KAR AUCTION SERVICES, INC. Notice of Annual Meeting and Proxy Statement

Annual Meeting of Stockholders Proxy Statement June 4, 2018

Proxy Statement 13APR201815452321 . 28MAR201223475050 Thank you again for your continued support of KAR, our Board of Directors, our employees and our future. Thank you again for your continued Sincerely, enhancing our technology platform. We are proud that through share buybacks and dividends, in 2017 we enhancing our technology platform. to stockholders and invested approximately $226 million in our business returned approximately $325 million acquisitions. through capital expenditures and strategic We have a comprehensive capital allocation plan for increasing stockholder value. We are focused on return of plan for increasing stockholder value. We are focused on return We have a comprehensive capital allocation investments in the business, including the acquisition of auctions and capital to our stockholders and accretive America and internationally, expanding our data analytic capabilities, and complementary capabilities in North income and sold more than 5.5 million vehicles. As an established market leader with an experienced income and sold more than 5.5 million well-positioned for continued growth with solid operating performance management team, we believe we are and disciplined capital investments. you are strongly encouraged to vote your shares in advance through one of the methods described in the you are strongly encouraged to vote proxy statement. a very successful 2017. We grew revenue, adjusted EBITDA and net I am pleased to report that KAR had www.virtualshareholdermeeting.com/kar2018 important. The matters to be acted upon are described in the notice of As a KAR stockholder, your vote is the proxy statement. Even if you are planning to attend the virtual meeting, annual meeting of stockholders and meeting will be hosted virtually. We believe that hosting a virtual meeting provides expanded access, improved a virtual meeting provides expanded virtually. We believe that hosting meeting will be hosted to attend the 2018 and the Company. You will be able cost savings for our stockholders communication and meeting by visiting and submit your questions during the vote your shares electronically annual meeting online, Dear Fellow Stockholder: or the of KAR Auction Services, Inc. (‘‘KAR’’ continued investment in and support Thank you for your This year, the 2018 annual meeting of stockholders. are cordially invited to attend KAR’s ‘‘Company’’). You April 24, 2018 2018. Chairman of the Board and Chief Executive Officer to stockholders on or about April 24, This proxy statement is dated April 24, 2018 and is first being distributed James P. Hallett 13APR201815452321

Proxy Statement 28MAR201223480188 On Behalf of the Board of Directors, Chief Legal Officer and Secretary 13APR201815452321 Carmel, Indiana 46032 To elect nine directors to the Board of Directors. compensation. To approve, on an advisory basis, executive as our independent registered public To ratify the appointment of KPMG LLP 13085 Hamilton Crossing Boulevard 13085 Hamilton Crossing You are entitled to vote at the 2018 annual meeting and at any adjournments or postponements You are entitled to vote at the 2018 annual at the close of business on April 11, 2018. thereof if you were a stockholder of record the 2018 annual meeting, please vote at your earliest Whether or not you plan to virtually attend in the Notice of Internet Availability of Proxy Materials or convenience by following the instructions For specific instructions on voting, please refer to the meeting in accordance with your instructions. instructions on your enclosed proxy card. need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, need the 16-digit control number included that accompanied your proxy materials. on your proxy card or on the instructions Proposal No. 1: Proposal No. 2: Proposal No. 3: accounting firm for 2018. properly come before the meeting or any adjournments or To transact any other business as may postponements thereof. NOTICE OF ANNUAL MEETING OF STOCKHOLDERS NOTICE OF Voting by Proxy be voted at the 2018 annual the proxy card you received in the mail so that your shares can Record Date Items of Business Admission You will To attend the 2018 annual meeting, visit www.virtualshareholdermeeting.com/kar2018. Place at www.virtualshareholdermeeting.com/kar2018 Online Time and Date 4, 2018 Eastern Daylight Time, on June 9:00 a.m., Carmel, Indiana April 24, 2018 Rebecca C. Polak 13APR201815452321 Proxy Statement 13APR201815452321 at stockholders ontheinternet,visit‘‘InvestorRelations’’pageofourwebsite,under‘‘ProxyMaterial’’link information containedintheproxymaterialsbeforevoting.Toviewstatementandannualreportto notice, arealsoavailabletoyouelectronicallyviatheinternet.Weencouragereviewallofimportant ended December31,2017,eachofwhichisbeingprovidedtostockholderspriororconcurrentlywiththis The proxystatementforthe2018annualmeetingandreporttostockholdersfiscalyear DIRECTOR COMPENSATION CORPORATE GOVERNANCE BOARD OFDIRECTORSSTRUCTUREAND ELECTION OFDIRECTORS:PROPOSALNO.1 PROXY STATEMENTSUMMARY EXECUTIVE OFFICERS COMPENSATION: PROPOSALNO.2 ADVISORY VOTETOAPPROVEEXECUTIVE COMMON STOCK BENEFICIAL OWNERSHIPOFTHECOMPANY’S www.karauctionservices.com COMPENSATION COMMITTEEINTERLOCKSAND CORPORATE GOVERNANCEDOCUMENTS BOARD OFDIRECTORS’RISKOVERSIGHT COMMITTEES OFTHEBOARDDIRECTORS ATTENDANCE BOARD OFDIRECTORSMEETINGSAND BOARD LEADERSHIP ROLE OFTHEBOARDDIRECTORS ELECTION TOTHEBOARDOFDIRECTORS INFORMATION REGARDINGTHENOMINEESFOR BOARD QUALIFICATIONSANDDIVERSITY NOMINATION PROCESS BOARD NOMINATIONSANDDIRECTOR DIRECTOR INDEPENDENCE EXECUTIVESUMMARY DIRECTORS ELECTEDANNUALLY EXECUTIVE COMPENSATION CORPORATE GOVERNANCEHIGHLIGHTS 2017 BUSINESSHIGHLIGHTS BOARD NOMINEES STOCKHOLDERS ITEMS TOBEVOTEDONATANNUALMEETINGOF ANNUAL MEETINGOFSTOCKHOLDERS PROPOSAL REPORTING COMPLIANCE SECTION 16(A)BENEFICIALOWNERSHIP AWARDS OUTSTANDING DIRECTORRESTRICTEDSTOCK DIRECTOR COMPENSATIONPAIDIN2017 GUIDELINES 19 . . DIRECTOR STOCKOWNERSHIPANDHOLDING . DIRECTORS DEFERREDCOMPENSATIONPLAN CASH ANDSTOCKRETAINERS EXECUTIVE SESSIONS BOARD STOCKHOLDER COMMUNICATIONSWITHTHE INSIDER PARTICIPATION Notice ofInternetAvailabilityProxyMaterialsfortheAnnualMeeting ...... 17 ...... 20 ...... 23 ...... 19 ...... 14 ...... 21 ...... 1 ...... 2 ...... 13 ...... 24 ...... 17 6 ...... 17 ...... 22 ...... 6 ...... 18 ...... 13 ...... 5 ...... 3 ...... 18 ...... 1 ...... 6 ...... 23 ...... 13 .... 1 ...... TABLE OFCONTENTS ...... 19 ...... 17 ...... 16 7 ...... 4 ...... 7 ...... 14 . 6 ... COMPENSATION DISCUSSIONANDANALYSIS MATERIALS ANDTHEANNUAL MEETING QUESTIONS ANDANSWERS ABOUTTHEPROXY SUBMISSION OFPROXYPROPOSALS REQUIREMENTS, INCLUDINGDEADLINES,FOR CERTAIN RELATEDPARTYRELATIONSHIPS PUBLIC ACCOUNTINGFIRM:PROPOSALNO.3 RATIFICATION OFINDEPENDENTREGISTERED CEO PAYRATIO CHANGE INCONTROL POTENTIAL PAYMENTSUPONTERMINATIONOR DURING FISCALYEAR2017 OPTION EXERCISESANDSTOCKVESTED YEAR-END 2017 OUTSTANDING EQUITYAWARDSATFISCAL GRANTS OFPLAN-BASEDAWARDSFOR2017 SUMMARY COMPENSATIONTABLEFOR2017 COMPENSATION STRUCTURE ANALYSIS OFRISKINTHECOMPANY’S COMPENSATION COMMITTEEREPORT MEETING RESULTS OFSAYONPAYVOTESAT2017ANNUAL INFORMATION COMPENSATION POLICIESANDOTHER PHILOSOPHY ANDOBJECTIVES ELEMENTS USEDTOACHIEVECOMPENSATION EXECUTIVE COMPENSATION AND THEEXECUTIVEOFFICERSINDETERMINING 29 THE ROLEOFCOMPENSATIONCOMMITTEE . . COMPENSATION PHILOSOPHYANDOBJECTIVES OVERVIEW BUSINESS OFSTOCKHOLDERS NOMINATION OFDIRECTORSANDOTHER RELATED PERSONS REVIEW ANDAPPROVALOFTRANSACTIONSWITH FIRM INDEPENDENT REGISTEREDPUBLICACCOUNTING AUDIT ANDPERMISSIBLENON-AUDITSERVICESOF POLICY ONAUDITCOMMITTEEPRE-APPROVALOF FEES PAIDTOKPMGLLP REPORT OFTHEAUDITCOMMITTEE PROPOSAL EXECUTIVE OFFICERS EMPLOYMENT AGREEMENTSWITHNAMED CHANGE INCONTROLTABLE POTENTIAL PAYMENTSUPONTERMINATIONOR PLAN ANNUAL CASHINCENTIVEAWARDS—OMNIBUS EQUITY-BASED AWARDS—OMNIBUSPLAN ...... 62 ...... 50 ...... 40 ...... 26 ...... 58 ...... 57 ...... 44 ...... 38 ...... 63 ...... 48 ...... 27 ...... 54 ...... 61 ...... 47 ...... 29 ...... 51 ...... 41 ...... 31 ...... 64 ...... 59 ...... 64 ...... 40 ...... 48 ...... 65 ....63 ...26 ...43 ...42 ..58 Proxy Statement 1 FOR FOR FOR Our Board’s each director nominee 1 ITEMS TO BE VOTED ON AT ITEMS TO BE VOTED ON to vote. Each share of common stock is entitled to one vote for each director of common stock is entitled to one to vote. Each share on at the 2018 annual of the other proposals to be voted nominee and for each Services had On the record date, KAR Auction meeting of stockholders. issued and outstanding. 134,956,732 shares of common stock KAR LLC American Stock Transfer & Trust Company, 9:00 a.m., Eastern Daylight Time, on June 4, 2018 9:00 a.m., Eastern Online at www.virtualshareholdermeeting.com/kar2018 April 11, 2018 are entitled as of the close of business on Stockholders of record ANNUAL MEETING OF STOCKHOLDERS ANNUAL MEETING OF STOCKHOLDERS ANNUAL MEETING PROXY STATEMENT SUMMARY STATEMENT PROXY Approve, on an advisory basis, executive compensationApprove, on an advisory basis, executive LLP as our independentRatification of the appointment of KPMG 2018 registered public accounting firm for 58 23 Election of each of the nine director nomineesElection of each of the nine director 6 3. 1. 2. Proposal Recommendation Page Registrar and Transfer Agent: NYSE Symbol: Record Date: Date and Time: Location: ended December 31, 2017. ended December contain all of the information that you should consider, and you should read the entire proxy statement before proxy statement should read the entire consider, and you that you should of the information contain all or ‘‘KAR ‘‘Company,’’ ‘‘KAR’’ Inc.’s (the KAR Auction Services, information regarding more complete voting. For for the year on Form 10-K Annual Report review the Company’s please 2017 performance, Auction Services’’) This summary highlights information contained elsewhere in this proxy statement. This summary does not This summary does proxy statement. elsewhere in this contained highlights information This summary 13APR201815452321 Proxy Statement 13APR201815452321 ** * LeadIndependentDirector Stephen E.Smith John P.Larson* Membership** Michael T.Kestner Lynn Jolliffe PrimaryOccupation J. MarkHowell Independent Since Mark E.Hill Age James P.Hallett Donna R.Ecton Todd F.Bourell Name AC =Audit Committee; CC =Compensation Committee; BOARD NOMINEES(PAGES7–12) 521 e CC,RC AC(Chair),RC CC,NCGC RC(Chair),AC AC,NCGC AutomotiveIndustryConsultant NCGC(Chair),RC Yes Yes 2013 Yes CC(Chair),AC 2014 69 Yes 55 CC,NCGC 2013 Yes 64 2014 66 — 2014 Yes ChiefExecutiveOfficerofKAR 53 2014 No 62 Yes 2007 65 Yes 2013 71 2015 48 ietrCommittee Director RC =Risk Committee; 2 Automotive IndustryConsultant Building Productsand Management Consultant Human CapitalandTalent Officer ofConexusIndiana President andChiefExecutive Lumavate LLC and ChiefExecutiveOfficerof Ventures, LLCandChairman Managing PartnerofCollina Auction Services,Inc. Chairman oftheBoardand Officer ofEEIInc. Chairman andChiefExecutive Capital, LLC Managing PartnerofWLJ Bestop, Inc. Chief ExecutiveOfficerof NCGC =Nominating andCorporateGovernanceCommittee 2 Proxy Statement 3 $153.9 $339.5 $473.3 $838.0 $362.0 13APR201817013311 13APR201815461426 Corporate AFC $747.9 $149.3 $288.9 $419.5 ($109.8) ($128.7) IAA $222.4 ADESA 2015 2016 2017 $649.8 $147.3 $265.1 $328.6 ($91.2) 2015 2016 2017 $214.6 $0 $900.0 $700.0 $500.0 $300.0 $100.0 $50 $400 $350 $300 $250 $200 $150 $100 Analysis of Financial Condition and Results of Operations— EBITDA and Adjusted EBITDA.’’ * 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, 2017 in Item 7, ‘‘Management’s Discussion and Through share buybacks and dividends, in 2017 Through share buybacks and dividends, to we returned approximately $325 million stockholders and invested approximately capital $226 million in our business through million. Adjusted EBITDA* rose 12% to $838.0 ($100.0) 3 $301.3 $1,937.5 $1,219.2 $3,458.0 $50.51 13APR201819122358 2017 BUSINESS HIGHLIGHTS BUSINESS 2017 13APR201814570418 AFC IAA $286.8 $3,150.1 $1,765.3 $1,098.0 $42.62 ADESA 2015 2016 2017 $268.4 $994.4 $2,690.6 $1,427.8 2015 2016 2017 $37.03 $0.0 $500.0 $0 $1,500.0 $1,000.0 $3,500.0 $3,000.0 $2,500.0 $2,000.0 $4,000.0 $10 $30 $20 $50 $40 $60 and Insurance Auto Auctions, Inc. (‘‘IAA’’) rose approximately 9% to 5.5 million units. Total vehicles sold by ADESA, Inc. (‘‘ADESA’’) $3.5 billion. Net revenue was up 10% to approximately and strategic acquisitions. expenditures Company’s common stock on the last trading Company’s common day of each year. December 30, 2016 to $50.51 at December 29,December 30, 2016 price shown below for each 2017. The closing price of a share of the year is the closing per diluted share). The closing stock price of KAR’s common stock KAR’s common stock price of The closing $42.62 at 19% from rose approximately million increased 63% from $222.4 Net income ($2.62 to $362.0 million ($1.60 per diluted share) sold, revenues, adjusted EBITDA and net income. Specific highlights for fiscal 2017 included: for fiscal 2017 Specific highlights and net income. adjusted EBITDA sold, revenues, For the year ended December 31, 2017, the Company again delivered solid growth in volume of total vehicles in volume of total solid growth Company again delivered 31, 2017, the ended December For the year 13APR201815452321 11APR201708502194 11APR201708502194 11APR201708502194 11APR201708502194 11APR201708502194 11APR201708502194 11APR201708502194 11APR201708502194 Proxy Statement 13APR201815452321 Governance’’. on ourwebsiteat practices. Thiscommitmentishighlightedbythepracticesdescribedbelowaswellinformationcontained We arecommittedtohighstandardsofethicalandbusinessconductstrongcorporategovernance through thereceiptofreports fromsuchcommittees). committee oftheBoard(inwhichcaseRiskCommittee maymaintainoversightoversuchrisks management, exceptfortheoversightofrisksthathave beenspecificallydelegatedtoanother exposures. TheRiskCommitteeprovidesoversightwith respecttoriskpracticesimplementedby of theCompany;and(ii)actions,activitiesinitiatives oftheCompanytomitigatesuchrisksand business, financial,technology,operationalandregulatory risksandothermaterialexposures and successionplan. an annualevaluationandreviewoftheCEOeach executiveofficer’sperformance,development or pledgingCompanystock. Board RiskOversight: Annual managementandCEOevaluationsuccession planningreview: Anti-Hedging andPledgingPolicies: guidelines aremet. Executive officersarerequiredtohold60%ofvestedshares,nettaxes,untilstockownership five timeshisannualbasesalary,andtheCEOcurrentlyholdsover25salary. guidelines thatareapplicabletoourexecutiveofficers.ThestockownershipguidelineforCEOis Robust EquityOwnershipRequirementsforExecutiveOfficers: Robust EquityRetentionRequirementsforNon-EmployeeDirectors: Robust EquityOwnershipRequirementsforNon-EmployeeDirectors: Annual BoardandCommitteeEvaluations: Board Diversity: Lead IndependentDirector: Executive Sessions: Director andCommitteeIndependence: Majority Voting: Annual Elections: director. stock grantedtonon-employeedirectorsmustbeheldforfouryearsafterthegrantwhileservingasa guideline forournon-employeedirectorsisfivetimestheirannualcashretainer. performance eachyear. directors andtheCompany’sCEOChairmanofBoard. sessions oftheindependentdirectorsandservesasprincipalliaisonbetween Board meeting. committees ofourBoardDirectors(the‘‘Board’’)arecomprisedentirelyindependentdirectors. policy fordirectorstotendertheirresignationshouldamajorityofthevotescastnotbeinfavor. CORPORATE GOVERNANCEHIGHLIGHTS(PAGES13–17) www.karauctionservices.com Wemaintainamajorityvotingstandardforuncontesteddirectorelectionswith MorethantwentypercentofourBoardiscomprisedwomen. Ourdirectorsareelectedannuallyforoneyearterms. Ourindependentdirectorsmeetinexecutivesessionateachregularlyscheduled TheRiskCommitteeassiststheBoardinitsoversight of:(i)theprincipal Wehavealeadindependentdirectorwhopresidesovertheexecutive Ourdirectorsandexecutiveofficersareprohibitedfromhedging onthe‘‘InvestorRelations’’pageunderlink‘‘Corporate Eightofourninedirectornomineesareindependent,andall TheBoardandeachcommitteeevaluatesits 4 Wehavestockownership Allsharesofourcommon Thestockownership OurBoardconducts 4 Proxy Statement 5 Our We do Stock option exercise Robust equity ownership requirements: Maximum payout caps: Maximum payout financial misconduct: Clawback policy for Moderate change in control benefits: Allow hedging or pledging of the Company’s Reprice stock options: Maintain a defined benefit pension plan: base salary and target bonus for the other executive officers. annual base guideline for our CEO is five times his 25 times salary, and the CEO currently holds over are his annual base salary. Executive officers net of required to hold 60% of vested shares, are met. taxes, until stock ownership guidelines prices are set equal to the grant date market price prepare an accounting restatement due to such prepare an accounting executive officer’s intentional misconduct. not maintain a defined benefit pension plan for our executive officers. ✔ ✘ ✘ ✘ ✔ ✔ ✔ 5 WHAT WE DO All of the provides for the recovery and clawback policy The WHAT WE DON’T DO We provide a or discounted without and cannot be repriced Dividend equivalents We prohibit hedging, pledging and short We have consistently The Compensation Our annual incentive Beginning with the 2017 equity EXECUTIVE COMPENSATION (PAGES 26–56) (PAGES COMPENSATION EXECUTIVE ‘‘Double-trigger’’ vesting provisions in equity ‘‘Double-trigger’’ vesting provisions Pay for performance: Independent Compensation Committee: Independent Compensation Independent compensation consultant: Stockholder alignment: Provide excessive perquisites: Allow dividends or dividend equivalents to be Allow dividends or dividend equivalents compensation of our CEO, as shown in the chartcompensation of our on page 28. and PRSUs. demonstrated close alignment between our totaldemonstrated close performance and thestockholder return (‘‘TSR’’) be maximum amounts that may Committee sets cash incentive compensation payable for annual paid on unvested PRSUs: securities: award agreements: attract and retain highly qualified executives. are accrued but not paid on PRSUs until (i) theare accrued but not paid on PRSUs until performance conditions are satisfied; and (ii) thePRSUs vest after the performance measurement period. limited number of perquisites that are designed to sales of Company stock by our directors and executive officers. stockholder approval. in connection with or following such change in in connection with or following such change control. based with 75% of our equity awards in the form ofbased with 75% of our equity awards performance restricted stock units (‘‘PRSUs’’). guidelines that are applicable have stock ownership or replaced grants, accelerated vesting of assumed of the equity awards upon a change in control Company is only permitted if an executive employment experiences a qualifying termination of our executive officers. The stock ownership to Compensation Committee retains its own to evaluateindependent compensation consultant programand review our executive compensation and practices.and our program is 100% performance-based equity incentive program is heavily performance- control severance benefits are two times base Change in times salary and target bonus for the CEO and one We members of our Compensation Committee aremembers of our Compensation NYSE rules.independent under cancellation of incentive compensation of an executive officer in the event we are required to ✘ ✘ ✔ ✔ ✔ ✔ Company performance. We believe that this strong pay-for-performance orientation has served us well in has served us orientation strong pay-for-performance believe that this performance. We Company see ‘‘Compensation officer compensation, our named executive regarding For more information recent years. such section. tables that follow the compensation and Analysis’’ and Discussion We maintain a compensation program structured to achieve a close connection between executive pay and executive close connection between to achieve a program structured a compensation We maintain ✔ 13APR201815452321 Proxy Statement 13APR201815452321 Governance Guidelines,Boardcandidatesalsoareselectedbaseduponvariouscriteriaincludingexperience, As detailedinboththeNominatingandCorporateGovernanceCommitteeCharter as itdeemsappropriate. Governance Committeemayalsoconsideradviceandrecommendationsfromothers,includingstockholders, Board membership.Whenformulatingitsmembershiprecommendations,theNominatingandCorporate Governance Committeeisresponsibleforidentifying,screeningandrecommendingcandidatestotheBoard for Board thatmayoccurbetweentheannualmeetingsofstockholders.TheNominatingandCorporate The Boardisresponsiblefornominatingmemberselectiontotheandfillingvacancieson CEO andChairmanoftheBoard,isnotanindependentdirector. J. MarkHowell,LynnJolliffe,MichaelT.Kestner,JohnP.LarsonandStephenE.Smith.JamesHallett,our the standardsof‘‘independence’’establishedbyNYSE:ToddF.Bourell,DonnaR.Ecton,MarkE.Hill, its evaluation,ourBoardhasaffirmativelydeterminedthatthefollowingdirectorsanddirectornomineesmeet broadly considerallrelevantfactsandcircumstancesinmakinganindependencedetermination.Basedupon relationship withus.Whilethefocusofinquiryisindependencefrommanagement,Boardrequired to a directorqualifiesasindependentiftheBoardaffirmativelydeterminesthathasnomaterial The Boardisresponsiblefordeterminingtheindependenceofourdirectors.UnderNYSElistingstandards, director nomineemustexceedthenumberofvotescast‘‘AGAINST’’suchnominee). in theelectionofdirectorsat2018annualmeetingtobeelected(i.e.,numbersharesvoted‘‘FOR’’a resignation orremoval.Eachdirectornomineemustreceivetheaffirmativevoteofamajorityvotescast stockholders anduntilsuchdirector’ssuccessorisdulyelectedqualified,orearlierdeath, do nothaveastaggeredorclassifiedboard.Eachdirector’stermwilllastuntilthe2019annualmeetingof annual meeting.TheCompany’sdirectorsareelectedeachyearbythestockholdersatWe Our Boardhasnominatedthenineindividualsnamedbelowtostandforelectionat2018 member oftheBoardforso longastheemploymentagreementisineffect. the Company’sCEOandChairman oftheBoard,providesthatMr.Hallettshallbe entitledtoserveasa An employmentagreement enteredintoonFebruary27,2012,betweentheCompany andJamesP.Hallett, ‘‘Requirements, IncludingDeadlines,forSubmissionof ProxyProposals’’sectiononpage64. the Board.Deadlinesforstockholdernominationsnext year’sannualmeetingareincludedinthe evaluates suchcandidatesinthesamemannerbywhich itevaluatesotherdirectorcandidatesconsideredby policy regardingconsiderationofdirectorcandidatesrecommended bystockholders,theBoardgenerally included insuchnotice.ThoughtheNominatingandCorporate GovernanceCommitteedoesnothaveaformal of personstoserveasdirectors,includingtherequirements oftimelynoticeandcertaininformationtobe forth inSection5oftheCompany’sSecondAmended andRestatedBy-Lawsfornominationsbystockholders recommended byanystockholder,providedthattherecommending stockholderfollowstheproceduresset In accordancewithitscharter,theBoardalsoconsiders candidatesforelectionasadirectoroftheCompany and theCompany’sannualmeetingsofstockholders. members areexpectedtopreparefor,attendandparticipateinallBoardapplicablecommitteemeetings and CorporateGovernanceCommitteeconsidersappropriateinthecontextofneedsBoard.Board light ofothercommitments,dedication,conflictsinterestandsuchrelevantfactorsthattheNominating skills, expertise,diversity,personalandprofessionalintegrity,character,businessjudgment,timeavailability in BOARD NOMINATIONSANDDIRECTORNOMINATIONPROCESS ELECTION OFDIRECTORS: DIRECTORS ELECTEDANNUALLY DIRECTOR INDEPENDENCE PROPOSAL NO.1 6 6 Proxy Statement 7 7 THE BOARD OF DIRECTORS THE BOARD BOARD QUALIFICATIONS AND DIVERSITY AND QUALIFICATIONS BOARD INFORMATION REGARDING THE NOMINEES FOR ELECTION TO FOR ELECTION REGARDING THE NOMINEES INFORMATION 2018 annual meeting. The ages of the nominees are as of the date of the 2018 annual meeting, June 4, 2018. 2018 annual meeting. The ages of the the nominees has consented to being named in this proxy statement and to serve as a director if elected. If a named in this proxy statement and to serve as a director if elected. If the nominees has consented to being director, your proxies will have the authority and discretion to vote for nominee is unavailable to serve as a the or the Board may reduce the number of directors to be elected at another nominee proposed by the Board The following information is furnished with respect to each nominee for election as a director. All of the The following information is furnished were elected by the stockholders at last year’s annual meeting. Each of nominees are currently directors and context of the needs of the Board. Although the Board does not have a formal diversity policy, the Nominating does not have a formal diversity policy, of the Board. Although the Board context of the needs in considering these factors, including diversity, Committee and Board review and Corporate Governance membership. candidates for Board a person to be considered as a candidate for director. However, Board candidates are selected based upon However, Board candidates are selected as a candidate for director. a person to be considered integrity, character, diversity, personal and professional experience, skills, expertise, various criteria including and such dedication, conflicts of interest time availability in light of other commitments, business judgment, appropriate in the Governance Committee considers that the Nominating and Corporate other relevant factors dimensions, including opinions, skills, perspectives, personal and professional experiences and other professional experiences personal and skills, perspectives, including opinions, dimensions, and The Nominating recommendations. element of its nomination is an important characteristics, differentiating be met for which must minimum qualifications any specific has not identified Governance Committee Corporate The Nominating and Corporate Governance Committee and the Board believe that diversity along multiple diversity along Board believe that and the Governance Committee and Corporate The Nominating 13APR201815452321 Proxy Statement 13APR201815452321 ✓ ✓ ✓ CareerHighlights ✓ BegancareerinbankingatChemicalBankandCitibankN.A. • Skills andQualifications GraduateofHarvardCollegeandtheUniversity ofPennsylvania • ServedasValueActCapital,LLC’srepresentative ontheboard • portfoliocompanies. Partner/AnalystatPeakInvestmentL.P.,aprivateinvestment • GlobalIndustryAnalystatWellingtonManagementCompany,a • Partner/AnalystatValueActCapital,LLC,aprivatelyheldhedge • ManagingPartnerofWLJCapital,LLC,apublicequities • Career Highlights odF orl DonnaR.Ecton Todd F.Bourell MA.NewYorkCity,runningtheUpperManhattanmiddlemarket (MBA). subsidiary oftheCompany. from October2003toMay2005,nowawholly-owned of directorsseveralpublicly-tradedcompanies,includingIAA firm, fromJuly1994to1998. September 2000toMay2001. worldwide privateinvestmentmanagementcompany,from fund, fromMay2001toDecember2014. investment firmhefoundedinJanuary2015. 13APR201814571927 Public companyboardexperience. board ofdirectors. (through ValueActCapital,LLC)andboardmemberonIAA’s Extensive knowledgeofIAA’sbusinessasaformerowner corporate governance. approach tocompanyperformance,capitalallocationand Background providesperspectiveoninstitutionalinvestors’ companies’ strategies,operationsandfinancialperformance. investment management,includingexperienceinevaluating Extensive experienceinfinance,mergersandacquisitions ic ue21 sinceDecember2013 CompensationCommittee(Chair)and CurrentBoardCommittees: IndependentDirector AuditCommittee Committee Nominating andCorporateGovernance Compensation Committeeand Current BoardCommittees: Age: since June2015 Independent Director 48 8 HeldseniorcorporatemanagementpositionsatNutri/ • ChiefExecutiveOfficerofanumbercompanies,including • Director(1994to1998)andChiefOperatingOfficer(1996 • ChairmanandChiefExecutiveOfficerofEEIInc.,a • ✓ ✓ ✓ ✓ ✓ Skills andQualifications Body CentralCorp.(2011to2014). Former DirectorandNon-ExecutiveChairmanoftheBoard Other PublicCompanyDirectorshipsinLastFiveYears: nitrogen fertilizerbusiness,sinceMarch2008. CVR GP,LLC,thegeneralpartnerofPartners,LP,a Other CurrentPublicCompanyDirectorships: GraduateofWellesleyCollege(BA)andthe Harvard Graduate • MemberoftheCouncilonForeignRelations inNewYorkCity. • ElectedtoandservedontheHarvardUniversity’s Boardof • Previouspubliccompanyboardofdirectorpositions have • Grimm, Inc. System, Inc.,CampbellSoupCompanyandNordemann North AmericaInc./AndesCandiesInc.(1991to1994). Business MailExpress,Inc.