 2020 and 2021 PRSUs, without proration, as of his termination date. With respect to a Change in Control, the amounts disclosed in the “CIC (single trigger)” rows in the table assume that the awards are assumed or replaced in the Change in Control.

Unvested portions of Mr. Davis’s one-time PRSU grant tied to volume-based goals on the BacklotCars platform will be forfeited upon a termination of Mr. Davis’s employment for any reason.

(4)

The amounts reported assume, for KAR awards, a KAR common stock price of $15.62, which was the closing price on December 31, 2021, and, for IAA awards, an IAA common stock price of $50.62, which was the closing price on December 31, 2021. In the event a named executive officer’s employment is terminated as a result of a termination for Cause or a voluntary termination prior to a Change in Control and as of December 31, 2021, he would forfeit the unvested portion of his RSUs. In the event a named executive officer’s employment is terminated as a result of a termination without Cause or a resignation for Good Reason prior to a Change in Control ~~each~~and as of December 31, 2021, he would forfeit the unvested portion of his 2019 RSUs (and 2021 RSUs, for Mr. Davis) but receive continued vesting of his unvested 2020 RSUs. In the event a named executive ~~officers~~officer’s employment is terminated due to his death or Disability prior to a Change in Control and as of December 31, 2021, he would be entitled to ~~(i) all~~receive immediate vesting of the ~~2016 PRSUs, (ii) 24/36ths~~unvested portion of his RSUs. In the event that a named executive officer terminates employment prior to a Change in Control due to his Retirement, Normal Retirement or Early Retirement (if eligible), he would be entitled to receive (i) immediate vesting of the ~~2017 PRSUs and (iii) 12/36ths~~unvested portion of his 2019 RSUs that are scheduled to vest in the 12 months following the retirement date plus a prorated portion of such RSUs based on the number of full months he was employed since the most recent anniversary of the ~~2018 PRSUs;~~grant date (after giving 12 months vesting credit following the retirement date) and (ii) if due to Early Retirement, continued vesting of unvested portion of his 2020 RSUs (and 2021 RSUs, for Mr. Davis) that are scheduled to vest in ~~each case,~~the 12 months following the retirement date plus a prorated portion of such RSUs based on ~~actual performance. With respect~~the number of full months he was employed since the most recent anniversary of the grant date (after giving 12 months vesting credit following the retirement date) and, if due to Normal Retirement, continued full vesting of the ~~events described above, the amounts disclosed in the table~~2020 RSUs (and 2021 RSUs, for ~~the 2016 PRSUs reflect actual performance and the amounts disclosed in the table for the 2017 and 2018 PRSUs assume performance at the target level.~~

Mr. Davis).

If a Change in Control occurs prior to the termination of such ~~officer's~~named executive officer’s employment, assuming a Change in Control date of December 31, ~~2018, he/she~~2021, he would be entitled to receive immediate vesting ~~and payout~~of any RSU awards that are

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not assumed or replaced in the Change in Control, each as of the ~~target number of 2016 PRSUs, without proration.~~Change in Control date. If such ~~officer's~~named executive officer’s employment is terminated following a Change in Control as a result of a termination without Cause or a resignation for Good Reason, assuming a Change in Control date of December 31, ~~2018, he/she~~2021, he would be entitled to receive immediate vesting of ~~the target number of 2017 PRSUs and 2018 PRSUs as of his/her termination date, without proration, with respect to~~ any ~~2017 PRSUs or 2018 PRSUs~~RSU awards that are assumed or replaced in the Change in Control, ~~(or, in the case of a termination without Cause effective~~ as of the Change in Control, immediate vesting of the target number of any 2017 PRSUs or 2018 PRSUs that are not assumed or replaced in the Change in Control). If a 2017 PRSU or 2018 PRSU is not assumed or replaced in the Change in Control, assuming a Change in Control date of December 31, 2018, such officer would be entitled to receive immediate vesting of the target number of 2017 PRSUs and 2018 PRSUs as of the Change in Control date, without proration. With respect to a Change in Control, the amounts disclosed in the "CIC (single trigger)" rows in the table assume that the 2017 PRSUs and 2018 PRSUs are assumed or replaced in the Change in Control.

~~(4)~~

The amounts reported assume a Company common stock price of $47.72, which was the closing price on December 31, 2018. In the event a named executive officer's employment is terminated prior to a Change in Control as a result of a termination with or without Cause or a voluntary termination (with or without Good Reason), he/she would forfeit the unvested portion of his/her 2016, 2017 and 2018 RSUs. In the event a named executive officer's employment is terminated prior to a Change in Control due to his/her death or Disability, he/she would be entitled to receive immediate vesting of the unvested portion of his/her 2016, 2017 and 2018 RSUs. In the event that a named executive officer terminates employment prior to a Change in Control due to his/her Retirement, he/she would be entitled to receive, if the applicable performance threshold was achieved, immediate vesting of the unvested portion of his/her 2016, 2017 and 2018 RSUs that are scheduled to vest in the 12 months following the retirement date and a prorated portion of such RSUs based on the number of full months he/she was employed since the most recent anniversary of the grant date (after giving 12 months vesting credit following the retirement date).

If a Change in Control occurs prior to the termination of such officer's employment, assuming a Change in Control date of December 31, 2018, he/she would be entitled to receive immediate vesting of the unvested portion of his/her 2016 RSU award and any 2017 and 2018 RSU awards that are not assumed or replaced in the Change in Control, each, as of the Change in Control date. If such officer's employment is terminated following a Change in Control as a result of a termination without Cause or a resignation for Good Reason, assuming a Change in Control date of December 31, 2018, he/she would be entitled to receive immediate vesting of any 2017 and 2018 RSU awards that is assumed or replaced in the Change in Control, as of his/herhis termination date. With respect to a Change in Control, the amounts disclosed in the ~~"CIC~~“CIC (single trigger)"” rows in the table assume that the ~~2017 and 2018~~ RSUs are assumed or replaced in the Change in Control.

(5)



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~~(5)~~: As described above, pursuant to his employment agreement and in the event of a Change in Control, Mr. Hallett may be entitled to an excise tax gross-up with respect to certain payments made in connection with a termination of his employment; however, the estimated value of the excess parachute payments on December 31, 2018 is within the statutory safe harbor amount under Section 280G of the Code, making the excise tax and related gross-up inapplicable. Actual excise tax amounts and tax gross-up payments, if any, would be calculated at the time of an actual Change in Control based on all factors and assumptions applicable at that time. No other named executive officer is entitled to an excise tax gross-up.
~~(6)~~

(6)

~~(7)~~

Long-term disability is a Company-paid benefit for all employees and therefore is not included in this table. The long-term disability benefit is only paid after six months on short-term disability and is 66.67% of base pay capped at $15,000 per month.

(7)

~~(8)~~

~~Pursuant to the terms of his employment agreement, Mr. Hallett would be entitled to a prorated payout of his 2018 annual bonus (the full bonus for a termination date~~As of December 31, 2018) upon his "retirement" (i.e., a voluntary termination of his employment, provided that he announces his retirement at least 12 months prior to such termination). Assuming a "retirement" date of December 31, 2018, Mr.2021, Messrs. Hallett and Loughmiller would each have been entitled to receive accelerated or continued vesting of all or a portion of the ~~2016, 2017 and 2018~~ RSUs and PRSUs because heeach had met the requirements for a Retirement, Normal Retirement or Early Retirement as of December 31, ~~2018~~2021 under the applicable award agreements ~~(he~~under the Omnibus Plan (each was either 65 years of age, 65 years of age with at least five years of service, 55 years of age with at least 10 years of service or had reached the age of 60 and had a combination of years of age and service with the Company and its affiliates of at least 70). Further, Mr. Hallett would be entitled to receive continued vesting of the options granted in 2021 because he had met the requirements for a Retirement as of December 31, 2021 under the applicable award agreements under the Omnibus Plan (he was at least 65 years of age with at least five years of service). Messrs. Kelly, Hammer, Davis and Coyle had not satisfied any of the Retirement, Normal Retirement or Early Retirement requirements under the applicable award agreements under the Omnibus Plan as of December 31, 2021 (i.e., each was under the age of 55), and thus, they would not have been entitled to accelerated or continued vesting of their equity for a “retirement” as of such date.

As of December 31, 2021, Mr. Hallett would be entitled to a prorated payout of his 2021 annual bonus (the full bonus for a termination date of December 31, 2021) upon his Retirement (i.e., termination of his employment other than for Cause). Messrs. Kelly, Loughmiller, Hammer, Davis and ~~Gottwald and Ms. Polak~~Coyle had not satisfied the Retirement requirements under the Omnibus Plan ~~and the applicable award agreements~~ as of December 31, ~~2018~~2021 (i.e., none had reached the age of ~~60 and met the applicable age and service requirements)~~65), and thus, they would not have been entitled to a prorated payout of their annual bonuses ~~or accelerated vesting of their equity~~ for a Retirement as of such date.

~~(9)~~

(8)

Under the terms of the employment agreements for each ~~named executive officer's employment agreement (other than with respect to Mr. Hallett), he/she (or his/her estate) would be entitled to COBRA premium payments for 12 months in the event~~ of ~~his/her death or Disability. Mr.~~Messrs. Kelly, Hallett, Loughmiller, Hammer and Coyle, he (or his estate) would be entitled to COBRA premium payments for 18 months in the event of his death or Disability, ~~but~~although Mr. Hallett would not have received this benefit with respect to a termination occurring on December 31, ~~2018~~2021 because he did not participate in our group health plans as of such date.

(9)

~~(10)~~

These amounts are equal to (i) for Mr. ~~Hallett,~~Kelly, (a) two times the sum of Mr. ~~Hallett's~~Kelly’s current annual base salary ($~~975,000 as of December 31, 2018)~~750,000) and ~~2018~~his 2021 target bonus ~~amount;~~amount, and (b) COBRA premium payments for 18 ~~months (because~~months; (ii) for Mr. Hallett, ~~did not participate in our group health plans as of December 31, 2018, no COBRA premium amount is included in the figures above);~~two and ~~(ii) for all other named executive officers, (a) one~~a half times the sum of Mr. Hallett’s current annual base salary ($725,000) and his 2021 target bonus amount; (iii) for Messrs. Loughmiller, Hammer and Coyle, (a) one and a half times the ~~officer's~~sum of his current annual base salary ($550,000 for Mr. Loughmiller, $550,000 for Mr. Hammer, and $500,000 for Mr. ~~Hammer, $583,495 for Mr. Gottwald,~~Coyle) and ~~$515,000 for Ms. Polak) and 2018~~his 2021 target bonus ~~amount;~~amount, and (b) COBRA premium payments for ~~12 months.~~18 months; and (iv) for Mr. Davis, three weeks of annual base salary times each year of service with the Company and its affiliates.

(10)

These amounts are equal to (i) for Messrs. Kelly, Loughmiller, Hammer and Coyle, (a) two times the sum of the named executive officer’s current annual base salary ($750,000 for Mr. Kelly, $550,000 for Mr. Loughmiller, $550,000 for Mr. Hammer, and $500,000 for Mr. Coyle) and his 2021 target bonus amount, and (b) COBRA premium payments for 18 months; (ii) for Mr. Hallett, two and a half times the sum of Mr. Hallett’s current annual base salary ($725,000) and his 2021 target bonus amount; and (iii) for Mr. Davis, three weeks of annual base salary times each year of service with the Company and its affiliates.

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EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVE OFFICERS

Each of our named executive officers has an employment agreement with the Company. A summary of each of the agreements is provided below.

~~CEO~~

~~Mr. Hallett's employment agreement, which became effective as of February 27, 2012, provides for the following severance~~Peter Kelly, Eric Loughmiller, John Hammer and ~~change of control payments:~~

~~Termination Due to Mr. Hallett's Death or Disability.~~James Coyle If Mr. Hallett's employment is terminated as a result of his death or disability, we will pay Mr. Hallett, or in the case of his death, Mr. Hallett's estate or beneficiaries, an amount equal to the sum of (i) any accrued but unpaid base salary and accrued but unused vacation days; (ii) any earned and vested benefits and payments pursuant to the terms of any benefit plan (collectively, the amounts described in (i) and (ii) above are, the "Accrued Obligations"); and (iii) subject to Mr. Hallett or his estate executing a general release of any claims that he may have against the Company (the "Release"), any annual bonus for a prior completed calendar year that has not yet been calculated or paid to Mr. Hallett (the "Earned but Unpaid Bonus").

