Table of Contents March 14, 2019 Dear Fellow Stockholder: You Are
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Table of Contents March 14, 2019 Dear Fellow Stockholder: You are cordially invited to attend the Annual Meeting of Stockholders of LKQ Corporation at 500 West Madison Street, Third Floor Conference Center - Washington Room, Chicago, Illinois 60661 at 1:30 p.m., Central Time, on May 6, 2019 . This Notice of Annual Meeting and Proxy Statement describe the business to be transacted at the meeting and provide other information concerning LKQ that you should be aware of when you vote your shares. The principal business of the Annual Meeting will be to elect directors, to ratify the appointment of our independent registered public accounting firm and to hold an advisory vote on executive compensation. We also plan to review the status of the Company’s business at the meeting and answer any questions you may have. It is important that your shares are represented at the Annual Meeting whether or not you plan to attend. To ensure that you will be represented, we ask that you vote your shares as soon as possible. On behalf of the Board of Directors and management, we would like to express our appreciation for your investment in LKQ Corporation. Sincerely, Joseph M. Holsten Dominick Zarcone Varun Laroyia Executive Chairman of the Board President and Chief Executive Officer Executive Vice President and Chief Financial Officer Table of Contents NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 6, 2019 Notice is hereby given that the 2019 Annual Meeting of the Stockholders of LKQ Corporation will be held at 500 West Madison Street, Third Floor Conference Center - Washington Room, Chicago, Illinois 60661 at 1:30 p.m., Central Time. The purpose of our 2019 Annual Meeting is to: 1. Elect 11 directors for the ensuing year. 2. Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2019. 3. Hold an advisory vote on executive compensation. 4. Transact such other business as may be properly brought before the 2019 Annual Meeting or any adjournment or postponement of the 2019 Annual Meeting. We are pleased to take advantage of the Securities and Exchange Commission rule allowing companies to furnish proxy materials to stockholders over the Internet. We believe that this e-proxy process lowers our costs and reduces the environmental impact of our Annual Meeting. On or about March 14, 2019 , we began mailing to stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials and how to vote online. Certain other stockholders have elected to receive the proxy materials by mail. You can vote at the 2019 Annual Meeting in person or by proxy if you were a stockholder of record on March 8, 2019 . Whether or not you plan to attend, please review our proxy materials and submit your vote by proxy. Instructions for voting are included in this Proxy Statement and in the Notice of Internet Availability of Proxy Materials. You may revoke your proxy at any time prior to its use at the 2019 Annual Meeting. By Order of the Board of Directors Victor M. Casini Senior Vice President, General Counsel and Corporate Secretary March 14, 2019 Table of Contents YOU ARE URGED TO MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE. Table of Contents LKQ CORPORATION PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 6, 2019 TABLE OF CONTENTS Page INTRODUCTION 1 GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING 1 Important Notice of Internet Availability of Proxy Materials for the Stockholder Meeting to be Held on Monday, May 6, 2019 1 Date, Time and Place of the Meeting 1 Purpose of the Meeting 1 Who Can Vote 1 How You Can Vote 2 How the Board Recommends that You Vote 2 How You May Revoke or Change Your Vote 2 Quorum Requirement 2 Vote Required 3 Discretionary Voting and Adjournments 3 PROPOSAL NO. 1- ELECTION OF OUR BOARD OF DIRECTORS 4 Governance Highlights 4 Introduction -- an Overview of LKQ's Mission and How our Board Composition Is Aligned with our Strategy 4 Nominees 6 Nominating Process 10 CORPORATE GOVERNANCE 11 Corporate Governance Guidelines 11 Performance Evaluation 11 Board Leadership Structure 11 Role of Board of Directors in Our Risk Management Process 11 Director Independence 12 Director Attendance 12 Director Stock Ownership Guidelines 12 Hedging/Pledging 12 Succession and Refreshment 12 Committees of the Board 13 Stockholder Communications with the Board of Directors 14 Compensation Committee Interlocks and Insider Participation 14 DIRECTOR COMPENSATION 15 Director Fees 15 Indemnification 16 Director Compensation Table 16 PROPOSAL NO. 2- RATIFICATION OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 17 Audit Fees and Non-Audit Fees 17 Policy on Audit Committee Approval of Audit and Non-Audit Services 17 Report