(1995to1996)andVanHouten 1998) ofPetsMart,Inc. acquisition, aswellturnaroundmanagementoftroubled operational assessmentsofcompaniesbeingconsideredfor provide privateequityfirmswithduediligenceandmarket management consultingfirmshefoundedinJuly1998to School ofBusinessAdministration(MBA). Overseers. Group Inc.andVencor, Mellon PSFS,H&RBlock,Inc.,TandyCorporation,Barnes included MellonBankCorporationandN.A., lending businessandmidtownManhattan’sretailbanks. 15APR201810122807 additional perspectivetoourBoard. companies, includingseveralcommitteechairroles,provides Current andpriorserviceontheboardofdirectorspublic COO andotherseniorexecutivepositions. Substantial financialexperiencegainedinherrolesasCEO, senior executiveofmultiplecompanies. developed inherrolesasamanagementconsultantand Significant strategyandriskassessmentexperience the U.S.,butalsoinCanada,U.K.andAustralia. Experience inrunningmultiplelocationbusinessesnotonly planning. operations, marketing,finance,humanresourcesandstrategic allows Ms.EctontoprovideourBoardinsightinto experience, includingasaCEO,withestablishedcompanies More than40yearsofoperationalandmanagement Age: 71 Directorof 8 Proxy Statement 9 Lead 62 and Risk Committee Age: and Corporate Governance Nominating Committee (Chair) Significant executive leadership and management experience Significant executive leadership and management leading and owning a software and technology-based technology, business provides our Board with expertise in innovation, and strategic investments. to numerous Extensive experience as an investor and mentor provides early stage software and technology companies entrepreneurial perspective to the Board. Indiana Key leadership experience in numerous central including business and community service organizations, the TechPoint, the Central Indiana Community Foundation, board. Orr Fellowship and the local Teach For America serving as a lead Public company board experience, including independent director. 13APR201814571383 companies, since 2006; and Chairman and Chief Executive companies, since 2006; a company that provides a platform Officer of Lumavate LLC, mobile applications, since November for building cloud-based 2017. company, since 2006. infrastructure as a services industry software and services business, Corporation, a banking acquired by from 1985 to 2006. Baker Hill Corporation was company, in 2005. Experian PLC, a global information solutions University (MBA). Other Public Company Directorships in Last Five Years: Other Public Company Directorships in Last Group, Inc., a Independent Director of Interactive Intelligence global software business, from 2005 to 2016. Skills and Qualifications ✓ ✓ ✓ ✓ • LLC, a privately held Co-founder and Chairman of Bluelock, • Officer of Baker Hill Co-Founder, President and Chief Executive • University of Notre Dame and Indiana Graduate of the 9 65 Director2007since April Age: of the Board andChairman Officer Chief Executive Current Board Committees: since June 2014 Independent Director Utilizes strong communication skills to guide Board Utilizes strong communication skills to guide discussions and keep our Board apprised of significant developments in our business and industry; including our risk management practices, strategic planning and development. experience in key leadership roles throughout the Company experience in key leadership roles throughout and over 35 years of experience in the industry. thorough and As Chief Executive Officer, Mr. Hallett has a and in-depth understanding of the Company’s business customers industry, including its employees, business units, to our and investors, which provides an additional perspective Board. Committed and deeply engaged leader with over 20 years of Committed and deeply engaged leader with over 13APR201814571016 Services Award Winner and one of Northwood University’s 2015 Services Award Winner and one of Northwood Outstanding Business Leaders. dealerships for 15 years. award in 2018. the Year in 2008 and the Ed Bobit Industry Icon 1990 to 1996. various senior executive leadership positions with ADESA various senior executive leadership positions and Chief between 1996 and 2005, including President Executive Officer of ADESA. Company. in Columbus, Ohio, from May 2005 automobile auction located to April 2007. Executive Officer since September 2009.Executive Officer since a wholly owned subsidiary of the 2007 to September 2009, and technology investment company that invests in software ✓ ✓ Skills and Qualifications ✓ •the EY Entrepreneur of the Year 2014 National Recognized as • industry awards, including NAAA Pioneer of Winner of multiple • two automobile auctions in Canada from Founded and owned • College. Graduate of Algonquin •then owned a number of new car franchise Managed and • 1996, Mr. Hallett held After selling his auctions to ADESA in • a large independent President of Columbus Fair Auto Auction, • 2014 and Chief Chairman of the Company since December • of ADESA from April Chief Executive Officer and President • Partner of Collina Ventures, LLC, a private Managing Career Highlights Career Highlights James P. HallettJames Mark E. Hill 13APR201815452321 Proxy Statement 13APR201815452321 ✓ ✓ Skills andQualifications GraduateoftheUniversityNotreDame(BBAin Accounting). • AuditStaffandSenioratErnst&YoungLLP. • CareerHighlights VicePresidentandCorporateControllerofADESA fromAugust • President,BrightPointAmericasofBrightPoint,Inc., adistributor • President,IngramMicroNorthAmericaMobilityof • MicroInc.,atechnology distributioncompany,fromJune2007 ChiefExecutiveOfficerofJolliffeSolutions,Inc.,providing • ChiefOperatingOfficerofAngie’sList,Inc.,apublicly-traded, • PresidentandChiefExecutiveOfficerofConexusIndiana, • Career Highlights ✓ ✓ .Mr oelLynnJolliffe J. MarkHowell Company. 1992 toJuly1994,nowawhollyownedsubsidiaryofthe Micro Inc.in2012. Officer, from1994to2012.BrightPoint,Inc.wassoldIngram Operating Officer,ExecutiveVicePresidentandChiefFinancial of mobiledevicesforphonecompanies,includingChief 2013. Micro Inc.,atechnologydistributioncompany,from2012to toJune2015. 2013 toSeptember2017. consultinginhumancapitalandtalentmanagementsinceJune local serviceprovidersviaitsonlinemarketplace,fromMarch connecting morethanthreemillionconsumerstohighly-rated 2015. United States-based,leadingconsumerwebservicesbusiness January 2018. sponsored byCentralIndianaCorporatePartnership,Inc.,since Indiana’s advancedmanufacturingandlogisticsinitiative 13APR201814571542 usata iaca xeine employeetalent. accounting andpubliccompanies. Certified PublicAccountantwithexperienceinpublic Substantial financialexperience. industry asaformeremployeeofADESA. multipleindustriesacrossthreecontinents. Provides unique,in-depthknowledgeofADESAandits operationalandpeopleperspective gainedfromexperiencein sold online. increasing amountoftheCompany’sconsignedvehiclesare technology-driven companiesprovidesvaluableinsightasan Extensive seniorleadershipexperienceatinternet-basedand ui omte NominatingandCorporateGovernance CompensationCommitteeand sinceJune2014 CurrentBoardCommittees: IndependentDirector Audit Committee Risk Committee(Chair)and Current BoardCommittees: Age: since December2014 Independent Director 53 10 Servedinvariouscapacities,includingVicePresident andChief • ExecutiveVicePresident,GlobalHumanResourcesofIngram • ✓ ✓ ✓ ✓ Skills andQualifications GraduatedfromQueensUniversityand ofToronto • BegancareeratBellCanadaandthenmoved toBankof • Canadian retailers,includingHoltRenfrew,from1985to1999. Financial Officerwithresponsibilityforhumanresources,attwo ServedasRegionalVicePresident,HumanResourcesand – VicePresident,HumanResourcesfortheNorthAmerica – (MBA). Montreal. 13APR201814571259 strategies andpoliciesfortheacquisitiondevelopmentof Significant experiencewithexecutivecompensationdecisions, she haslivedandworkedintheU.S.,Canadaabroad. Diversity inviewpointandinternationalbusinessexperienceas Deep understandingofbusinessdriversfromthefinancial, human resourcesandgeneralmanagement. Extensive functionalandleadershipexperienceinfinance, from August1999toOctober2006. Services forIngramMicroEuropeanCoordinationCenter region fromOctober2006toMay2007. Age: Committee 66 10 Proxy Statement 11 55 Age: Extensive business, management and operational experience Extensive business, management and operational a senior as CEO in the automotive aftermarket and as General executive at one of the world’s largest automakers, into the Motors Company, provides him with perspective opportunities. Company’s challenges, operations, and strategic captive Extensive experience in automotive remarketing, automotive finance (GMAC), rental car program design and of the dealer activities, as well as an in-depth understanding perspective overall automotive business, provide him a broad on our industry and key customers. finance Extensive experience as a senior leader in corporate reporting, has provided him with key skills, including financial analysis and accounting and control, business planning and of our risk management, that are valuable to the oversight business. 13APR201814571137 University (M.S., Management). 2015. Operating Officer from June 2007 that as President and Chief to January 2008. recently serving as General Manager from 1986 to 2007, most for the Buick, Pontiac and GMC Divisions overseeing operations Director of from January 2005 to May 2007 and as General Finance (CFO) for U.S. Sales, Service and Marketing Operations from 2001 to 2004. from 1999 to 2000. • Northern Illinois University and Purdue Graduated from Skills and Qualifications ✓ ✓ ✓ • Motors Company Served in a number of capacities at General • Company’s used car remarketing activity Led General Motors 11 64 Independent DirectorIndependent 2013since December Age: Committees:Current Board (Chair) andAudit Committee Risk Committee Lead Independent Director Current Board Committees: since June 2014 Compensation Committee and Risk Committee statement preparation. both Management experience in the automotive industry with additional domestically and internationally provides him are important insight into financial and business matters that to the Company. public Certified Public Accountant with experience in accounting and public companies. Over 20 years as a CFO provides valuable experience and Over 20 years as a CFO provides valuable experience perspective as Chair of the Audit Committee. United Brings experience as the former CFO of a large, with States-based company which includes experience complex capital structures and mergers and acquisitions. financial Extensive experience in financial analysis and 13APR201814571670 Wolfensohn Ventures LP and as a senior audit manager at Wolfensohn Ventures LP and as a senior audit KPMG LLP. parts, from October 1998 to July 2011. parts, from October 1998 power precision components, from 1995 to 1998. CFO services, from April 2012 to August 2013. CFO services, from April an automotive supplier of powertrain of Hilite International, Inc., since December 2015. products company, from August 2013 toCorporation, a building December 2015. • electronics Officer of Escort Inc., an automotive Chief Executive soft tops and accessories for Jeep vehicles, since August of from January 2008 to January 2014 and prior to manufacturer, ✓ ✓ ✓ ✓ Skills and Qualifications ✓ • capacities at Banc One Capital Partners, Served in various • Southeast Missouri State University. Graduated from • Officer of Sinter Metals, Inc., a supplier of metal Chief Financial • firm providing part-time Partner in FocusCFO, LLC, a consulting • Officer and a director Executive Vice President, Chief Financial • Holding Chief Financial Officer of Building Materials Career Highlights• automotive industry Consultant in the building products and • Officer of Bestop, Inc., a leading manufacturer Chief Executive Career Highlights Michael T. Kestner T. Michael John P. Larson 13APR201815452321 Proxy Statement 13APR201815452321 GraduatedfromCaliforniaStateUniversity,Northridge (BA, • InterimPresidentoftheCaliforniaCouncilonEconomic SkillsandQualifications • MemberoftheboarddirectorsCarecredit Corporation, • BegancareeratBullock’sDept.Stores,adivision ofFederated • ServedtwotermsasChairoftheVehicleFinanceDivisionfor • SeniorVicePresident,FinancialServicesofAmericanHonda • ConsultantintheautomotiveindustrysinceOctober2012. • Career Highlights Stephen E.Smith MBA). 2014. economics andpersonalfinance,fromJuly2013toFebruary and educationalmaterialstoCaliforniateachersrelating Education, anot-for-profitorganizationthatprovidestraining 1996 to2002. a privately-heldconsumercredithealthcarecompany,from division andinstoremanagement. Department Stores.Heldseniorlevelpositionsinthecreditcard Financial ServicesRoundtable. the AmericanFinancialServicesAssociation.Memberof organization atAHFC. vehicle servicecontracts.Startedtheconsumerfinance commercial lending,consumerlendingandfinancing (including variousotherpositions).Financialservicesincluded dealers andtheircustomers,from1985toOctober2012 automobile, motorcycle,marineandpowerequipmentproduct Finance Corporation(AHFC),aprovideroffinancialservicesto 13APR201814571800 each ofthedirectornomineesnamedinthisproxy statementandontheproxy Proxies solicitedby theBoard ofDirectors willbevoted “FOR” theelectionof KAR Auction Services’ Board ofDirectors recommendsavote “FOR” the election oftheforegoing ninenomineestotheBoard ofDirectors. Governance Committee Nominating andCorporate Audit Committeeand Current BoardCommittees: Age: since December2013 Independent Director 69 card unlessstockholders vote. specifyacontrary 12 ✓ ✓ ✓ ✓ Considerable financialskillandexpertise. service contracts. vehicle remarketing,dealerinventoryfinancingand Extensive experienceinmanagingleaseresidualsetting, satisfaction andloyalty,talentmanagement. efficiency andperformanceimprovement,customer strategy development,salesandmarketing,operating consumer andcommercialfinancebusiness.Expertisein Significant expertiseincreating,buildinganddeveloping into thefinancingandleasingofvehicles. experience intheautomotiveindustrywithparticularinsight Over 25yearsofextensiveoperationalandmanagement 13APR201814570296 12 Proxy Statement 13 on the ‘‘Investor www.karauctionservices.com 13 BOARD LEADERSHIP meetings. assure there is sufficient time for discussion of all agenda items. Board, including the quality, quantity, appropriateness and timeliness of such information. for consultation and direct communication. present, including executive sessions of the independent members of the Board. present, including executive sessions and and the Chairman and CEO and facilitates communication generally between among directors. Chairman and CEO, including an annual evaluation of his or her interactions with Chairman and CEO, including an annual evaluation of his or her interactions the independent directors. • Reviews, in consultation with the Chairman and CEO, the agenda for Board • Reviews, in consultation with the Chairman and CEO, the meeting schedules to • Reviews, in consultation with the Chairman and CEO, information sent to the • If requested by stockholders, ensures that he or she is available, when appropriate, • Together with the Compensation Committee, conducts an annual evaluation of the • Guides the Board’s governance process, including self-evaluations. • members of the Board. Has the authority to call meetings of the independent • the Chairman of the Board is not Presides at all meetings of the Board at which • as principal liaison on Board-wide issues between the independent directors Serves CORPORATE GOVERNANCE CORPORATE ROLE OF THE BOARD OF DIRECTORS OF THE BOARD ROLE BOARD OF DIRECTORS STRUCTURE AND STRUCTURE DIRECTORS OF BOARD Chairman and CEO Performance Evaluation and Board Governance Communicating with Stockholders In connection with the appointment of a Lead Independent Director, the Board adopted a Lead Independent In connection with the appointment of clear mandate with significant authority and responsibilities, including: Director Charter, which sets forth a Meeting Schedules Director, Mr. Larson, has served on the Board since 2014 and has strong communication and leadership skills, Director, Mr. Larson, has served on the Company’s strategic objectives, the industry in which we operate, as well as extensive knowledge about to the Company. and the areas of strategic importance Agendas addition, the Board believes that the appointment of a Lead Independent Director helps ensure that the addition, the Board believes that the by its independent directors. Our Lead Independent Director Company benefits from effective oversight of the independent directors and serves as the principal liaison between presides over the executive sessions CEO and Chairman of the Board. Our Lead Independent the independent directors and the Company’s Executive Sessions Communications decision making and alignment on corporate strategy. Given Mr. Hallett’s unparalleled knowledge of the decision making and alignment on corporate believes Mr. Hallett is in the best position to focus the independent industry and the Company, the Board In matters and to speak for and lead both the Company and the Board. directors’ attention on critical business Board Meetings and At present, the Board has chosen to combine the positions of CEO and Chairman of the Board and to appoint At present, the Board has chosen to believes that having the same person serve in the roles of Chairman a Lead Independent Director. Our Board for the Company at this time, as it fosters clear accountability, effective of the Board and CEO is appropriate does not have a policy on whether the same person should serve as both the CEO and Chairman of the serve as both the CEO and Chairman on whether the same person should does not have a policy The Board believes that it should have the flexibility to make these Board, or if the roles must remain separate. way that it believes best to provide appropriate leadership for the determinations from time to time in the Company under then-existing circumstances. Neither the Company’s Second Amended and Restated By-Laws nor the Company’s Corporate Governance By-Laws nor the Company’s Corporate Second Amended and Restated Neither the Company’s and the Board of Chairman of the Board and CEO, that the Company separate the roles Guidelines require proxy statement and is not deemed incorporated by reference into this proxy statement or any other public into this proxy statement or is not deemed incorporated by reference proxy statement and (the ‘‘SEC’’). Securities and Exchange Commission filing made with the of the Company and assures that the long-term interests of the stockholders are being served. The Company’s of the stockholders are being served. assures that the long-term interests of the Company and website at Guidelines are available on our Corporate Governance not part of this The information on our website is the link ‘‘Corporate Governance.’’ Relations’’ page under The Board oversees the Company’s CEO and other senior management in the competent and ethical operation management in the competent the Company’s CEO and other senior The Board oversees 13APR201815452321 Proxy Statement 13APR201815452321 Meetings Heldin2017: A descriptionofeachBoardcommitteeissetforthbelow. membership ofeachcommittee: this proxystatementoranyotherpublicfilingmadewiththeSEC.Thefollowingtablesetsforthcurrent information onourwebsiteisnotpartofthisproxystatementanddeemedincorporatedbyreferenceinto www.karauctionservices.com operates pursuanttoawrittencharter.Copiesofthecommitteechartersareavailableonourwebsiteat the NominatingandCorporateGovernanceCommitteeRiskCommittee.Eachofourcommittees In 2017,theBoardmaintainedfourstandingcommittees:AuditCommittee,Compensation directors attendedlastyear’sannualmeetingofstockholdersinperson. Governance Guidelines,eachdirectorisexpectedtoattendallannualmeetingsofstockholders.Allour meetings oftheBoardandcommitteesonwhichtheyservedduring2017.AsstatedinourCorporate The Boardheldsevenmeetingsduring2017.Alloftheincumbentdirectorsattendedatleast75% the independencestandards forauditcommitteemembersadoptedbytheSEC. Audit Committeemeetsthe standardsof‘‘independence’’establishedbytheNYSE andis‘‘independent’’under expert’’ asthattermisdefinedbytheSEC.Inaddition, theBoardhasdeterminedthateachmemberof each ofMessrs.HowellandKestnerMs.Ectonhas beendesignatedasan‘‘auditcommitteefinancial Independence: policies foremployeesorformeroftheindependent registeredpublicaccountingfirm. independent registeredpublicaccountingfirm,evaluate itsindependenceandperformancesetclearhiring matters; reviewsandapprovesrelatedpersontransactions; andhasthesolediscretiontoappointannuallyour programs (includingourCodeofBusinessConductand Ethics)andsignificanttax,legalregulatory independent registeredpublicaccountingfirm;reviews ourfinancialriskandcontrolprocedures,compliance significant financialitemsandchangesinaccountingpolicies orpractices,withourseniormanagementand management’s correctiveactionplanswherenecessary; reviewsourfinancialstatements,includingany plans andfindingsofourindependentregisteredpublic accountingfirmandourinternalauditteamtracks the performanceofourindependentregisteredpublicaccountingfirm.TheAuditCommitteereviewsaudit financial statements,ourindependentregisteredpublicaccountingfirm’squalificationsandindependence Primary Responsibilities: Audit Committee ** LeadIndependentDirector * ChiefExecutiveOfficerandChairmanoftheBoard Stephen E.Smith John P.Larson** Michael T.Kestner Lynn Jolliffe J. MarkHowell Mark E.Hill James P.Hallett* Donna R.Ecton Todd F.Bourell aeAdtCmiteCmiteCmiteRiskCommittee Committee Committee AuditCommittee Name BOARD OFDIRECTORSMEETINGSANDATTENDANCE EachmemberoftheAuditCommitteeis‘‘financiallyliterate’’ undertherulesofNYSE,and COMMITTEES OFTHEBOARDDIRECTORS 11APR201708502194 Five 1P210529 11APR201708502194 11APR201708502194 11APR201708502194 11APR201708502194 11APR201708502194 OurAuditCommitteeassiststheBoardinitsoversightofintegrityour onthe‘‘InvestorRelations’’pageunderlink‘‘CorporateGovernance.’’The (Chair) 1P210529 11APR201708502194 11APR201708502194 1P210529 11APR201708502194 11APR201708502194 11APR201708502194 11APR201708502194 Nominating and oenneCompensation Governance Corporate 14 (Chair) 1P210529 11APR201708502194 11APR201708502194 (Chair) 11APR201708502194 11APR201708502194 (Chair) 14 Proxy Statement 15 15 The Risk Committee assists the Board in its oversight of (i) the principal business, The Risk Committee assists the Board in its oversight of (i) the principal The Nominating and Corporate Governance Committee is responsible for making Corporate Governance Committee The Nominating and The Compensation Committee reviews and recommends policies relating to recommends policies reviews and Committee The Compensation Four Seven Four All of the members of the Risk Committee are independent under the NYSE rules. All of the members of the Risk Committee are independent under the NYSE All of the members of the Nominating and Corporate Governance Committee are independent All of the members of the Nominating All of the members of the Compensation Committee are independent under the NYSE rules of the Compensation Committee are All of the members risk management (‘‘ERM’’) program and has direct oversight over certain risks within the ERM framework. risk management (‘‘ERM’’) program and has direct oversight over certain Independence: financial, technology, operational and regulatory risks, and other material risks and exposures of the Company financial, technology, operational and regulatory risks, and other material such risks and exposures. The Risk and (ii) the actions, activities and initiatives of the Company to mitigate security and other risks related to Committee also provides oversight for matters specifically relating to cyber oversees the Company’s enterprise information technology systems and procedures. The Risk Committee also Meetings Held in 2017: Primary Responsibilities: under the NYSE rules. The Nominating and Corporate Governance Committee periodically reviews the format of the evaluation The Nominating and Corporate Governance is solicited on the operation of the Board and director performance. process to ensure that actionable feedback Independence: Lead Independent Director also conducts a personal interview with each Board member to gather in-depth Lead Independent Director also conducts Board, committee and individual director performance and suggestions perspectives and candid insight about member completes an evaluation of each other Board member. for improvement; in addition, each Board Risk Committee Governance Committee also utilizes the results of this self-evaluation process in assessing and determining the the results of this self-evaluation process in assessing and determining Governance Committee also utilizes of prospective candidates for election to the Board and making characteristics and critical skills required respect to assignments of Board members to various committees. The recommendations to the Board with Committee oversees an annual evaluation process of the Board and each committee of the Board. The Committee oversees an annual evaluation is by the Board and each committee. Once the evaluation process evaluation process includes a self-evaluation by the full Board and each committee, as applicable, and changes in complete, the results are discussed and implemented as appropriate. The Nominating and Corporate practices or procedures are considered Corporate Governance Committee is responsible for overseeing our Corporate Governance Guidelines and Corporate Governance Committee is to the Board concerning governance matters. reporting and making recommendations Governance Guidelines, the Nominating and Corporate Governance As required by the Company’s Corporate recommendations to the Board regarding candidates for directorships and the size and composition of the directorships and the size and composition to the Board regarding candidates for recommendations Governance Committee also reviews non-employee director Board. The Nominating and Corporate makes recommendations to the Board. In addition, the Nominating and compensation on an annual basis and Meetings Held in 2017: Meetings Held in Primary Responsibilities: (including the enhanced independence requirements for compensation committee members). independence requirements for (including the enhanced compensation of these officers based on such evaluations. The Compensation Committee also administers the The Compensation Committee officers based on such evaluations. compensation of these plans. and other awards under our equity issuance of equity Independence: Primary Responsibilities: Primary reviews and Compensation Committee employees. The of our officers and and benefits compensation officers, and other executive of our CEO to the compensation objectives relevant corporate goals and approves and approves the and objectives, light of those goals of these officers in the performance evaluates Committee Corporate Governance Nominating and Meetings Held in 2017: Meetings Compensation Committee Compensation 13APR201815452321 Proxy Statement 13APR201815452321 committees overseethefollowingrisks: The Board’sleadershipstructure,throughitscommittees,alsosupportsroleinriskoversight.Ingeneral, the or otherrisksandreportstotheBoardonthesematters. these regularreports,theRiskCommitteereceivesreportsonspecificareasofrisksuchasregulatory,cyclical initially overseenbythecommitteesfordiscussionandinputfromBoard.Asnotedabove,inadditionto Committee chairpersonaswellothercommitteechairpersons,whichmayincludeadiscussionofrisks regulations. AteachregularlyscheduledBoardmeeting,thealsoreceivesreportsfromRisk including environmentalupdatesandtheCompany’scontinuingcompliancewithapplicablelaws provides informationregardingthestatusofCompany’smateriallitigationandrelatedmatters,ifany, operational andcompetitiverisks.Finally,theCompany’sChiefLegalOfficerprovidesaprivilegedreportwhich primary businessunitprovidesanoperationalreport,whichincludesinformationrelatingtostrategic, funds, andtheimplicationstoCompany’sdebtcovenantscreditrating,ifany.Thepresidentofeach Company’s resultsofoperations,itsliquidityposition,includingananalysisprospectivesourcesanduses relating torisksfacedbytheCompany.TheCompany’sChiefFinancialOfficerprovidesareporton At itsregularlyscheduledmeetings,theBoardgenerallyreceivesanumberofreportswhichincludeinformation risk, anddiscussionswithmanagementthirdpartiesregardingriskassessmentmanagement. reviews occurprincipallythroughthereceiptofreportsfrommanagementandthirdpartiesontheseareas the othercommitteesateachregularlyscheduledBoardmeeting.TheRiskCommitteeandcommittee oversight oversuchrisksthroughthereceiptofreportsfromchairpersonRiskCommitteeand through thereceiptofreportsfromcommitteechairpersonstoRiskCommittee.TheBoardmaintains risk