In addition, if Mr. Hallett is participating in the health plans of the Company at the time of his termination, we will pay him, or in the case of his death, his estate or beneficiaries, his or their premiums attributable to maintaining insurance coverage under COBRA for the shorter of (i) 18 months; or (ii) until Mr. Hallett becomes eligible for comparable coverage under the health plans of another employer (the "Continued Benefits"). Subject to receipt and effectiveness of the Release, we also will pay Mr. Hallett, or his estate or beneficiaries, a prorated bonus based upon the portion of the year during which Mr. Hallett was employed by us (the "Prorated Bonus").

For purposes of Mr. Hallett's employment agreement, "disability" means a "Total Disability" (or equivalent) as defined in the Company's long term disability plan in effect at the time of the disability.

~~Termination by the Company for Cause.~~ Following a majority vote of the Board (excluding Mr. Hallett or any other employee of the Company), we may terminate Mr. Hallett's employment at any time for "Cause." In such event, our only obligation to Mr. Hallett would be the payment, in a lump sum, of Mr. Hallett's Accrued Obligations.

"Cause" is defined in the employment agreement to mean (i) Mr. Hallett's willful, continued and uncured failure to perform substantially his duties under the employment agreement for a period of 14 days following notice to Mr. Hallett of such failure; (ii) Mr. Hallett engaging in illegal conduct or gross misconduct that is demonstrably likely to lead to material injury to the Company; (iii) Mr. Hallett's indictment or conviction of, or plea of~~nolo contendere~~ to, a crime constituting a felony or any other crime involving moral turpitude; or (iv) Mr. Hallett's failure to comply with the provisions of the employment agreement relating to confidential information, intellectual property, non-competition and non-solicitation which is not cured within the 14 day period following written notice to Mr. Hallett of such failure.

~~Termination by the Company Without Cause.~~ Mr. Hallett's employment may be terminated without Cause at any time upon 30 days' prior written notice. In the event of a termination without Cause, the Company will pay Mr. Hallett the following "Severance Benefits": (i) two times the sum of Mr. Hallett's (a) annual base salary and (b) target bonus for the year in which termination occurs which, for this purpose, shall not equal less than 100% of Mr. Hallett's base salary; (ii) a Prorated Bonus in a lump sum; and (iii) the Continued Benefits. In addition to the Severance Benefits described above, we will also pay Mr. Hallett the Accrued Obligations and any Earned but Unpaid Bonus.

~~Termination by Mr. Hallett for Good Reason.~~ Mr. Hallett may terminate his employment for "Good Reason" within 90 days following the occurrence of an event constituting "Good Reason," if such event remains uncured for a period of 30 days following notice of the event by Mr. Hallett to the Company. Upon such termination, the Company will pay Mr. Hallett the sum of the Severance Benefits, the Accrued Obligations and any Earned but Unpaid Bonus.



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~~"Good Reason" is defined in the employment agreement to mean the occurrence of any of the following:~~

•: A material reduction of Mr. Hallett's authority, duties and responsibilities, or the assignment to Mr. Hallett of duties materially inconsistent with Mr. Hallett's position as Chief Executive Officer;
•: A requirement by the Company that Mr. Hallett relocate his principal business location to a location more than 50 miles from the Company's executive offices as of the effective date of the employment agreement;
•: ~~Any material failure by the Company to comply with any of the terms and conditions of the employment agreement;~~
•: ~~Any failure to timely pay or provide Mr. Hallett's base salary, or any reduction in Mr. Hallett's base salary below $816,000, other than in connection with across-the-board salary reductions;~~
•: ~~Any material reduction in Mr. Hallett's base salary or annual bonus opportunity; or~~
•: A "Change of Control," defined by reference to the term "Change in Control" used the Omnibus Plan, occurs and, if applicable, the Company fails to cause its successor to assume or reaffirm the Company's obligations under the employment agreement without change.

~~Termination by Mr. Hallett without Good Reason.~~ Mr. Hallett may terminate his employment under the employment agreement at any time without Good Reason upon 30 days' prior written notice. In such event, we will pay Mr. Hallett a lump sum amount equal to the Accrued Obligations.

~~Termination by Mr. Hallett upon Retirement.~~ Mr. Hallett may voluntarily terminate his employment under the employment agreement due to retirement by announcing his retirement at least 12 months prior to such termination. In the event of such a termination, we will pay Mr. Hallett a lump sum amount equal to the Accrued Obligations and a Prorated Bonus.

~~Excise Tax Gross-Up.~~ As described above in "Compensation Policies and Other Information—Tax and Accounting Considerations—Employment Agreements," Mr. Hallett's employment agreement provides that in the event that any payment or benefit in connection with his employment is or becomes subject to an excise tax under Section 4999 of the Code, the Company will make a cash payment to Mr. Hallett, which after the imposition of all income, employment, excise and other taxes thereon as well as any penalty and interest assessments associated therewith, will be sufficient to place Mr. Hallett in the same after-tax position as he would have been in had such excise tax not applied. However, in the event that a reduction of the total payments due to Mr. Hallett would avoid the application of the excise tax, then the total payments will be reduced to the extent necessary to avoid the excise tax, but in no event by more than 10% of the original amount of the total payments due.

~~Requirements With Respect to Non-Competition and Non-Solicitation.~~ Upon a termination of employment for any reason, Mr. Hallett is subject to the following two year post-termination restrictive covenants (except in the case of retirement): (i) non-competition restrictions; and (ii) non-solicitation of Company employees and customers.

~~Other Named Executive Officers~~

The Company has entered into substantially similar employment agreements with Messrs. Kelly, Loughmiller, Hammer and ~~Gottwald and Ms. Polak,~~Coyle, providing for their at-will employment and the ~~following~~ severance and change of control ~~payments.~~

payments described below.

Termination Due to Death or Disability. If Messrs. Kelly, Loughmiller, Hammer or ~~Gottwald or Ms. Polak~~Coyle terminates ~~his/her~~his employment due to death or disability, the Company will be obligated to pay to the executive (or ~~his/her~~his legal representatives) an amount equal to the sum of (i) any earned but unpaid base salary; (ii) accrued but unpaid vacation earned through the date of termination; (iii) unreimbursed business expenses; and (iv) any vested employee benefits. The aggregate of the foregoing is referred to as the ~~"Accrued~~“Accrued Obligations."” In addition, the executive or ~~his/her~~his estate/beneficiaries would be entitled to receive (i) COBRA premium payments for 1218 months or until the executive becomes eligible for coverage under another ~~employer's~~employer’s health



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plan, if the executive is participating in the ~~Company's~~Company’s health plans on the date of such termination of employment (the ~~"Continued Benefits"~~“Continued Benefits”); (ii) the prorated portion of ~~his/her~~his annual bonus for the calendar year in which such termination of employment occurred, calculated based on the ~~executive's~~executive’s actual performance and based on the number of days the executive was employed by the Company during such calendar ~~year;~~year (the “Pro Rata Bonus”); and (iii) a payment equal to the amount of any annual bonus which has been earned in a prior year but which has not yet been paid to the executive (the ~~"Earned~~“Earned but Unpaid ~~Bonus"~~Bonus”).

For purposes of their employment agreements, ~~"disability"~~“disability” means a ~~"Total Disability" (or~~“Total Disability” (or equivalent) as defined in the ~~Company's~~Company’s long term disability plan in effect at the time of the disability.

Voluntary Termination or Termination for Cause. If Messrs. Kelly, Loughmiller, Hammer or ~~Gottwald or Ms. Polak~~Coyle voluntarily terminates ~~his/her~~his employment or if the Company terminates ~~his/her~~his employment for Cause, the ~~Company's~~Company’s sole obligation will be to pay ~~him/her~~him the Accrued Obligations. For purposes of their employment agreements, ~~"Cause"~~“Cause” means the (i) ~~executive's~~executive’s willful, continued and uncured failure to perform substantially their duties under the agreement (other than any such failure resulting from incapacity due to medically documented illness or injury) for a period of 14 days following written notice by the Company to the executive of such failure; (ii) executive engaging in illegal conduct or gross misconduct that is demonstrably likely to lead to material injury to the Company, monetarily or otherwise; (iii) ~~executive's~~executive’s indictment or conviction of, or plea ofnolo contendere to, a crime constituting a felony or any other crime involving moral turpitude; (iv) executive’s material breach of the Company’s code of business conduct and ethics; or ~~(iv) executive's~~(v) executive’s violation of the restrictive covenants under the agreement or any other covenants owed to the Company by executive.

Termination Without Cause or Resignation for Good Reason. In the event Messrs. Kelly, Loughmiller, Hammer or ~~Gottwald or Ms. Polak~~Coyle is terminated by the Company without Cause or such executive resigns for Good Reason, the executive would be entitled to receive, subject to the execution and non-revocation of a release of claims, (i) a lump sum cash payment equal to the sum of ~~his/her~~one and a half times (except for Mr. Kelly, two times) his annual base salary plus target annual bonus for the year in which such termination of employment occurs; (ii) the Continued Benefits; (iii) the Pro Rata Bonus; and ~~(iii)~~(iv) the Earned but Unpaid Bonus. For purposes of their employment agreements, ~~"Good Reason"~~“Good Reason” means (i) any material reduction of the ~~executive's~~executive’s authority, duties and responsibilities; (ii) any material failure by the Company to comply with any of the terms and conditions of the agreement; (iii) any failure to timely pay or provide the ~~executive's~~executive’s base salary, or any reduction in the ~~executive's~~executive’s base salary, excluding any base salary reduction made in connection with across the board salary reductions; (iv) the requirement by the Company that the executive relocate ~~his/her~~his principal business location to a location more than 50 miles from the ~~executive's~~executive’s principal base of operation as of the effective date of the agreement; or (v) a Change of Control occurs and, if applicable, the Company fails to cause its successor (whether by purchase, merger, consolidation or otherwise) to assume or reaffirm the ~~Company's~~Company’s obligations under the agreement without change. For purposes of the foregoing, ~~"Change~~“Change of ~~Control"~~Control” has the same meaning as the term ~~"Change~~“Change in ~~Control"~~Control” under the Omnibus Plan.

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Change In Control Termination. In the event Messrs. Kelly, Loughmiller, Hammer or Coyle is terminated by the Company without Cause or such executive resigns for Good Reason, as described above, and such termination occurs within two years of a Change of Control (as defined under the Omnibus Plan), the executive would be entitled to receive, subject to the execution and non-revocation of a release of claims, (i) a lump sum cash payment equal to the sum of two times his annual base salary plus target annual bonus for the year in which such termination of employment occurs; (ii) the Continued Benefits; (iii) the Pro Rata Bonus; and (iv) the Earned but Unpaid Bonus.

Requirements With Respect to Non-Competition and Non-Solicitation. Upon a termination of employment for any reason, Messrs. Kelly, Loughmiller, Hammer and ~~Gottwald and Ms. Polak~~Coyle are subject to the following one year post-termination restrictive covenants: (i) non-competition restrictions; and (ii) non-solicitation of Company employees and customers.

Jim Hallett

In connection with Mr. Hallett stepping down as Chief Executive Officer on April 1, 2021, the Company and Mr. Hallett entered into a new employment agreement to reflect Mr. Hallett’s new role as Executive Chairman, effective April 1, 2021, providing for the following severance and change of control payments:

Termination Due to Death or Disability. If Mr. Hallett terminates his employment due to death or disability, the Company will be obligated to pay to Mr. Hallett (or his legal representatives) an amount equal to the sum of (i) any earned but unpaid base salary; (ii) accrued but unpaid vacation earned through the date of termination; (iii) unreimbursed business expenses; and (iv) any vested employee benefits. The aggregate of the foregoing is referred to as the “Accrued Obligations.” In addition, Mr. Hallett or his estate/beneficiaries would be entitled to receive (i) COBRA premium payments for 18 months or until Mr. Hallett becomes eligible for coverage under another employer’s health plan, if Mr. Hallett is participating in the Company’s health plans on the date of such termination of employment (the “Continued Benefits”); (ii) the prorated portion of his annual bonus for the calendar year in which such termination of employment occurred, calculated based on Mr. Hallett’s actual performance and based on the number of days Mr. Hallett was employed by the Company during such calendar year (the “Pro Rata Bonus”); and (iii) a payment equal to the amount of any annual bonus which has been earned in a prior year but which has not yet been paid to Mr. Hallett (the “Earned but Unpaid Bonus”).

For purposes of his employment agreement, “disability” means a “Total Disability” (or equivalent) as defined in the Company’s long term disability plan in effect at the time of the disability.