of the Audit Committee 18 PROPOSAL NO. 3- ADVISORY VOTE ON EXECUTIVE COMPENSATION 19 i Table of Contents OTHER PROPOSALS 20 EXECUTIVE COMPENSATION - COMPENSATION DISCUSSION AND ANALYSIS 21 Executive Summary 21 Advisory Vote on Executive Compensation 23 Objectives of Our Compensation Programs 24 What Our Compensation Programs are Designed to Reward 24 Executive Compensation Decision-Making 24 Elements of Our Compensation Programs, Why We Chose Each Element, and How We Determine the Amount of Each Element 25 2019 Changes to Annual Bonuses and Long-Term Incentive Awards 28 Retirement Plans 28 Severance Protection 28 Compensation-Related Governance Policies 29 Indemnification 30 Deductibility 30 Risks Relating to our Compensation Policies and Practices 30 Compensation Committee Report 30 EXECUTIVE COMPENSATION - COMPENSATION TABLES 31 Summary Compensation Table 31 Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2018 33 Outstanding Equity Awards at Fiscal Year-End December 31, 2018 34 Option Exercises and Stock Vested for Fiscal Year Ended December 31, 2018 35 Nonqualified Deferred Compensation for Fiscal Year Ended December 31, 2018 35 Potential Payments Upon Termination or Change in Control 36 CEO Pay Ratio 39 OTHER INFORMATION 40 Principal Stockholders 40 Section 16(a) Beneficial Ownership Reporting Compliance 41 Certain Transactions 41 Solicitation of Proxies 42 Delivery of Proxy Materials to Households 42 Submitting Your Proposals for the 2020 Annual Meeting 42 General 43 ii Table of Contents INTRODUCTION We have sent you this Proxy Statement because our Board of Directors is soliciting your proxy to vote your shares of the common stock of LKQ Corporation at our upcoming annual meeting of stockholders for 2019 (the “ 2019 Annual Meeting”). In this Proxy Statement, the words “LKQ,” “Company,” “we,” “our,” “ours,” and “us” refer to LKQ Corporation and its subsidiaries. In accordance with rules promulgated by the Securities and Exchange Commission (the “SEC”), the information below included under the captions “Report of the Audit Committee” and “Compensation Committee Report” will not be deemed to be filed or to be proxy soliciting material or incorporated by reference in any prior or future filings by us under the Securities Act of 1933 or the Securities Exchange Act of 1934 (the “Exchange Act”). GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING Important Notice of Internet Availability of Proxy Materials for the Stockholder Meeting to be Held on Monday, May 6, 2019 Our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (the “ 2018 Annual Report”) and this Proxy Statement are available at: https://materials.proxyvote.com/501889. Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials to the owners of our stock. All stockholders have the ability to access our proxy materials on the website referred to in the Notice of Internet Availability of Proxy Materials or request to receive a printed set of our proxy materials. Instructions on how to access our proxy materials over the Internet or to request a printed copy of our proxy materials may be found in the Notice of Internet Availability of Proxy Materials. In addition, stockholders may request to receive proxy materials in printed form on an ongoing basis. We believe this process should expedite your receipt of our proxy materials and reduce the environmental impact of the 2019 Annual Meeting. We are mailing the Notice of Internet Availability of Proxy Materials to our stockholders on or about March 14, 2019 . Date, Time and Place of the Meeting The 2019 Annual Meeting will be held on Monday, May 6, 2019 , at 1:30 p.m., Central Time, at 500 West Madison Street, Third Floor Conference Center - Washington Room, Chicago, Illinois 60661. To obtain directions to attend the meeting, please contact our Corporate Secretary. Our principal executive offices are located at 500 West Madison Street, Suite 2800, Chicago, Illinois 60661 (telephone: 312-621-1950). Admission to the meeting is limited to our stockholders (or their proxy holders) and other invited guests. Purpose of the Meeting The purpose of the 2019 Annual Meeting is to vote on the following: 1. The election of 11 directors, each to serve for a term of one year (or until his or her successor is duly elected and qualified); 2. The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2019 ; 3. On an advisory basis, executive compensation; and 4. The transaction of any other business properly brought before the 2019 Annual Meeting or any adjournment or postponement of the 2019 Annual Meeting. Who Can Vote Stockholders of record at the close of business on March 8, 2019 , the record date, will be entitled to notice of and to vote at the 2019 Annual Meeting or any adjournment or postponement of the meeting.