hasbeendelegatedtoanothercommittee,theRiskCommitteemaymaintainoversightoversuchrisks been specificallydelegatedtoanothercommitteeoftheBoard.Evenwhenoversightaspecificarea oversight withrespecttoriskpracticesimplementedbymanagement,exceptfortheofrisksthathave carried outbytheBoardasawholeandeachofitsvariouscommittees.TheRiskCommitteeprovides communication ofthemostmaterialriskstoBoardanditscommittees.OversightCompany’sis Our managementisresponsiblefortheandassessmentofriskatCompany,including • • • • procedures asnotedabove. generally andspecificallywithrespecttocybersecurity andinformationtechnologysystems succession, compositionoftheBoardandprincipalpoliciesthatguideCompany’sgovernance. Committee monitorspotentialrisksrelatingtotheeffectivenessofBoard,notablydirector Company’s compensationpractices. arising fromtheCompany’swhistleblowerhotline. performance oftheindependentregisteredpublicaccountingfirm;and(iv)ethicsrelatedissues and procedures(includingtheperformanceofCompany’sinternalauditfunction);(iii) the Company’sfinancialstatements;(ii)internalcontrolsoverreportinganddisclosure Risk Committee: Nominating andCorporateGovernanceCommittee: Compensation Committee: Audit Committee: BOARD OFDIRECTORS’RISKOVERSIGHT TheRiskCommitteemaintainsoversightovertheCompany’s enterprise-levelrisks TheAuditCommitteemaintainsinitialoversightoverrisksrelatedto(i)theintegrityof TheCompensationCommitteemaintainsoversightoverrisksrelatedtothe 16 TheNominatingandCorporateGovernance 16 Proxy Statement 17 17 responsibilities for the Lead Independent Director. responsibilities for the including those officers responsible for financial reporting. for financial those officers responsible including designated by the Board. and its committees. Committee, Nominating and Corporate Committee, Compensation and Risk Committee. Governance Committee EXECUTIVE SESSIONS INSIDER PARTICIPATION on the ‘‘Investor Relations’’ page under the ‘‘Corporate Governance’’ link and in on the ‘‘Investor Relations’’ page under CORPORATE GOVERNANCE DOCUMENTS GOVERNANCE CORPORATE COMPENSATION COMMITTEE INTERLOCKS AND COMPENSATION COMMITTEE STOCKHOLDER COMMUNICATIONS WITH THE BOARD STOCKHOLDER COMMUNICATIONS Lead Independent Director CharterLead Independent significant authority and Sets forth a clear mandate and Corporate Governance GuidelinesCorporate Governance Committee Charters the functions of the Board Contains general principles regarding the following Board committees, as applicable: Audit Applies to Code of Ethics for Principal Executive andCode of Ethics for Senior Financial Officers executive officer, principal Applies to the Company’s principal persons who are financial and accounting officer and such other Document Ethics Conduct and Code of Business employees, officers and directors, Applies to all of the Company’s Purpose/Application Mr. Larson, our Lead Independent Director, presides at the executive sessions of our independent directors. Mr. Larson, our Lead Independent Director, presides at the executive sessions independent director) or the Lead Independent Director (if the Chairman of the Board is not an independent independent director) or the Lead Independent Director (if the Chairman another independent director director) shall preside at such executive sessions, or in such director’s absence, as applicable. Currently, designated by the Chairman of the Board or the Lead Independent Director, The independent directors of the Company meet in executive session at every regularly scheduled Board The independent directors of the Company meet in executive session at Chairman of the Board (if an meeting. The Company’s Corporate Governance Guidelines state that the and anonymous reports regarding accounting, internal accounting controls, auditing or any other relevant and anonymous reports regarding accounting, internal accounting controls, matters. Officer reviews all such correspondence and forwards to the applicable director(s) copies of all such applicable Officer reviews all such correspondence and forwards to the applicable correspondence. and others to submit confidential The Audit Committee has established procedures for employees, stockholders Any stockholder or other interested parties desiring to communicate with the Board, the Chairman of the Board, Any stockholder or other interested the independent directors individually or as a group regarding the Company a committee of the Board or any of at delivering such correspondence to the Company’s Chief Legal Officer may directly contact such directors by Indiana 46032. Our Chief Legal KAR Auction Services, Inc., 13085 Hamilton Crossing Boulevard, Carmel, member of the board of directors or compensation committee of any entity that has one or more executive member of the board of directors or of Compensation Committee. None of the individuals serving as members officers serving on our Board or our the fiscal year 2017 are now or were previously an officer or employee of the Compensation Committee during Company or its subsidiaries. During fiscal year 2017, Messrs. Bourell and Larson and Mmes. Ecton and Jolliffe served as members of the During fiscal year 2017, Messrs. Bourell our executive officers serve, or in fiscal year 2017 has served, as a Compensation Committee. None of Relations, 13085 Hamilton Crossing Boulevard, Carmel, Indiana 46032. The information on our website is not Relations, 13085 Hamilton Crossing deemed incorporated by reference into this proxy statement or any other part of this proxy statement and is not public filing made with the SEC. We expect that any amendment to or waiver of the codes of ethics that apply to executive officers or directors of ethics that apply to executive amendment to or waiver of the codes We expect that any website. The foregoing documents are available at will be disclosed on the Company’s www.karauctionservices.com them. Requests should be made to KAR Auction Services, Inc., Investor print to any stockholder who requests The Board has adopted the following corporate governance documents: following corporate has adopted the The Board 13APR201815452321 Proxy Statement 13APR201815452321 Non-employee directorswhoservedfortheentiretyof2017received: of theCompanydonotreceivepaymentforserviceasdirectors. with themajorityofcompensationdeliveredthroughequitygrants.Directorswhoalsoserveasemployees recommendations, theNominatingandCorporateGovernanceCommitteeutilizedabalanceofcashequity, that directorsexpendinfulfillingtheirduties.Inestablishingthenon-employeedirectorcompensation trends, theresponsibilitiesofdirectorsgenerally,includingcommitteechairs,andsignificantamounttime 2016. Insettingdirectorcompensation,weconsideredvariousfactorsincludingmarketcomparisonstudiesand director compensationin2017.Therehavebeennoincreasespaidtoourdirectorssince Corporate GovernanceCommitteerecommended,andtheBoardagreed,thatnochangesshouldbemadeto independent compensationconsultant(mostrecentlyin2016).Basedonthisreview,theNominatingand and CorporateGovernanceCommitteereviewsdirectorcompensationannually,assistedperiodicallybyan considering therecommendationsofNominatingandCorporateGovernanceCommittee.The qualified candidatestoserveontheBoard.TheBoardmakesalldirectorcompensationdeterminationsafter We useacombinationofcashandstockbasedincentivecompensationtoattractretainindependent, meetings, committeemeetingsandBoardeducationevents. All ofourdirectorsarereimbursedforreasonableexpensesincurredinconnectionwithattendingBoard ui n opnainCmiteCarFe$000Cash $20,000 FormofPayment(1) Payment/Award Cash ValueofCash $10,000 Pursuant toourPolicyonGrantingEquityAwards,unlessspecificallyprovidedotherwisebytheCompensation (3) One-fourthoftheannualcashretainerispaidatendeachquarter,providedthatdirectorservedasa (2) May electtoreceiveannualcashretainerinsharesofourcommonstock. (1) Nominating andCorporateGovernanceRiskCommitteeChairFee Audit andCompensationCommitteeChairFee Lead IndependentDirectorFee Annual StockRetainer(3) Annual CashRetainer(2) Program For2017Service Components ofDirectorCompensation director insuchfiscalquarter. the restrictedstockgrant. the grant.Thenumberofsharesourcommonstockreceivedisbasedonvaluedate director waselectedorre-elected.One-fourthoftheannualrestrictedstockgrantvestsquarterlyfollowingdate Committee ortheBoard,annualgrantsfordirectorsareeffectiveondateofmeetingatwhich DIRECTOR COMPENSATION CASH ANDSTOCKRETAINERS 18 1508RestrictedStock $115,018 3,0 Cash Cash $30,000 $85,000 18 Proxy Statement 19 Cash(1) Awards(2) Total or Paid in Stock Fees Earned 19 DIRECTOR COMPENSATION PAID IN 2017 DIRECTOR COMPENSATION DIRECTORS DEFERRED COMPENSATION PLAN COMPENSATION DEFERRED DIRECTORS DIRECTOR STOCK OWNERSHIP AND HOLDING GUIDELINES OWNERSHIP AND DIRECTOR STOCK Standards Board Accounting Standards Codification Topic 718 (‘‘ASC 718’’), of shares of restricted stock awarded to Standards Board Accounting Standards Codification Topic 718 (‘‘ASC 718’’), of received 2,594 shares of each non-employee director as an annual stock retainer. All non-employee directors Deferred Compensation Plan, restricted stock as an annual stock retainer in June 2017. Pursuant to the Director receive 100% of his or her annual Messrs. Bourell, Hill, Howell, Kestner and Larson and Ms. Ecton each elected to stock retainer in a deferred share account. $30,000 paid to the Lead Independent Director, an additional $20,000 paid to the Chairman of the Audit Committee $30,000 paid to the Lead Independent Director, an additional $20,000 paid to the to the Chairman of the Nominating and the Chairman of the Compensation Committee and an additional $10,000 paid and Corporate Governance Committee and the Chairman of the Risk Committee. (2) The amounts represent the aggregate grant date fair value, computed in accordance with the Financial Accounting (1) The amounts represent the $85,000 annual cash retainer paid to each non-employee director, plus an additional Michael T. KestnerJohn P. LarsonStephen E. Smith $105,000 $115,000 $115,018 $85,000 $220,018 $115,018 $115,018 $230,018 $200,018 Donna R. EctonMark E. HillJ. Mark HowellLynn Jolliffe $105,000 $115,018 $95,000 $95,000 $220,018 $85,000 $115,018 $115,018 $210,018 $210,018 $115,018 $200,018 Name Todd F. Bourell $85,000 $115,018 $200,018 Mr. Hallett was not entitled to receive any fees or other compensation for serving as a member of our Board in Mr. Hallett was not entitled to receive any fees or other compensation for 2017 because he was employed by the Company. The following table provides information regarding the compensation paid to our non-employee directors. The following table provides information his or her annual cash retainer amount in shares of Company stock. his or her annual cash retainer amount Company’s common stock granted by the Company for at least four years, subject to certain exceptions Company’s common stock granted by Governance Committee. approved by the Nominating and Corporate requires each non-employee director to own a minimum of five times The Company’s stock ownership guideline The Company’s non-employee directors are subject to the Company’s director stock ownership and holding The Company’s non-employee directors requires each non-employee director to hold any shares of the guidelines. The stock holding guideline shares. cash account, plus the number of shares of our common stock equal to the number of shares in the director’s stock equal to the number of shares the number of shares of our common cash account, plus or within 60 days in installments over a specified period will be delivered to a director deferred share account, any fractional Board, with cash being paid in lieu of of the director’s departure from the following the date the Director Deferred Compensation Plan. Amounts under the Director Deferred Compensation Plan may also the Director Deferred Compensation Compensation Plan. Amounts under the Director Deferred directors under our 401(k) plan. Non-employee same investment choices as are available be invested in the share stock retainer in the form of a deferred receive all or a portion of their annual also may choose to director’s deferred that the amount of cash in a Deferred Compensation Plan provides account. The Director Deferred Compensation Plan’’) in December 2009. Pursuant to the terms of the Director Deferred the terms of the Director 2009. Pursuant to in December Compensation Plan’’) Deferred fees his or her cash director the receipt of may elect to defer director Plan, each non-employee Compensation in interest as described which account accrues account, deferred compensation interest-bearing into a pre-tax Our Board adopted the KAR Auction Services, Inc. Directors Deferred Compensation Plan (the ‘‘Director Compensation Inc. Directors Deferred Auction Services, adopted the KAR Our Board 13APR201815452321 Proxy Statement 13APR201815452321 stock heldbyeachnon-employeedirectorasofDecember31,2017: The followingtablesetsforthinformationregardingthenumberofunvestedordeferredsharesourcommon tpe .Sih1288,093 7,257 6,246 8,616 8,591 12,608 1,298 1,318 7,214 1,298 1,318 1,318 1,318 1,318 This numberrepresentsvestedphantomstockanddividendequivalentswhicharedeferredineachdirector’saccount (2) Thisnumberrepresentsunvestedsharesofrestrictedstockand,forthosedirectorswhodeferred,phantom (1) Stephen E.Smith John P.Larson Michael T.Kestner Lynn Jolliffe J. MarkHowell Mark E.Hill Donna R.Ecton Todd F.Bourell Name on aone-for-onebasis. pursuant totheDirectorDeferredCompensationPlan.Theseshareswillbesettledforofourcommonstock stock anddividendequivalents. OUTSTANDING DIRECTORRESTRICTEDSTOCKAWARDS 20 netdSae Sharesand Unvested Shares qiaet()Equivalents(2) Equivalents(1) n iiedDividend and Dividend ,1 10,733 1,318 Deferred Phantom 20 Proxy Statement 21 8,647 * 8,546 * 14,112 * 42,71310,04211,969 * 66,881 * * * 13,868 * Shares(1) Class(2) Number of Percent of 9,053,964 6.71% 1,739,958 1.29% Shares Beneficially Owned 21 COMMON STOCK COMMON BENEFICIAL OWNERSHIP OF THE COMPANY’S THE OF OWNERSHIP BENEFICIAL 100 Vanguard Blvd., Malvern, Pennsylvania 19355. determining the percent of the class held by the holder of such option, but not for the purpose of computing the determining the percent of the class held by the holder of such option, but not for percentage held by others. with respect to 76,555 shares, the According to this Schedule 13G/A, The Vanguard Group has the sole voting power with respect to 16,181 shares and sole dispositive power with respect to 11,359,935 shares, the shared voting power of The Vanguard Group is the shared voting and dispositive power with respect to 81,345 shares. The address within 60 days of April 11, 2018. persons(8) Mark E. Hill(7) J. Mark Howell Lynn Jolliffe John Kett(6) Michael T. KestnerJohn P. Larson Eric M. Loughmiller(6)Rebecca C. Polak(6)Stephen E. Smith 17,302 249,035 214,106 * * * Donna R. Ecton Donald S. Gottwald(6)James P. Hallett(6) 72,967 609,459 * * The Vanguard Group(3)FMR LLC(4) T. Rowe Price Associates, Inc.(5)Todd F. Bourell 8,118,328 11,441,280 6.02% 8.48% (3) Based solely on information disclosed in a Schedule 13G/A filed by The Vanguard Group on February 9, 2018. (2) Shares subject to options exercisable within 60 days of April 11, 2018 are considered outstanding for the purpose of * Less than one percent (1) The number of shares includes shares of our common stock subject to vesting requirements and options exercisable Executive officers, directors and director nominees as a group 19 Executive officers, directors and director NAMED EXECUTIVE OFFICERS, DIRECTORS AND DIRECTOR NOMINEES NAMED EXECUTIVE OFFICERS, DIRECTORS 5% BENEFICIAL OWNERS Name of Beneficial Owner Schedule 13G filing. Unless otherwise indicated in a footnote, the business address of each person is our the business address of each Unless otherwise indicated in a footnote, Schedule 13G filing. Hamilton Crossing Boulevard, Carmel, c/o KAR Auction Services, Inc., 13085 corporate address, Indiana 46032. investment power with respect to the shares indicated as beneficially owned, unless otherwise indicated in a as beneficially owned, unless otherwise with respect to the shares indicated investment power our common stock below are based on shares of table. The percentage calculations footnote to the following Schedule 13D or set forth in any stockholder’s April 11, 2018 rather than the percentages outstanding as of the Company’s voting securities of which 134,956,732 shares of common stock were outstanding as of shares of common stock were outstanding securities of which 134,956,732 the Company’s voting and (3) all of our and named executive officers; each of our directors, director nominees April 11, 2018; (2) in a group. Beneficial ownership is determined nominees and executive officers as directors, director voting and each stockholder will have sole rules of the SEC. To our knowledge, accordance with the The following table sets forth certain information with respect to the beneficial ownership of our common stock of our common the beneficial ownership with respect to certain information table sets forth The following any class of 5% or more of record or beneficially who owns of each person or entity 11, 2018 of: (1) as of April 13APR201815452321 Proxy Statement 13APR201815452321 all suchfilingrequirementsweremetduring2017. such reportsandwrittenrepresentationsfromthedirectorsexecutiveofficers,Companybelievesthat securities andsubsequentchangesinthatownershipwiththeSECNYSE.Basedsolelyonareview of shares oftheCompany’scommonstocktofilereportsinitialownershipandotherequity Services’ directorsandexecutiveofficerspersonswhoownmorethan10%oftheissuedoutstanding Section 16(a)oftheSecuritiesExchangeAct1934,asamended(‘‘ExchangeAct’’),requiresKARAuction Includesanaggregateof929,633sharesourcommonstockissuablepursuanttooptionsthatareexercisablewithin (8) Includes800sharesheldinafamilymember’sbrokerageaccount,overwhichMr.Hillholdspowerofattorney. (7) Includesthefollowingsharesofourcommonstockissuablepursuanttooptionsthatareexercisablewithin60days (6) BasedsolelyoninformationdisclosedinaSchedule13G/AfiledbyT.RowePriceAssociates,Inc.February14, (5) BasedsolelyoninformationdisclosedinaSchedule13G/AfiledbyFMRLLCFebruary13,2018.Accordingtothis (4) SECTION 16(A)BENEFICIALOWNERSHIPREPORTINGCOMPLIANCE 60 daysofApril11,2018. Mr. Hilldisclaimsbeneficialownershipofthesesharesexcepttotheextenthispecuniaryinteresttherein. April 11,2018:Mr.Gottwald,50,000;Hallett,344,404;Kett,0;Loughmiller,97,204;Ms.Polak,167,716. Maryland 21202. power withrespecttozeroshares.TheaddressofT.RowePriceAssociates,Inc.is100E.PrattStreet,Baltimore, 2,841,580 shares,thesoledispositivepowerwithrespectto8,118,328andsharedvoting 2018. AccordingtothisSchedule13G/A,T.RowePriceAssociates,Inc.hasthesolevotingpowerwithrespect address ofFMRLLCis245SummerStreet,Boston,Massachusetts02210. with respectto9,053,964shares,andthesharedvotingdispositivepowerzeroshares.The Schedule 13G/A,FMRLLChasthesolevotingpowerwithrespectto1,659,065shares,dispositive 22 22 Proxy Statement 23 13APR201814570174 stockholders specify a contrary vote. a contrary specify stockholders recommends that you vote “FOR” the that recommends you 23 PROPOSAL PROPOSAL NO. 2 NO. PROPOSAL EXECUTIVE COMPENSATION: EXECUTIVE ADVISORY VOTE TO APPROVE TO VOTE ADVISORY advisory vote to approve executive compensation. compensation. executive to approve vote advisory accelerated vesting of assumed or replaced equity awards upon a change in control of the Company accelerated vesting of assumed or replaced termination of employment in connection with or following only if an executive experiences a qualifying such change in control. ownership guideline for our CEO is five times his annual base named executive officers. The stock over 25 times his annual base salary. salary, and the CEO currently holds of an executive officer’s incentive compensation in the event we are required to prepare an accounting of an executive officer’s incentive compensation intentional misconduct. restatement due to such executive officer’s times base salary and target bonus for the other executive and target bonus for the CEO and one officers. independent under NYSE rules. executive compensation program and practices. compensation consultant to review our with 75% of our equity awards in the form of PRSUs. program is heavily performance-based and PRSUs. annual cash incentive compensation performance and the compensation of our CEO. performance and the KAR Auction Services’ Board of Directors Services’ KAR Auction Proxies solicited by the Board of Directors will be voted “FOR” the advisory vote “FOR” the advisory will voted be the Board of Directors by Proxies solicited to approve executive compensation unless compensation unless executive to approve • in equity award agreements: Our 2017 equity awards permit Double-trigger vesting provisions • our requirements: We have stock ownership guidelines that are applicable to Robust equity ownership • misconduct: Our clawback policy provides for the recovery and cancellation Clawback policy for financial • benefits: Change in control severance benefits are two times base salary Moderate change in control • consultant: The Compensation Committee retains its own independent Independent compensation • annual incentive program is 100% performance-based and our equity incentive Pay for performance: Our • for Compensation Committee sets maximum amounts that may be payable Maximum payout caps: The • our TSR demonstrated close alignment between alignment: We have consistently Stockholder • Committee: All of the members of our Compensation Committee are Independent Compensation upon the Board; however, the Board and the Compensation Committee value our stockholders’ opinions, and upon the Board; however, the Board and the Compensation Committee advisory vote when considering future the Compensation Committee will take into account the outcome of the executive compensation decisions. In deciding how to vote on this proposal, the Board encourages you to read the ‘‘Compensation Discussion and the Board encourages you to read the ‘‘Compensation Discussion In deciding how to vote on this proposal, vote is advisory, it will not be binding Analysis’’ section and the compensation tables that follow. Because this Our executive compensation program includes certain ‘‘best practices’’ in governance and executive ‘‘best practices’’ in governance and program includes certain Our executive compensation the following: compensation, including follow such section. The Company seeks this non-binding advisory vote from its stockholders annually, advisory vote from its stockholders The Company seeks this non-binding follow such section. stockholders Company’s 2017 annual meeting of of the stockholders’ vote at the pursuant to the results selecting such frequency. In accordance with Section 14A of the Exchange Act and related SEC rules, the Company seeks a non-binding related SEC rules, the Company Section 14A of the Exchange Act and In accordance with as described in of its named executive officers its stockholders to approve the compensation advisory vote from tables that beginning on page 26 and the compensation Discussion and Analysis’’ section the ‘‘Compensation 13APR201815452321 Proxy Statement 13APR201815452321 Chief ServicesOfficeratInteractiveIntelligenceGroup,Inc.(whichwasacquiredbyGenesys)fromJanuary Telecommunications Laboratories,Inc.(‘‘Genesys’’)fromDecember2016toMarch2017.Mr.Fisherwasthe Senior VicePresidentofCloudOperationsandGeneralManager,Indianapolis,Genesys as theCompany’sExecutiveVicePresidentandChiefInformationOfficersinceApril2017.Mr.Fisherwas ADESA inMay2005andthereafterservedasPresidentoftheColumbusFairAutoAuctionuntilApril2007. January 2001to2003andExecutiveVicePresidentfromAugust1996May2004.Mr.Hallettleft ExecutiveVicePresidentofInternationalMarketsandStrategicInitiatives 2001 toJuly2003;Chairman,PresidentandChiefExecutiveOfficerofALLETEAutomotiveServices,Inc.from ExecutiveVicePresidentofHumanResources Officer ofADESACorporationfromAugust1996toJuly2003;Corporation’sChairmanOctober 55 43 between August1996andOctober2001againJanuary2003March2004;ChiefExecutive President ofADESACorporation,LLCfromMarch2004toMay2005;Corporation ChiefLegalOfficerandSecretaryforKARPresidentofTradeRev September 2009.Mr.Hallettservedas:ExecutiveVicePresidentofADESA,Inc.fromMay2004to2005; President of AFC 47 December 2014.Mr.HallettservedasPresidentandChiefExecutiveOfficerofADESAfromApril2007to ChiefExecutiveOfficerandPresidentofIAA 56 served astheChiefExecutiveOfficersinceSeptember2009andChairmanofBoardDirectors ExecutiveVicePresidentandChiefFinancialOfficer 54 PresidentofDigitalServicesandChiefTechnologyOfficer 59 49 Benjamin Skuy President of ADESA Lisa A.Price 47 Rebecca C.Polak Position ChiefOperating OfficerandChiefStrategy ExecutiveVicePresidentandChiefInformationOfficer Age James E.Money 51 ChiefExecutiveOfficerandChairmanoftheBoardDirectors 44 Eric M.Loughmiller 65 John W.Kett Peter J.Kelly John C.Hammer Donald S.Gottwald Thomas J.Fisher James P.Hallett Name fiscal yearendedDecember31,2017.Ourexecutiveofficersareasfollows: This informationsupplementstheincludedinItem10ofourAnnualReportonForm10-Kfor fetv eray1,21.Pirt DS,M.Hme a he xctv fie fUS uoSls Inc. HammerwasChiefExecutiveOfficerofU.S.Auto Sales, 19,2018.PriortoADESA,Mr. effective February addition, Mr.GottwaldservesontheNorthwoodUniversity AutomotiveMarketingCurriculumAdvisoryBoard. the AmericanFinancialServicesAssociationandpreviously servedontheassociation’sboardofdirectors.In Services Corp.andManagingDirectorofAmericanSuzuki FinancialServices.Mr.Gottwaldhasbeenactivein GMAC FinancialServicesfromJune1993toDecember 2005,includingManagingDirectorofSaabFinancial Prior toworkingatHSBCAutoFinance,Mr.Gottwald served inseveralrolesofincreasedresponsibilitywith Executive VicePresidentofDealerBusinessforHSBC AutoFinancefromDecember2005toOctober2008. served asthePresidentofAFCfromJanuary2009to May2013.Previously,Mr.Gottwaldservedintheroleof previously servedastheChiefExecutiveOfficerofAFC fromJanuary2009toMarch2014.Mr.Gottwaldalso Chief OperatingOfficersinceMarch2014andthe StrategyOfficersinceJuly2017.Mr.Gottwald Director ofSystemsEngineeringfromJanuary2005to2011. May 2012toJanuary2014,SeniorDirectorofSolutionsEngineeringfrom2011and 2014 toDecember2016andalsoheldotherrolesincludingVicePresidentofGlobalSalesOperationsfrom John C.Hammer,47,President ofADESA. Donald S.Gottwald,51,ChiefOperatingOfficerand ChiefStrategyOfficer. Thomas J.Fisher,44,ExecutiveVicePresidentandChiefInformationOfficer. James P.Hallett,65,ChiefExecutiveOfficerandChairmanoftheBoardDirectors. EXECUTIVE OFFICERS r Hammerassumedtherole ofPresidentADESA Mr. 24 Mr.Gottwaldhasbeenthe Mr.Fisherhasserved Mr.Halletthas 24 Proxy Statement 25 Mr. Kelly has been the Mr. Kelly has been Mr. Loughmiller has Ms. Price has been the Executive Mr. Kett has been Chief Executive Mr. Kett has been 25 Mr. Money has been President of AFC since June 2016. Mr. Money has been President of AFC Benjamin Skuy, 55, Executive Vice President of International Markets and Strategic Initiatives. Benjamin Skuy, 55, Executive Vice President of International Markets Lisa A. Price, 43, Executive Vice President of Human Resources. Rebecca C. Polak, 47, Chief Legal Officer and Secretary for KAR and President of TradeRev. Rebecca C. Polak, 47, Chief Legal James E. Money, 56, President of AFC. James E. Money, 56, President of Eric M. Loughmiller, 59, Executive Vice President and Chief Financial Officer. Eric M. Loughmiller, 59, Executive John W. Kett, 54, Chief Executive Officer and President of IAA. Chief Executive Officer and President John W. Kett, 54, Peter J. Kelly, 49, President of Digital Services and Chief Technology Officer. President of Digital Services and Peter J. Kelly, 49, Senior Manager at The Bank of Nova Scotia. 