Voluntary Termination or Termination for Cause. If Mr. Hallett voluntarily terminates his employment or if the Company terminates his employment for Cause, the Company’s sole obligation will be to pay him the Accrued Obligations. For purposes of his employment agreement, “Cause” means the (i) Mr. Hallett’s willful, continued and uncured failure to perform substantially his duties under the agreement (other than any such failure resulting from incapacity due to medically documented illness or injury) for a period of 14 days following written notice by the Company to Mr. Hallett of such failure; (ii) Mr. Hallett engaging in illegal conduct or gross misconduct that is demonstrably likely to lead to material injury to the Company, monetarily or otherwise; (iii) Mr. Hallett’s indictment or conviction of, or plea of nolo contendere to, a crime constituting a felony or any other crime involving moral turpitude; (iv) Mr. Hallett’s material breach of the Company’s code of business conduct and ethics; or (v) Mr. Hallett’s violation of the restrictive covenants under the agreement or any other covenants owed to the Company by Mr. Hallett.

Termination Without Cause or Resignation for Good Reason. In the event Mr. Hallett is terminated by the Company without Cause or Mr. Hallett resigns for Good Reason, Mr. Hallett would be entitled to receive, subject to the execution and non-revocation of a release of claims, (i) a lump sum cash payment equal to the sum of two and a half times his annual base salary plus target annual bonus for the year in which such termination of employment occurs; (ii) the Continued Benefits; (iii) the Pro Rata Bonus; and (iv) the Earned but Unpaid Bonus. For purposes of his employment agreement, “Good Reason” means (i) any material reduction of Mr. Hallett’s authority, duties and responsibilities; (ii) any material failure by the Company to comply with any of the terms and conditions of the agreement; (iii) any failure to timely pay or provide Mr. Hallett’s base salary, or any reduction in Mr. Hallett’s base salary, excluding any base salary reduction made in connection with across the board salary reductions; (iv) the requirement by the Company that Mr. Hallett relocate his principal business location to a location more than



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~~Table~~50 miles from Mr. Hallett’s principal base of ~~Contents~~operation as of the effective date of the agreement; or (v) a Change of Control occurs and, if applicable, the Company fails to cause its successor (whether by purchase, merger, consolidation or otherwise) to assume or reaffirm the Company’s obligations under the agreement without change. For purposes of the foregoing, “Change of Control” has the same meaning as the term “Change in Control” under the Omnibus Plan.

Requirements With Respect to Non-Competition and Non-Solicitation.

Upon a termination of employment for any reason, Mr. Hallett is subject to the following one year post-termination restrictive covenants: (i) non-competition restrictions; and (ii) non-solicitation of Company employees and customers.

Justin Davis

In connection with the Company’s BacklotCars acquisition, the Company and Mr. Davis entered into an employment agreement, providing for Mr. Davis’s at will employment and the severance payments described below:

Termination Without Cause or Resignation for Good Reason. In the event Mr. Davis is terminated by the Company without Cause or Mr. Davis resigns for Good Reason, Mr. Davis would be entitled to receive, subject to the execution and non-revocation of a release of claims, an aggregate cash payment equal to three weeks of Mr. Davis’s annual base salary for each year of service with the Company and its affiliates (not to exceed an amount equal to one year of Mr. Davis’s annual base salary). For purposes of his employment agreement, “Cause” means (i) indictment for, conviction of, or plea of nolo contendere to, a felony or a crime involving moral turpitude; (ii) misappropriation of anything of value including, but not limited to, monies, assets or property; (iii) engaging in conduct that results or could reasonably be expected to result in material harm to the Company’s business or reputation; or (iv) any willful action or inaction of Mr. Davis (including but not limited to the breach of his non-competition and non-solicitation obligations) which, in the reasonable opinion of the Company, constitutes dereliction (willful neglect or willful abandonment of assigned duties) or failure to comply with any valid and legal directive of the person(s) to whom Mr. Davis reports and which subjects the Company to liability. For purposes of his employment agreement, “Good Reason” means (i) a material reduction in Mr. Davis’s base salary, excluding any base salary reduction made in connection with across the board salary reductions; or (ii) a relocation of Mr. Davis’s principal place of employment by more than 50 miles.

Requirements With Respect to Non-Competition and Non-Solicitation. Upon a termination of employment for any reason, Mr. Davis continues to be subject to the following restrictive covenants: (i) non-competition restrictions for twelve months post-termination; and (ii) non-solicitation of Company employees for eighteen months post-termination.

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~~Summary:~~CEO PAY RATIO

Summary

For the ~~2018~~2021 fiscal year, the ratio of the annual total compensation of Mr. ~~Hallett,~~Kelly, our Chief Executive Officer ("(“CEO ~~Compensation"~~Compensation”), to the median of the annual total compensation of all of our employees and those of our consolidated subsidiaries other than Mr. ~~Hallett ("~~Kelly (“Median Annual ~~Compensation"~~Compensation”) was ~~173~~197 to 1.

This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions described below. The assumptions used in the calculation of our estimated pay ratio are specific to our company and our employee population; therefore, our pay ratio may not be comparable to the pay ratios of other companies, including the companies in our proxy comparator group.

In this summary, we refer to the employee who received the Median Annual Compensation as the ~~"Median~~“Median Employee."” For purposes of this summary, Median Annual Compensation was ~~$35,420,~~$43,003, and was calculated by totaling for our Median Employee all applicable elements of compensation for the ~~2018~~2021 fiscal year in accordance with Item 402(c)(2)(x) of Regulation S-K. For purposes of this summary, CEO Compensation was ~~$6,138,226.~~$8,477,933. CEO Compensation for purposes of this disclosure represents the total compensation reported for Mr. ~~Hallett~~Kelly in the ~~"Summary~~“Summary Compensation Table for ~~2018"~~2021” for the ~~2018~~2021 fiscal year.

~~Methodology:~~Methodology

As permitted by SEC rules, the Median Employee identified in ~~2017~~2020 was utilized as the Median Employee for ~~2018~~2021 as the Company did not experience changes in employee population or compensation arrangements that we reasonably believe would result in a significant change to this pay ratio disclosure. In ~~2017,~~2020, to identify the Median Employee, we first determined our employee population as of December 31, ~~2017~~2020 (the ~~"Determination Date"~~“Determination Date”). We had ~~17,481~~10,097 employees (other than the CEO at the time, Mr. Hallett), representing all full-time, part-time, seasonal and temporary employees of us and our consolidated subsidiaries as of the Determination Date. This number did not include any independent contractors or ~~"leased"~~“leased” workers, as permitted by the applicable SEC rules. Of our ~~17,481~~10,097 total employees (other than Mr. Hallett), approximately ~~231 (or about 1%) were employed in the United Kingdom and approximately 9 (or less than 1%) were employed in Mexico. We chose to exclude these 240 employees based~~308 (approximately 3% of our total employee population) are located outside of the U.S. ~~in identifying our Median Employee, as~~and Canada. As permitted under thede minimis exemption to Item 402(u) of Regulation ~~S-K.~~S-K, we chose to exclude those 308 employees in the following countries in identifying our Median Employee: Belgium (111); France (6); Germany (44); Italy (19); Mexico (14); the Netherlands (13); the United Kingdom (87); and Uruguay (14). We used our number of total employees ~~(17,481,~~(10,097, other than Mr. Hallett) in making ourde minimis calculation.

We then measured compensation for the period beginning on January 1, ~~2017~~2020 and ending on December 31, ~~2017~~2020 for ~~17,241~~9,789 employees (after the permitted exclusions noted above). This compensation measurement was first calculated by totaling base salary (for salaried employees) and wages (for hourly employees) for each employee, ~~gross wages reported on Form W-2 (or its equivalent for non-U.S. employees), which included cash compensation, including regular pay (wages~~ and ~~salary), all variants of overtime (if eligible), and all variants of bonus payments actually paid (if any). In determining the Median Employee, we~~converting international currencies into U.S. dollars. We annualized the total compensation for the portion of our permanent employee workforce (full-time and part-time) which worked for less than the full fiscal year due to commencing employment after the beginning of the fiscal year.

We identified five possible Median Employees (five employees with the same compensation), who were all located in the U.S. We then calculated gross wages reported on Form W-2 for all five employees, which included cash compensation, including regular pay (wages and salary), all variants of overtime (if eligible), and all variants of bonus payments actually paid (if any). We annualized the pay of employees who were placed on furlough for a portion of 2020. We then re-ranked that group of five employees to identify the Median Employee.

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~~RATIFICATION OF INDEPENDENT REGISTERED~~
~~PUBLIC ACCOUNTING FIRM:~~
~~PROPOSAL NO. 3~~

~~PROPOSAL~~

The Audit Committee has appointed KPMG LLP ~~("KPMG"~~(“KPMG”) to serve as the ~~Company's~~Company’s independent registered public accounting firm for its fiscal year ending December 31, ~~2019.~~2022. The Audit Committee and the Board seek to have the stockholders ratify the Audit ~~Committee's~~Committee’s appointment of KPMG, which has served as the ~~Company's~~Company’s independent registered public accounting firm since 2007.

Although the Company is not required to seek stockholder approval of this appointment, the Board believes it ~~to be~~is sound corporate governance to do so. If the appointment of KPMG is not ratified by the stockholders, the Audit Committee will consider the vote of the ~~Company's~~Company’s stockholders and may appoint another independent registered public accounting firm or may decide to maintain its appointment of KPMG. Ratification of the appointment of our independent registered public accounting firm requires the affirmative vote of ~~the~~a majority of the shares present ~~in person or represented by proxy~~and entitled to vote at the ~~2019~~2022 annual meeting.

Representatives of KPMG will be present at the ~~2019~~2022 annual meeting and will have the opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.


✓		The Board of Directors recommends that you vote ~~"FOR"~~FOR the ratification of the appointment of KPMG as our independent registered public accounting firm for ~~2019.~~2022.

Proxies solicited by the Board of Directors will be voted “FOR” the ratification of the appointment of KPMG as our independent registered public accounting firm for 2022 unless stockholders specify a contrary vote.


		Proxies solicited by the Board of Directors will be voted "FOR" the ratification of the appointment of KPMG as our independent registered public accounting firm for 2019 unless stockholders specify a contrary vote.62

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee is currently comprised of ~~four~~three independent directors, each of whom satisfies the independence requirements of Section 10A of the Exchange Act and Rule 10A-3 ~~under the Exchange Act.~~thereunder. The Audit Committee oversees our financial reporting process on behalf of the Board and serves as the primary communication link between the Board as the representative of our stockholders, KPMG as our independent auditor, and our internal auditors. Our management has the primary responsibility for our financial statements and the reporting process, including the systems of internal controls and for assessing the effectiveness of internal controls over financial reporting. The Audit Committee, at least quarterly, meets with the ~~Company's~~Company’s Chief Financial Officer, the ~~Company's Vice President~~Company’s head of Internal Audit and representatives of KPMG and conducts separate executive sessions to discuss the audited consolidated financial statements, the evaluations of the ~~Company's~~Company’s internal controls and the overall quality of the ~~Company's~~Company’s financial reporting and compliance programs.

In fulfilling its responsibilities during the fiscal year, the Audit Committee reviewed and discussed with management the consolidated financial statements and related financial statement disclosures included in our Quarterly Reports on Form 10-Q and the audited consolidated financial statements and related financial statement disclosures included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018.~~2021. Also, the Audit Committee reviewed with the independent auditors their judgments as to both the quality and the acceptability of our accounting policies. The Audit ~~Committee's~~Committee’s review with the independent auditors included a discussion of ~~other~~the matters required ~~under Auditing Standards promulgated~~to be discussed by the applicable requirements of the Public Company Accounting Oversight Board ~~("PCAOB"~~(“PCAOB”)~~, including PCAOB Auditing Standard No. 1301,~~~~Communications with~~ and the SEC. KPMG has provided the Audit ~~Committees.~~ ~~The Audit~~ Committee ~~received the~~ written disclosures and ~~the letter from the independent auditors~~all communications required ~~by the~~under PCAOB ~~Rule Nos. 3524~~standards, including those concerning independence, and ~~3526 regarding communications with~~ the Audit Committee ~~concerning independence and~~ has discussed those disclosures with ~~the independent auditors.~~KPMG. The Audit Committee has also reviewed non-audit services performed by KPMG and considered whether ~~KPMG's~~KPMG’s provision of non-audit services was compatible with maintaining its independence from the Company.

The Audit Committee discussed with our internal auditors and independent auditors the overall scope and plans for their respective audits and reviewed our plans for compliance with management certification requirements pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. The Audit Committee met with the internal auditors and independent auditors, with and without management present, to discuss the results of the ~~auditors'~~auditors’ examinations, their evaluations of our internal controls, including a review of the disclosure control process, and the overall quality of our financial reporting. Management represented to the Audit Committee that the ~~Company's~~Company’s consolidated audited financial statements as of and for the fiscal year ended December 31, ~~2018~~2021 were prepared in accordance with accounting principles generally accepted ~~accounting principles,~~in the United States, and the Audit Committee has reviewed and discussed the audited consolidated financial statements with management and the independent auditors. The Audit Committee, or the ~~Chairman~~Chair of the Audit Committee, also pre-approved all audit and non-audit services provided by the independent auditors during and relating to fiscal year ~~2018.~~2021. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018.~~

2021.