2008; Chief Operating Officer of ADESA Canada from January 2002 to July 2006; and Chief Financial Officer 2008; Chief Operating Officer of ADESA Canada from January 2002 to Mr. Skuy served as Assistant Vice of ADESA Canada from July 1999 to January 2002. Prior to joining ADESA, 1990 to May 1998 he served as President at Manulife Financial from June 1998 to July 1999. From August Mr. Skuy has been Executive Vice President of International Markets and Strategic Initiatives since September Mr. Skuy has been Executive Vice President of International Markets and 1999 and September 2009: Executive 2009. Mr. Skuy previously served in the following positions between July Canada from January 2008 to Vice President of International Markets and Managing Director of ADESA Canada from July 2006 to January September 2009; Managing Director and Chief Operating Officer of ADESA Counsel from November 2005 to January 2008. Prior to joining ADESA, Ms. Price practiced employment law Counsel from November 2005 to January 2008. Prior to joining ADESA, with Stewart & Irwin in Indianapolis from November 2000 to November 2005. Vice President of Human Resources since June 2013. Ms. Price previously served as the Vice President of Vice President of Human Resources since June 2013. Ms. Price previously to June 2013 and Senior Corporate Employment and Litigation Counsel of the Company from January 2008 2007 and as Vice President of ADESA from December 2006 to April 2007. Prior to joining ADESA, Ms. Polak 2007 and as Vice President of ADESA with Krieg DeVault in Indianapolis from 2000 to 2005 and with Haynes practiced corporate and securities law and Boone in Dallas from 1995 to 1999. Ms. Polak has been Chief Legal Officer and Secretary for KAR and President of TradeRev since October 2017. Ms. Polak has been Chief Legal Officer Vice President, General Counsel and Secretary from April 2007 to Ms. Polak previously served as Executive Counsel and Assistant Secretary of ADESA from February 2005 to April October 2017, the Assistant General Mr. Money joined AFC in 1999 as Controller and was later promoted to Vice President of Finance in 2006 and Mr. Money joined AFC in 1999 as Controller to joining AFC, Mr. Money served as Chief Financial Officer of Fundex to Chief Financial Officer in 2009. Prior Money is a certified public accountant. Games, LTD from 1998 to 1999. Mr. PricewaterhouseCoopers LLP, an independent registered public accounting firm. Mr. Loughmiller is a certified PricewaterhouseCoopers LLP, an independent public accountant. Financial Officer of May & Speh, Inc. from 1996 to 1998 until May & Speh was acquired by Acxiom Financial Officer of May & Speh, Inc. finance leader of the Outsourcing Division of Acxiom Corporation from Corporation. Mr. Loughmiller was the Speh, Mr. Loughmiller was an audit partner with 1998 to 2000. Prior to joining May & been Executive Vice President and Chief Financial Officer since April 2007. Previously, from 2001 to 2006, been Executive Vice President and and Chief Financial Officer of ThoughtWorks, Inc., an information Mr. Loughmiller was the Vice President Mr. Loughmiller served as Executive Vice President and Chief technology consulting firm. Prior to that, joining IAA, Mr. Kett served in a variety of senior financial and operational roles for Central Steel and Wire Co., and operational roles for Central served in a variety of senior financial joining IAA, Mr. Kett Vistar, Inc.), Newark Electronics and Deloitte LLP. Safelite Glass Corporation (formerly Officer and President of IAA since May 2014. Mr. Kett joined IAA in 2001 as Senior Vice President of Planning joined IAA in 2001 as Senior Vice of IAA since May 2014. Mr. Kett Officer and President Prior to Chief Financial Officer and then President. and was later promoted to and Business Development Previously, Mr. Kelly was President and Chief Financial Officer of Openlane from February 2010 to February Officer of Openlane from February was President and Chief Financial Previously, Mr. Kelly 2010. of Openlane from May 2008 to February Mr. Kelly was Chief Financial Officer 2011. Prior to that, at Openlane from in a number of executive roles of Openlane in 1999 and served Mr. Kelly was a co-founder 1999 to 2008. President of Digital Services since December 2014 and the Chief Technology Officer since June 2013. the Chief Technology Officer since Services since December 2014 and President of Digital to June 2013. of Openlane from February 2011 President and Chief Executive Officer Mr. Kelly was the for more than a decade at various subsidiaries of GMAC Financial Services. He has also served as a general has also served as Services. He of GMAC Financial various subsidiaries than a decade at for more Mr. Benz Credit Corp. roles at Mercedes held management at AutoNation and manager Hammer has 25 years industry. in the automotive of experience and U.S. Auto Finance,U.S. Auto and Auto, of Cruz Officer Executive and Chief 2018, to February 2016 from June Inc. LLC 2018. Mr. 2017 to February from June and President of Executive Officer served as Chief Hammer previously 2016. Mr. March 2014 to June AFC from and Officer, 2009 as Chief Operating joined AFC in April Hammer Mr. 2013. Prior to AFC, of AFC in May the role of President assumed roles senior management Hammer held 13APR201815452321 Proxy Statement 13APR201815452321 These compensationhighlights arediscussedinmoredetailbelow. This CompensationDiscussionandAnalysisisorganizedintosixsections: Named ExecutiveOfficers 2017 ExecutiveCompensationHighlights as executiveofficersattheendoflastcompletedfiscalyear.Ournamedare: financial officer;and(iii)eachofthethreeothermosthighlycompensatedexecutiveofficerswhowereserving Our namedexecutiveofficersforthelastcompletedfiscalyearwere(i)ourchiefofficer;(ii) awarded andpaidtothenamedexecutiveofficers. read inconjunctionwiththetablesandtextelsewherethisproxystatementthatdescribecompensation The followingdiscussionandanalysisofourcompensationprogramfornamedexecutiveofficersshouldbe Wecontinuedourheavy focusonperformance-basedequityawardswith75%ofour2017 • Halfofthe2014PRSUs paidoutat125%oftargetandtheremaining2014PRSUs200% • PayoutsbasedonAdjustedEBITDAperformancein2017underourAnnualIncentiveProgram(as • ‘‘TradeRev’’ istheassumednameforNthGenSoftwareInc. * Title John Kett Becca Polak Don Gottwald Eric Loughmiller Jim Hallett Name Results ofSayonPayVotesat2017AnnualMeeting(page40) Compensation PoliciesandOtherInformation(pages38–40) (pages 31–38) Elements UsedtoAchieveCompensationPhilosophyandObjectives eemnn xctv opnain(ae 29–30) Determining ExecutiveCompensation(pages The RoleoftheCompensationCommitteeandExecutiveOfficersin Compensation PhilosophyandObjectives(page29) Executive Summary(pages27–28) Share performanceovera three-year measurementperiod. in theformofPRSUsthatwill payoutbasedonourCumulativeOperatingAdjusted NetIncomePer respectively. target basedonstrongCumulativeAdjustedNetIncome PerShare(‘‘CANIPS’’)andTSRperformance, respective performance. objectives, whichresultedinvaryingincreasespayouts foreachnamedexecutiveofficerbasedontheir Program 2017payout,basedonthenamedexecutiveofficers’ achievementofpre-establishedqualitative Compensation CommitteeappliedtheMBOmodifier(as subsequentlydefined)totheAnnualIncentive remaining namedexecutiveofficerwhosepayoutisbased ontheperformanceofKARandIAA.The whose payoutisbasedontheperformanceofKARand approximately130%ofthetargetamountfor subsequently defined)wereatapproximately111%ofthetargetamountfornamedexecutiveofficers COMPENSATION DISCUSSIONANDANALYSIS Chief ExecutiveOfficerandPresidentofIAA Chief LegalOfficerandSecretaryforKARPresidentofTradeRev* Chief OperatingOfficerandStrategy Executive VicePresidentandChiefFinancialOfficer Chief ExecutiveOfficerandChairmanoftheBoard OVERVIEW 26 26 Proxy Statement 27 $153.9 $339.5 $473.3 $838.0 $362.0 13APR201817013311 13APR201815461426 Corporate AFC $747.9 $149.3 $288.9 $419.5 ($109.8) ($128.7) $222.4 IAA ADESA 2015 2016 2017 $649.8 $147.3 $265.1 $328.6 ($91.2) 2015 2016 2017 $214.6 $0 $50 $400 $350 $300 $250 $200 $150 $100 $900.0 $700.0 $500.0 $300.0 $100.0 ($100.0) December 31, 2017 in Item 7, ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations— EBITDA and Adjusted EBITDA.’’ Through share buybacks and dividends, in 2017 Through share buybacks and dividends, to we returned approximately $325 million stockholders and invested approximately capital $226 million in our business through expenditures and strategic acquisitions. million. Adjusted EBITDA* rose 12% to $838.0 * 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 27 $301.3 $1,937.5 $1,219.2 $3,458.0 $50.51 EXECUTIVE SUMMARY EXECUTIVE 2017 Business Highlights 2017 Business 13APR201819122358 13APR201814570418 AFC IAA $286.8 $3,150.1 $1,765.3 $1,098.0 $42.62 ADESA 2015 2016 2017 $268.4 $994.4 $2,690.6 $1,427.8 2015 2016 2017 $37.03 $0.0 $0 $30 $20 $10 $60 $50 $40 $500.0 $3,000.0 $2,500.0 $2,000.0 $1,500.0 $1,000.0 $4,000.0 $3,500.0 approximately 9% to 5.5 million units. Total vehicles sold by ADESA and IAA rose Net revenue was up 10% to approximately $3.5 billion. day of each year. 2017. The closing price shown below for each 2017. The closing price of a share of the year is the closing stock on the last trading Company’s common The closing stock price of KAR’s common stockThe closing stock 19% from $42.62 atrose approximately to $50.51 at December 29,December 30, 2016 million increased 63% from $222.4 Net income per diluted share). ($2.62 to $362.0 million ($1.60 per diluted share) sold, revenues, adjusted EBITDA and net income. Specific highlights for fiscal 2017 included: for fiscal 2017 Specific highlights and net income. adjusted EBITDA sold, revenues, For the year ended December 31, 2017, the Company again delivered solid growth in volume of total vehicles in volume of total solid growth Company again delivered 31, 2017, the ended December For the year 13APR201815452321 Proxy Statement 13APR201815452321 recent years. Company performance.Webelievethatthisstrongpayforperformanceorientationhasserveduswellin We maintainacompensationprogramstructuredtoachievecloseconnectionbetweenexecutivepayand ✔ ✔ ✔ ✔ Our ExecutiveCompensationPracticesareAlignedwithStockholders’Interests ✘ ✘ ✘ E a $0)$,9 488$,2 508$5,812 $5,078 $4,824 $4,808 $5,994 CEO Pay($000) nee S 0 5.7128 0.2281 290.68 238.16 201.12 182.83 152.97 100 Indexed TSR iclYa 02Y 0321 0521 2017 2016 2015 2014 2013 2012YE Fiscal Year 02Y 0321 0521 2017 2016 2015 2014 2013 2012 YE ae ih7%o u qiyaad ntefr andPRSUs. Committeesetsmaximumamountsthatmaybe payableforannualcashincentivecompensation of PRSUs. based with75%ofourequityawardsintheform equity incentiveprogramisheavilyperformance- program is100%performance-basedandour ssoni h hr eo.Beginningwiththe2017 Change salaryandtargetbonusfortheCEOone executiveofficerintheeventwearerequiredto as showninthechartbelow. incontrolseverancebenefits aretwotimesbase performance andthecompensationofourCEO, demonstrated closealignmentbetweenourTSR program andpractices. andcancellationofincentivecompensationan evaluate andreviewourexecutivecompensation independent compensationconsultantto Compensation Committeeretainsitsown are independentunderNYSErules. the membersofourCompensationCommittee and executiveofficers. short salesofCompanystockbyourdirectors to attractandretainhighlyqualifiedexecutives. limited numberofperquisitesthataredesigned paid onunvestedPRSUs: securities: efrac odtosaestsid n i)tewithoutstockholderapproval. priceandcannotberepricedordiscounted period. PRSUs vestaftertheperformancemeasurement performance conditionsaresatisfied;and(ii)the are accruedbutnotpaidonPRSUsuntil(i)the Allow hedgingorpledgingoftheCompany’s Provide excessiveperquisites: Allow dividendsordividendequivalentstobe Stockholder alignment: Independent compensationconsultant: Independent CompensationCommittee: Pay forperformance: $5,994 Weprohibithedging,pledgingand E a $0)IndexedTSR CEO Pay($000) $4,808 Orana netv TheCompensation Ourannualincentive $4,824 Wehaveconsistently Dvdn qiaet pricesaresetequaltothegrantdatemarket Dividendequivalents $5,078 W rvd forourexecutiveofficers. Weprovidea 13APR201815275740 WHAT WEDON’TDO $5,812 The Alo Ourclawbackpolicyprovidesfortherecovery Allof WHAT WEDO 28 ✔ ✔ ✔ ✘ ✘ ✔ ✔ award agreements: executive officers. times basesalaryandtargetbonusfortheother executive officer’sintentionalmisconduct. prepare anaccountingrestatementduetosuch ownership guidelineforourCEOisfivetimeshis applicable toourexecutiveofficers.Thestock have stockownershipguidelinesthatare change incontrol. employment inconnectionwithorfollowingsuch experiences aqualifyingterminationof of theCompanyisonlypermittedifanexecutive replaced equityawardsuponachangeincontrol equity grants,acceleratedvestingofassumedor do notmaintainadefinedbenefitpensionplan guidelines aremet. shares, netoftaxes,untilstockownership officers arerequiredtohold60%ofvested over 25timeshisannualbasesalary.Executive annual basesalary,andtheCEOcurrentlyholds Maintain adefinedbenefitpensionplan: Reprice stockoptions: Moderate changeincontrolbenefits: Clawback policyforfinancialmisconduct: Maximum payoutcaps: Robust equityownershiprequirements: ‘‘Double-trigger’’ vestingprovisionsinequity Stockoptionexercise We We 28 Proxy Statement 29 Although KAR Auction Services is comprised 29 The Compensation Committee of our Board is comprised of The Compensation Committee of our The Compensation Committee has primary responsibility for all The Compensation Committee has EXECUTIVE COMPENSATION THE EXECUTIVE OFFICERS IN DETERMINING THE EXECUTIVE OFFICERS COMPENSATION PHILOSOPHY AND OBJECTIVES AND PHILOSOPHY COMPENSATION THE ROLE OF THE COMPENSATION COMMITTEE AND THE ROLE OF THE COMPENSATION financial results; value; Company performance and stockholder with long-term, overall measurable goals and objectives; officers manage from the perspective of owners with an equity stake in the Company; the perspective of owners with an officers manage from • opportunity without encouraging excessive risk-taking; provide competitive upside • and retain skilled and experienced executive officers; and enhance our ability to attract • with performance and with competitive market practices. provide rewards commensurate • directly tied to our incentive compensation programs and focus our executive officers through motivate • by aligning rewards synergies among all business units a one-company culture and encourage support • on pre-established, through variable pay based a significant percentage of total compensation provide • so that our executive with the interests of our stockholders interests of our executive officers align the of the lack of directly comparable companies for KAR Auction Services’ business, as noted above, companies of the lack of directly comparable companies for KAR Auction Services’ industries; (ii) similarly- in the proxy comparator group were selected based on (i) a focus on service-oriented profitability and/or market valuation sized revenue and market capitalization levels; (iii) comparable growth, In order to confirm competitiveness of compensation, the Compensation Committee uses a combination of In order to confirm competitiveness of compensation, the Compensation service industry surveys); and (i) survey data (cuts from the Aon Hewitt and Mercer general industry and adjusting base salary levels. In light (ii) proxy compensation data of a ‘‘proxy comparator group’’ in setting and named executive officer compensation levels. With assistance from its independent compensation consultant, named executive officer compensation levels. With assistance from its independent Committee has developed a ClearBridge Compensation Group LLC (‘‘ClearBridge’’), the Compensation meaningful comparator group for the Company. Compensation Committee’s Use of Market and Survey Data. the Compensation Committee of a unique mix of businesses and lacks directly comparable public companies, peer companies when setting understands that most companies consider pay levels at comparably-sized, compensation decisions relating to our named executive officers. The Compensation Committee reviews the compensation decisions relating to our as well as the mix of elements used to compensate our named aggregate level of our executive compensation, executive officers on an annual basis. Composition of the Compensation Committee. Composition of the Compensation and Messrs. Bourell and Larson. Mmes. Ecton (Chairman) and Jolliffe Role of the Compensation Committee. While the Company does not target any specific percentile positioning versus the market, the market median is any specific percentile positioning versus the market, the market median While the Company does not target the sole determinant when making compensation decisions. Compensation used as a reference point but is not of factors including experience, tenure, specific requirements of roles decisions are made considering a number and Company performance. relative to the market and individual compensation programs that we have developed and implemented is intended to satisfy one or more of the implemented is intended to satisfy one that we have developed and compensation programs following specific objectives: executive officers is (i) closely aligned with our performance on both a short-term and long-term basis; both a short-term performance on aligned with our officers is (i) closely executive in and (iii) competitive for stockholders; to create value results intended to specific, measurable (ii) linked Each of the finance industry. and auto the vehicle remarketing executive talent into and retaining key attracting We design and administer our executive pay programs to help ensure the compensation of our named ensure the compensation programs to help our executive pay and administer We design 13APR201815452321 Proxy Statement 13APR201815452321 Compensation Committeebymakingrecommendationsregardingcompensationactionsfortheexecutive at whichcompensationactionsinvolvingournamedexecutiveofficersarediscussed.Mr.Hallettassiststhe Role oftheExecutiveOfficers. subject toreviewandapprovaloftheCompensationCommittee. Compensation Committeedoesnotraiseanyconflictofinterest.AllworkperformedbyClearBridgeisandwas listing standardsregardingcompensationconsultantsandhasconcludedthattheworkofClearBridgefor The CompensationCommitteehasreviewedtheindependenceofClearBridgeinlightSECrulesandNYSE Corporation competitiveness oftheexecutiveofficers’elementscompensation. Committee withrespecttoannualandlong-termincentiveplandesign;(vi)guidanceonthe long-term equityawards;(iv)adviceregardingrelatedcompensationmatters;(v)totheCompensation WestinghouseAirBrakeTechnologies evaluation oflong-termincentivecompensationpractices;(iii)adviceandguidanceregardingthedesignnew with respecttotheassessmentofCompany’sexecutivecompensationpractices;(ii)adviceregarding independent compensationconsultantin2017.ClearBridgeprovided(i)advicetotheCompensationCommittee Role oftheIndependentCompensationConsultant. TotalSystemServices,Inc. relative tomarketandindividualCompanyperformance. Sotheby’s PitneyBowesInc. Committee alsoconsideredexperienceandtenure,sustainedperformancespecificrequirementsofroles Vantiv,Inc. not asthesoledeterminantinmakingitsdecisionsregarding2017basesalarylevels.TheCompensation WernerEnterprises,Inc. The CompensationCommitteeviewedtheproxycomparatorgroupandmarketdataasanimportantguide, but MSCIndustrialDirectCo.Inc. OldDominionFreightLineInc. similar industriestotheCompany. executive talent.Wherepossible,theCompensationCommitteeincludedcompaniesthatareinrelatedor Stericycle,Inc. profitability and/ormarketvaluationprofiles;and(iv)companieswithwhichKARAuctionServicescompetesfor LKQCorp. oriented industries;(ii)similarly-sizedrevenueandmarketcapitalizationlevels;(iii)comparablegrowth, Companies inthe2017proxycomparatorgroupwereselectedbasedon(i)afocuscompaniesservice- Equifax Inc. ebay Inc. CDK Global,Inc. Copart, Inc. GATXCorp. Cintas Corporation Allison TransmissionHoldings,Inc. 2017 ProxyComparatorGroup consisting ofthefollowing17companiesinmaking2017compensationdecisions: Based ontherecommendationofClearBridge,CompensationCommitteeusedaproxycomparatorgroup Committee includedcompaniesthatareinrelatedorsimilarindustriestotheCompany. profiles; and(iv)theavoidanceofover-representinganyoneindustry.Wherepossible,Compensation the CompensationCommitteeatwhichhiscompensationisdiscussed. officers otherthanhimself.Mr.Hallettrecuseshimselfanddoesnotparticipateinanyportionofmeeting of Mr.HallettregularlyparticipatesinmeetingsoftheCompensationCommittee TheCompensationCommitteeusedClearBridgeasits 30 30 Proxy Statement 31 performance resulted in approximately 130% of target for the remaining named executive officer- based on Adjusted EBITDA performance in 2017. The application of the MBO modifier (as defined below) resulted in varying increases in the total payout for each named executive officer based on their respective performance. See page 35. RSU awards made up 25% of the value of the aggregate long-term incentives granted to the named executive officers in 2017. Actual award payouts are based on achievement of 2017 Adjusted EBITDA and an MBO modifier (defined below) relating to pre-established qualitative objectives for implementing and documenting certain talent development and succession plan programs. scope, individualperformance and review ofcompetitive pay practices. See pages 35–36. Operating Adjusted Net executive officers in 2017. Income Per Share performance through December 31, 2019. PRSU awards made up 75% of the value of the aggregate long-term incentives granted to the named executive officers in 2017. compensation. 31 Align the interests of executives with long-term stockholder value and serve to retain executivetalent. Awards earned based on 3-year Cumulative facilitate the attraction andretention of a skilled and of tenure, review experienced executivemanagement team. competitive pay practices and base salary as a in 2017. See pages percentage of total 32–33. AND OBJECTIVES anniversaries of the grantdate subject to the namedexecutive officer’s stockholder value and serve to retain executivecontinued employment withthe Company, provided that the Company achieves individual performance and future results, job scope,$100 million in adjusted net income in its 2017 fiscal executive officers in 2017. talent.year, as reported by the to all of the named Company (which condition was satisfied). practices. review of competitive pay See page 36. component payable incash.Reviewed annually and executive officers for theiradjusted when appropriate. individual performance, CEO officer other than our based on performanceagainst annuallyestablished targets. and past performance pre-determined financial experience, job scope, performance, experience, Company. objectives at the job scope and review of 111% of target for certain received a salary increase named executive officers of competitive pay practices. KAR and IAA’s strong Key Why We Pay How We 2017 Element Characteristics This Element Determine Amount Decisions Restricted stockunits (RSUs) RSUs vest ratably on each interests of Align the of the first three Awards based on executives with long-term individual’s ability to impact The Compensation Committee granted RSUs Performancerestricted stockunits (PRSUs) vest at the end of a PRSUs three-year performance Motivate and reward period. executives for performance based on individual’s ability Award opportunities are Committee granted PRSUs The Compensation on key long-term measures. to impact future results, job to all of the named Annual cashincentive awards payable in cash component Variable compensation successful achievement of based on individual Motivate and reward the Award opportunities are resulted in approximately KAR’s strong performance Base salary Fixed compensation Reward the named Company performance, Each named executive ELEMENTS USED TO ACHIEVE COMPENSATION PHILOSOPHY COMPENSATION ACHIEVE TO USED ELEMENTS Variable Fixed survey data and proxy compensation data of other companies. survey data and proxy program uses a mix of fixed and variable compensation elements and provides alignment with both short- and elements and provides alignment of fixed and variable compensation program uses a mix to drive overall incentives. Our incentives are designed goals through annual and long-term long-term business align with our correlate to stockholder value and and business unit strategies that corporate performance reviews compensation, the Compensation Committee order to confirm competitiveness of strategic vision. In The following table lists the elements of compensation for our 2017 executive compensation program. The program. executive compensation for our 2017 elements of compensation table lists the The following Elements of 2017 Executive Compensation Program Design Program Compensation of 2017 Executive Elements 13APR201815452321 Proxy Statement 13APR201815452321 because theCompensationCommitteedeterminedthat hisbasesalarywasalreadysetatacompetitivelevel. Kett andMs.Polak.TheCompensationCommitteedid notapproveabasesalaryadjustmentforMr.Hallett above, theCompensationCommitteeapprovedabase salaryadjustmentforMessrs.Gottwald,Loughmillerand base salariesofeachournamedexecutiveofficers for2017.Afterconsideringmultiplefactorsasnoted Base Salariesfor2017. these factorswereappliedin2017isdescribedbelow. not attemptedtorankorotherwiseassignrelativeweights tothefactorsthatitconsiders.Adescriptionofhow with determiningthebasesalaryofeachournamed executiveofficers,theCompensationCommitteehas and tenure.InviewofthewidevarietyfactorsconsideredbyCompensationCommitteeinconnection compensation ofourexecutiveofficers,Companyperformance,individualexperience,jobscope amount andrelativepercentageoftotalcompensationthatisderivedfrombasesalarywhensettingthe General. Base Salary Compensation StructureandGoalSetting incentives. officers, isat-risk,consistingofPRSUs,restrictedstockunits(‘‘RSUs’’)andotherperformance-based total compensation,andapproximately70%oftheaveragecompensationourothernamedexecutive average ofourothernamedexecutiveofficersisshowninthechartsbelow.Approximately83%CEO’s responsibility forourperformance.Themixoftargetdirectcompensation2017CEOandthe percentage ofcompensationshouldbetiedtoperformanceforexecutiveswhobearhigherlevels that asignificantamountofexecutivecompensationshouldbeintheformequityandgreater and annualcashincentiveawards.Theseawardsarelinkedtoactualperformance,consistentwithourbelief business unitperformancewithalargepercentageofcompensationatriskthroughlong-termequityawards Our executivecompensationprogramisdesignedtodeliverinaccordancewithcorporateand At-Risk 83% Compensation Annualsalarylevelsforournamedexecutiveofficersarebaseduponvariousfactors,includingthe All Other 1% E opnainOtherNamedExecutiveOfficer CEO Compensation Target Annual Cash Bonus 20% Performance- Based RSUs 47% Inlate2016andthefirstquarterof2017,Compensation Committeereviewedthe Base Salary 16% Time-Vested RSUs 16% 13APR201815275496 Not At-Risk 17% 32 At-Risk 70% Compensation All Other 2% Average Compensation Target Annual Cash Bonus 25% Performance- Based RSUs 34% Base Salary Time-Vested 28% RSUs 11% 13APR201815275618 Not At-Risk 30% 32 Proxy Statement 33 $975,000$525,000$583,495$515,000$501,275 8% 5% 0% 8% 5% Base Salary Increase % Under the KAR Auction Services, Inc. Annual Under the KAR Auction Services, Inc. 33 In late 2017, the Compensation Committee reviewed the base salaries of each of our Compensation Committee reviewed In late 2017, the Named executive officers with greater job responsibilities have a significant proportion of their annual Named executive officers with greater Use of 2017 Adjusted EBITDA efforts; • and business improvement consulting expenses incurred for cost reduction, operating restructuring • stock based compensation expense; • of net income; certain other non-cash amounts included in the determination • charges and revenue reductions resulting from purchase accounting; • minority interest; • expenses associated with the consolidation of salvage operations; • gains and losses from asset sales; • of indebtedness; unrealized foreign currency translation gains and losses in respect • certain non-recurring gains and losses; John Kett Jim Hallett Eric Loughmiller Don Gottwald Becca Polak Name John Kett $477,405 3% 1, 2017 January Merit increase. Eric LoughmillerDon GottwaldBecca Polak $500,000 $583,495 $475,000 11% 3% January 1, 2017 8% January 1, 2017 Merit and market adjustment. January 1, 2017 Merit and market adjustment. increase. Merit NameJim Hallett Base Salary $900,000 % Increase Effective Date 0% Why Was Increase Approved? N/A N/A Incentive Program. (earnings before interest expense, income taxes, depreciation and ‘‘Adjusted EBITDA’’ is equal to EBITDA other things: amortization) adjusted to exclude, among In 2017, the Compensation Committee used ‘‘2017 Adjusted EBITDA’’ for KAR Auction Services and/or IAA, In 2017, the Compensation Committee officer, as the relevant metric for determining awards under the Annual depending upon the named executive Annual Cash Incentive Program the achievement of certain pre-established corporate performance goals eligible participants is contingent upon Committee. as determined by the Compensation The KAR Auction Services, Inc. Annual Incentive Program. The KAR Auction Services, Inc. Annual Program’’), which is part of the KAR Auction Services, Inc. 2009 Incentive Program (the ‘‘Annual Incentive as amended (the ‘‘Omnibus Plan’’), the grant of cash-based awards to Omnibus Stock and Incentive Plan, General. performance through their annual incentive opportunity. cash compensation tied to Company confirm competitiveness of compensation, the Compensation Committee reviews survey data and proxy confirm competitiveness of compensation, compensation data of other companies. The Compensation Committee did not approve a 2018 base salary adjustment for Mr. Gottwald because the The Compensation Committee did not that his base salary was already set at competitive levels. In order to Compensation Committee determined Committee approved the following base salaries, effective January 1, 2018: the following base salaries, effective Committee approved Base Salaries for 2018. Base Salaries for Compensation factors as noted above, the for 2018. After considering multiple named executive officers The following base salaries were in effect for 2017: in effect were base salaries following The 13APR201815452321 Proxy Statement 13APR201815452321 prorated forperformancebetweentheestablishedlevels. percentages arebasedontheachievementofperformancemetricssetforthbelow,withpaymentamounts The chartbelowreflectsAdjustedEBITDAperformancemetricsandachievedresultsfor2017.payout based onachievementof2017AdjustedEBITDAforeachnamedexecutiveofficerwasasfollows: determine thesizeofpayoutsunderAnnualIncentiveProgram.In2017,annualincentiveopportunity Using thesemeasures,theCompensationCommitteeestablishes,onanannualbasis,specifictargetsthat the levelofperformancerequired toreceivethreshold,targetandsuperiorannual incentivepayouts.The The CompensationCommittee reviewstheCompany’sbusinessplanapprovedby theBoardanddetermines 35below. shown onpage applied theMBOmodifiertoincreaseannualincentive awardofeachthenamedexecutiveofficers,as Based oneachexecutive’slevelofachievement oftheseobjectives,theCompensationCommittee talent developmentandsuccessionplanprograms. executive’s achievementofpre-establishedqualitative objectivesforimplementinganddocumentingcertain (‘‘MBO’’) modifiertoincreaseorreducetheannualincentive awardsbyuptoplusorminus10%basedonan In 2017,theCompensationCommitteecouldalso,inits discretion,applytheManagementbyObjectives onKt 47455 0 5 050 50 IAA 100 150 100 100 Services 100 100 112.5 150 Salary 50 75 187.5 112.5 100 Salary 37.5 125 75 50 $477,405 Salary 62.5 $475,000 37.5 Salary $583,495 $900,000 $500,000 John Kett Becca Polak Don Gottwald Eric Loughmiller Jim Hallett Name to 50%) Business PerformanceFactor: Target IncentiveOpportunity: anyextraordinary,unusualornon-recurringcharges,expenseslosses. • anyimpairmentchargesorwrite-offsofintangibles;and • expensesincurredinconnectionwithpermittedacquisitions; • expensesrealizedupontheterminationofemployeesandorcancellationleases, • improvement efforts; software licensesorothercontractsinconnectionwiththeoperationalrestructuringandbusiness KAR Performance Metric&Goal IAA AdjustedEBITDA KAR AdjustedEBITDA Performance Targetsfor the AnnualIncentiveProgram Use ofManagementbyObjectives BasePaymultipliedbyIndividualTargetOpportunity 2017AdjustedEBITDAofKAR(50%or100%)andBusinessUnit(0% aeBs aeBs Auction Base Base Base Base Threshold 50% Payout $286.7 $772.4 hehl agtSuperior Target Threshold 34 f%o fKAR %of %of % of ou potnt 2017AdjustedEBITDA Bonus Opportunity Achieved Results 100% Payout $307.1 $835.0 Target $844.5 $337.4 150% Payout Superior $337.8 $876.8 Bonus GoalWeighting% Percentage 17APR201804405514 149.4% 111.3% Payout 34 Proxy Statement 35 Annual Incentive Percentage of Target Achieved Award Earned (Adjusted Target Percentage of Award Earned Annual Incentive 35 Under the Annual Incentive Program, threshold performance Under the Annual Incentive Program, Target Annual (Adjusted As previously disclosed, on February 24, 2017, the Compensation Threshold Target Superior Results(1) EBITDA) The chart which follows provides the 2017 Adjusted EBITDA performance targets provides the 2017 Adjusted EBITDA The chart which follows Annual Incentive Program purposes, certain acquisitions consummated in 2017 were excluded, which resulted in Annual Incentive Program purposes, certain Adjusted EBITDA of $844.5 million. (1) $838 million, but for KAR’s reported Adjusted EBITDA for the year ended December 31, 2017 was approximately KAR Auction ServicesIAA $772.4 $835.0 $876.8 $286.7 $844.47 $307.1 $337.8 $337.44 111.3% 149.4% Becca PolakJohn Kett(1) This amount is based on the percentages of the target annual incentive awards earned for KAR and IAA. $356,250 $477,405 111.3% 130.4%(1) 110.0% 109.4% $436,338 $681,026 Eric LoughmillerDon Gottwald $375,000 $583,495 111.3% 111.3% 109.4% 108.2% $456,798 $702,974 NameJim Hallett Incentive Award $1,125,000 EBITDA) 111.3% MBO Multiplier 108.2% 2017 Payout $1,355,361 as described below. 2017 Long-Term Incentive Awards. to the Company’s named Committee granted PRSUs and RSUs under its long-term incentive program Long-Term Incentive Opportunities in the form of PRSUs and RSUs, each The Company provides long-term incentive compensation opportunities incentive awards: ‘‘Summary Compensation Table for 2017’’ on page 42. Based on the Company’s performance during 2017, and 2017’’ on page 42. Based on the Company’s performance during 2017, ‘‘Summary Compensation Table for for the different performance goals set forth above, our named the accompanying payout percentages percentages and corresponding payout amounts of their target annual executive officers earned the following incentive opportunities for our named executive officers for 2017. Because KAR Auction Services and IAA each incentive opportunities for our named of performance in 2017, each of our named executive officers was eligible achieved at least the threshold level Incentive Program in 2018, which amounts are set forth in the to receive an award under the Annual 2017 Annual Incentive Program Payouts. any payout to occur. Payouts can range from 50% of target awards for objectives must be met in order for of 150% of target awards (165% with the MBO modifier) for performance at threshold up to a maximum performance is below threshold. The table below shows the annual superior performance or no payout if 2017 Performance Targets. 2017 Performance achieved as well as the actual level of performance Compensation Committee for 2017 established by the (dollars in millions): 2017 annual incentive program payout, based on the named executive officers’ achievement of pre-established named executive officers’ achievement program payout, based on the 2017 annual incentive officer based on in payouts for each named executive which resulted in varying increases qualitative objectives, their respective performance. of the Compensation Committee, the circumstances warrant such an adjustment. In 2017, the Compensation an adjustment. warrant such the circumstances Committee, of the Compensation award. incentive program of any 2017 annual performance targets or decrease the did not increase Committee to the the MBO modifier Committee applied the Compensation this proxy statement, elsewhere in As described Compensation Committee established the performance objectives in amounts which it believed would increase believed which it amounts in objectives performance the established Committee Compensation of the named executive on the part sustained performance given a value and be achievable stockholder The and superior objectives. achieve the target greater results to increasingly which would require officers and discretion target if, in the at each performance potential payouts decrease the Committee may Compensation 13APR201815452321 Proxy Statement 13APR201815452321 onKt ,1 4699323$145,681 $202,921 3,273 $249,033 4,559 $213,603 $878,716 RSUsatGrant $436,999 5,595 RSUs 4,799 19,742 $608,674 9,818 $747,100 atGrant $2,636,060 $640,721 13,675 16,785 59,224 ShareGoal) 14,395 Adjusted NetIncome’’forafiscalyearisequaltotheCompany’snetincomeasreportedinForm10-K filed Adjusted NetIncomebytheweightedaveragedilutedcommonsharesoutstandingperyear.‘‘Operating ‘‘Cumulative OperatingAdjustedNetIncomePerShare’’forafiscalyeariscalculatedbydividing December 31,2019. for thethreefiscalyearsinmeasurementperiodbeginningonJanuary1,2017andending Adjusted NetIncomePerShare’’meansthesumofCompany’sOperatingShare Share’’ exceedscertainlevelsoverthethree-yearperiodbeginningonJanuary1,2017.‘‘CumulativeOperating The PRSUswillvestifandtotheextentthatCompany’s‘‘CumulativeOperatingAdjustedNetIncomePer John Kett Becca Polak Don Gottwald Eric Loughmiller Jim Hallett Name was intheformofPRSUsand25%valueRSUs. The aggregatetargetawardvalueforeachnamedexecutiveofficerwasallocatedsuchthat75%ofthe individual performanceandareviewofcompetitivepaypractices. executive officersin2017.Awardswerebasedontheindividual’sabilitytoimpactfutureresults,jobscope, executive officers,asdescribedinthetablebelow.TheCompanydidnotgrantanystockoptionstoitsnamed 2017. TheamountsofPRSUs andRSUsaredisclosedinthe‘‘OutstandingEquity Awards’’tablebelow. certain oftheCompany’snamed executiveofficers,someofwhichremainedoutstanding atfiscalyear-end As previouslydisclosed,on February22,2016,theCompensationCommitteegranted PRSUsandRSUsto Prior Years’Awards. filed bytheCompanywithrespecttosuchfiscalyear, andwhichconditionwassatisfied). performance goalof$100millioninadjustednetincome inits2017fiscalyear(asreportedtheForm10-K Company througheachsuchanniversary,providedthat theCompanyhasachievedSection162(m) anniversaries ofthegrantdate,subjecttonamed executive officer’scontinuedemploymentwiththe The RSUswillvestandconvertintosharesofcommon stockoftheCompanyoneachfirstthree the levelsdescribedabove. interpolation willbeusedtocalculatethepercentageofPRSUsearnedandpaidifperformancefallsbetween target performanceandupto200%forachievingthemaximumlevelorhigher.Linear the performanceperiodwillbe:0%forbelowthresholdperformance,50%100% for The amountofthetargetPRSUsactuallyearnedandpaidinsharescommonstockalumpsumfollowing tax ratechangescausedbyinlegislation. impairments; (vi)excludetheimpactofadoptionnewaccountingstandards;and(vii) of the Company’scontrolthatmayaffectoveralleconomicenvironment;(v)excludesignificantasset acquisition contingentconsideration;(iv)excludetheimpactofsignificantactsGodorothereventsoutside of associated withacquiredintangibleassetsrecordedduringpurchaseaccountingofacquisitions;(iii)exclude related financingcostsnotcontemplatedinthelongtermincentivetargets;(ii)excludeamortizationexpense and unbudgetedcapitaltransactions,includingdebtprepayment,refinancing,sharerepurchases by theCompanywithrespecttosuchfiscalyear,adjusted(i)excludegains/lossesfromcertainnon-recurring 2016 Performance-BasedandTime-BasedRSUAwards 2017 Time-BasedRSUAwards 2017 Performance-BasedRSUAwards Target PRSUs dutdNtValueof Adjusted Net (Cumulative noePrTre hrsValueof TargetShares Income Per Operating 36 36 Proxy Statement 37 0% of Target 50% of Target 100% of Target 200% of Target 84,25714,043 $4,300,477 $716,755 equivalents) Payout(1) 2017 CANIPS (including dividend Number of PRSUs Vesting The Company currently grants long-term 37 2014 Performance-Based RSU Awards 2015 Performance-Based and Time-Based RSU Awards and Time-Based 2015 Performance-Based $5.22 Greater than or equal to $6.26 Below $4.83 $4.83 determined by the Compensation Committee. Our Board initially adopted the Omnibus Plan on December 10, 2009 and it has since been amended and Our Board initially adopted the Omnibus Plan on December 10, 2009 and are eligible to receive options, restated, as approved by the stockholders. Under the Omnibus Plan, participants and/or cash-based awards, each as restricted stock, RSUs, stock appreciation rights, other stock-based awards Company’s TSR. Plan under which Long-Term Incentive Awards are Granted. incentive awards under the Omnibus Plan. As previously disclosed, on March 7, 2017, 50% of the PRSUs granted in 2014 vested above the target As previously disclosed, on March 7, 2017, 50% of the PRSUs granted the Company’s CANIPS and the performance level but below the maximum performance level based on level based on the remaining 50% of the PRSUs granted in 2014 vested at the maximum performance (1) on a share price of $51.04, the February Based 6, 2018 market close price. Don GottwaldBecca PolakJohn Kett 21,454 12,483 $1,095,012 $637,132 Name Jim Hallett Eric Loughmiller 39,008 $1,990,968 PRSUs vesting: The Company achieved CANIPS of $5.57 versus a target of $5.22 for the three-year performance period ended The Company achieved CANIPS of 6, 2018, based on the CANIPS achieved, 133.5 percent of the 2015 December 31, 2017. As such, on February but below the maximum level and resulted in the following number of PRSUs vested above the target level Target: Maximum: Threshold: below: CANIPS During the Measurement PeriodBelow Threshold: Number of PRSUs Vesting exceeding certain levels over the three-year period beginning on January 1, 2015 and ending on December 31, on January 1, 2015 and ending levels over the three-year period beginning exceeding certain table below. in the ‘‘Outstanding Equity Awards’’ of PRSUs and RSUs are disclosed 2017. The amounts with the chart achieved was determined in accordance that vested based on CANIPS The number of PRSUs For the year ended December 29, 2017, an additional one-third of the RSUs had vested, as disclosed in the one-third of the RSUs had vested, December 29, 2017, an additional For the year ended and Stock Vested’’ table below. ‘‘Option Exercises CANIPS was determined based on the Company’s that vested on February 6, 2018 The number of PRSUs certain of the Company’s named executive officers, some of which remained outstanding at fiscal year-end of which remained outstanding named executive officers, some certain of the Company’s those granted in 2016. have terms substantially similar to 2017. These awards As previously disclosed, on February 20, 2015, the Compensation Committee granted PRSUs and RSUs to Committee granted PRSUs on February 20, 2015, the Compensation As previously disclosed, Other than with respect to the double-trigger vesting upon a change in control of the Company described Company of the in control a change upon vesting to the double-trigger respect than with Other the year ended in 2017. For similar to those granted terms substantially awards have above, these Stock Exercises and in the ‘‘Option vested, as disclosed of the RSUs had 29, 2017, one-third December below. Vested’’ table 13APR201815452321 Proxy Statement 13APR201815452321 parachute payments’’payabletocertainnamedexecutiveofficersuponachangeincontrolandresultsthe and relatedprovisionsimposesubstantialexcisetaxesunderSection4999oftheCodeonso-called‘‘excess Employment Agreements. Payments UponTerminationorChangeinControl—EmploymentAgreementswithNamedExecutiveOfficers.’’ one ofitssubsidiaries.Adescriptiontheseagreementscanbefoundinthesectiontitled‘‘Potential within theCompany.AllofournamedexecutiveofficershaveanemploymentagreementwithCompany or our executiveofficerstoensurethatwecontinueretaintheirservicesandpromotestabilitycontinuity The CompensationCommitteerecognizesthat,fromtimetotime,itisappropriateenterintoagreements with Table for2017’’onpage42moreinformationregardingperquisites. and Company-paidgrouptermlifeinsurancepremiums.Pleaseseefootnote4tothe‘‘SummaryCompensation include anautomobileallowanceoruseofaCompany-ownedautomobile,forexecutivephysicals executive officers.Theperquisiteswhicharecurrentlyavailabletocertainofournamedofficers Committee believesarereasonableandconsistentwiththeobjectiveofattractingretaininghighlyqualified The CompanyprovidesthenamedexecutiveofficersalimitednumberofperquisitesthatCompensation Table’’. Payments UponTerminationofChangeinControl—PotentialControl We alsoprovidecertainenhancedretirementvestingofequity-incentiveawardsasdescribedin‘‘Potential who travelforbusinesspurposes. life, disabilityandaccidentaldeathinsurance.Wealsoprovidetravelinsurancetoallemployees and encourageahealthylifestyle.Ourhealthwelfareprogramsincludemedical,dental,vision,pharmacy, executive officer.Thehealthandwelfareprogramsareintendedtoprotectemployeesagainstcatastrophicloss employer matchingcontributionsequalto100%ofthefirst4%compensationcontributedbynamed executive officers.AswithallCompanyemployees,ournamedofficersareeligibletoreceive401(k) We offeravarietyofhealthandwelfareretirementprogramstoalleligibleemployees,includingournamed generally disallowsafederal taxdeductionbytheCompanyforcompensationpaid toCoveredEmployees(as Tax DeductibilityofAwards UndertheOmnibusPlan. contain excisetaxgross-upprovisions. None oftheemploymentagreementsenteredintowith Messrs.Loughmiller,GottwaldorKettMs.Polak the originalamountoftotalpayments. payments willbereducedtotheextentnecessaryavoid theexcisetax,butinnoeventbymorethan10%of reduction ofthetotalpaymentstoMr.Hallettwouldavoid theapplicationofexcisetax,thentotal position ashewouldhavebeeninhadsuchexcisetax notbeenapplied.However,intheeventthata and interestassessmentsassociatedtherewith,willbe sufficienttoplaceMr.Hallettinthesameafter-tax which, aftertheimpositionofallincome,employment, exciseandothertaxesthereon,aswellanypenalty an excisetaxunderSection4999oftheCode,then CompanywillmakeacashpaymenttoMr.Hallett, agreement inconnectionwithMr.Hallett’semployment orterminationofemploymentisbecomessubjectto Mr. Hallett’semploymentagreementprovidesthatinthe eventthatanypaymentorbenefitundersuch ‘‘gross-up payment’’intheeventthatsuchexcisetaxesresultfromanyexcessparachutepayments. Mr. Hallett’semploymentagreement,whichbecameeffectiveasofFebruary27,2012,providesforapotential loss ofthecompensationdeductionforsuchpaymentsbyCompany. Tax andAccountingConsiderations Employment andSeveranceAgreements Perquisites Retirement, HealthandWelfareBenefits COMPENSATION POLICIESANDOTHERINFORMATION Section 280GoftheInternalRevenueCode1986,asamended(the‘‘Code’’) 38 Section162(m)oftheCode (‘‘Section162(m)’’) 38 Proxy Statement 39 39 The Company’s clawback policy provides for the recovery of The Company’s clawback policy provides We account for stock-based compensation in accordance with We account for stock-based compensation otherwise using such information for their personal benefit. • pledging the Company’s securities as collateral for loans; and • of material, non-public information, or purchasing or selling the Company’s securities while in possession • ownership of margin securities; • puts and calls or similar instruments on the Company’s securities; or trading in options, warrants, • ‘‘short.’’ selling the Company’s securities anti-hedging of Company stock policy, which prohibits our officers and directors from engaging in certain forms anti-hedging of Company stock policy, which prohibits our officers and directors such as prepaid variable forward of hedging or monetization transactions with respect to the Company’s stock, contracts, equity swaps, collars and exchange funds. In addition to the Company’s existing anti-pledging of Company stock policy, the Company adopted a formal In addition to the Company’s existing anti-pledging of Company stock policy, Our executives and directors are permitted to enter into trading plans that are intended to comply with the Our executives and directors are permitted to enter into trading plans that diversify their asset portfolios and requirements of Rule 10b5-1 of the Exchange Act so that they can prudently exercise their stock options before their scheduled expiration dates. Anti-Hedging Policy We also prohibit officers, directors and employees from: We also prohibit officers, directors and Our insider trading policy expressly prohibits: Our insider trading policy expressly required to repay to the Company the excess amount of incentive compensation received under the inaccurate required to repay to the Company the to revise this policy as needed to comply with the requirements of financial statement. The Company intends and Consumer Protection Act when such requirements become effective. the Dodd-Frank Wall Street Reform Clawback Policy for Financial Restatements. any the Company is required to prepare an accounting restatement due to incentive compensation in the event intentional misconduct. In such an event, the executive officer would be current or former executive officer’s Insider Trading Policy consequences to the Company. Accounting for Stock-Based Compensation. the requirements of ASC 718. executive compensation arrangements that will attract and retain the executive talent to compete successfully. and retain the executive talent to compete arrangements that will attract executive compensation pay to company performance in a meaningful way, the Compensation For example, in seeking to tie executive and approving pay programs that are not driven by tax Committee may make decisions in designing executive compensation, the Compensation Committee retains the discretion to award compensation that retains the discretion to award compensation the Compensation Committee executive compensation, believes limit. The Compensation Committee qualify for the Section 162(m) deductibility exceeds or does not and maintain to compromise our ability to design limitation should not be permitted that the tax deduction from the deduction limit, we cannot guarantee that compensation intended to qualify as ‘‘performance-based limit, we cannot guarantee that compensation from the deduction so qualify or will be deductible. compensation’’ will when determining by the Compensation Committee is one of many factors considered Though tax deductibility deductible by the Company for federal income tax purposes. However, because of ambiguities and However, because of ambiguities for federal income tax purposes. deductible by the Company issued thereunder, Section 162(m) and the regulations the application and interpretation of uncertainties as to 162(m)’s exemption the legislation repealing Section scope of the transition relief under including the uncertain transition relief applicable to certain arrangements in place as of November 2, 2017. in place as of certain arrangements relief applicable to transition that they Omnibus Plan so awards under the structured certain has generally Committee The Compensation 162(m) and to be exemption for purposes of Section ‘‘performance-based compensation’’ may comply with the defined in Section 162(m)) in excess of $1,000,000. Historically, compensation that qualifies as ‘‘performance- as that qualifies compensation Historically, of $1,000,000. in excess 162(m)) in Section defined been this exemption has from this limit, but could be excluded Section 162(m) under based compensation’’ to the compensation paid 31, 2017, such that after December years beginning effective for taxable repealed, for unless it qualifies by the Company will not be deductible of $1,000,000 Employees in excess Covered 13APR201815452321 Proxy Statement 13APR201815452321 The CompensationCommitteehasreviewedtheDiscussionandAnalysisforexecutive meeting ofstockholders. the CompanyisagainholdinganaSayonPayvotetoapproveexecutivecompensationat2018annual Company adoptedanannualSayonPayvotefrequency.AsdescribedinmoredetailProposalNo.2above, majority ofourstockholdersvotedinfavorholdingaSayonPayvoteeveryyear,andaccordingly,the stockholder voteonwhethertoholdaSayPayeveryone,twoorthreeyears.Atthatmeeting, In addition,attheCompany’s2017annualmeetingofstockholders,Companyheldanon-binding the 2017annualmeetingofstockholders. significant majorityofstockholdersthatvotedtoapprovetheCompany’sexecutivecompensationprograms at decided toretaintheCompany’sgeneralapproachexecutivecompensationin2018,partdue of compensationprovidedtothenamedexecutiveofficers.Followingitsreview,CompensationCommittee setting compensation,theelementsusedtoachievecompensationphilosophyandobjectiveslevels compensation philosophyandobjectives,theroleofCompensationCommitteeexecutiveofficersin The CompensationCommitteeconsideredtheresultsofvote,includingappropriateness less than3%ofthevoteswerecastagainst,and1%abstainedfromvoting. over 97%ofthevotesonmatterwerecasttoapproveCompany’sexecutivecompensationprograms, executive compensation(commonlyreferredtoas‘‘SayonPay’’).Atthemeeting,excludingbrokernon-votes, At theCompany’s2017annualmeetingofstockholders,Companyheldanon-bindingstockholdervoteon executive officersareincompliancewiththestockownershipguidelines. under awardsgrantedonorafterJanuary1,2015untiltheapplicableownershipguidelineismet.Allnamed The namedexecutiveofficersmusthold60%ofthevestedshares,nettaxes,Companystockreceived named executiveofficers: The CompensationCommitteeadoptedthefollowingstockownershipguidelineswhichareapplicabletoour and JohnP.Larson. 2017 AnnualReportonForm10-K.Thisreportissubmitted byDonnaR.Ecton,ToddF.Bourell,LynnJolliffe Discussion andAnalysisbeincludedinthisproxystatementincorporatedbyreferenceintotheCompany’s with management,theCompensationCommitteerecommendedtoourBoardthat compensation for2017anddiscussedthatanalysiswithmanagement.Basedonitsreviewdiscussions Stock OwnershipGuidelinesandHoldingRequirement RESULTS OFSAYONPAYVOTESAT2017ANNUALMEETING E 5timesannualbasesalary StockOwnershipGuideline 3timesannualbasesalary Other NamedExecutiveOfficers CEO Title COMPENSATION COMMITTEEREPORT Donna R.Ecton Compensation Committee Todd F.Bourell John P.Larson Lynn Jolliffe 40 (Chairman) 40 Proxy Statement 41 41 COMPENSATION STRUCTURE COMPENSATION ANALYSIS OF RISK IN THE COMPANY’S THE IN RISK OF ANALYSIS compensation arrangements. In light of these analyses, the Compensation Committee concluded that the compensation arrangements. In light is program that does not encourage excessive risk-taking that Company has a balanced pay and performance adverse effect on the Company. reasonably likely to have a material performance levels that may encourage short-term business decisions to meet payout thresholds. The performance levels that may encourage that the Company’s compensation programs (i) do not include such Compensation Committee concluded steps and controls that are designed to limit risks of our elements; or (ii) have implemented features, The Compensation Committee also reviewed the Company’s compensation programs for certain design The Compensation Committee also to encourage excessive risk-taking, including: over-weighting towards features that may have the potential payout curves, unreasonable thresholds and steep payout cliffs at certain annual incentives, highly leveraged paid to an executive officer if the compensation resulted from any financial result or metric impacted by the paid to an executive officer if the compensation will This policy helps to discourage inappropriate risks, as executives executive officer’s intentional misconduct. which is harmful to the Company’s financial and reputational health. be held accountable for misconduct Per Share. These metrics encourage performance that supports the business as a whole. The executive annual Per Share. These metrics encourage payout opportunity equal to 165% of target. Our executives are also incentive awards include a maximum in order to align the executives’ interests with those of our expected to meet share ownership guidelines policy permits the Company to recover incentive compensation stockholders. Also, the Company’s clawback the compensation. There is a balanced mix between cash and equity and between annual and longer-term and equity and between annual There is a balanced mix between cash the compensation. awards and long-term incentive awards granted to executives are tied incentives. In addition, annual incentive Adjusted EBITDA and Cumulative Operating Adjusted Net Income to corporate performance goals, including practices for 2017. structures the Company’s employee compensation Compensation Committee reviewed In its evaluation, the incentive nature of mitigate risk without diminishing the design elements that manage and and noted numerous to annually review all incentive compensation and equity-based plans, and evaluate whether the compensation plans, and evaluate whether all incentive compensation and equity-based to annually review the unnecessary and excessive risk-taking, Company’s employees incentivize arrangements of the policies and all of the Company’s compensation evaluated the risk profile of Compensation Committee measurement and pay delivery works to avoid misaligned incentives for individuals to undertake excessive or incentives for individuals to undertake pay delivery works to avoid misaligned measurement and and when to considerable internal controls, Further, program administration is subject inappropriate risk. and pay decisions—the Compensation outcomes—performance assessments determining the principal of its responsibilities good business judgment. As part principles of sound governance and Committee relies on The Compensation Committee considers the potential risks in our business when designing and administering business when potential risks in our considers the Committee The Compensation performance approach to believes its balanced Committee and the Compensation pay program, the Company’s 13APR201815452321 Proxy Statement 13APR201815452321 onKt,21 4745$8,8 6106$071$1,771,902 $30,791 $681,026 $1,753,083 $30,150 The