The Audit Committee evaluates the performance of the independent auditors each year and determines whether to re-engage the current independent auditors or consider other audit firms. To assist in the evaluation of ~~KPMG's~~KPMG’s performance for the ~~2018~~2021 audit, the Audit Committee conducted a comprehensive evaluation, which included obtaining input from certain members of management, assessing ~~KPMG's~~KPMG’s independence, technical expertise, industry knowledge, adequacy of audit approach and scope, appropriateness of fees, and service and communication with management and the Audit Committee. The results of this evaluation were discussed with the KPMG engagement ~~partner and the managing partner of KPMG's local office.~~partner. The Audit Committee reviews with our Chief Financial Officer and ~~our Vice President~~the head of Internal Audit, the overall audit scope and plans, the results of internal and external audit examinations, evaluations by management and the independent auditors of our internal ~~controls~~control over financial reporting, the quality of our financial reporting and the ability of the independent auditors to remain independent. Based on these evaluations, the Audit Committee approved the engagement of KPMG as our independent auditors for fiscal year ~~2019.~~

2022.



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Although the Audit Committee has the sole authority to appoint the independent auditors, the Audit Committee has continued its long-standing practice of recommending that the Board ask our stockholders to ratify the appointment of the independent auditors at our annual meeting of stockholders. ~~This report is submitted by Michael T. Kestner, Donna R. Ecton, J. Mark Howell and Stephen E. Smith.~~

~~The Audit Committee~~

~~Michael T. Kestner~~~~(Chairman)~~
~~Donna R. Ecton~~
~~J. Mark Howell~~
~~Stephen E. Smith~~

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AUDIT COMMITTEE

FEES PAID TO KPMG LLP

The following table sets forth the aggregate fees charged to ~~KAR Auction Services~~the Company by KPMG for audit services rendered in connection with the audit of our consolidated financial statements and reports for ~~2018~~2021 and ~~2017~~2020 and for other services rendered during ~~2018~~2021 and ~~2017~~2020 to ~~KAR Auction Services~~the Company and its subsidiaries, as well as all out-of-pocket costs incurred in connection with these services:

Fee Category	2021	2020
Audit Fees(1)	$2,563,576	$2,432,339
Audit-Related Fees(2)	360,460	328,700
Tax Fees(3)	170,000	—
All Other Fees(4)	—	1,905
Total Fees	$3,094,036	$2,762,944

Fee Category
2018
2017

Audit Fees(1)
$ 2,496,449 $ 2,880,000
Audit-Related Fees(2)
3,098,162 416,116
Tax Fees(3)
98,526 148,239
All Other Fees(4)
1,905 1,780

Total Fees
$ 5,695,042 $ 3,446,135

(1)

~~(1)~~: Audit Fees: Consists of fees for professional services rendered for the audit of our consolidated financial statements, review of the interim condensed consolidated financial statements included in the ~~Company's~~Company’s quarterly reports, the audit of our internal controls over financial reporting and services that are normally provided by independent registered public accounting firms in connection with statutory and regulatory filings or engagements, and attest services, except those not required by statute or regulation.

(2)

~~(2)~~

Audit-Related Fees: Consists principally of fees for professional services rendered with respect to ~~the audits performed over the carve-out financial statements related to the proposed spin-off of IAA and issued~~Service Organization Control 1 reporting, our Registration Statement on Form ~~10 for IAA Spinco Inc., SOC 1 reporting,~~S-8 and the audit of our 401(k) benefit plan.

(3)

~~(3)~~

Tax Fees: Consists of fees for various tax planning projects.

(4)

~~(4)~~

All Other Fees: Consists principally of a license to use ~~KPMG's~~KPMG’s accounting research software.

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND
PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

~~KAR Auction Services'~~

The Company’s independent registered public accounting firm fee pre-approval policy provides for an annual process through which the Audit Committee evaluates the nature and scope of the audit prior to the commencement of the audit. The Audit Committee also evaluates audit-related, tax and other services that are proposed, along with the anticipated cost of such services. The Audit Committee reviews schedules of specific services to be provided. If other services are provided outside of this annual process, under the policy they may be (i) pre-approved by the Audit Committee at a regularly scheduled meeting; or (ii) pre-approved by the ~~Chairman~~Chair of the Audit Committee, acting between meetings and reporting back to the Audit Committee at the next scheduled meeting. All audit fees, audit-related fees, tax fees and all other fees described above were approved by the Audit Committee or the ~~Chairman~~Chair of the Audit Committee before such services were rendered.



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~~CERTAIN RELATED PARTY RELATIONSHIPS~~

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RELATED PERSON TRANSACTIONS

REVIEW AND APPROVAL OF TRANSACTIONS
WITH RELATED PERSONS

Pursuant to our written related ~~party~~person transactions policy, the Company reviews relationships and transactions in which the Company, or one of its business units, and our directors and executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest.

In the course of the review and approval of a related ~~party~~person transaction, the Board or the Audit Committee may consider the following factors:

•

the nature of the related ~~person's~~person’s interest in the transaction;

•

the material terms of the transaction, including, without limitation, the amount and type of transaction;

•

the importance of the transaction to the related person;

•

the importance of the transaction to the Company;

•

whether the transaction would impair the judgment of a director or executive officer to act in our best interest; and

•

any other matters that we deem appropriate.

Transactions in which the amount involved exceeds $120,000 in which the Company, or one of its business units, was a participant and a related person had a direct or indirect material interest are required to be disclosed in this proxy statement. ~~There~~Mr. Davis’s brother, Ryan Davis, is a co-founder and current Chief Strategy Officer of BacklotCars. During 2021, Mr. Ryan Davis earned approximately $289,650 in cash, was granted RSUs with a grant value of $83,343, and was also granted a one-time BacklotCars incentive award to incentivize the achievement of certain volume-based goals on the BacklotCars platform with a grant value of $1,000,000. Mr. Ryan Davis was also eligible to participate in benefit programs available to other employees of comparable level and on substantially similar terms and conditions. Except for the employment of Mr. Ryan Davis and the transactions set forth below, there were ~~not any such~~no related ~~party~~person transactions identified since January 1, 2021.

Issuance of Series A Preferred Stock

On June 10, 2020, we issued 500,000 shares of Series A Preferred Stock to Ignition Acquisition Holdings LP, a Delaware limited partnership and affiliate fund of Apax, for ~~2018.~~

an aggregate purchase price of $500 million, or $1,000 per share, in a private offering pursuant to the Investment Agreement, dated as of May 26, 2020, by and between the Company and the Apax Investor, an affiliate of Ignition Acquisition Holdings LP (the “Apax Investment Agreement”). On June 10, 2020 and June 29, 2020, we issued an aggregate of 50,000 shares of Series A Preferred Stock to Periphas Kanga Holdings, LP (“Periphas”), a Delaware limited partnership and affiliate of Periphas Capital GP, LLC (“Periphas Capital”), for an aggregate purchase price of $50 million, or $1,000 per share, in private offerings pursuant to the Investment Agreement, dated as of May 26, 2020, by and between the Company and Periphas Capital (the “Periphas Investment Agreement” and, together with the Apax Investment Agreement, the “Investment Agreements”).



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~~Table~~The Series A Preferred Stock ranks senior to our common stock, with respect to dividend rights and rights on the distribution of ~~Contents~~assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. The holders of the Series A Preferred Stock are entitled to a cumulative dividend at the rate of 7% per annum, payable quarterly in arrears. Dividends are payable in kind through the issuance of additional shares of Series A Preferred Stock for the first eight dividend payments, and thereafter, in cash or in kind, or in any combination of both, at our option. The holders of the Series A Preferred Stock are also entitled to participate in dividends declared or paid on our common stock on an as-converted basis.

~~REQUIREMENTS, INCLUDING DEADLINES, FOR~~
~~SUBMISSION OF PROXY PROPOSALS~~

The Series A Preferred Stock will be convertible at the option of the holders thereof at any time after June 10, 2021 into shares of common stock at a conversion price of $17.75 per share of Series A Preferred Stock and a conversion rate of 56.3380 shares of common stock per share of Series A Preferred Stock, subject to certain anti-dilution adjustments. At any time after June 10, 2023, if the closing price of the common stock exceeds $31.0625

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per share, as may be adjusted pursuant to the Certificate of Designations, for at least 20 trading days in any period of 30 consecutive trading days, at our election, all or any portion of the Series A Preferred Stock will be convertible into the relevant number of shares of common stock.

The holders of the Series A Preferred Stock are entitled to vote with the holders of our common stock as a single class on all matters submitted to a vote of the holders of our common stock.

At any time after June 10, 2026, we may redeem some or all of the Series A Preferred Stock for a per share amount in cash equal to: (i) the sum of (x) the liquidation preference thereof, plus (y) all accrued and unpaid dividends, multiplied by (ii) (A) 105% if the redemption occurs at any time after June 10, 2026 and prior to June 10, 2027 (B) 100% if the redemption occurs on or after June 10, 2027.

Upon the occurrence of a change of control, and subject to certain limitations set forth in the Certificate of Designations, each holder of the Series A Preferred Stock will either (i) receive such number of shares of common stock into which such holder is entitled to convert all or a portion of such holder’s shares of Series A Preferred Stock at the then current conversion price, (ii) receive, in respect of all or a portion of such holder’s shares of Series A Preferred Stock, the greater of (x) the amount per share of Series A Preferred Stock that such holder would have received had such holder, immediately prior to such change of control, converted such share of Series A Preferred Stock into common stock and (y) a purchase price per share of Series A Preferred Stock, payable in cash, equal to the product of (A) 105% multiplied by (B) the sum of the liquidation preference and accrued dividends with respect to such share of Series A Preferred Stock, or (iii) unless the consideration in such change of control event is payable entirely in cash, retain all or a portion of such holder’s shares of Series A Preferred Stock.

For so long as the Apax Investor or its affiliates beneficially own at least 25% of the shares of Series A Preferred Stock originally purchased pursuant to the Apax Investment Agreement on an as-converted basis, the Apax Investor will continue to have the right to appoint one individual to the Board. Additionally, so long as the Apax Investor or its affiliates beneficially own at least 50% of the shares of Series A Preferred Stock originally purchased pursuant to the Apax Investment Agreement on an as-converted basis, the Apax Investor will have the right to appoint one non-voting observer to the Board. Likewise, so long as Periphas beneficially owns a certain percentage of the shares of Series A Preferred Stock purchased in the Periphas issuance on an as-converted basis, Periphas will have the right to appoint one non-voting observer to the Board.

The Apax Investor and certain of its affiliates are subject to certain standstill restrictions, until the later of June 10, 2023 and the date on which the Apax Investor no longer beneficially owns 25% of the shares of Series A Preferred Stock originally purchased pursuant to the Apax Investment Agreement on an as-converted basis. Periphas is also subject to certain standstill restrictions, until the later of June 10, 2023 and the date on which Periphas no longer owns 50% of the shares of Series A Preferred Stock purchased in the Periphas issuance on an as-converted basis. Subject to certain customary exceptions, Ignition Acquisition Holdings LP and Periphas were restricted from transferring the Series A Preferred Stock until June 30, 2021.

The Apax Investor, its affiliates and Periphas have certain customary registration rights with respect to shares of the Series A Preferred Stock and the shares of the common stock held by it issued upon any future conversion of the Series A Preferred Stock. Pursuant to these rights, on February 18, 2021, the Company filed a registration statement on Form S-3 with the SEC to register for resale an aggregate of (i) 634,305 shares of Series A Preferred Stock, consisting of the 571,606 shares of Series A Preferred Stock held by Ignition Acquisition Holdings LP and Periphas as of February 12, 2021 (including shares issued as dividends payable in kind), and 62,699 shares of Series A Preferred Stock to be issued as dividends paid in-kind on such shares through June 30, 2022; and (ii) 35,735,493 shares of common stock, which represents the total number of shares of common stock issuable upon conversion of all such shares of Series A Preferred Stock. Under the registration statement, Ignition Acquisition Holdings LP and Periphas may offer and sell shares of Series A Preferred Stock or shares of common stock in public or private transactions, or both. These sales may occur at fixed prices, at market prices prevailing at the time of sale, at prices related to prevailing market prices, or at negotiated prices.

At the close of business on April 8, 2022, the record date, Ignition Acquisition Holdings LP and Periphas held 566,728 and 56,669 shares of our Series A Preferred Stock, respectively, which shares represented approximately 20.83% and 2.56% of our common stock on an as-converted basis.

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REQUIREMENTS, INCLUDING DEADLINES, FOR
SUBMISSION OF PROXY PROPOSALS

NOMINATION OF DIRECTORS AND OTHER BUSINESS OF
STOCKHOLDERS

In order to submit stockholder proposals for inclusion in our proxy statement related to the ~~2020~~2023 annual meeting of stockholders pursuant to SEC Rule 14a-8, materials must be received by the Secretary at the ~~Company's~~Company’s principal executive office inat KAR Auction Services, Inc., Secretary, 11299 North Illinois Street, Carmel, Indiana 46032 no later than December ~~26, 2019.~~

23, 2022.

The proposals must comply with all of the requirements of SEC Rule 14a-8. Proposals should be addressed to: ~~Rebecca C. Polak,~~Charles S. Coleman, EVP, Chief Legal Officer and Secretary, KAR Auction Services, Inc., ~~13085 Hamilton Crossing Boulevard,~~11299 North Illinois Street, Carmel, Indiana 46032. As the ~~SEC's~~SEC’s shareholder proposal rules make clear, simply submitting a proposal does not guarantee its ~~inclusion.~~

inclusion in our proxy statement.

The ~~Company's~~Company’s By-Laws also establish an advance notice procedure with regard to director nominations and stockholder proposals that are not submitted for inclusion in the proxy statement pursuant to SEC Rule 14a-8, but that a stockholder instead wishes to present directly at an annual meeting. To be properly brought before the ~~2020~~2023 annual meeting, a notice of the nomination or the matter the stockholder wishes to present at the meeting must be delivered to the Secretary at the ~~Company's~~Company’s principal office in Carmel, Indiana (see address above), not less than 90 or more than 120 days prior to the first anniversary of the date of this ~~year's~~year’s annual meeting. As a result, any notice given by or on behalf of a stockholder pursuant to these provisions of the ~~Company's~~Company’s By-Laws (and not pursuant to SEC Rule 14a-8) must be received no earlier than February ~~5, 2020,~~2, 2023, and no later than March ~~6, 2020.~~4, 2023. All director nominations and stockholder proposals must comply with the requirements of the ~~Company's~~Company’s By-Laws, a copy of which may be obtained at no cost from the Secretary of the Company by writing to KAR Auction Services, Inc., Secretary, ~~13085 Hamilton Crossing Boulevard,~~11299 North Illinois Street, Carmel, Indiana 46032.

Other than the proposals described in this proxy statement, ~~KAR Auction Services~~the Company does not expect any matters to be presented for a vote at the ~~2019~~2022 annual meeting. However, if you grant a proxy, the persons named as proxy holders on the proxy card will have the discretion to vote your shares on any additional matters properly presented for a vote at the ~~2019~~2022 annual meeting. If for any unforeseen reason, any one or more of the ~~Board's~~Board’s nominees is not available to stand for election as director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated as a substitute by the Board.

The chairman of the meeting may refuse to allow the transaction of any business not presented beforehand, or to acknowledge the nomination of any person not made in compliance with the foregoing procedures.



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~~QUESTIONS AND ANSWERS ABOUT THE PROXY~~
~~MATERIALS AND THE ANNUAL MEETING~~

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QUESTIONS AND ANSWERS ABOUT THE PROXY
MATERIALS AND THE ANNUAL MEETING

Q:	Q:		Why am I receiving these materials?
A:	A:		We are providing these proxy materials to you in connection with the solicitation, by ~~the~~our Board, ~~of KAR Auction Services,~~ of proxies to be voted at the ~~Company's 2019~~Company’s 2022 annual meeting of stockholders and at any adjournments or postponements thereof. Stockholders are invited to attend the ~~2019~~2022 annual meeting to be held via a live audio webcast on June ~~4, 2019~~2, 2022 beginning at 9:00 a.m., Eastern Daylight Time, atwww.virtualshareholdermeeting.com/~~KAR2019~~KAR2022,, where stockholders will be able to listen to the meeting live, submit questions and vote online. You will need the 16-digit control number provided on your Notice (as defined ~~below)~~below under “Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials?”), on your proxy card, or on the instructions that accompanied your proxy materials. Our proxy materials are first being distributed to stockholders on or about April ~~24, 2019.~~22, 2022.
	Q:
Q:		What proposals will be voted on, what is the ~~Board's~~Board’s voting recommendation, and what are the standards for determining whether a proposal has been approved?

The holders of shares of Series A Preferred Stock are being asked to vote, as a separate class, on:

•

Proposal No. 1: To elect one director (Roy Mackenzie) designated by the Apax Investor to serve until the
2023 annual meeting of stockholders and until such director’s successor is duly elected and qualified, or
such director’s earlier death, resignation or removal.

The holders of shares of common stock and shares of Series A Preferred Stock, voting together as a single class, are being asked to consider and vote on the following items:

•

Proposal No. 2: To elect nine directors to serve until the 2023 annual meeting of stockholders and until
such director’s successor is duly elected and qualified, or such director’s earlier death, resignation or
removal.

•

Proposal No. 3: To approve, on an advisory basis, executive compensation.

•

Proposal No. 4: To ratify the appointment of KPMG LLP as our independent registered public
accounting firm for 2022.

Proposal

~~Proposal~~

Voting Choices and
Board Recommendation

Voting

Standard

~~Voting~~Effect of
~~Standard~~
Abstention

Effect of

Broker Non-Vote

~~Effect of~~
~~Abstention~~

~~Effect of~~
~~Broker~~
~~Non-Vote~~

Election of Director Nominee Designated by the Apax Investor

•

Vote “FOR” the nominee

•

Vote “AGAINST” the nominee

•

Abstain from voting for the nominee

The Board recommends a vote FOR •the director nominee.

~~Vote "FOR" all nominees~~

More votes “FOR” than “AGAINST”

No effect

~~Directors~~

•

~~Vote "FOR" specific nominees~~

~~"FOR" than~~

Election of Directors

•

Vote ~~"AGAINST"~~“FOR” all nominees

~~"AGAINST"~~

•

Vote ~~"AGAINST"~~“FOR” specific nominees

•

Vote “AGAINST” all nominees

•

Vote “AGAINST” specific nominees

•

Abstain from voting for all nominees

•

Abstain from voting for specific nominees

The Board recommends a vote "FOR"
each of the director nominees.

More votes “FOR” than “AGAINST”

No effect

2.3.

Advisory Vote to Approve Executive Compensation

•

Vote ~~"FOR"~~“FOR” the advisory proposal

•

~~Majority of the~~

Vote ~~against~~

~~No effect~~

~~to Approve~~

•

~~Vote "AGAINST"~~“AGAINST” the advisory proposal

~~shares present~~

~~Executive~~

•

Abstain from voting on the advisory

~~and entitled to~~

proposal

~~Compensation~~

~~proposal~~

~~vote~~

The Board recommends a vote "FOR"
the advisory vote to approve executive compensation.

~~Ratification of~~

•

~~Vote "FOR" the ratification~~

Majority of the shares present and entitled to vote

Vote against

~~Not~~

No effect

Ratification of Independent

•

~~Vote "AGAINST" the ratification~~

~~shares present~~

~~applicable~~

Registered Accounting Firm

•

Vote “FOR” the ratification

•

Vote “AGAINST” the ratification

•

Abstain from voting on the ratification

~~and entitled to vote~~

The Board recommends a vote "FOR"
the ratification of the appointment of
KPMG as our independent registered
accounting firm for ~~2019.~~2022.

Majority of the shares present and entitled to vote

Vote against

Not applicable

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		Q:
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Q:		Who is entitled to vote?
A:	A:	~~All shares owned by you~~	Only holders of our common stock and/or Series A Preferred Stock outstanding as of the record date, which is the close of business on April ~~11, 2019,~~8, 2022, may ~~be voted by you. You may cast one~~ vote ~~per~~at the 2022 annual meeting. Each share of our common stock ~~that you held~~is entitled to one vote on each matter properly brought before the 2022 annual meeting and on which holders of common stock are entitled to vote. Each record holder of Series A Preferred Stock will have a number of votes equal to the largest number of whole shares of common stock into which such shares are convertible on the record ~~date.~~
		date on each matter that is properly brought before the 2022 annual meeting and on which holders of Series A Preferred Stock are entitled to vote together with common stock as a single class. In addition, each holder of record of Series A Preferred Stock will have one vote for each share of Series A Preferred Stock on each matter that is properly brought before the 2022 annual meeting and on which holders of Series A Preferred Stock are entitled to vote separately, as a class. These shares include shares that are:
		• held directly in your name as the stockholder of record; and
		• held for you as the beneficial owner through a broker, bank or other nominee, including shares purchased under the KAR Auction Services, Inc. Amended and Restated Employee Stock Purchase Plan (the ~~"Employee Stock Purchase Plan"~~“ESPP”).
		On the record date, ~~KAR Auction Services~~the Company had ~~133,271,194~~121,532,564 shares of common stock issued and outstanding and 623,397 shares of Series A Preferred Stock issued and outstanding.
Q:	Q		Are there any requirements on how the holders of the Series A Preferred Stock must vote?
	A:		Under the Investment Agreement, at the 2022 annual meeting, Ignition Acquisition Holdings LP and Periphas are required to vote their shares of Series A Preferred Stock in favor of the nine director nominees who are also being voted on by holders of common stock, in favor of the Say on Pay proposal and for ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2022, as described in these proxy materials. Ignition Acquisition Holdings LP and Periphas are entitled to vote at their discretion on the other proposals described in this proxy statement.
	Q:		What is the difference between holding shares as a stockholder of record and as a beneficial owner?
A:	A:		*Stockholder of Record.*.If your shares are registered directly in your name with the ~~Company's~~Company’s transfer agent, American Stock Transfer & Trust Company, LLC, you are considered a ~~"stockholder~~“stockholder of ~~record"~~record” with respect to those shares. As the stockholder of record, you have the right to grant your voting proxy directly to the Company or to vote in person online during the ~~2019~~2022 annual meeting.
		*Beneficial Owner*. If your shares are held in a brokerage account or by a bank or other nominee, you hold your shares in ~~"street name"~~“street name” and are considered a ~~"beneficial owner"~~“beneficial owner” with respect to those shares. These proxy materials are being forwarded to you by your broker or nominee who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker on how to vote your shares and are also invited to attend the ~~2019~~2022 annual meeting.
Q:	Q:		How can I vote my shares and participate at the ~~2019~~2022 annual meeting?
A:	A:		Stockholders may participate in the ~~2019~~2022 annual meeting by visiting the following website:www.virtualshareholdermeeting.com/~~KAR2019~~KAR2022.. To participate in the ~~2019~~2022 annual meeting, you will need the 16-digit control number provided on your Notice, on your proxy card, or on the instructions that accompanied your proxy materials.
		*Stockholder of Record*. Shares held directly in your name as the stockholder of record may be voted online during the ~~2019~~2022 annual meeting. If you choose to vote your shares online during the ~~2019~~2022 annual meeting, please follow the instructions provided on the Notice to log in towww.virtualshareholdermeeting.com/~~KAR2019~~KAR2022.. You will need the control number included on your Notice, on your proxy card, or on the instructions that accompanied your proxy materials.
		*Beneficial Owner*. If you are a beneficial owner in street name and want to vote your shares online during the ~~2019~~2022 annual meeting, you will need to ask your bank, broker or other nominee to furnish you with a legal proxy and proof of beneficial ownership, such as your most recent account statement as of April ~~11, 2019,~~8,

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				2022, the record date, a copy of the voting instruction form provided by your broker, bank, trustee, or nominee, or other similar evidence of ownership. Follow the instructions from your broker or bank included with these proxy materials, or contact your broker or bank to request a proxy form.
		If you hold both common stock and Series A Preferred Stock, you will need to vote, or authorize a proxy to vote, each class of stock separately. Please be sure to vote or authorize a proxy to vote for each class of stock separately so that all your votes can be counted. For more information, see “What if I hold both common stock and Series A Preferred Stock” below. Even if you plan to attend the ~~2019~~2022 annual meeting, the Company strongly recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the ~~2019~~2022 annual meeting. See ~~"How~~“How can I vote my shares without attending the ~~2019~~2022 annual meeting?"” below.
		The ~~2019~~2022 annual meeting will begin promptly at 9:00 a.m., Eastern Daylight Time. We encourage you to access the meeting prior to the start time. Please allow ample time for online check-in, which will begin at 8:45 a.m. Eastern Daylight Time.