amountreportedisequaltothepaidnamedexecutiveofficerunderAnnualIncentiveProgram, (3) — $436,338 $2,313,472 $30,870 The amountsreportedinthiscolumnrepresentthegrantdatefairvaluecomputedaccordancewithASC718.See $582,680 (2) $477,405 2017 $702,974 $1,836,984 — $25,862 $811,595 $5,811,876 AllOther Theamountsreportedinthiscolumnfor2017representthegrantdatefairvalueofPRSUsandRSUsgrantedon $41,739 $475,000 (1) $456,798 2017 — Total IncentivePlan $1,355,361 $996,133 Option John Kett, $583,495 Compensation(4) — 2017 Compensation(3) Awards(2) Stock — Awards(1) $854,324 Salary $500,000 Becca Polak, $3,514,776 2017 $900,000 Year 2017 Don Gottwald, Eric Loughmiller, Jim Hallett, Position Name andPrincipal serving asourexecutiveofficersofDecember31,2017. chief financialofficer;and(iii)eachofthethreeothermosthighlycompensatedexecutiveofficerswhowere The tablebelowcontainsinformationconcerningthecompensationof(i)ourchiefexecutiveofficer;(ii) 4 The amountsreportedfor2017consistofthefollowing: (4) n rsdn fIA21 4000$7,8 4100$360$1,440,838 $33,620 $1,498,859 $30,670 $481,030 $1,191,722 $27,231 $518,781 $1,336,690 $33,990 $2,030,406 $32,454 — $341,204 $401,416 $1,934,406 — $31,385 $2,217,718 $476,188 $46,780 $689,098 $450,000 $485,907 2015 — $463,500 $625,541 2016 — $410,540 $423,287 — $5,078,083 $400,000 $461,284 and PresidentofIAA $43,220 2015 Chief ExecutiveOfficer $440,000 $742,354 — 2016 — $566,500 President ofTradeRev 2016 $1,094,772 $727,480 Secretary forKARand $1,310,398 $550,000 $450,000 Chief LegalOfficerand 2015 2016 Officer — Officer andChiefStrategy Chief Operating $3,040,091 $900,000 2016 EVP andCFO CEO andChairman Executivephysical:Mr.Loughmiller–$192. • Company-paidgrouptermlifeinsurancepremiums:Mr. Hallett–$5,939;Mr.Loughmiller$3,870;Gottwald • 401(k)matchingcontributions:Mr.Hallett–$10,800;Loughmiller –$10,800;Mr.Gottwald • MarketvalueofCompanycarutilizedduring2017:Mr. Loughmiller–$11,000. • Automobileallowance:Mr.Hallett–$25,000;Gottwald$18,000;Ms.PolakKett$18,000. • which isgovernedbytheOmnibusPlan. The Companydidnotgrantanystockoptionstoitsnamedexecutiveofficersin2017. Note 4toourfinancialstatementsfor2017regardingtheassumptionsmadeindetermininggrantdatefairvalue. Mr. Loughmiller–$1,281,442;Gottwald$1,494,200;Ms.Polak$1,217,348;andKett$873,998. awards, basedonthegrantdatevalueofourcommonstock,isasfollows:Mr.Hallett–$5,272,120; the performanceperiod(excludingdividends)ifmaximumisachievedwithrespectto2017PRSU the assumptionsmadeindetermininggrantdatefairvalue.Themaximumawardthatcanbeearnedatendof February 24,2017,computedinaccordancewithASC718.SeeNote4toourfinancialstatementsfor2017regarding $2,070; Ms.Polak–$1,350;Mr.Kett$1,991. Ms. Polak–$10,800;Mr.Kett$10,800. SUMMARY COMPENSATIONTABLEFOR2017 05$5,0 13261—$8,5 3,5 $2,193,962 $37,456 $4,823,941 $383,855 $43,420 $1,023,613 — $1,322,651 $450,000 — 2015 $2,856,908 $900,000 2015 42 Non-Equity 42 Proxy Statement 43 4,799 213,603 5,595 249,033 4,559 202,921 3,273 145,681 Stock of Stock 19,742 878,716 Securities Restricted Fair Value Number of Underlying Date Grant 43 Plan Awards(1) Plan Awards(2) Estimated Future Payouts Estimated Future Payouts under Non-Equity Incentive under Equity Incentive Grant 2/24/20172/24/2017 2/24/20172/24/2017 6,838 13,675 27,350 4,909 9,818 19,636 608,674 436,999 2/24/20172/24/2017 2/24/20172/24/2017 7,198 14,395 28,790 8,393 16,785 33,570 640,721 747,100 2/24/20172/24/2017 29,612 59,224 118,448 2,636,060 GRANTS OF PLAN-BASED AWARDS FOR 2017 FOR AWARDS PLAN-BASED OF GRANTS computed in accordance with ASC 718 (for PRSUs, grant date fair market value is based on target awards). See computed in accordance with ASC 718 (for PRSUs, grant date fair market value determining the grant date fair value. Note 4 to our financial statements for 2017 regarding the assumptions made in Cumulative Operating Adjusted Net Income Per Share exceeds certain levels over the three-year period beginning on Cumulative Operating Adjusted Net Income January 1, 2017. with the Company and provided that anniversaries of the grant date subject to the executive’s continued employment (as reported by the Company and the Company achieves $100 million in adjusted net income in its 2017 fiscal year which condition was satisfied). (‘‘superior’’) levels, respectively, under the Annual Incentive Program, excluding application of the MBO modifier which (‘‘superior’’) levels, respectively, under the annual incentive awards by up to plus or minus 10%. See, ‘‘Compensation may cause an increase or decrease in the to Achieve Compensation Philosophy and Objectives—Annual Cash Discussion and Analysis—Elements Used on the terms of the Annual Incentive Program. Incentive Program’’ for further information These awards vest if and to the extent that the Company’s threshold, target and maximum levels, respectively. Loughmiller — 187,500 375,000 562,500 Objectives—Annual Cash Incentive Program’’ and ‘‘Long-Term Incentive Opportunities,’’ respectively. Objectives—Annual Cash Incentive Program’’ and ‘‘Long-Term Incentive Additional information concerning our cash and equity incentive plans may be found in the sections titled Additional information concerning our cash and equity incentive plans may Philosophy and ‘‘Compensation Discussion and Analysis—Elements Used to Achieve Compensation (4) The amounts reported in this column represent the grant date fair value of awards granted on February 24, 2017, (3) Column (i) includes the number of RSUs granted in 2017. These awards vest ratably on each of the first three (2) earned for performance at the Columns (f), (g) and (h) include the potential number of PRSUs which may be (1) target and maximum Columns (c), (d) and (e) include the potential awards for performance at the threshold, John Kett — 238,703 477,405 716,108 Becca Polak — 178,125 356,250 534,375 Don Gottwald — 291,748 583,495 875,243 Eric Jim Hallett — 562,500 1,125,000 1,687,500 Name(a) Date Threshold (b) Target ($)(c)(1) Maximum ($)(d)(1) Threshold Target Maximum ($)(e)(1) Units (#)(f)(2) (#)(g)(2) (#)(h)(2) Awards (#)(3)(i) ($)(4)(j) upon the achievement of certain performance objectives under the Annual Incentive Program and the grants of Program and the the Annual Incentive objectives under performance achievement of certain upon the 2017. option awards in did not grant any Plan in 2017. We the Omnibus RSUs made under PRSUs and The following table summarizes the payouts which our named executive officers could or may have received could or may have executive officers which our named the payouts table summarizes The following 13APR201815452321 Proxy Statement 13APR201815452321 John Kett ec oa 7,2 00 05/06/2019 10.00 05/06/2019 10.00 176,720 02/27/2024 30.89 60,000 Becca Polak 24,301(1) 72,903 Don Gottwald Eric Loughmiller 1 TheseserviceoptionsweregrantedonFebruary 27,2014andvestratablyoneachofthefirst four anniversariesofthe (1) a b c d e f i (j) (i) (f) (e) 03/01/2020 13.46 ($) (d) (#) (c) Date (b) Price($) 150,000 Options (#) Unexercisable Exercisable Jim Hallett (a) Name date ofgrant. OUTSTANDING EQUITYAWARDS nxrie nxrie nxrie pinOto hthv thathave thathave Option Option Unexercised Unexercised Unexercised AT FISCALYEAR-END2017 pin # pin # nandEecs xiainNtVse NotVested NotVested Expiration Exercise Unearned Options(#) Options (#) neligUdryn neligOhrRgt OtherRights OtherRights Underlying Underlying Underlying ubro ubro ubro hrs Shares, Shares, Numberof Numberof Number of euiisScrte euiisUiso Unitsor Unitsor Securities Securities Securities 4,0 8611 08 02/27/2024 30.89 48,601(1) 145,803 6278791 08 02/27/2024 30.89 8,749(1) 26,247 pinAad StockAwards Option Awards 44 netv lnAad:Marketor PlanAwards: Incentive wrs nandofUnearned Unearned Awards: qiyIcniePlanAwards: Incentive Equity lnNme fPayoutValue Numberof Plan 2,9()6,157,055(6) 121,898(6) 7,021,202(4) 139,006(4) 6,375,804(2) 126,229(2) 0286 1,020,700(6) 20,208(6) 1,122,199(4) 22,217(4) 1,062,689(2) 21,039(2) 1,421,682(6) 28,147(6) 1,065,303(4) 21,091(4) 944,600(2) 18,701(2) 4035 740,845(5) 14,053(5) 4586 1,745,005(6) 34,548(6) 1,714,473(4) 33,943(4) 1,623,501(2) 32,142(2) 1,496,535(6) 29,628(6) 3,026,397(4) 59,917(4) 2,951,779(2) 58,440(2) 1,016,592(7) 19,742(7) ,7()168,539(7) 3,273(7) 123,895(5) 58,247(3) 2,332(5) 1,072(3) 234,760(7) 4,559(7) 117,626(5) 2,214(5) ,3()349,431(3) 6,431(3) ,9()288,108(7) 5,595(7) 189,242(5) 89,001(3) 3,562(5) 1,638(3) 247,119(7) 4,799(7) 334,070(5) 6,288(5) 161,756(3) 2,977(3) 5()51,782(3) 953(3) qiyIncentive Equity Equity 44 Proxy Statement 45 45 John Kett $6,106 NameJim HallettEric LoughmillerDon GottwaldBecca Polak $16,463 $31,028 Amount $9,326 $5,797 John Kett $4,101 NameJim HallettEric LoughmillerDon GottwaldBecca Polak $11,388 $24,601 Amount $6,266 $3,646 compare our performance through 2017 under the PRSU grants against the threshold, target and maximum performance compare our performance through 2017 under the PRSU grants against the threshold, and payout amount. If the levels for the grant and report in these columns the applicable potential share number next highest level. Through performance is between levels, we are required to report the potential payout at the Net Income Per Share performance December 31, 2017, we exceeded target levels of Cumulative Operating Adjusted and have accordingly reported the PRSUs at the maximum award level. executive officer’s continued vest ratably on each of the first three anniversaries of the grant date during the named price of Company common stock employment with the Company through each such anniversary, multiplied by the market may be earned and vest based on the Company’s Cumulative Operating Adjusted Net Income Per Share performance may be earned and vest based on the Company’s Cumulative Operating Adjusted multiplied by the market price of over a three-year period, at the maximum level, held by each named executive officer per share, including reinvested Company common stock at the close of the last trading day in 2017, which was $50.51 are required by SEC rules to dividends on such PRSUs. In calculating the number of PRSUs and their value, we and unpaid cash dividend equivalents in the following amounts: and unpaid cash dividend equivalents in performance is between levels, we are required to report the potential payout at the next highest level. Through performance is between levels, we are required levels of Cumulative Operating Adjusted Net Income Per Share performance December 31, 2017, we exceeded target at the maximum award level. and have accordingly reported the PRSUs of the grant date during the named executive officer’s continued vest ratably on each of the first three anniversaries such anniversary, multiplied by the market price of Company common stock employment with the Company through each which was $50.51 per share. The total amount in column (j) includes accrued at the close of the last trading day in 2017, may be earned and vest based on the Company’s Cumulative Operating Adjusted Net Income Per Share performance may be earned and vest based on the Company’s level, held by each named executive officer multiplied by the market price of over a three-year period, at the maximum last trading day in 2017, which was $50.51 per share, including reinvested Company common stock at the close of the the number of PRSUs and their value, we are required by SEC rules to dividends on such PRSUs. In calculating the PRSU grants against the threshold, target and maximum performance compare our performance through 2017 under the applicable potential share number and payout amount. If the levels for the grant and report in these columns payout at the next highest level. Through December 31, 2017, we exceeded target levels of CANIPS performance and CANIPS performance target levels of 31, 2017, we exceeded Through December next highest level. payout at the award level. PRSUs at the maximum reported the have accordingly continued date during the named executive officer’s of the first three anniversaries of the grant vest ratably on each common stock multiplied by the market price of Company Company through each such anniversary, employment with the (j) includes accrued per share. The total amount in column trading day in 2017, which was $50.51 at the close of the last equivalents in the following amounts: and unpaid cash dividend may be earned and vest based on the CANIPS performance over a three-year period, at the maximum level, held by level, at the maximum period, a three-year over performance CANIPS on the and vest based earned may be close of the last trading common stock at the price of Company by the market executive officer multiplied each named of calculating the number on such PRSUs. In reinvested dividends per share, including which was $50.51 day in 2017, grants 2017 under the PRSU through to compare our performance required by SEC rules their value, we are PRSUs and columns the applicable and report in these levels for the grant maximum performance threshold, target and against the potential to report the levels, we are required is between amount. If the performance number and payout potential share (7) The total amounts and values in columns (i) and (j) equal the total number of RSUs granted on February 24, 2017 that (6) The total amounts and values in columns (i) and (j) equal the total number of PRSUs granted on February 24, 2017 that (5) 22, 2016 that values in columns (i) and (j) equal the total number of RSUs granted on February The total amounts and (4) 22, 2016 that values in columns (i) and (j) equal the total number of PRSUs granted on February The total amounts and (3) on February 20, 2015 that (i) and (j) equal the total number of RSUs granted total amounts and values in columns The (2)2015 that 20, on February PRSUs granted of the total number (j) equal (i) and in columns and values amounts The total 13APR201815452321 Proxy Statement 13APR201815452321 and unpaidcashdividendequivalentsinthefollowingamounts: at thecloseoflasttradingdayin2017,whichwas$50.51pershare.Thetotalamountcolumn(j)includesaccrued onKt $3,220 $4,485 $5,505 Amount $19,423 $4,721 John Kett Becca Polak Don Gottwald Eric Loughmiller Jim Hallett Name 46 46 Proxy Statement 47 47 Option AwardsAwards Stock FISCAL YEAR 2017 YEAR FISCAL Acquired on Value Realized on Acquired on Vesting Realized on Value Number of SharesNumber of Number of Shares OPTION EXERCISES AND STOCK VESTED DURING VESTED STOCK AND EXERCISES OPTION RSUs. the full amount of the 2014 TSR PRSUs at 200% of target, one-third of the 2015 RSUs and one-third of the 2016 one-third of the 2015 RSUs and one-third 2014 TSR PRSUs at 200% of target, the full amount of the RSUs. (2) one-third of the 2016 RSUs. This amount includes shares vested with respect to one-third of the 2015 and (3) to the vested 2015 and 2016 This amount includes accumulated dividend equivalents paid in cash with respect (1) 125% of target, of the 2014 CANIPS PRSUs at shares vested with respect to the full amount This amount includes Eric LoughmillerDon GottwaldBecca PolakJohn Kett — 56,250 — 85,246 1,973,783 — 2,809,262 — 3,419 (2) 45,101 (1) 2,238 (2) (3) 183,251 16,093 (1) (3) 2,066,224 (3) 119,571 739,086 (3) Name(a)Jim Hallett (#) Exercise — ($) Exercise (b) — (c) (#) 91,684 (1) Vesting ($) 4,211,937 (3) (d) (e) 13APR201815452321 Proxy Statement 13APR201815452321 awards havebeenandwillbemadepursuanttothetermsofOmnibusPlan. change incontrol,assetforthbelow.SinceDecember10,2009,allgrantsofstockoptionsandotherequity other equityawardsissuedpursuanttotheOmnibusPlanuponterminationofemploymentscenariosora Plan (andtherelatedawardagreementsthereunder)provideforfollowingtreatmentofstockoptionsand To theextentanamedexecutiveofficer’semploymentagreementdoesnotprovideotherwise,Omnibus ‘‘Employment AgreementswithNamedExecutiveOfficers’’below. become dueuponcertaintypesofemploymentterminationspursuanttotheiragreements,see executive officers’severancepaymentsandthetreatmentoftheirannualcashincentiveawardsthatmay terminations ortheoccurrenceofachangeincontrolCompany.Fordiscussionournamed annual cashincentiveawardsduetoournamedexecutiveofficersuponcertaintypesofemployment The followingisadiscussionofthetreatmentequity-basedawardsheldbyournamedexecutiveofficersand Options upon aterminationofemploymentforanyreason(exceptinthecasedisabilityordeath,asdescribedOmnibusPlan). Unless otherwisespecifiedinanawardagreement,allunvestedequity-basedawardsundertheOmnibusPlanwillbeforfeited yeTriainfrCueo eieetfrGo esnorExit Event ChangeinControl forGoodReason withoutCauseor orRetirement Death, Disability forCause Company Termination Voluntary Type Award POTENTIAL PAYMENTSUPONTERMINATIONOR xiaindt) eaneecsbeoutorsubstitute discretiontocash remainexercisable vestedoptions committee awardsremainingsubjectto awardagreement, unvested optionsarecancelled. For Cause untilearlierexpirationdate). expiration date). 90 days(oruntilearlier options remainexercisablefor Voluntary resignation Omnibus Plan: l etdadvestinfull,withperformance : allvestedand EQUITY-BASED AWARDS—OMNIBUSPLAN yteTriainEffectof Termination by the Termination etdeecsbefroeya o pcfe na vestingwith specifiedinan exercisableforoneyear(or : vested CHANGE INCONTROL Termination orChangeinControlScenario achievement ofgoals. Singletrigger disability, allunvestedoptions Unlessotherwise In theeventofdeathor All vestedoptionsremain 48 ni ale companyawards. withsuccessor expiration date). until earlier for 90days(or 48 Proxy Statement 49 Double Double if adjusted net income goal is attained. 2017 RSUs: trigger vesting for any 2017 RSUs that are assumed or replaced in a Change in Control. Single trigger vesting for any 2017 RSUs that are not assumed or replaced in a Change in Control. Operating adjusted net income goal is deemed attained. 2015/2016 PRSUs: 2015/2016 2017 PRSUs: vesting at the target performance level for any 2017 PRSUs that are not assumed or replaced in a Change in Control. Prorated portion of Prorated portion Prorated portion of the 2015 PRSUs Prorated portion of the vesting at trigger 49 Termination or Change in Control Scenario in or Change Termination For 2015 PRSUs – Prorated portion of the PRSUs based For 2015 PRSUs – Prorated performance during the on the Company’s actual the number of full months he/she performance period and performance period. was employed during such of the For 2016 and 2017 PRSUs – Prorated potion PRSUs based on the Company’s actual performance of full during the performance period and the number the months worked through the retirement date (including executive’s ‘‘early retirement date’’ which is the date of the a voluntary termination of employment after attaining the Company combination of years of age and service with age of and its affiliates of at least 70, with a minimum 60) plus a credit of an additional 12 months. Without Cause or for Good Reason: Without Cause actual performancebased on the Company’s the PRSUs the number of full period and during the performance during such performancemonths he/she was employed vesting Single trigger period. Death or Disability: at target performance level. actual performance during thebased on the Company’s the number of full months he/sheperformance period and performance period. Fullwas employed during such performance target level for any 2017 PRSU award based on thevesting of 2016 and 2017 during the performanceCompany’s actual performance period. PRSUs that are Retirement: replaced assumed or in a Change in Control. Single trigger Forfeiture of any unvested RSUs. Single trigger vesting Full vesting of any unvested RSUs. by the Termination of Effect Termination Forfeiture of any unvested 2015 RSUs. date (including the ‘‘early retirement date’’) and a prorated portion of such RSUs based on date (including the ‘‘early retirement date’’) and since the most recent anniversary of the the number of full months he/she was employed following the date of retirement). grant date (after giving 12 months vesting credit Voluntary Termination (with or without Good Reason), or Termination by the CompanyVoluntary Termination (with or without Good (for Cause or without Cause): 2015/2016 RSUs: Death or Disability: Retirement: adjusted net income target with respect to the Immediate vesting (subject to achievement of target with respect to the 2017 RSUs) of any 2016 RSUs or operating adjusted net income in the 12 months following the retirement unvested 2016 or 2017 RSUs scheduled to vest Automatic forfeiture. 2017 2015 2016 PRSUs PRSUs PRSUs 2017 RSUs 2015 RSUs 2016 RSUs Type Termination for Cause or Retirement for Good Reason Event or Exit Award Voluntary Company Disability Death, without Cause or in Control Change in a named executive officer’s employment agreement. pertaining to the Company or any subsidiary or not to compete or interfere with the Company or any pertaining to the Company or any subsidiary or not to compete or interfere subsidiary. the event such term is not specified The Omnibus Plan does not provide a default ‘‘good reason’’ definition in violation of any applicable law; (iv) the named executive officer’s failure to reasonably cooperate, following a violation of any applicable law; (iv) the named executive officer’s failure investigation; or (v) the request to do so by the Company or any subsidiary, in any internal or governmental not to disclose any information named executive officer’s material breach of any written covenant or agreement perform substantially his/her employment-related duties; (ii) the named executive officer’s personal dishonesty, perform substantially his/her employment-related duties; (ii) the named executive executive officer’s indictment for, incompetence, willful misconduct, or breach of fiduciary duty; (iii) the named a felony or his/her willful conviction of, or entering a plea of guilty or nolo contendere to a crime constituting Unless specified otherwise in a named executive officer’s employment agreement, the termination of a named Unless specified otherwise in a named executive officer’s employment agreement, be deemed to be for ‘‘cause’’ under executive officer’s employment with the Company or any subsidiary shall of the named executive officer to the Omnibus Plan upon any of the following events: (i) the refusal or neglect 13APR201815452321 Proxy Statement 13APR201815452321 Death, Disability,VoluntaryTermination(withorwithoutGoodReason)bythe gemnswt ae xctv fies’blwfrmr nomto.OmnibusPlanoras pro-rated amountoftheincentiveawardbasedonactualperformanceforperiod. administratorofthe Retirement: Agreements withNamedExecutiveOfficers’’belowformoreinformation. the executive’semploymentagreementwithCompany,toextentapplicable.See‘‘Employment Company (forCauseorwithoutCause): emnto o as rRtrmn o odRao orExitEvent forGoodReason orRetirement forCause Termination outr yteCmayDah iaiiywtotCueo ChangeinControl withoutCauseor Death,Disability bytheCompany Voluntary Unlessotherwisespecifiedinanemploymentagreement,executivereceivesa ANNUAL CASHINCENTIVEAWARDS—OMNIBUSPLAN emnto emnto Effectof Termination Termination Ana ahicnieaad r rae sdsrbdi determinedbythe Annualcashincentiveawardsaretreatedasdescribedin Termination orChangeinControlScenario 50 discretion. the administrator’s actual performance,in payment basedon agreement, prorata evidenced inanaward Unless otherwise 50 Proxy Statement 51 51 TABLE Non- Excise Equity Stock Tax Life $681,026 — $1,092,444 $182,142 — — $1,955,612 $702,974 — $1,668,987 $278,244$436,338 — $171,655 $1,004,952 $169,407 — $2,650,205 — — $1,782,352 $456,798 $476,786 $2,989,088 $495,826 — — $4,418,498 $1,355,361 $953,552 $6,698,503 $1,096,041 — — $10,103,457 $1,355,361 — $9,818,801 $1,305,643 — — $12,479,805 —(10) $1,355,361 $953,552 $10,844,977 $2,112,632 — — $15,266,522 —(10) $1,355,361 $953,552 $10,844,977 $2,112,632 — $800,000 $16,066,522 $20,535(10)$20,535(10) $681,026 $681,026$975,345(9) — $681,026 — $1,780,795 $1,780,795 $350,682 $350,682 — $1,253,528 — — $800,000 $3,633,038 — — $2,833,038 — — $2,909,899 $23,264(10)$23,264(10) $436,338 $436,338 $171,655 $171,655 $1,874,013$854,514(9) $1,874,013 $404,168 $436,338 $404,168 — — — $800,000 $1,222,569 $3,709,438 — — $2,909,438 — — $2,513,421 $20,701(10)$20,701(10) $702,974 $702,974 — — $2,813,426 $2,813,426 $566,352 $566,352 — — $800,000 $4,903,453 — $4,103,453 $14,487(10)$14,487(10) $456,798 $456,798 $476,786 $476,786 $4,231,779$889,487(9) $4,231,779 $742,945 $456,798 $742,945 — — — $800,000 $3,228,534 $6,722,795 — — $5,922,795 — — $4,574,819 $1,187,691(9) $702,974 — $1,946,012 — — — $3,836,677 $4,050,000(9) $1,355,361 — $7,622,425 — — — $13,027,786 ...... — — — — — — — — ...... — — — — — — — — ...... — — — — — — — — ...... — — — — — — — — ...... — — — — — — — — ...... — ...... — ...... — ...... — ...... — ...... — — — — — — — — ...... — — — — — — — — ...... — — — — — — — — ...... — — — — — — — — ...... — ...... Reason Reason Reason Reason Reason POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL IN OR CHANGE TERMINATION UPON PAYMENTS POTENTIAL •• CIC (single trigger) Termination after CIC (double trigger) . $975,345(9) $681,026 — $1,602,794 $350,682 — — $3,609,847 •• Death • Disability(7) • Retirement(8) • Voluntary / for Cause Termination w/o Cause or for Good •• CIC (single trigger) Termination after CIC (double trigger) . $854,514(9) $436,338 $171,655 $1,715,793 $404,168 — — $3,582,468 •• Disability(7) • Retirement(8) • Voluntary / for Cause Termination w/o Cause or for Good •• CIC (single trigger) Termination after CIC (double trigger) .• $1,187,691(9) Death $702,974 — $2,541,489 $566,352 — — $4,998,506 •• Retirement(8) • Voluntary / for Cause Termination w/o Cause or for Good • Termination after CIC (double trigger) .• $889,487(9)• Death Disability(7) $456,798 $476,786 $3,737,356 $742,945 — — $6,303,372 •• Voluntary / for Cause Termination w/o Cause or for Good • CIC (single trigger) •• Death • Disability(7) Retirement(8) • Termination after CIC (double trigger) . $4,050,000(9) $1,355,361 $953,552 $9,777,030 $2,112,632 — — $18,248,575 • CIC (single trigger) •• Voluntary / for Cause Termination w/o Cause or for Good •• Death • Disability(7) Retirement(8) John Kett Becca Polak Don Gottwald Eric Loughmiller Jim Hallett Named Executive Officer andNamed Executive Officer Triggering Event Cash Incentive Options Severance PRSUs Pay(1) RSUs (2) Gross- Insurance (3) (4) Up(5) (6) Total time. The table is merely an illustrative example of the impact of a hypothetical termination of employment or impact of a hypothetical termination merely an illustrative example of the time. The table is can only be paid upon a termination of employment The amounts that would actually be change in control. the facts and circumstances then prevailing. time of such termination, based on determined at the The amounts in the table below assume that the termination and/or change in control, as applicable, was as applicable, change in control, the termination and/or assume that in the table below The amounts named and that the respective prior fiscal year, day of the 2017, the last business as of December 29, effective at such PRSUs and RSUs exchange for vested received cash in all options and/or officers exercised executive 13APR201815452321 Proxy Statement 13APR201815452321 4 The amountsreportedassumeaCompanycommonstockpriceof$50.51,whichwastheclosingon (4) TheamountsreportedassumeaCompanycommonstockpriceof$50.51,whichwastheclosingon (3) TheamountsreportedassumeaCompanycommonstockpriceof$50.51,whichwastheclosingon (2) Theamountsreportedareequaltothefullamountofnamedexecutiveofficer’s2017annualbonus(a (1) Footnotes toPotentialPaymentsUponTerminationorChangeinControlTable the ChangeinControl,asofhis/her terminationdate.WithrespecttoaChangeinControl, theamountsdisclosedin 2017, he/shewouldbeentitled toreceiveimmediatevestingofany2017RSUawardthat isassumedorreplacedin termination withoutCauseoraresignationforGoodReason, assumingaChangeinControldateofDecember29, of theChangeinControldate.Ifsuchofficer’semployment is terminatedfollowingaChangeinControlasresultof and 2016RSUawardsany2017awardthatisnot assumedorreplacedintheChangeControl,each,as of December29,2017,he/shewouldbeentitledtoreceiveimmediate vestingoftheunvestedportionhis/her2015 If aChangeinControloccurspriortotheterminationofsuch officer’semployment,assumingaChangeinControldate the grantdate(aftergiving12monthsvestingcreditfollowing theretirementdate). portion ofsuchRSUsbasedonthenumberfullmonthshe/she wasemployedsincethemostrecentanniversaryof his/her 2016and2017RSUsthatarescheduledtovestinthe 12monthsfollowingtheretirementdateandaprorated entitled toreceive,iftheapplicableperformancethresholdwas achieved,immediatevestingoftheunvestedportion executive officerterminatesemploymentpriortoaChangein Controlduetohis/herRetirement,he/shewouldbe receive immediatevestingoftheunvestedportionhis/her 2015,2016and2017RSUs.Intheeventthatanamed employment isterminatedpriortoaChangeinControldue to his/herdeathorDisability,he/shewouldbeentitled he/she wouldforfeittheunvestedportionofhis/her2016and2017RSUs.Ineventanamedexecutiveofficer’s Control asaresultofterminationwithorwithoutCausevoluntary(withGoodReason), his/her 2015RSUaward.Intheeventanamedexecutiveofficer’semploymentisterminatedpriortoChangein result ofsuchofficer’sdeathorDisabilitypriortoaChangeinControl,officerwouldforfeittheunvestedportion December 29,2017.Intheeventanamedexecutiveofficer’semploymentisterminatedforanyreasonotherthanas (single trigger)’’rowsinthetableassumethat2017PRSUsareassumedorreplacedChangeControl. Change inControldate,withoutproration.WithrespecttoaControl,theamountsdisclosed‘‘CIC 2017, suchofficerwouldbeentitledtoreceiveimmediatevestingofthetargetnumber2017PRSUsas PRSU isnotassumedorreplacedintheChangeControl,assumingaControldateofDecember29, in theChangeControlifsuchofficer’semploymentisterminatedeffectiveasofControl).Ifa2017 Change inControl(or,thecaseofaterminationwithoutCause,any2017PRSUsthatarenotassumedorreplaced his/her terminationdate,withoutproration,withrespecttoany2017PRSUsthatareassumedorreplacedinthe December 29,2017,he/shewouldbeentitledtoreceiveimmediatevestingofthetargetnumber2017PRSUsas as aresultofterminationwithoutCauseorresignationforGoodReason,assumingChangeinControldate PRSUs and2016PRSUs,withoutproration.Ifsuchofficer’semploymentisterminatedfollowingaChangeinControl of December29,2017,he/shewouldbeentitledtoreceiveimmediatevestingandpayoutthetargetnumber2015 If aChangeinControloccurspriortotheterminationofsuchofficer’semployment,assumingdate disclosed inthetablefor2016and2017PRSUsassumeperformanceattargetlevel. described above,theamountsdisclosedintablefor2015PRSUsreflectactualperformanceand and (iii)12/36thsofthe2017PRSUs;ineachcase,basedonactualperformance.Withrespecttoevents each ofthenamedexecutiveofficerswouldbeentitledto(i)all2015PRSUs,(ii)24/36ths2016PRSUs performance. AssumingaterminationwithoutCauseorresignationforGoodReasonpriortoChangeinControl, death orDisability24/36thsofthe2017PRSUsincaseRetirement(ifeligible);eachcase,basedonactual would beentitledto(i)allofthe2015PRSUs,(ii)2016PRSUsand(iii)2017incase Change inControlandasofDecember29,2017afullyearvesting,eachthenamedexecutiveofficers Assuming aterminationasresultofthenamedexecutiveofficer’sdeath,DisabilityorRetirement(ifeligible)priorto period (plusadditionalvestinginthecaseofRetirement,ifeligible,withrespectto2016and2017PRSUs). during eachperformanceperiodandthenumberoffullmonthshe/shewasemployedsuch employees, alloraproratedportionofthe2015,2016and2017PRSUsbasedonCompany’sactualperformance (as definedintheOmnibusPlan),he/shewouldbeentitledtoreceive,atsametimeasactiveCompany his/her death,DisabilityorRetirement(ifeligible)(eachasdefinedintheOmnibusPlan),priortoaChangeControl Reason (eachasdefinedintheapplicableemploymentagreement),orsuchofficerterminatesdueto December 29,2017.IntheeventthatanamedexecutiveofficeristerminatedwithoutCauseorresignsforGood December 29,2017.Messrs.GottwaldandKettdidnothaveanyoutstanding,unvestedoptionsasofsuchdate. agreement ortheOmnibusPlan,asapplicable. prorated amount,assumingpaymentuponachangeincontrol),payableunderthetermsofsuchofficer’semployment December 29,2017terminationresultsina100%payout,whereasonanyotherdatewouldresult 52 52 Proxy Statement 53 53 death or Disability, but would not have received this benefit with respect to a termination occurring on December 29, death or Disability, but would not have received group health plans as of such date. 2017 because he did not participate in our premium amount is included in the figures above); and (ii) for all other named executive officers, (a) one times the sum premium amount is included in the figures ($500,000 for Mr. Loughmiller, $583,495 for Mr. Gottwald, $475,000 for of the officer’s current annual base salary 2017 target bonus amount; and (b) COBRA premium payments for Ms. Polak and $477,405 for Mr. Kett) and 12 months. to COBRA premium payments for 12 months in the event of his/her death or she (or his/her estate) would be entitled be entitled to COBRA premium payments for 18 months in the event of his Disability. Mr. Hallett (or his estate) would RSUs and PRSUs and none had reached the age of 60 and met the applicable age and service requirements), and RSUs and PRSUs and none had reached to a prorated payout of their annual bonuses or accelerated vesting of their thus, they would not have been entitled equity for a Retirement as of such date. 2017 target bonus amount; and (b) COBRA premium payments for ($900,000 as of December 29, 2017) and participate in our group health plans as of December 29, 2017, no COBRA 18 months (because Mr. Hallett did not ‘‘retirement’’ date (he had not reached the age of 65). However, Mr. Hallett would have been entitled to receive ‘‘retirement’’ date (he had not reached the RSUs and PRSUs because he had met the requirements for a Retirement accelerated vesting of the 2016 and 2017 award agreements (he had reached the age of 60 and had a as of December 29, 2017 under the applicable with the Company and its affiliates of at least 70). combination of years of age and service and Ms. Polak had not satisfied the Retirement requirements under the Messrs. Loughmiller, Gottwald and Kett agreements as of December 29, 2017 (i.e., with respect to the annual bonus Omnibus Plan and the applicable award earlier, none had reached the age of 65 and with respect to the 2016 or 2017 and equity awards granted in 2015 and disability. The benefit is 66.67% of base pay capped at $15,000 per month. is 66.67% of base pay capped at $15,000 disability. The benefit a voluntary 29, 2017) upon his ‘‘retirement’’ (i.e., bonus for a termination date of December annual bonus (the full such his retirement at least 12 months prior to provided that he announces termination of his employment, in 2015 and 2017, with respect to equity awards granted a ‘‘retirement’’ date of December 29, termination). Assuming because he had vesting of such equity awards not have been entitled to receive accelerated earlier, Mr. Hallett would under the Omnibus Plan and the applicable award agreements as of such not met the requirements for a Retirement statutory safe harbor amount under Section 280G of the Code, making the excise tax and related gross-up the excise tax and of the Code, making Section 280G harbor amount under statutory safe an at the time of any, would be calculated payments, if amounts and tax gross-up Actual excise tax inapplicable. executive applicable at that time. No other named based on all factors and assumptions actual Change in Control excise tax gross-up. officer is entitled to an $800,000. times his/her annual salary, not exceeding amount equal to two the ‘‘CIC (single trigger)’’ rows in the table assume that the 2017 RSUs are assumed or replaced in the Change in in the Change or replaced assumed RSUs are the 2017 that table assume rows in the trigger)’’ (single the ‘‘CIC Control. of his with a termination made in connection to certain payments with respect to an excise tax gross-up be entitled the 29, 2017 is within on December excess parachute payments value of the however, the estimated employment; (10) (other than with respect to Mr. Hallett), he/ Under the terms of each named executive officer’s employment agreement (9) current annual base salary These amounts are equal to (i) for Mr. Hallett, (a) two times the sum of Mr. Hallett’s (8) of his 2017 would be entitled to a prorated payout of his employment agreement, Mr. Hallett Pursuant to the terms (7) short-term and only paid after six months on is a Company-paid benefit for all employees Long-term disability (6) to a payment in an designated beneficiary is entitled Term Life Policy, each named executive officer’s Under the Group (5) may in Control, Mr. Hallett the event of a Change agreement and in to his employment above, pursuant As described 13APR201815452321 Proxy Statement 13APR201815452321 likely toleadmaterialinjurytheCompany;(iii)Mr.Hallett’sindictmentorconvictionof,pleaof Mr. Hallettofsuchfailure;(ii)engaginginillegalconductorgrossmisconductthatisdemonstrably to performsubstantiallyhisdutiesundertheemploymentagreementforaperiodof14daysfollowingnotice to ‘‘Cause’’ isdefinedintheemploymentagreementtomean(i)Mr.Hallett’swillful,continuedanduncuredfailure Obligations. event, ouronlyobligationtoMr.Hallettwouldbethepayment,inalumpsum,ofHallett’sAccrued other employeeoftheCompany),wemayterminateMr.Hallett’semploymentatanytimefor‘‘Cause.’’Insuch Termination bytheCompanyforCause. defined intheCompany’slongtermdisabilityplaneffectattimeofdisability. For purposesofMr.Hallett’semploymentagreement,‘‘disability’’meansa‘‘TotalDisability’’(orequivalent) as Bonus’’). prorated bonusbasedupontheportionofyearduringwhichMr.Hallettwasemployedbyus(the‘‘Prorated Subject toreceiptandeffectivenessoftheRelease,wealsowillpayMr.Hallett,orhisestatebeneficiaries, a eligible forcomparablecoverageunderthehealthplansofanotheremployer(the‘‘ContinuedBenefits’’). maintaining insurancecoverageunderCOBRAfortheshorterof(i)18months;or(ii)untilMr.Hallettbecomes will payhim,orinthecaseofhisdeath,estatebeneficiaries,theirpremiumsattributableto In addition,ifMr.HallettisparticipatinginthehealthplansofCompanyattimehistermination,we ‘‘Earned butUnpaidBonus’’). annual bonusforapriorcompletedcalendaryearthathasnotyetbeencalculatedorpaidtoMr.Hallett(the estate executingageneralreleaseofanyclaimsthathemayhaveagainsttheCompany(the‘‘Release’’), amounts describedin(i)and(ii)aboveare,the‘‘AccruedObligations’’);(iii)subjecttoMr.Hallettorhis (ii) anyearnedandvestedbenefitspaymentspursuanttothetermsofbenefitplan(collectively, an amountequaltothesumof(i)anyaccruedbutunpaidbasesalaryandunusedvacationdays; his deathordisability,wewillpayMr.Hallett,inthecaseofdeath,Hallett’sestatebeneficiaries, Termination DuetoMr.Hallett’sDeathorDisability. following severanceandchangeofcontrolpayments: Mr. Hallett’semploymentagreement,whichbecameeffectiveasofFebruary27,2012,providesforthe the agreementsisprovidedbelow. Each ofournamedexecutiveofficershasanemploymentagreementwiththeCompany.Asummaryeach Unpaid Bonus. Company willpayMr.Hallett thesumofSeveranceBenefits,AccruedObligations andanyEarnedbut for aperiodof30daysfollowing noticeoftheeventbyMr.HalletttoCompany. Uponsuchtermination,the within 90daysfollowingtheoccurrenceofaneventconstituting ‘‘GoodReason,’’ifsucheventremainsuncured Termination byMr.HallettforGoodReason. any EarnedbutUnpaidBonus. addition totheSeveranceBenefitsdescribedabove,we willalsopayMr.HalletttheAccruedObligationsand 100% ofMr.Hallett’sbasesalary;(ii)aProratedBonus inalumpsum;and(iii)theContinuedBenefits.In (b) targetbonusfortheyearinwhichterminationoccurs which,forthispurpose,shallnotequallessthan Mr. Hallettthefollowing‘‘SeveranceBenefits’’:(i)two times thesumofMr.Hallett’s(a)annualbasesalaryand any timeupon30days’priorwrittennotice.Intheevent ofaterminationwithoutCause,theCompanywillpay Termination bytheCompanyWithoutCause. written noticetoMr.Hallettofsuchfailure. intellectual property,non-competitionandnon-solicitationwhichisnotcuredwithinthe14dayperiodfollowing failure tocomplywiththeprovisionsofemploymentagreementrelatingconfidentialinformation, contendere CEO EMPLOYMENT AGREEMENTSWITHNAMEDEXECUTIVEOFFICERS to,acrimeconstitutingfelonyoranyotherinvolvingmoralturpitude;(iv)Mr.Hallett’s FollowingamajorityvoteoftheBoard(excludingMr.Hallettorany Mr.Hallettmayterminatehisemploymentfor‘‘Good Reason’’ Mr.Hallett’semploymentmaybeterminatedwithoutCause at IfMr.Hallett’semploymentisterminatedasaresultof 54 nolo 54 Proxy Statement 55 Upon a termination of employment 55 Mr. Hallett may terminate his employment under the Mr. Hallett may terminate his employment Mr. Hallett may voluntarily terminate his employment under the Mr. Hallett may voluntarily terminate If Messrs. Loughmiller, Gottwald or Kett or Ms. Polak terminates As described above in ‘‘Compensation Policies and Other Information—Tax and As described above in ‘‘Compensation occurs and, if applicable, the Company fails to cause its successor to assume or reaffirm the Company’s its successor to assume or reaffirm the Company fails to cause occurs and, if applicable, change. employment agreement without obligations under the than 50 miles from the Company’s executive offices as of the effective date of the employment date of the offices as of the effective executive from the Company’s than 50 miles agreement; agreement; salary reductions; than in connection with across-the-board below $816,000, other of duties materially inconsistent with Mr. Hallett’s position as Chief Executive Officer; position as Chief with Mr. Hallett’s materially inconsistent of duties •or salary or annual bonus opportunity; reduction in Mr. Hallett’s base Any material • the Omnibus Plan, to the term ‘‘Change in Control’’ used of Control,’’ defined by reference A ‘‘Change • of the employment with any of the terms and conditions failure by the Company to comply Any material •Mr. Hallett’s base salary base salary, or any reduction in to timely pay or provide Mr. Hallett’s Any failure • to Mr. Hallett or the assignment and responsibilities, authority, duties of Mr. Hallett’s A material reduction • a location more location to his principal business Mr. Hallett relocate by the Company that A requirement vested employee benefits. The aggregate of the foregoing is referred to as the ‘‘Accrued Obligations.’’ In vested employee benefits. The aggregate of the foregoing is referred to receive (i) COBRA premium addition, the executive or his/her estate/beneficiaries would be entitled to under another employer’s health payments for 12 months or until the executive becomes eligible for coverage Termination Due to Death or Disability. to pay to the executive (or his/her his/her employment due to death or disability, the Company will be obligated unpaid base salary; (ii) accrued but legal representatives) an amount equal to the sum of (i) any earned but business expenses; and (iv) any unpaid vacation earned through the date of termination; (iii) unreimbursed Gottwald and Kett and Ms. Polak, providing for their at-will employment and the following severance and Gottwald and Kett and Ms. Polak, providing for their at-will employment change of control payments. The Company has entered into substantially similar employment agreements with Messrs. Loughmiller, The Company has entered into substantially similar employment agreements for any reason, Mr. Hallett is subject to the following two year post-termination restrictive covenants (except in to the following two year post-termination restrictive covenants (except for any reason, Mr. Hallett is subject restrictions; and (ii) non-solicitation of Company employees and the case of retirement): (i) non-competition customers. reduced to the extent necessary to avoid the excise tax, but in no event by more than 10% of the original reduced to the extent necessary to avoid amount of the total payments due. and Non-Solicitation. Requirements With Respect to Non-Competition Other Named Executive Officers assessments associated therewith, will be sufficient to place Mr. Hallett in the same after-tax position as he assessments associated therewith, will tax not applied. However, in the event that a reduction of the total would have been in had such excise the application of the excise tax, then the total payments will be payments due to Mr. Hallett would avoid Accounting Considerations—Employment Agreements,’’ Mr. Hallett’s employment agreement provides that in Accounting Considerations—Employment in connection with his employment is or becomes subject to an excise the event that any payment or benefit the Company will make a cash payment to Mr. Hallett, which after the tax under Section 4999 of the Code, excise and other taxes thereon as well as any penalty and interest imposition of all income, employment, termination. In the event of such a termination, we will pay Mr. Hallett a lump sum amount equal to the termination. In the event of such a termination, Bonus. Accrued Obligations and a Prorated Excise Tax Gross-Up. Termination by Mr. Hallett upon Retirement. by announcing his retirement at least 12 months prior to such employment agreement due to retirement Termination by Mr. Hallett without Good Reason. Termination by Mr. Hallett without we without Good Reason upon 30 days’ prior written notice. In such event, employment agreement at any time equal to the Accrued Obligations. will pay Mr. Hallett a lump sum amount ‘‘Good Reason’’ is defined in the employment agreement to mean the occurrence of any of the following: of the of any occurrence mean the to agreement employment in the is defined Reason’’ ‘‘Good 13APR201815452321 Proxy Statement 13APR201815452321 Plan. foregoing, ‘‘ChangeofControl’’hasthesamemeaningasterminunderOmnibus to assumeorreaffirmtheCompany’sobligationsunderagreementwithoutchange.Forpurposesof applicable, theCompanyfailstocauseitssuccessor(whetherbypurchase,merger,consolidationorotherwise) principal baseofoperationastheeffectivedateagreement;or(v)aChangeControloccursand, if executive relocatehis/herprincipalbusinesslocationtoamorethan50milesfromtheexecutive’s made inconnectionwithacrosstheboardsalaryreductions;(iv)requirementbyCompanythat executive’s basesalary,oranyreductionintheexcludingsalary comply withanyofthetermsandconditionsagreement;(iii)failuretotimelypayorprovide reduction oftheexecutive’sauthority,dutiesandresponsibilities;(ii)anymaterialfailurebyCompanyto Unpaid Bonus.Forpurposesoftheiremploymentagreements,‘‘GoodReason’’means(i)anymaterial year inwhichsuchterminationofemploymentoccurs;(ii)theContinuedBenefits;and(iii)Earnedbut (i) alumpsumcashpaymentequaltotheofhis/herannualbasesalaryplustargetbonusfor the executivewouldbeentitledtoreceive,subjectexecutionandnon-revocationofareleaseclaims, Kett orMs.PolakisterminatedbytheCompanywithoutCausesuchexecutiveresignsforGoodReason, Termination WithoutCauseorResignationforGoodReason. Company byexecutive. (iv) executive’sviolationoftherestrictivecovenantsunderagreementoranyotherowedto of to materialinjurytheCompany,monetarilyorotherwise;(iii)executive’sindictmentconvictionof,plea of suchfailure;(ii)executiveengaginginillegalconductorgrossmisconductthatisdemonstrablylikelytolead documented illnessorinjury)foraperiodof14daysfollowingwrittennoticebytheCompanytoexecutive their dutiesundertheagreement(otherthananysuchfailureresultingfromincapacityduetomedically agreements, ‘‘Cause’’meansthe(i)executive’swillful,continuedanduncuredfailuretoperformsubstantially Company’s soleobligationwillbetopayhim/hertheAccruedObligations.Forpurposesoftheiremployment voluntarily terminateshis/heremploymentoriftheCompanyforCause, Voluntary TerminationorforCause. in theCompany’slongtermdisabilityplaneffectattimeofdisability. For purposesoftheiremploymentagreements,‘‘disability’’meansa‘‘TotalDisability’’(orequivalent)asdefined not yetbeenpaidtotheexecutive(the‘‘EarnedbutUnpaidBonus’’). (iii) apaymentequaltotheamountofanyannualbonuswhichhasbeenearnedinprioryearbut based onthenumberofdaysexecutivewasemployedbyCompanyduringsuchcalendaryear;and which suchterminationofemploymentoccurred,calculatedbasedontheexecutive’sactualperformanceand employment (the‘‘ContinuedBenefits’’);(ii)theproratedportionofhis/herannualbonusforcalendaryearin plan, iftheexecutiveisparticipatinginCompany’shealthplansondateofsuchtermination employees andcustomers. post-termination restrictivecovenants:(i)non-competitionrestrictions;and(ii)non-solicitationofCompany for anyreason,Messrs.Loughmiller,GottwaldandKettMs.Polakaresubjecttothefollowingoneyear Requirements WithRespecttoNon-CompetitionandNon-Solicitation. nolo contendere to,acrimeconstitutingfelonyoranyotherinvolvingmoralturpitude; IfMessrs.Loughmiller,GottwaldorKettMs.Polak 56 IntheeventMessrs.Loughmiller,Gottwaldor Uponaterminationofemployment 56 Proxy Statement 57 calculation. de minimis 57 exemption to Item 402(u) of Regulation S-K. We used our exemption to Item 402(u) of Regulation CEO PAY RATIO PAY CEO de minimis To identify the Median Employee, we first determined our employee population as of To identify the Median Employee, we For the 2017 fiscal year, the ratio of the annual total compensation of Mr. Hallett, our Chief of Mr. Hallett, total compensation ratio of the annual fiscal year, the For the 2017 (full-time and part-time) which worked for less than the full fiscal year due to commencing employment after the for less than the full fiscal year due to commencing employment after (full-time and part-time) which worked beginning of the fiscal year. calculated by totaling, for each employee, gross wages reported on Form W-2 (or its equivalent for non-U.S. calculated by totaling, for each employee, including regular pay (wages and salary), all variants of employees), which included cash compensation, of bonus payments actually paid (if any). In determining the Median overtime (if eligible), and all variants for the portion of our permanent employee workforce Employee, we annualized the total compensation We then measured compensation for the period beginning on January 1, 2017 and ending on December 31, We then measured compensation for was permitted exclusions noted above). This compensation measurement 2017 for 17,241 employees (after the 231 (or about 1%) are employed in the United Kingdom and approximately 9 (or less than 1%) are employed in the United Kingdom and approximately 9 (or less than 1%) are employed 231 (or about 1%) are employed in these 240 employees based outside of the U.S. in identifying our Median Mexico. We have chosen to exclude Employee, as permitted under the other than Mr. Hallett) in making our number of total employees (17,481, representing all full-time, part-time, seasonal and temporary employees of us and our consolidated subsidiaries representing all full-time, part-time, seasonal does not include any independent contractors or ‘‘leased’’ workers, as of the Determination Date. This number rules. Of our 17,481 total employees (other than Mr. Hallett), approximately as permitted by the applicable SEC Mr. Hallett in the ‘‘Summary Compensation Table for 2017’’ for the 2017 fiscal year. Compensation Table for 2017’’ Mr. Hallett in the ‘‘Summary Methodology: Date’’). We had 17,481 employees (other than Mr. Hallett), December 31, 2017 (the ‘‘Determination totaling for our Median Employee all applicable elements of compensation for the 2017 fiscal year in of compensation for the 2017 fiscal Employee all applicable elements totaling for our Median Compensation was purposes of this summary, CEO 402(c)(2)(x) of Regulation S-K. For accordance with Item reported for represents the total compensation Compensation for purposes of this disclosure $5,811,876. CEO the pay ratios of other companies, including the companies in our proxy comparator group. companies, including the companies the pay ratios of other as the ‘‘Median the Median Annual Compensation refer to the employee who received In this summary, we was calculated by Compensation was $35,321, and of this summary, Median Annual Employee.’’ For purposes This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using consistent with Item 402(u) of Regulation estimate calculated in a manner This ratio is a reasonable estimated pay ratio used in the calculation of our described below. The assumptions the data and assumptions be comparable to therefore, our pay ratio may not company and our employee population; are specific to our Executive Officer (‘‘CEO Compensation’’), to the median of the annual total compensation of all of our of all of annual total compensation the median of the to Officer (‘‘CEO Compensation’’), Executive Annual Compensation’’) Mr. Hallett (‘‘Median other than consolidated subsidiaries and those of our employees to 1. was 165 Summary: 13APR201815452321 Proxy Statement 13APR201815452321 statement, iftheydesiretodoso,andrespondappropriatequestions. Representatives ofKPMGwillbepresentatthe2018annualmeetingandhaveopportunitytomake a by proxyatthe2018annualmeeting. public accountingfirmrequirestheaffirmativevoteofmajoritysharespresentinpersonorrepresented decide tomaintainitsappointmentofKPMG.Ratificationtheourindependentregistered of theCompany’sstockholdersandmayappointanotherindependentregisteredpublicaccountingfirmor so. IftheappointmentofKPMGisnotratifiedbystockholders,AuditCommitteewillconsidervote seek stockholderapprovalofthisappointment,theBoardbelievesittobesoundcorporategovernancedo Company’s independentregisteredpublicaccountingfirmsince2007.AlthoughtheCompanyisnotrequiredto to havethestockholdersratifyAuditCommittee’sappointmentofKPMG,whichhasservedas public accountingfirmforitsfiscalyearendingDecember31,2018.TheAuditCommitteeandtheBoardseek The AuditCommitteehasappointedKPMGLLP(‘‘KPMG’’)toserveastheCompany’sindependentregistered Proxies solicitedbytheBoardofDirectors willbe KAR AuctionServices’BoardofDirectors recommends thatyouvote“FOR”the the appointmentofKPMGasourindependent registeredpublicaccountingfirm ratification oftheappointmentKPMGas ourindependentregisteredpublic RATIFICATION OFINDEPENDENTREGISTERED for 2018unlessstockholders specifyacontraryvote. PUBLIC ACCOUNTINGFIRM: PROPOSAL NO.3 accounting firmfor2018. PROPOSAL 58 voted “FOR”theratificationof 13APR201816552299 58 Proxy Statement 59 Communications with 59 REPORT OF THE AUDIT COMMITTEE AUDIT OF THE REPORT The Audit Committee received the written disclosures and the letter from the independent The Audit Committee received the written Internal Audit, the overall audit scope and plans, the results of internal and external audit examinations, Internal Audit, the overall audit scope and plans, the results of internal and controls over financial reporting, the evaluations by management and the independent auditors of our internal to remain independent. Based on quality of our financial reporting and the ability of the independent auditors scope, and service and communication with management and the Audit Committee. The results of this scope, and service and communication with management and the Audit and ultimately with the KPMG evaluation were discussed with the Audit Committee in executive session Officer and our Vice President of engagement partner. The Audit Committee reviews with our Chief Financial whether to re-engage the current independent auditors or consider other audit firms. To assist in the evaluation whether to re-engage the current independent auditors or consider other an evaluation whereby each of KPMG’s performance for the 2017 audit, the Audit Committee conducted a written evaluation member of the Audit Committee and certain members of management completed adequacy of audit approach and assessing KPMG’s independence, technical expertise, industry knowledge, ended December 31, 2017. each year and determines The Audit Committee evaluates the performance of the independent auditors auditors. The Audit Committee, or the Chairman of the Audit Committee, also pre-approved all audit and auditors. The Audit Committee, or the on auditors during and relating to fiscal year 2017. In reliance non-audit services provided by the independent to above, the Audit Committee recommended to the Board that the the reviews and discussions referred on Form 10-K for the fiscal year audited consolidated financial statements be included in our Annual Report Company’s consolidated audited financial statements as of and for the fiscal year ended December 31, 2017 Company’s consolidated audited financial accepted accounting principles, and the Audit Committee has were prepared in accordance with generally consolidated financial statements with management and the independent reviewed and discussed the audited pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. The Audit Committee met with the internal auditors pursuant to Section 404 of the Sarbanes-Oxley without management present, to discuss the results of the auditors’ and independent auditors, with and and internal controls, including a review of the disclosure control process, examinations, their evaluations of our Management represented to the Audit Committee that the the overall quality of our financial reporting. The Audit Committee discussed with our internal auditors and independent auditors the overall scope and plans The Audit Committee discussed with our plans for compliance with management certification requirements for their respective audits and reviewed auditors required by the PCAOB Rule Nos. 3524 and 3526 regarding communications with the Audit Committee auditors required by the PCAOB Rule those disclosures with the independent auditors. The Audit concerning independence and has discussed services performed by KPMG and considered whether KPMG’s Committee has also reviewed non-audit compatible with maintaining its independence from the Company. provision of non-audit services was included a discussion