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		We are holding the ~~2019~~2022 annual meeting online and providing Internet voting to provide expanded access and to allow you to vote your shares online during the annual meeting, with procedures designed to ensure the authenticity and correctness of your voting instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.
Q:	Q:		What if I hold both common stock and Series A Preferred Stock?
	A:		Some of our stockholders may hold both common stock and Series A Preferred Stock. If you are a holder of both common stock and Series A Preferred Stock, you can expect to receive separate sets of printed proxy materials. You will need to vote, or authorize a proxy to vote, each class of stock separately in accordance with the instructions set forth herein and on the applicable proxy cards or voting instruction forms. Voting, or authorizing a proxy to vote, only your common stock will not also cause your shares of Series A Preferred Stock to be voted, and vice versa. If you hold both common stock and Series A Preferred Stock, please be sure to vote or authorize a proxy to vote for each class of stock separately so that all your votes can be counted.
	Q:		How can I vote my shares without attending the ~~2019~~2022 annual meeting?
A:	A:		Whether you hold your shares directly as the stockholder of record or beneficially in street name, you may votewithout attending the ~~2019~~2022 annual meeting in one of the following manners:
		*By Internet*. Go towww.proxyvote.com and follow the instructions. You will need the control number included on your proxy card or voting instruction form;
		*By Telephone*. Dial 1-800-690-6903. You will need the control number included on your proxy card or voting instruction form; or
		*By Mail*.Complete, date and sign your proxy card or voting instruction ~~card~~form and mail it using the enclosed, pre-paid envelope.
		If you vote on the Internet or by telephone, you do not need to return your proxy card or voting instruction ~~card.~~form. Internet and telephone voting for stockholders will be available 24 hours a day, and will close at 11:59 p.m., Eastern Daylight Time, on June ~~3, 2019.~~1, 2022.
Q:	Q:		If I am an employee holding shares pursuant to the ~~Employee Stock Purchase Plan,~~ESPP, how will my shares be voted?
A:	A:		Employees holding stock acquired through the ~~Employee Stock Purchase Plan~~ESPP will receive a voting instruction ~~card~~form covering all shares held in their individual account from ~~Computershare,~~Fidelity, the plan record keeper. The ~~voting instruction cards have an earlier return date than proxy cards. The~~ record keeper for the ~~Employee Stock Purchase Plan~~ESPP will vote your shares (i) in accordance with the specific instructions on your returned voting instruction ~~card;~~form; or (ii) in its discretion, if you return a signed voting instruction ~~card~~form with no specific voting instructions.
Q:	Q:		What is the quorum requirement for the ~~2019~~2022 annual meeting?
A:	A:		A quorum of stockholders is necessary to hold the ~~2019~~2022 annual meeting. A quorum at the ~~2019~~2022 annual meeting exists if ~~the holders of~~stockholders entitled to cast a majority of the ~~Company's capital stock issued and outstanding and~~votes entitled to ~~vote~~be cast at the ~~2019~~2022 annual

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			meeting are present in person or represented by proxy. Abstentions and broker ~~non-votes~~non votes are counted as present for establishing a quorum. A broker non-vote occurs on an item when a broker, bank or other nominee is not permitted to vote on that item absent instruction from the beneficial owner of the shares and no instruction is given.
Q:	Q:		What happens if I do not give specific voting instructions?
A:	A:		*Stockholder of Record*. If you are a stockholder of record and you sign and return a proxy card without giving specific voting instructions, then the proxy holders will vote your shares in the manner recommended by the Board on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the ~~2019~~2022 annual meeting.
		*Beneficial Owner*. If you are a beneficial owner of shares and do not provide the organization (e.g., broker, bank or other nominee) that holds your shares in ~~"street name"~~“street name” with specific voting instructions, the organization that holds your shares may generally vote in its discretion on ~~"routine"~~“routine” matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on ~~"non-routine"~~“non-routine” matters, such organization cannot vote your shares and will inform the inspector of election that it does not have the authority to vote on these matters with respect to your shares. This is generally referred to as a ~~"broker~~“broker non-vote."” Therefore, we urge you to give voting instructions to your broker, bank or other nominee. Shares represented by such broker non-votes will be counted in determining whether there is a quorum. Because broker non-votes are not considered shares entitled to vote, they will have no effect on the outcome of any proposal other than reducing the number of shares present in person or by proxy and entitled to vote from which a majority is calculated.

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		• Routine Matters. The ratification of the appointment of KPMG as our independent registered public accounting firm for ~~2019~~2022 (Proposal No. 3)4) is considered a routine matter under applicable rules. A broker, bank or other nominee may generally vote on routine matters, and therefore no broker ~~non-votes~~non votes will exist in connection with Proposal No. 3.4.
		• ~~Non-Routine~~Non Routine Matters. The election of directors ~~(Proposal~~(Proposals No. ~~1) and~~1 & 2), the advisory vote to approve executive compensation (Proposal No. 2)3), are each considered “non routine” matters under applicable rules are considered ~~non-routine~~non routine matters under applicable rules. A broker, bank or other nominee cannot vote without instructions on non-routine matters, and therefore there may be broker ~~non-votes~~non votes on Proposal No. 1, Proposal No. 2 and Proposal No. 2.3.
Q:	Q:		What does it mean if I receive more than one proxy card or voting instruction ~~card?~~form?
A:	A:		It means your shares are registered differently or are in more than one account. Please provide voting instructions for all proxy and voting instruction ~~cards~~forms you receive.
Q:	Q:		Who will count the vote?
A:	A:		The votes will be counted by the inspector of elections appointed for the ~~2019~~2022 annual meeting.
Q:	Q:		Can I revoke my proxy or change my vote?
A:	A:		Yes. You may revoke your proxy or change your voting instructions at any time prior to the vote at the ~~2019~~2022 annual meeting by:
		• providing written notice of revocation to the Secretary of the Company at ~~13085 Hamilton Crossing Boulevard,~~11299 North Illinois Street, Carmel, Indiana 46032;
		• delivering a valid, later-dated proxy or a later-dated vote on the Internet or by telephone; or
		• attending the ~~2019~~2022 annual meeting online and voting during the meeting, which will automatically cancel any proxy previously granted.
		Please note that your attendance at the ~~2019~~2022 annual meeting alone will not cause your previously granted proxy to be revoked unless you vote online during the ~~2019~~2022 annual meeting. If you wish to revoke your proxy, you must do so in sufficient time to permit the necessary examination and tabulation of the subsequent proxy or revocation before the vote is taken. Shares held in street name may be voted by you online during the ~~2019~~2022 annual meeting only if you obtain a signed proxy from the record holder giving you the right to vote such shares.

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	Q:	Who will bear the cost of soliciting proxies for the ~~2019~~2022 annual meeting?
A:	A:	The Company pays the cost of soliciting your proxy and reimburses brokers and others for forwarding to you the proxy materials as beneficial owners of our common stock. The ~~Company's~~Company’s directors, officers and employees also may solicit proxies by mail, telephone and personal contact. They will not receive any additional compensation for these activities.
Q:	Q:	Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials?
A:	A:	This year, we are again taking advantage of the SEC rules that allow us to furnish our proxy materials over the Internet. As a result, most of our stockholders will be mailed a Notice of Internet Availability of Proxy Materials ~~("Notice"~~(“Notice”), rather than a full paper set of the proxy materials. The Notice includes information on how to access the proxy materials via the Internet as well as how to vote via the Internet. We believe this method of delivery will decrease printing and shipping costs, expedite distribution of proxy materials to you, and reduce our impact on the environment. Stockholders who receive the Notice but would like to receive a printed copy of the proxy materials in the mail should follow the instructions in the Notice for requesting such materials.


	Q:
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Q:		I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?
A:	A:		We have adopted a procedure called ~~"householding,"~~“householding,” which the SEC has approved. Under this procedure, we may deliver a single copy of the Notice and, if applicable, this proxy statement and the ~~Company's~~Company’s Annual Report to multiple stockholders who share the same address unless we received contrary instructions from one or more of the stockholders. This procedure reduces our printing and mailing costs and also reduces our impact on the environment. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, a separate copy of the Notice or this proxy statement and the ~~Company's~~Company’s Annual Report, as requested, will be promptly delivered to any stockholder at a shared address to which we delivered a single copy of any of these documents. If you prefer to receive separate copies of the Notice, the proxy statement or Annual Report, contact Broadridge Financial Solutions, Inc. by calling 1-866-540-7095 or in writing at 51 Mercedes Way, Edgewood, New York 11717, Attention: Householding Department.
		If you are a stockholder of record and are receiving more than one copy of the proxy materials at a single address and would like to participate in householding, please notify us by contacting Broadridge Financial Solutions, Inc. using the mailing address and phone number above. Stockholders who hold shares in ~~"street name"~~“street name” may contact their broker, bank or other nominee to request information about householding.
Q:	Q:		How can I obtain a copy of ~~KAR Auction Services'~~KAR’s Annual Report on Form 10-K?
A:	A:		Copies of the ~~Company's~~Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018,~~2021, as filed with the SEC, are available to stockholders free of charge on our website at~~www.karauctionservices.com~~www.karglobal.com under the ~~"Investor Relations"~~“Investor Relations” tab, or by writing to KAR Auction Services, Inc., Investor Relations, ~~13085 Hamilton Crossing Boulevard,~~11299 North Illinois Street, Carmel, Indiana 46032.
Q:	Q:		Where can I find the voting results of the ~~2019~~2022 annual meeting?
A:	A:		KAR ~~Auction Services~~ will announce preliminary voting results at the ~~2019~~2022 annual meeting and publish preliminary, or final results if available, in a Current Report on Form 8-K within four business days of the ~~2019~~2022 annual meeting.
Q:	Q:		How can I attend the ~~2019~~2022 annual meeting?
A:	A:		The ~~2019~~2022 annual meeting will be a completely virtual meeting of stockholders, which will be conducted through a live audio webcast. There will be no physical meeting location. You are entitled to participate in the annual meeting only if you were a Company stockholder as of the close of business on April ~~11, 2019~~8, 2022 or if you hold a valid proxy for the annual meeting.
		You will be able to attend the ~~2019~~2022 annual meeting online and submit your questions during the meeting by visitingwww.virtualshareholdermeeting.com/~~KAR2019~~KAR2022.. You also will be able to vote your shares online during the annual meeting.
		To participate in the ~~2019~~2022 annual meeting, you will need the 16-digit control number included on your Notice, on your proxy card, or on the instructions that accompanied your proxy materials. Instructions on

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			how to attend and participate in our online meeting, including how to demonstrate proof of stock ownership, are posted on the meeting website.
		The meeting will begin promptly at 9:00 a.m., Eastern Daylight Time. We encourage you to access the meeting prior to the start time. Online access to the meeting will open at 8:45 a.m., Eastern Daylight Time, and you should allow ample time to log in to the meeting and test your ~~device's~~device’s audio capabilities prior to the start of the meeting.
		The webcast will be available for replay until midnight on June ~~3, 2020.~~1, 2023.
Q:	Q:	~~Why is the 2019 annual meeting virtual?~~
A:		As in 2018, we are excited to host a virtual annual meeting to provide ease of access, real-time communication and cost savings for our stockholders and the Company. Hosting a virtual meeting facilitates stockholder attendance and participation by enabling stockholders to participate from around the world. In addition, hosting a virtual meeting provides improved communication and cost savings for our stockholders and the Company.

Q:		What if I have technical difficulties or trouble accessing the meeting?
A:	A:		If you encounter any ~~technical~~ difficulties ~~or trouble~~ accessing the virtual meeting ~~please call 1-800-586-1548 (US) or 1-303-562-9288 (International). Technical support will be available~~ during the check-in or meeting time, ~~and~~please call the technical support number that will ~~remain available throughout~~be posted on the ~~meeting.~~virtual meeting log-in page at www.virtualshareholdermeeting.com/KAR2022.



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*** Exercise Your Right to Vote *** Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on June 4, 2019. KAR AUCTION SERVICES, ~~INC. XXXX XXXX XXXX XXXX (located on the following page). KAR AUCTION SERVICES, INC. 13085 HAMILTON CROSSING BLVD.~~INC.11299 NORTH ILLINOIS STREET CARMEL, IN 46032 You are receiving this communication because you hold shares in the company named above. This is not a ballot. You cannot use this notice to vote these shares. This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. You may view the proxy materials online at www.proxyvote.com or easily request a paper copy (see reverse side). We encourage you to access and review all of the important information contained in the proxy materials before voting. proxy materials and voting instructions. E77278-P21192 See the reverse side of this notice to obtain Meeting Information Meeting Type: Annual Meeting For holders as of: April 11, 2019 Date: June 4, 2019 Time: 9:00 AM EDT Location: Meeting live via the Internet-please visit www.virtualshareholdermeeting.com/KAR2019. The company will be hosting the meeting live via the Internet this year. To attend the meeting via the Internet please visit www.virtualshareholdermeeting.com/KAR2019 and be sure to have the information that is printed in the box marked by the arrow

Before You Vote How to Access the Proxy Materials Have the information that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX (located on the by the arrow XXXX XXXX XXXX XXXX (located on the following page) in the subject line. How To Vote Please Choose One of the Following Voting Methods XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. the arrow XXXX XXXX XXXX XXXX (located on the following page) available and follow the instructions. E77279-P21192 Vote By Internet: Before The Meeting: Go to www.proxyvote.com. Have the information that is printed in the box marked by the arrow During The Meeting: Go to www.virtualshareholdermeeting.com/KAR2019. Have the information that is printed in the box marked by Vote By Mail: You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. Proxy Materials Available to VIEW or RECEIVE: NOTICE AND PROXY STATEMENTFORM 10-K How to View Online: following page) and visit: www.proxyvote.com. How to Request and Receive a PAPER or E-MAIL Copy: If you want to receive a paper or e-mail copy of these documents, you must request one. There is NO charge for requesting a copy. Please choose one of the following methods to make your request: 1)46032VOTE BY INTERNET:www.proxyvote.com 2) BY TELEPHONE:1-800-579-1639 3) BY E-MAIL*:sendmaterial@proxyvote.com * If requesting materials by e-mail, please send a blank e-mail with the information that is printed in the box marked Requests, instructions and other inquiries sent to this e-mail address will NOT be forwarded to your investment advisor. Please make the request as instructed above on or before May 21, 2019 to facilitate timely delivery.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES AND "FOR" PROPOSALS 2 AND 3. 1. Election of Directors Nominees: 2. To approve, on an advisory basis, executive compensation. 1a. Donna R. Ecton 1b. James P. Hallett 3. To ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for 2019. 1c. Mark E. Hill NOTE: Such other business as may properly come before the meeting or any adjournment thereof. 1d. J. Mark Howell 1e. Stefan Jacoby 1f. Lynn Jolliffe 1g. Michael T. Kestner 1h. John P. Larson 1i. Stephen E. Smith E77280-P21192 Voting Items

~~E77281-P21192~~

~~VOTE BY INTERNET Before~~INTERNETBefore The Meeting - Go to www.proxyvote.com ~~Use~~or scan the QR Barcode aboveUse the Internet to transmit your voting instructions and for electronic delivery of ~~information up until~~information.Vote by 11:59 ~~p.m. EDT the day before the cut-off date or meeting date.~~P.M. ET on June 1, 2022. Have your proxy card in hand when you access ~~the web~~theweb site and follow the instructions to obtain your records and to create an electronic ~~voting instruction form. KAR AUCTION SERVICES, INC. 13085 HAMILTON CROSSING BLVD. CARMEL, IN 46032 During~~votinginstruction form.During The Meeting - Go to www.virtualshareholdermeeting.com/~~KAR2019 You~~KAR2022You may attend the meeting via the Internet and vote during the meeting. Have the ~~information that~~informationthat is printed in the box marked by the arrow available and follow the ~~instructions. VOTE~~instructions.VOTE BY PHONE - ~~1-800-690-6903 Use~~1-800-690-6903Use any touch-tone telephone to transmit your voting ~~instructions up until 11:~~instructions. Vote by11:59 ~~p.m. EDT the day before the cut-off date or meeting date.~~P.M. ET on June 1, 2022. Have your proxy card in hand when you call and then ~~follow the instructions. VOTE~~followthe instructions.VOTE BY ~~MAIL Mark,~~MAILMark, sign and date your proxy card and return it in the postage-paid envelope we ~~have provided~~haveprovided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood,NY 11717. TOSignature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) DateTO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: ~~E77267-P21192~~ KEEP THIS PORTION FOR YOUR ~~RECORDS DETACH AND RETURN THIS PORTION ONLY THIS~~RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. ~~KAR AUCTION SERVICES, INC. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES~~DETACH AND ~~"FOR" PROPOSALS 2 AND 3. 1. Election of Directors Nominees: For~~RETURN THIS PORTION ONLYD82943-P71481For Against ~~Abstain~~AbstainFor Against AbstainFor Against AbstainFor Against Abstain! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1a. Donna R. Ecton 1b. James P. Hallett For Against Abstain ! ! ! ! ! ! 1c. Mark E. Hill 2. To approve, on an advisory basis, executive compensation. 1d. J. Mark Howell 3. To ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for 2019. 1e. Stefan Jacoby 1f. Lynn Jolliffe 1g. Michael T. Kestner 1h. John P. Larson 1i. Stephen E. Smith For address changes and/or comments, please check this box and write them on the back where indicated. Please!Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. ~~Joint owners~~Jointowners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized ~~officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date~~

officer.KAR AUCTION SERVICES, INC.1. Election of the director nominee designated by the ApaxInvestor.Nominee:1a. Roy MackenzieThe Board of Directors recommends you vote FOR thefollowing:2. Election of the other director nominees.Nominees:2a. Carmel Galvin2b. James P. Hallett2c. Mark E. Hill2d. J. Mark Howell2e. Stefan Jacoby2f. Peter Kelly2g. Michael T. Kestner2i. Mary Ellen Smith2h. Sanjeev Mehra3. To approve, on an advisory basis, executive compensation.The Board of Directors recommends you vote FOR thefollowing proposals 3 and 4:4. To ratify the appointment of KPMG LLP as the Company'sindependent registered public accounting firm for 2022.

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ANNUAL MEETING OF STOCKHOLDERS ~~OF KAR~~OFKAR AUCTION SERVICES, ~~INC. JUNE 4, 2019~~INC.JUNE 2, 2022 Important Notice Regarding Availability of Proxy Materials for theAnnual Meeting:The Notice and Proxy Statement and Form 10-K are available atwww.proxyvote.comPlease sign, date and mailYour proxy card in the envelope provided as soonas possible Important Notice Regarding Availability of Proxy Materials for the Annual Meeting: The ~~Notice and Proxy Statement and Form 10-K are~~Combined Document is available at www.proxyvote.com ~~Please sign, date and mail Your proxy card in the envelope provided as soon as possible E77268-P21192~~D82944-P71481 PROXY KAR AUCTION SERVICES, INC. ANNUAL MEETING OF STOCKHOLDERS - JUNE ~~4, 2019~~2, 2022 PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints Eric M. Loughmiller and ~~Rebecca C. Polak,~~Charles S. Coleman, and each of them, as true and lawful agents and proxies with full power of substitution in each, to attend and represent the undersigned on all matters to come before the Annual Meeting of Stockholders and to vote as designated on the reverse side, all the shares of ~~common stock~~Series A Convertible Preferred Stock of KAR Auction Services, Inc., held of record by the undersigned on April ~~11, 2019,~~8, 2022, during or at any adjournment or postponement of the Annual Meeting of Stockholders to be held at 9:00 a.m., EDT, via the ~~Inter net~~Internet at www.virtualshareholdermeeting.com/~~KAR2019.~~KAR2022. I hereby acknowledge receipt of the Notice of Annual Meeting of Stockholders and the accompanying Proxy Statement, the terms of which are incorporated by reference, and revoke any proxy previously given by me with respect to such meeting. This proxy will be voted as directed, or if no direction is indicated, the proxy holders will vote the shares represented by this proxy "FOR" ~~each of~~ the nominees listed in ~~Proposal~~Proposals 1 and 2, "FOR" Proposals 23 and 3,4, and in the discretion of the proxy holders on any other matter that may properly come before the meeting. ~~(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)~~ (Continued and to be signed on reverse side) ~~Address Changes/Comments:~~

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KAR AUCTION SERVICES, INC.11299 NORTH ILLINOIS STREET CARMEL, IN 46032VOTE BY INTERNETBefore The Meeting - Go to www.proxyvote.com or scan the QR Barcode aboveUse the Internet to transmit your voting instructions and for electronic delivery of information.Vote by 11:59 P.M. ET on June 1, 2022. Have your proxy card in hand when you access theweb site and follow the instructions to obtain your records and to create an electronic votinginstruction form.During The Meeting - Go to www.virtualshareholdermeeting.com/KAR2022You may attend the meeting via the Internet and vote during the meeting. Have the informationthat is printed in the box marked by the arrow available and follow the instructions.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions. Vote by11:59 P.M. ET on June 1, 2022. Have your proxy card in hand when you call and then followthe instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelope we haveprovided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood,NY 11717. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) DateTO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLYD82945-P71481For Against AbstainFor Against Abstain! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Jointowners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.KAR AUCTION SERVICES, INC.3. To approve, on an advisory basis, executive compensation.The Board of Directors recommends you vote FOR thefollowing proposals 3 and 4:4. To ratify the appointment of KPMG LLP as the Company'sindependent registered public accounting firm for 2022.2. Election of the other director nominees.Nominees:The Board of Directors recommends you vote FOR thefollowing:2a. Carmel Galvin2b. James P. Hallett2c. Mark E. Hill2d. J. Mark Howell2e. Stefan Jacoby2f. Peter Kelly2g. Michael T. Kestner2h. Sanjeev Mehra2i. Mary Ellen Smith! ! !! ! !

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ANNUAL MEETING OF STOCKHOLDERS OFKAR AUCTION SERVICES, INC.JUNE 2, 2022 Important Notice Regarding Availability of Proxy Materials for theAnnual Meeting:The Notice and Proxy Statement and Form 10-K are available atwww.proxyvote.comPlease sign, date and mailYour proxy card in the envelope provided as soonas possible D82946-P71481Important Notice Regarding Availability of Proxy Materials for the Annual Meeting: The Combined Document is available at www.proxyvote.com D82946-P71481PROXYKAR AUCTION SERVICES, INC.ANNUAL MEETING OF STOCKHOLDERS - JUNE 2, 2022PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORSThe undersigned hereby appoints Eric M. Loughmiller and Charles S. Coleman, and each of them, as true and lawful agents and proxies with full power of substitution in each, to attend and represent the undersigned on all matters to come before the Annual Meeting of Stockholders and to vote as designated on the reverse side, all the shares of common stock ofKAR Auction Services, Inc., held of record by the undersigned on April 8, 2022, during or at any adjournment or postponement of the Annual Meeting of Stockholders to be held at 9:00 a.m., EDT, via the Internet atwww.virtualshareholdermeeting.com/KAR2022. I hereby acknowledge receipt of the Notice of Annual Meeting of Stockholders and the accompanying Proxy Statement, the terms of which are incorporated by reference, and revoke any proxy previously given by me with respect to such meeting.This proxy will be voted as directed, or if no direction is indicated, the proxy holders will vote the shares represented by this proxy "FOR" each of the nominees listed in Proposal 2, "FOR" Proposals 3 and 4,and in the discretion of the proxy holders on any other matter that may properly come before the meeting.(Continued and to be signed on reverse side)


~~Filed by the Registrant~~ý
~~Filed by a Party other than the Registrant~~o
~~Check the appropriate box:~~
o		~~Preliminary Proxy Statement~~
o		~~Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))~~
ý		~~Definitive Proxy Statement~~
o		~~Definitive Additional Materials~~
o		~~Soliciting Material under §240.14a-12~~


KAR AUCTION SERVICES, INC.
~~(Name of Registrant as Specified In Its Charter)~~

~~(Name of Person(s) Filing Proxy Statement, if other than the Registrant)~~
~~Payment of Filing Fee (Check the appropriate box):~~
ý	~~No fee required.~~
o	~~Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.~~
	~~(1)~~	~~Title of each class of securities to which transaction applies:~~
	~~(2)~~	~~Aggregate number of securities to which transaction applies:~~
	~~(3)~~	~~Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):~~
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o	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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	~~(4)~~	~~Date Filed:~~

Proposal		Our Board's Recommendation	Page

1.	Election of each of the nine director nominees.	FOR each director nominee	6
2.	Approval, on an advisory basis, of executive compensation.	FOR	24