of other matters required under Auditing Standards promulgated by the Public Company included a discussion of other matters including PCAOB Auditing Standard No. 1301, Accounting Oversight Board (‘‘PCAOB’’), Audit Committees. statement disclosures included in our Annual Report on Form 10-K for the fiscal year ended December 31, statement disclosures included in our with the independent auditors their judgments as to both the quality 2017. Also, the Audit Committee reviewed policies. The Audit Committee’s review with the independent auditors and the acceptability of our accounting In fulfilling its responsibilities during the fiscal year, the Audit Committee reviewed and discussed with Audit Committee reviewed and discussed during the fiscal year, the In fulfilling its responsibilities included in our related financial statement disclosures financial statements and management the consolidated financial financial statements and related on Form 10-Q and the audited consolidated Quarterly Reports Financial Officer, the Company’s Vice President of Internal Audit and representatives of KPMG and conducts Audit and representatives of KPMG Company’s Vice President of Internal Financial Officer, the evaluations of the financial statements, the sessions to discuss the audited consolidated separate executive compliance the Company’s financial reporting and controls and the overall quality of Company’s internal programs. KPMG and our internal auditors. Our management has the primary responsibility for financial statements and the primary responsibility for financial auditors. Our management has KPMG and our internal of internal controls and for assessing the effectiveness including the systems of internal the reporting process, Chief at least quarterly, meets with the Company’s reporting. The Audit Committee, controls over financial requirements of Section 10A of the Exchange Act and Rule 10A-3 under the Exchange Act. The Audit under the Exchange Act and Rule 10A-3 of the Exchange of Section 10A requirements as the primary the Board and serves on behalf of reporting process oversees our financial Committee auditors, the independent our stockholders, representative of the Board as the link between communication The Audit Committee is comprised of four independent directors, each of whom satisfies the independence each of whom satisfies directors, of four independent Committee is comprised The Audit 13APR201815452321 Proxy Statement 13APR201815452321 Michael T.Kestner,DonnaR.Ecton,J.MarkHowellandStephenE.Smith. appointment oftheindependentauditorsatourannualmeetingstockholders.Thisreportissubmittedby has continueditslong-standingpracticeofrecommendingthattheBoardaskourstockholderstoratify Although theAuditCommitteehassoleauthoritytoappointindependentauditors, fiscal year2018. these evaluations,theAuditCommitteeapprovedengagementofKPMGasourindependentauditorsfor Michael T.Kestner The AuditCommittee Stephen E.Smith Donna R.Ecton J. MarkHowell 60 (Chairman) 60 Proxy Statement 61 $3,446,135 $3,117,543 61 FEES PAID TO KPMG LLP KPMG TO PAID FEES Consists principally of fees for professional services rendered with respect to SOC Consists principally of fees for professional Consists principally of a license to use KPMG’s accounting research software. Consists principally of a license to use Consists of fees for professional services rendered for the audit of our consolidated financial professional services rendered for the audit Consists of fees for Consists of fees for various tax planning projects. Consists of fees for various tax planning Tax Fees: All Other Fees: Audit-Related Fees: Audit Fees: provided by independent registered public accounting firms in connection with statutory and regulatory provided by independent registered public except those not required by statute or regulation. filings or engagements, and attest services, (2017 fee increase resulted in part from an increase in the 1 readiness assessments and reporting to 2016). Also includes professional services rendered in number of SOC 1 report issuances compared plan. connection with the audit of our 401(k) benefit statements, review of the interim condensed consolidated financial statements included in the Company’s the interim condensed consolidated financial statements, review of controls over financial reporting and services that are normally quarterly reports, the audit of our internal All Other Fees(4)Total Fees 1,780 1,905 Fee CategoryAudit Fees(1)Audit-Related Fees(2)Tax Fees(3) 416,116 $2,880,000 2017 $2,775,568 247,942 148,239 2016 92,128 (3) (4) (2) (1) rendered in connection with the audit of our consolidated financial statements and reports for 2017 and 2016 reports for 2017 statements and financial the audit of our consolidated in connection with rendered as well as and its subsidiaries, Auction Services and 2016 to KAR during 2017 services rendered and for other with these services: in connection costs incurred all out-of-pocket The following table sets forth the aggregate fees charged to KAR Auction Services by KPMG for audit services by KPMG for audit Auction Services charged to KAR the aggregate fees table sets forth The following 13APR201815452321 Proxy Statement 13APR201815452321 approved bytheAuditCommitteeorChairmanofbeforesuchserviceswererendered. next scheduledmeeting.Allauditfees,audit-relatedtaxfeesandallotherdescribedabovewere Chairman oftheAuditCommittee,actingbetweenmeetingsandreportingbacktoCommitteeat may be(i)pre-approvedbytheAuditCommitteeataregularlyscheduledmeeting;or(ii) services tobeprovided.Ifotherareprovidedoutsideofthisannualprocess,underthepolicythey proposed, alongwiththeanticipatedcostofsuchservices.TheAuditCommitteereviewsschedulesspecific commencement oftheaudit.TheAuditCommitteealsoevaluatesaudit-related,taxandotherservicesthatare annual processthroughwhichtheAuditCommitteeevaluatesnatureandscopeofauditpriorto KAR AuctionServices’independentregisteredpublicaccountingfirmfeepre-approvalpolicyprovidesforan POLICY ONAUDITCOMMITTEEPRE-APPROVALOFAND PERMISSIBLE NON-AUDITSERVICESOFINDEPENDENT REGISTERED PUBLICACCOUNTINGFIRM 62 62 Proxy Statement 63 63 WITH RELATED PERSONS WITH REVIEW AND APPROVAL OF TRANSACTIONS OF AND APPROVAL REVIEW CERTAIN RELATED PARTY RELATIONSHIPS PARTY RELATED CERTAIN interest; and • impair the judgment of a director or executive officer to act in our best whether the transaction would • deem appropriate. any other matters that we • the transaction; of the related person’s interest in the nature • type of transaction; without limitation, the amount and terms of the transaction, including, the material • person; of the transaction to the related the importance • to the Company; the importance of the transaction currently employed as the Director of Online Sales at ADESA. During 2017, Joseph Caruso earned currently employed as the Director of Joseph Caruso does not report to Thomas J. Caruso. approximately $175,672 in total compensation. units, was a participant and a related person had a direct or indirect material interest are required to be units, was a participant and a related J. Caruso, the Company’s Chief Client Officer and who was disclosed in this proxy statement. Thomas the Company for a portion of 2017, has a son, Joseph Caruso, who is designated as an executive officer of Transactions in which the amount involved exceeds $120,000 in which the Company, or one of its business Transactions in which the amount involved In the course of the review and approval of a related party transaction, the Board or the Audit Committee may transaction, the Board or the Audit review and approval of a related party In the course of the factors: consider the following Pursuant to our written related party transactions policy, the Company reviews relationships and transactions in the Company reviews relationships related party transactions policy, Pursuant to our written or their immediate our directors and executive officers or one of its business units, and which the Company, material interest. such persons have a direct or indirect participants to determine whether family members are 13APR201815452321 Proxy Statement 13APR201815452321 to acknowledgethenominationofanypersonnotmadeincompliancewithforegoingprocedures. The chairmanofthemeetingmayrefusetoallowtransactionanybusinessnotpresentedbeforehand, or for suchothercandidateorcandidatesasmaybenominatedasubstitutebytheBoard. nominees isnotavailableasacandidatefordirector,thepersonsnamedproxyholderswillvoteyour presented foravoteatthe2018annualmeeting.Ifanyunforeseenreason,oneormoreofBoard’s holders ontheproxycardwillhavediscretiontovoteyoursharesanyadditionalmattersproperly to bepresentedforavoteatthe2018annualmeeting.Ifyougrantproxy,personsnamedasproxy Other thantheproposalsdescribedinthisproxystatement,KARAuctionServicesdoesnotexpectanymatters Services, Inc.,Secretary,13085HamiltonCrossingBoulevard,Carmel,Indiana46032. a copyofwhichmaybeobtainedatnocostfromtheSecretaryCompanybywritingtoKARAuction director nominationsandstockholderproposalsmustcomplywiththerequirementsofCompany’sBy-Laws, SEC Rule14a-8)mustbereceivednoearlierthanFebruary4,2019,andlaterMarch6,2019.All or onbehalfofastockholderpursuanttotheseprovisionstheCompany’sBy-Laws(andnot 120 dayspriortothefirstanniversaryofdatethisyear’sannualmeeting.Asaresult,anynoticegiven by the SecretaryatCompany’sprincipalofficeinCarmel,Indiana(seeabove),notlessthan90ormore notice ofthenominationormatterstockholderwishestopresentatmeetingmustbedelivered wishes topresentdirectlyatanannualmeeting.Tobeproperlybroughtbeforethe2019meeting,a stockholder proposalsthatarenotsubmittedforinclusionintheproxystatement,butainstead The Company’sBy-Lawsalsoestablishanadvancenoticeprocedurewithregardtodirectornominationsand proposal doesnotguaranteeitsinclusion. Boulevard, Carmel,Indiana46032.AstheSEC’sshareholderproposalrulesmakeclear,simplysubmittinga Rebecca C.Polak,ChiefLegalOfficerandSecretary,KARAuctionServices,Inc.,13085HamiltonCrossing The proposalsmustcomplywithalloftherequirementsSECRule14a-8.Proposalsshouldbeaddressedto: Company’s principalofficeinCarmel,Indiana,nolaterthanDecember25,2018. meeting ofstockholderspursuanttoSECRule14a-8,materialsmustbereceivedbytheSecretaryat In ordertosubmitstockholderproposalsforinclusioninourproxystatementrelatedthe2019annual NOMINATION OFDIRECTORSANDOTHERBUSINESSSTOCKHOLDERS REQUIREMENTS, INCLUDINGDEADLINES,FOR SUBMISSION OFPROXYPROPOSALS 64 64 Proxy Statement 65 Non-Vote shares presentand entitled to against vote shares presentand entitled to againstvote applicable ‘‘FOR’’ than ‘‘AGAINST’’ 65 • Abstain from voting on the advisory proposal • Vote ‘‘FOR’’ the ratification• Vote ‘‘AGAINST’’ the ratification • Abstain from voting on the ratification Majority of the Vote Not • Vote ‘‘FOR’’ all nominees• Vote ‘‘FOR’’ specific nominees • Vote ‘‘AGAINST’’ all nominees • Vote ‘‘AGAINST’’ specific nominees • Abstain from voting for all nominees • Abstain from voting for specific nominees votes More • Vote ‘‘FOR’’ the advisory proposal• Vote ‘‘AGAINST’’ the advisory proposal No effect No effect Majority of the Vote No effect The Board recommends a vote ‘‘FOR’’ the The Board recommends a vote ‘‘FOR’’ advisory vote to approve executive compensation. the The Board recommends a vote ‘‘FOR’’ as ratification of the appointment of KPMG firm our independent registered accounting for 2018. Board Recommendation Standard each The Board recommends a vote ‘‘FOR’’ of the director nominees. Abstention Broker MATERIALS AND THE ANNUAL MEETING THE ANNUAL AND MATERIALS QUESTIONS AND ANSWERS ABOUT THE PROXY THE ABOUT ANSWERS AND QUESTIONS Firm Appointment of KPMG as our Independent Registered Accounting to Approve Executive Compensation Directors 3. Ratification of 2. Advisory Vote materials are first being distributed to stockholders on or about April 24, 2018. distributed to stockholders on or materials are first being 1. Election of We are providing these proxy materials to you in connection with the solicitation, by the Board of KAR Auction solicitation, by the connection with the materials to you in these proxy We are providing any annual meeting of stockholders and at to be voted at the Company’s 2018 Services, of proxies to be invited to attend the 2018 annual meeting thereof. Stockholders are adjournments or postponements at at 9:00 a.m., Eastern Daylight Time, webcast on June 4, 2018 beginning held via a live audio live, will be able to listen to the meeting where stockholders www.virtualshareholdermeeting.com/kar2018, (as control number provided on your Notice vote online. You will need the 16-digit submit questions and Our proxy that accompanied your proxy materials. your proxy card, or on the instructions defined below), on What proposals will be voted on, what is the Board’s voting recommendation, and what are the standards recommendation, and what are the be voted on, what is the Board’s voting What proposals will a proposal has been approved? for determining whether Q: Q: these materials? Why am I receiving A: A: Proposal Voting Choices and Voting Effect of Effect of 13APR201815452321 Proxy Statement 13APR201815452321 A: Whatisthedifference betweenholdingsharesasastockholderofrecordandbeneficialowner? Q: A: Whoisentitled tovote? Q: A: HowcanIvotemysharesandparticipateatthe2018annualmeeting? Q: telephone companies. costs associatedwithyourInternetaccess,suchasusage chargesfromInternetaccessprovidersand authenticity andcorrectnessofyourvotinginstructions.However, pleasebeawarethatyoumustbearany to allowyouvoteyoursharesonlineduringtheannual meeting,withproceduresdesignedtoensurethe We areholdingthe2018annualmeetingonlineandproviding Internetvotingtoprovideexpandedaccessand 8:45 a.m.EasternDaylightTime. access themeetingpriortostarttime.Pleaseallowample timeforonlinecheck-in,whichwillbeginat The 2018annualmeetingwillbeginpromptlyat9:00a.m., EasternDaylightTime.Weencourageyouto 2018 annualmeeting.See‘‘HowcanIvotemyshareswithout attendingthe2018annualmeeting?’’below. shares inadvanceasdescribedbelowsothatyourvotewillbecountedifyoulaterdecidenottoattendthe Even ifyouplantoattendthe2018annualmeeting,Companystronglyrecommendsthatvoteyour materials, orcontactyourbrokerbanktorequestaproxyform. similar evidenceofownership.Followtheinstructionsfromyourbrokerorbankincludedwiththeseproxy record date,acopyofthevotinginstructionformprovidedbyyourbroker,bank,trustee,ornominee,other proxy andproofofbeneficialownership,suchasyourmostrecentaccountstatementApril11,2018,the the 2018annualmeeting,youwillneedtoaskyourbank,brokerorothernomineefurnishwithalegal Beneficial Owner. accompanied yourproxymaterials. You willneedthecontrolnumberincludedonyourNotice,proxycard,orinstructionsthat please followtheinstructionsprovidedonNoticetologinwww.virtualshareholdermeeting.com/kar2018. during the2018annualmeeting.Ifyouchoosetovoteyoursharesonlinemeeting, Stockholder ofRecord. your proxymaterials. 16-digit controlnumberprovidedonyourNotice,proxycard,ortheinstructionsthataccompanied www.virtualshareholdermeeting.com/kar2018. Toparticipateinthe2018annualmeeting,youwillneed Stockholders mayparticipateinthe2018annualmeetingbyvisitingfollowingwebsite: to voteyoursharesandarealsoinvitedattendthe2018annualmeeting. record withrespecttothoseshares.Asthebeneficialowner,youhaverightdirectyourbrokeronhow proxy materialsarebeingforwardedtoyoubyyourbrokerornomineewhoisconsideredthestockholderof your sharesin‘‘streetname’’andareconsidereda‘‘beneficialowner’’withrespecttothoseshares.These Beneficial Owner. the Companyortovoteinpersononlineduring2018annualmeeting. respect tothoseshares.Asthestockholderofrecord,youhaverightgrantyourvotingproxydirectly agent, AmericanStockTransfer&TrustCompany,LLC,youareconsidereda‘‘stockholderofrecord’’with Stockholder ofRecord. On therecorddate,KARAuctionServiceshad134,956,732sharesofcommonstockissuedandoutstanding. heldforyouasthebeneficialownerthroughabroker,bankorothernominee,includingsharespurchased • helddirectlyinyournameasthestockholderofrecord;and • These sharesincludethatare: voted byyou.Youmaycastonevotepershareofourcommonstockthatyouheldontherecorddate. All sharesownedbyyouasoftherecorddate,whichisclosebusinessonApril11,2018,maybe Plan’’). under theKARAuctionServices,Inc.EmployeeStockPurchasePlan(the‘‘Employee Ifyouareabeneficialownerinstreetnameandwanttovoteyoursharesonlineduring Ifyoursharesareheldinabrokerageaccountorbybankothernominee,youhold Shareshelddirectlyinyournameasthestockholderofrecordmaybevotedonline IfyoursharesareregistereddirectlyinnamewiththeCompany’stransfer 66 66 Proxy Statement 67 67 and follow the instructions. You will need the control number included will need the control the instructions. You and follow The election of directors (Proposal No. 1) and the advisory vote to approve If you are a stockholder of record and you sign and return a proxy card without If you are a stockholder of record and the 2018 annual meeting in one of the following manners: one of the following annual meeting in the 2018 The ratification of the appointment of KPMG as our independent registered public The ratification of the appointment of KPMG as our independent registered www.proxyvote.com If you are a beneficial owner of shares and do not provide the organization (e.g., broker, If you are a beneficial owner of shares Dial 1-800-690-6903. You will need the control number included on your proxy card or voting your proxy card number included on need the control You will Dial 1-800-690-6903. Go to Complete, date and sign your proxy card or voting instruction card and mail it using the enclosed, sign your proxy card or voting instruction Complete, date and without attending Routine Matters. Non-Routine Matters. accounting firm for 2018 (Proposal No. 3) is considered a routine matter under applicable rules. A broker, accounting firm for 2018 (Proposal No. 3) is considered a routine matter under no broker non-votes are bank or other nominee may generally vote on routine matters, and therefore expected to exist in connection with Proposal No. 3. broker, bank or other nominee cannot vote without instructions on non-routine matters, and therefore there broker, bank or other nominee cannot vote without instructions on non-routine may be broker non-votes on Proposal No. 1 and Proposal No. 2. executive compensation (Proposal No. 2) are considered non-routine matters under applicable rules. A executive compensation (Proposal No. 2) are considered non-routine matters • • ‘‘non-routine’’ matters, such organization cannot vote your shares and will inform the inspector of election that ‘‘non-routine’’ matters, such organization shares. This is generally referred it does not have the authority to vote on these matters with respect to your to your broker, bank or other to as a ‘‘broker non-vote.’’ Therefore, we urge you to give voting instructions whether there is a nominee. Shares represented by such broker non-votes will be counted in determining they will have no effect on the quorum. Because broker non-votes are not considered shares entitled to vote, in person or by proxy and entitled outcome of any proposal other than reducing the number of shares present to vote from which a majority is calculated. giving specific voting instructions, then the proxy holders will vote your shares in the manner recommended by giving specific voting instructions, then this proxy statement and as the proxy holders may determine in their the Board on all matters presented in properly presented for a vote at the 2018 annual meeting. discretion with respect to any other matters Beneficial Owner. shares in ‘‘street name’’ with specific voting instructions, the bank or other nominee) that holds your generally vote in its discretion on ‘‘routine’’ matters. If the organization that holds your shares may not receive instructions from you on how to vote your shares on organization that holds your shares does to vote at the 2018 annual meeting are present in person or represented by proxy. Abstentions and broker to vote at the 2018 annual meeting are establishing a quorum. A broker non-vote occurs on an item when a non-votes are counted as present for to vote on that item absent instruction from the beneficial broker, bank or other nominee is not permitted is given. owner of the shares and no instruction Stockholder of Record. Stock Purchase Plan will vote your shares (i) in accordance with the specific instructions on your returned Stock Purchase Plan will vote your shares if you return a signed voting instruction card with no specific voting instruction card; or (ii) in its discretion, voting instructions. to hold the 2018 annual meeting. A quorum at the 2018 annual A quorum of stockholders is necessary of the Company’s capital stock issued and outstanding and entitled meeting exists if the holders of a majority card. Internet and telephone voting for stockholders will be available 24 hours a day, and will close at available 24 hours a day, and will close voting for stockholders will be card. Internet and telephone Daylight Time, on June 3, 2018. 11:59 p.m., Eastern instruction Stock Purchase Plan will receive a voting stock acquired through the Employee Employees holding The Computershare, the plan record keeper. held in their individual account from card covering all shares return date than proxy cards. The record keeper for the Employee voting instruction cards have an earlier By Telephone. instruction form; or By Mail. pre-paid envelope. instruction to return your proxy card or voting or by telephone, you do not need If you vote on the Internet Whether you hold your shares directly as the stockholder of record or beneficially in street name, you may or beneficially in street of record directly as the stockholder hold your shares Whether you vote By Internet. instruction form; card or voting on your proxy shares be voted? A: Q: instructions? What happens if I do not give specific voting A: Q: 2018 annual meeting? What is the quorum requirement for the Q: Stock Purchase Plan, how will my shares pursuant to the Employee If I am an employee holding A: Q: annual meeting? attending the 2018 my shares without How can I vote A: 13APR201815452321 Proxy Statement 13APR201815452321 A: CanIrevokemy proxyorchangemyvote? Q: A: Whowillcount thevote? Q: A: Whatdoesitmean ifIreceivemorethanoneproxyorvotinginstructioncard? Q: A: Ishareanaddresswithanotherstockholder,andwereceivedonlyonepapercopyoftheproxy Q: A: WhydidIreceiveanoticeinthemailregardingInternetavailabilityofproxymaterialsinstead Q: A: Whowillbearthecostofsolicitingproxiesfor2018annualmeeting? Q: materials. HowmayIobtainanadditionalcopyoftheproxymaterials? of apapercopytheproxymaterials? name’’ maycontacttheirbroker, bankorothernomineetorequestinformationabout householding. Solutions, Inc.usingthemailing addressandphonenumberabove.Stockholderswho holdsharesin‘‘street address andwouldliketoparticipate inhouseholding,pleasenotifyusbycontacting Broadridge Financial If youareastockholderofrecordandreceivingmore thanonecopyoftheproxymaterialsatasingle Attention: HouseholdingDepartment. Solutions, Inc.bycalling1-866-540-7095orinwritingat 51 MercedesWay,Edgewood,NewYork11717, separate copiesoftheNotice,proxystatementorAnnual Report,contactBroadridgeFinancial shared addresstowhichwedeliveredasinglecopyofany ofthesedocuments.Ifyouprefertoreceive statement andtheCompany’sAnnualReport,asrequested, willbepromptlydeliveredtoanystockholderata and receiveseparateproxycards.Uponwrittenororalrequest, aseparatecopyoftheNoticeorthisproxy impact ontheenvironment.Stockholderswhoparticipate inhouseholdingwillcontinuetobeableaccess one ormoreofthestockholders.Thisprocedurereduces ourprintingandmailingcostsalsoreduces Report tomultiplestockholderswhosharethesameaddress unlesswereceivedcontraryinstructionsfrom may deliverasinglecopyoftheNoticeand,ifapplicable, thisproxystatementandtheCompany’sAnnual We haveadoptedaprocedurecalled‘‘householding,’’which theSEChasapproved.Underthisprocedure,we materials. printed copyoftheproxymaterialsinmailshouldfollowinstructionsNoticeforrequestingsuch and reduceourimpactontheenvironment.StockholderswhoreceiveNoticebutwouldliketoa method ofdeliverywilldecreaseprintingandshippingcosts,expeditedistributionproxymaterialstoyou, how toaccesstheproxymaterialsviaInternetaswellvoteInternet.Webelievethis Materials (‘‘Notice’’),ratherthanafullpapersetoftheproxymaterials.TheNoticeincludesinformationon the Internet.Asaresult,mostofourstockholderswillbemailedNoticeInternetAvailabilityProxy This year,weareagaintakingadvantageoftheSECrulesthatallowustofurnishourproxymaterialsover additional compensationfortheseactivities. employees alsomaysolicitproxiesbymail,telephoneandpersonalcontact.Theywillnotreceiveany the proxymaterialsasbeneficialownersofourcommonstock.TheCompany’sdirectors,officersand The Companypaysthecostofsolicitingyourproxyandreimbursesbrokersothersforforwardingtoyou shares. 2018 annualmeetingonlyifyouobtainasignedproxyfromtherecordholdergivingrighttovote or revocationbeforethevoteistaken.Sharesheldinstreetnamemaybevotedbyyouonlineduring you mustdosoinsufficienttimetopermitthenecessaryexaminationandtabulationofsubsequentproxy proxy toberevokedunlessyouvoteonlineduringthe2018annualmeeting.Ifwishrevokeyourproxy, Please notethatyourattendanceatthe2018annualmeetingalonewillnotcausepreviouslygranted attendingthe2018annualmeetingonlineandvotingduringmeeting,whichwillautomaticallycancelany • deliveringavalid,later-datedproxyorvoteontheInternetbytelephone; • providingwrittennoticeofrevocationtotheSecretaryCompanyat13085HamiltonCrossing • annual meetingby: Yes. Youmayrevokeyourproxyorchangevotinginstructionsatanytimepriortothevote2018 The voteswillbecountedbytheinspectorofelectionappointedfor2018annualmeeting. instructions forallproxyandvotinginstructioncardsyoureceive. It meansyoursharesareregistereddifferentlyorinmorethanoneaccount.Pleaseprovidevoting Boulevard, Carmel,Indiana46032; proxy previouslygiven. 68 68 Proxy Statement 69 or www.karauctionservices.com 69 and you should allow ample time to log in to the meeting and test your device’s audio capabilities prior to the and you should allow ample time to log start of the meeting. until midnight on June 3, 2019. The webcast will be available for replay technology to provide ease of access, real-time communication and cost We are excited to embrace the latest Hosting a virtual meeting will facilitate stockholder attendance savings for our stockholders and the Company. to participate from around the world. In addition, hosting a virtual and participation by enabling stockholders and cost savings for our stockholders and the Company. meeting provides improved communication The 2018 annual meeting will be a completely virtual meeting of stockholders, which will be conducted will be a completely virtual meeting The 2018 annual meeting in the location. You are entitled to participate webcast. There will be no physical meeting through a live audio 2018 or if as of the close of business on April 11, if you were a Company stockholder annual meeting only for the annual meeting. you hold a valid proxy during the online and submit your questions attend the annual meeting of stockholders You will be able to your shares You also will be able to vote www.virtualshareholdermeeting.com/kar2018. meeting by visiting online during the annual meeting. will need the 16-digit control number included on your Notice, on To participate in the annual meeting, you that accompanied your proxy materials. Instructions on how to attend your proxy card, or on the instructions including how to demonstrate proof of stock ownership, are posted on and participate in our online meeting, the meeting website. a.m., Eastern Daylight Time. We encourage you to access the The meeting will begin promptly at 9:00 access to the meeting will open at 8:45 a.m., Eastern Daylight Time, meeting prior to the start time. Online by writing to KAR Auction Services, Inc., Investor Relations, 13085 Hamilton Crossing Boulevard, Carmel, Hamilton Crossing Relations, 13085 Inc., Investor to KAR Auction Services, by writing Indiana 46032. publish at the 2018 annual meeting and will announce preliminary voting results KAR Auction Services of the 2018 on Form 8-K within four business days results if available, in a Current Report preliminary, or final annual meeting. Copies of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed 31, 2017, as year ended December 10-K for the fiscal Report on Form the Company’s Annual Copies of website at of charge on our stockholders free are available to with the SEC, A: Q: Why is the 2018 annual meeting virtual? Q: annual meeting? How can I attend the 2018 A: A: Q: results of the 2018 annual meeting? Where can I find the voting Q: Form 10-K? Annual Report on Auction Services’ a copy of KAR How can I obtain A: 13APR201815452321 (This page has been left blank intentionally.)