3.	Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2019.	FOR	57

Name	Age	Director Since	Independent	Primary Occupation	Committee Membership**

Donna R. Ecton	72	2013	Yes	Chairman and Chief Executive Officer of EEI Inc.	CC (Chair), AC
James P. Hallett	66	2007	No	Chairman of the Board and Chief Executive Officer of KAR Auction Services, Inc.	—
Mark E. Hill	63	2014	Yes	Managing Partner of Collina Ventures, LLC and Chairman and Chief Executive Officer of Lumavate LLC	NCGC (Chair), RC
J. Mark Howell	54	2014	Yes	President and Chief Executive Officer of Conexus Indiana	RC (Chair), AC
Stefan Jacoby	61	—	Yes	Automotive Industry Consultant	—
Lynn Jolliffe	67	2014	Yes	Human Capital and Talent Management Consultant	CC, NCGC
Michael T. Kestner	65	2013	Yes	Building Products and Automotive Industry Consultant	AC (Chair), RC
John P. Larson*	56	2014	Yes	Chief Executive Officer of Bestop, Inc.	CC, RC
Stephen E. Smith	70	2013	Yes	Automotive Industry Consultant	AC, NCGC

Name	Fees Earned or Paid in Cash(1)	Stock Awards(2)	Total

Todd F. Bourell	$85,000	$115,025	$200,025
Donna R. Ecton	$105,000	$115,025	$220,025
Mark E. Hill	$95,000	$115,025	$210,025
J. Mark Howell	$95,000	$115,025	$210,025
Lynn Jolliffe	$85,000	$115,025	$200,025
Michael T. Kestner	$105,000	$115,025	$220,025
John P. Larson	$115,000	$115,025	$230,025
Stephen E. Smith	$85,000	$115,025	$200,025

Name	Unvested Shares and Dividend Equivalents(1)	Deferred Phantom Shares and Dividend Equivalents(2)

Todd F. Bourell	1,082	9,837
Donna R. Ecton	1,082	15,369
Mark E. Hill	1,082	13,446
J. Mark Howell	1,082	11,249
Lynn Jolliffe	1,070	6,498
Michael T. Kestner	1,082	12,603
John P. Larson	1,082	9,736
Stephen E. Smith	1,070	8,421

	Shares Beneficially Owned

Name of Beneficial Owner	Number of Shares(1)	Percent of Class(2)
5% BENEFICIAL OWNERS
The Vanguard Group(3)	13,295,682	9.98%
T. Rowe Price Associates, Inc.(4)	8,391,117	6.30%
BlackRock, Inc.(5)	7,337,570	5.51%
NAMED EXECUTIVE OFFICERS, DIRECTORS AND DIRECTOR NOMINEES
Todd F. Bourell	11,074	*
Donna R. Ecton	16,684	*
Donald S. Gottwald	38,604	*
James P. Hallett(6)	517,837	*
John C. Hammer	1,830
Mark E. Hill(7)	45,234	*
J. Mark Howell	12,506	*
Stefan Jacoby	—	—
Lynn Jolliffe	14,280	*
Michael T. Kestner	19,802	*
John P. Larson	10,971	*
Eric M. Loughmiller(6)	274,046	*
Rebecca C. Polak(6)	92,364	*
Stephen E. Smith	16,230	*
Executive officers, directors and director nominees as a group (20 persons)(8)	1,472,050	1.10%



Fiscal Year	2013 YE	2014	2015	2016	2017	2018

CEO Pay ($000)		$4,808	$4,824	$5,078	$5,812	$6,138

Indexed TSR	100	121	133	158	193	187

Name	Base Salary	Increase %	Effective Date

Jim Hallett	$975,000	8%	January 1, 2018
Eric Loughmiller	$525,000	5%	January 1, 2018
	$550,000	5%	July 29, 2018
John Hammer	$500,000	N/A	February 19, 2018
Don Gottwald	$583,495	0%	N/A
Becca Polak	$515,000	8%	January 1, 2018

		Bonus Opportunity			Bonus Goal Weighting % 2018 Adjusted EBITDA

Name	Base Salary	Threshold % of Base Salary	Target % of Base Salary	Superior % of Base Salary	KAR Auction Services	ADESA
Jim Hallett	$975,000	62.5	125	187.5	100
Eric Loughmiller(1)	$535,417	42.5	85	127.5	100
John Hammer(2)	$500,000	50	100	150	50	50
Don Gottwald	$583,495	50	100	150	100
Becca Polak	$515,000	37.5	75	112.5	100

	Threshold	Target	Superior	Achieved Results(1)	Percentage of Target Award Earned (Adjusted EBITDA)

KAR Auction Services	$841.75	$910.00	$955.50	$900.22	92.83%
ADESA	$454.00	$478.53	$526.39	$448.76	0.00%

Name	Target Annual Incentive Award	Percentage of Target Award Earned (Adjusted EBITDA)	MBO Modifier	2018 Payout

Jim Hallett	$1,218,750	92.83%	107.75%	$1,219,046
Eric Loughmiller	$458,854(1)	92.83%	108.20%	$460,882
John Hammer	$416,667(2)	46.42%(3)	108.75%	$210,318
Don Gottwald	$583,495	92.83%	108.80%	$589,324
Becca Polak	$386,250	92.83%	105.00%	$376,484

Name	Target PRSUs (Cumulative Operating Adjusted Net Income Per Share Goal)	Value of Target Shares at Grant	RSUs	Value of RSUs at Grant

Jim Hallett	54,057	$2,925,024	18,019	$975,008
Eric Loughmiller	12,735	$689,091	4,245	$229,697
John Hammer(1)	15,594	$843,791	5,199	$281,318
Don Gottwald	14,154	$765,873	4,718	$255,291
Becca Polak	12,492	$675,942	4,164	$225,314

	Name			PRSUs			Value of PRSUs at Grant
	Justin Davis			54,855			$1,000,007

Name	Number of PRSUs Vesting (including dividend equivalents)	2016 PRSU Payout(1)

Jim Hallett	83,528	$4,497,983
Eric Loughmiller	36,004	$1,938,815
John Hammer	N/A	N/A
Don Gottwald	20,396	$1,098,325
Becca Polak	12,673	$682,441

	Option Awards						Stock Awards

Name (a)	Number of Securities Underlying Unexercised Options Exercisable (#) (b)		Option Exercise Price ($) (e)		Option Expiration Date (f)		Number of Shares or Units of Stock That Have Not Vested (#)(g)			Market Value of Shares or Units of Stock That Have Not Vested ($)(h)			Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j)
Jim Hallett		194,404		30.89		02/27/2024

								7,065(1	)		363,923(1	)		83,528(2	)		3,985,956(2	)

								12,634(3	)		634,142(3	)		125,104(4	)		5,969,963(4	)

								17,298(5	)		844,089(5	)		55,478(6	)		2,647,410(6	)
Eric Loughmiller		97,204		30.89		02/27/2024

								3,144(1	)		161,950(1	)		36,004(2	)		1,718,111(2	)

								3,199(3	)		160,568(3	)		30,407(4	)		1,451,022(4	)

								4,245(5	)		207,142(5	)		13,069(6	)		623,653(6	)
John Hammer								5,199(5	)		253,695(5	)		16,004(6	)		763,711(6	)
Don Gottwald								1,781(1	)		91,740(1	)		20,396(2	)		973,297(2	)

								3,730(3	)		187,221(3	)		35,456(4	)		1,691,960(4	)

								4,718(5	)		230,224(5	)		14,526(6	)		693,181(6	)
Becca Polak		34,996		30.89		2/27/2024

								1,107(1	)		57,022(1	)		12,673(2	)		604,756(2	)

								3,039(3	)		152,537(3	)		28,886(4	)		1,378,440(4	)

								4,164(5	)		203,190(5	)		12,820(6	)		611,770(6	)

	Option Awards				Stock Awards

Name (a)	Number of Shares Acquired on Exercise (#) (b)		Value Realized on Exercise ($) (c)		Number of Shares Acquired on Vesting (#) (d)		Value Realized on Vesting ($) (e)
Jim Hallett		150,000		7,296,799		104,257 (1)		5,370,077 (2)
Eric Loughmiller		—		—		46,729 (1)		2,405,207 (2)
John Hammer		—		—		—		—
Don Gottwald		60,000		2,860,369		26,738 (1)		1,377,503 (2)
Becca Polak		176,720		8,231,664		16,063 (1)		828,199 (2)

Named Executive Officer and Triggering Event		Cash Severance	Non- Equity Incentive Pay(1)	Stock Options (2)	PRSUs (3)	RSUs (4)	Excise Tax Gross- Up(5)	Life Insurance (6)	Total

Jim Hallett

•	Death	—(9)	$1,219,046	—	$9,618,430	$1,842,154	—	$800,000	$13,479,630
•	Disability(7)	—(9)	$1,219,046	—	$9,618,430	$1,842,154	—	—	$12,679,630
•	Retirement(8)	—	$1,219,046	—	$8,735,946	$1,455,220	—	—	$11,410,212
•	Voluntary / for Cause	—	—	—	—	—	—	—	—
•	Termination w/o Cause or for Good Reason	$4,387,500(10)	$1,219,046	—	$6,858,469	—	—	—	$12,465,015
•	CIC (single trigger)	—	$1,219,046	—	$3,403,926	$363,923	—	—	$4,986,895
•	Termination after CIC (double trigger)	$4,387,500(10)	$1,219,046	—	$9,036,359	$1,842,154	—	—	$16,485,059

Eric Loughmiller

•	Death	$16,727(9)	$460,882	—	$3,067,341	$529,660	—	$800,000	$4,874,610
•	Disability(7)	$16,727(9)	$460,882	—	$3,067,341	$529,660	—	—	$4,074,610
•	Retirement(8)	—	—	—	—	—	—	—	—
•	Voluntary / for Cause	—	—	—	—	—	—	—	—
•	Termination w/o Cause or for Good Reason	$1,116,727(10)	$460,882	—	$2,409,699	—	—	—	$3,987,308
•	CIC (single trigger)	—	$460,882	—	$1,467,218	$161,950	—	—	$2,090,050
•	Termination after CIC (double trigger)	$1,116,727(10)	$460,882	—	$2,816,447	$529,660	—	—	$4,923,716

John Hammer

•	Death	$26,971(9)	$210,318	—	$763,719	$253,695	—	$800,000	$2,054,703
•	Disability(7)	$26,971(9)	$210,318	—	$763,719	$253,695	—	—	$1,254,703
•	Retirement(8)	—	—	—	—	—	—	—	—
•	Voluntary / for Cause	—	—	—	—	—	—	—	—
•	Termination w/o Cause or for Good Reason	$1,026,971(10)	$210,318	—	$254,573	—	—	—	$1,491,862
•	CIC (single trigger)	—	$210,318	—	—	—	—	—	$210,318
•	Termination after CIC (double trigger)	$1,026,971(10)	$210,318	—	$763,719	$253,695	—	—	$2,254,703

Don Gottwald

•	Death	$23,844(9)	$589,324	—	$2,512,506	$509,185	—	$800,000	$4,434,859
•	Disability(7)	$23,844(9)	$589,324	—	$2,512,506	$509,185	—	—	$3,634,859
•	Retirement(8)	—	—	—	—	—	—	—	—
•	Voluntary / for Cause	—	—	—	—	—	—	—	—
•	Termination w/o Cause or for Good Reason	$1,190,834(10)	$589,324	—	$1,768,379	—	—	—	$3,548,537
•	CIC (single trigger)	—	$589,324	—	$831,188	$91,740	—	—	$1,512,252
•	Termination after CIC (double trigger)	$1,190,834(10)	$589,324	—	$2,370,373	$509,185	—	—	$4,659,716

Becca Polak

•	Death	$26,805(9)	$376,484	—	$1,905,821	$412,749	—	$800,000	$3,521,859
•	Disability(7)	$26,805(9)	$376,484	—	$1,905,821	$412,749	—	—	$2,721,859
•	Retirement(8)	—	—	—	—	—	—	—	—
•	Voluntary / for Cause	—	—	—	—	—	—	—	—
•	Termination w/o Cause or for Good Reason	$928,055(10)	$376,484	—	$1,268,209	—	—	—	$2,572,748
•	CIC (single trigger)	—	$376,484	—	$516,466	$57,022	—	—	$949,972
•	Termination after CIC (double trigger)	$928,055(10)	$376,484	—	$1,817,505	$412,749	—	—	$3,534,793

Fee Category	2018		2017

Audit Fees(1)	$	2,496,449	$	2,880,000
Audit-Related Fees(2)		3,098,162		416,116
Tax Fees(3)		98,526		148,239
All Other Fees(4)		1,905		1,780

Total Fees	$	5,695,042	$	3,446,135

~~Gross profit increased~~
~~approximately 11% to~~
~~$1.6 billion.~~

Enhanced digital offerings with the
acquisition of CARWAVE
expanding dealer-to-dealer footprint in California
and other western states

~~Through share buybacks and dividends, in 2018 we returned approximately~~~~$338 million~~ to
~~stockholders and invested approximately~~~~$243 million~~ ~~in our business through capital~~
~~expenditures and strategic acquisitions.~~